EXHIBIT 10.21
-------------
ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement is made and entered into as of the 4th day
of September, 1996, by and among CXR Acquisition Corp., a Delaware corporation
(the "Buyer"), a wholly-owned subsidiary of Trex Medical Corporation, a Delaware
corporation ("Trex Medical") and Continental X-Ray Corporation, an Illinois
corporation ("Continental"), Alphatek Corporation, an Illinois corporation
("Alphatek"), Broadview Manufacturing Corporation, an Illinois corporation
("Broadview"), Haymarket Square Associates, an Illinois partnership
("Haymarket"), Advanced Medical Imaging, Inc., an Illinois corporation ("AMI"),
Trans-Continental X-Ray Corporation, an Illinois corporation ("Trans-
Continental"), and the stockholders of Continental, Alphatek, Broadview, AMI and
Trans-Continental and the partners of Haymarket whose names appear on the
signature pages hereto (collectively, the "Stockholders") and, as to Section
7.21 only, Trex Medical. Continental, Alphatek, Broadview, Haymarket, AMI and
Trans-Continental are referred to herein individually as the Seller and
collectively as the Sellers.
The Buyer desires to purchase, and the Sellers desire to sell, all of
their assets, subject to the assumption by the Buyer of certain liabilities.
NOW THEREFORE, in consideration of the premises and the mutual
covenants, agreements and provisions herein contained, the parties hereto agree
as follows:
AGREEMENT
The parties, intending to be legally bound, agree as follows:
1. DEFINITIONS
For purposes of this Agreement, the following terms have the meanings
specified or referred to in this Section 1:
"Accounts Receivable" -- as defined in Section 3.8.
"Agent" -- as defined in Section 2.9.
"Applicable Contract"-- any Contract (a) under which any Seller or any
of its Subsidiaries has or may acquire any rights, (b) under which any Seller or
any of its Subsidiaries has or may become subject to any obligation or
liability, or (c) by which any Seller or any of the assets owned or used by any
Seller or any of its Subsidiaries is or may become bound.
"Assets" -- as defined in Section 2.1.
"Assumed Liabilities" -- as defined in Section 2.3.
"Balance Sheet Date" -- as defined in Section 3.4.
"Breach" -- for purposes of Section 6 hereof, a "Breach" of a
representation, warranty, covenant, obligation, or other provision of this
Agreement or any instrument delivered pursuant to this Agreement will be deemed
to have occurred if there is or has been (a) any inaccuracy in or breach of, or
any failure to perform or comply with, such representation, warranty, covenant,
obligation, or other provision, or (b) any claim (by any Person) or other
occurrence or circumstance that is or was inconsistent with such
representation, warranty, covenant, obligation, or other provision, and the
term "Breach" means any such inaccuracy, breach, failure, claim, occurrence, or
circumstance.
"Buyer" -- as defined in the first paragraph of this Agreement.
"Closing" -- as defined in Section 2.6.
"Closing Balance Sheet" -- as defined in Section 2.4.
"Closing Date" -- as defined in Section 2.6.
"Code" -- the Internal Revenue Code of 1986 or any successor law, and
regulations issued by the IRS pursuant to the Internal Revenue Code or any
successor law.
"Consent" -- any approval, consent, ratification, waiver, or other
authorization (including any Governmental Authorization).
"Contemplated Transactions" -- all of the transactions contemplated by
this Agreement, including:
(a) the sale of the Assets by the Sellers to the Buyer;
(b) the performance by the Buyer and the Sellers of their
respective covenants and obligations under this Agreement; and
(c) Buyer's acquisition and ownership of the Assets and
exercise of control over the Assets.
"Contract" -- any agreement, contract, obligation, promise, or
undertaking (whether written or oral and whether express or implied) that is
legally binding.
"Damages" -- as defined in Section 6.2.
"Disclosure Letter" -- the disclosure letter delivered by the Sellers to
the Buyer concurrently with the execution and delivery of this Agreement and
attached hereto as Exhibit A and incorporated into this Agreement as a part
hereof.
"Draft Closing Balance Sheet" -- as defined in Section 2.4.
2
"Encumbrance" -- any charge, claim, community property interest,
condition, equitable interest, lien, mortgage, option, pledge, security
interest, right of first refusal, or restriction of any kind, including any
restriction on use, voting (in the case of any security), transfer, receipt of
income, or exercise of any other attribute of ownership.
"Environment" -- soil, land, surface or subsurface strata, surface
waters (including navigable waters and ocean waters), groundwater, drinking
water supply, stream sediments, ambient air (including indoor air), plant and
animal life, and any other environmental medium or natural resource.
"Environmental, Health and Safety Liabilities" -- any cost, damages,
expense, liability, obligation, or other responsibility arising from or under
Environmental Law, Occupational Safety and Health Law, a Contract or other
obligation relating to:
(a) any environmental, health, or safety matters or conditions
(including on-site or off-site contamination, occupational safety and health,
and regulation of chemical substances or products);
(b) fines, penalties, judgments, awards, settlements, legal or
administrative proceedings, damages, losses, claims, demands and response,
remedial, or inspection costs and expenses arising under Environmental Law or
Occupational Safety and Health Law;
(c) financial responsibility under Environmental Law or
Occupational Safety and Health Law for cleanup costs or corrective action,
including any cleanup, removal, containment, or other remediation or response
actions ("Cleanup") required by applicable Environmental Law or Occupational
Safety and Health Law (whether or not such Cleanup has been required or
requested by any Governmental Body or any other Person) and for any natural
resource damages; or
(d) any other compliance, corrective, or remedial measures
required under Environmental Law or Occupational Safety and Health Law.
The terms "removal," "remedial," and "response action" include the types of
activities covered by the United States Comprehensive Environmental Response,
Compensation, and Liability Act, 42 U.S.C. Sec. 9601 et seq., as amended
("CERCLA").
"Environmental Law" -- any Legal Requirement or principle of common law
designed:
(a) to advise appropriate authorities, employees, and the
public of intended or actual releases of pollutants or hazardous or toxic
substances or materials, violations or discharge limits, or other prohibitions
and of the commencement of activities, such as resource extraction or
construction, that could have an adverse impact on the Environment;
(b) to permit or license, or to prevent or acceptably minimize
the release of
3
pollutants or hazardous or toxic substances or materials into the Environment;
(c) to reduce the quantities, prevent the release, and minimize
the hazardous characteristics of wastes that are generated;
(d) to assure that products are designed, formulated, packaged,
or used so that they do not present unreasonable risks to human health or the
Environment when used or disposed of;
(e) to protect resources, species, or ecological amenities;
(f) to acceptably minimize the risks inherent in transportation
of hazardous or toxic substances, pollutants, oil, petroleum, or other
potentially harmful substances;
(g) to clean up pollutants that have been released, prevent the
threat of release, or pay the costs of such cleanup, remediation or prevention;
or
(h) to make responsible parties pay private parties, or groups
of them, for damages done to their health or Environment, or to permit self-
appointed representatives of the public interest to recover for injuries done to
public assets.
"ERISA" -- the Employee Retirement Income Security Act of 1974 or any
successor law, and regulations and rules issued pursuant to that Act or any
successor law.
"Escrow Amount" -- as defined in Section 2.9.
"ERISA Affiliate" -- as defined in Section 3.11.
"Exchange Act" -- the Securities Exchange Act of 1934 or any successor
law, and regulations and rules issued pursuant to that Act or any successor law.
"Excluded Assets" -- as defined in Section 2.1.
"Excluded Liabilities" -- as defined in Section 2.3.
"Facilities" -- any real property, leaseholds, or other interests
currently or formerly owned, leased or operated by any of the Sellers (or any
predecessor Persons) and any buildings, plants, structures, or equipment
currently or formerly owned, leased or operated by any of the Sellers (or any
predecessor Persons).
"Financial Statements" -- as defined in Section 3.4.
"GAAP" -- generally accepted United States accounting principles.
"Governmental Authorization" -- any approval, consent, license, permit,
waiver,
4
exemption or variance, or other authorization issued, granted, given, or
otherwise made available by or under the authority of any Governmental Body or
pursuant to any Legal Requirement.
"Governmental Body" -- any:
(a) nation, state, county, city, town, village, district, or
other jurisdiction of any nature;
(b) federal, state, local, municipal, foreign, or other
government;
(c) governmental or quasi-governmental authority of any nature
(including any governmental agency, branch, department, official, or entity and
any court or other tribunal);
(d) multi-national organization or body; or
(e) body exercising, or entitled or purporting to exercise, any
administrative, executive, judicial (including court), legislative, police,
regulatory, or taxing authority or power of any nature.
"Hazardous Activity" -- the distribution, generation, handling,
importing, management, manufacturing, processing, production, refinement,
Release, storage, transfer, transportation, treatment, or use (including any
withdrawal or other use of groundwater) of Hazardous Materials in, on, under,
about, or from the Facilities or any part thereof into the Environment, and any
other act, business, operation, or thing that increases the danger, or risk of
danger, or poses an unreasonable risk of harm to persons or property on or off
the Facilities, or that may affect the value of the Facilities or the Sellers.
"Hazardous Materials" -- any substance that is now or may reasonably be
foreseen to be listed, deemed, designated, or classified as, or otherwise
determined to be, hazardous, radioactive, or toxic or a pollutant or a
contaminant under or pursuant to any Environmental Law, including any admixture
or solution thereof, and specifically including petroleum and all derivatives
thereof or synthetic substitutes therefor and polychlorinated biphenyls,
asbestos or asbestos containing materials.
"Indemnified Persons" -- as defined in Section 6.2.
"IRS" -- the United States Internal Revenue Service or any successor
agency, and, to the extent relevant, the United States Department of the
Treasury.
"June Balance Sheet" -- as defined in Section 3.4.
"June Income Statements" -- as defined in Section 3.4.
"Knowledge" -- an individual will be deemed to have "Knowledge" of a
particular fact or other matter if:
5
(a) such individual is actually aware of such fact or other
matter; or
(b) a prudent individual could be expected to discover or
otherwise become aware of such fact or other matter in the course of conducting
a reasonably comprehensive investigation concerning the existence of such fact
or other matter.
A Person (other than an individual) will be deemed to have "Knowledge" of a
particular fact or other matter if any individual who is serving, or who has at
any time served, as a director, officer, management employee, partner,
executor, or trustee of such Person (or in any similar capacity) has, or at any
time had, Knowledge of such fact or other matter.
"Land" -- as defined in Section 3.29(a).
"Legal Requirement" -- any federal, state, local, municipal, foreign,
international, multinational, or other, constitution, law, ordinance, Order,
regulation, requirement, statute, treaty, or any principle of common law
interpreting any of the foregoing.
"Material Adverse Effect" -- any loss to the Sellers, taken as a whole,
in excess of $100,000.
"Net Asset Benchmark" -- as defined in Section 2.4.
"Neutral Auditors" -- as defined in Section 2.4.
"Occupational Safety and Health Law" -- any Legal Requirement designed
to provide safe and healthful working conditions and to reduce occupational
safety and health hazards, and any program, whether governmental or private
(such as those promulgated or sponsored by industry associations and insurance
companies), designed to provide safe and healthful working conditions.
"Order" -- any award, decision, injunction, judgment, order, ruling,
subpoena, or verdict entered, issued, made, or rendered by any court,
administrative agency, or other Governmental Body or by any arbitrator.
"Ordinary Course of Business" -- an action taken by a Person will be
deemed to have been taken in the "Ordinary Course of Business" only if:
(a) such action is consistent with the past practices of such
Person and is taken in the ordinary course of the normal day-to-day operations
of such Person;
(b) such action is not required to be authorized by the board
of directors of such Person (or by any Person or group of Persons exercising
similar authority), is not required to be specifically authorized by the parent
company (if any) of such Person, and does not require any other separate or
special authorization of any nature; and
6
(c) such action is similar in nature and magnitude to actions
customarily taken, without any separate or special authorization, in the
ordinary course of the normal day-to-day operations of other Persons that are in
the same line of business as such Person.
"Organizational Documents" -- (a) the articles or certificate of
incorporation and the bylaws of a corporation; (b) the partnership agreement
and any statement of partnership of a general partnership; (c) the limited
partnership agreement and the certificate of limited partnership of a limited
partnership; (d) any charter or similar document adopted or filed in connection
with the creation, formation, or organization of a Person; and (e) any
amendment to any of the foregoing.
"Permitted Exceptions" -- as defined in Section 5.1.
"Person" -- any individual, corporation (including any non-profit
corporation), general or limited partnership, limited liability company,
limited liability partnership, joint venture, estate, trust, association,
organization, or other entity or Governmental Body.
"Plans" -- as defined in Section 3.11.
"Proceeding" -- any action, arbitration, audit, hearing, investigation,
litigation, or suit (whether civil, criminal, administrative, investigative, or
informal) commenced, brought, conducted, or heard by or before, or otherwise
involving, any Governmental Body or arbitrator.
"Products" -- as defined in Section 3.12(c).
"Purchase Price" -- as defined in Section 2.2.
"Real Property" -- as defined in Section 3.29.
"Related Person" -- with respect to a particular individual:
(a) each other member of such individual's Family;
(b) any Person that is directly or indirectly controlled by any
one or more members of such individual's Family;
(c) any Person in which members of such individual's Family
hold (individually or in the aggregate) a Material Interest; and
(d) any Person with respect to which one or more members of
such individual's Family serves as a director, officer, partner, executor, or
trustee (or in a similar capacity).
With respect to a specified Person other than an individual:
(a) any Person that directly or indirectly controls, is
directly or indirectly
7
controlled by, or is directly or indirectly under common control with such
specified Person;
(b) any Person that holds a Material Interest in such specified
Person;
(c) each Person that serves as a director, officer, partner,
executor, or trustee of such specified Person (or in a similar capacity);
(d) any Person in which such specified Person holds a Material
Interest; and
(e) any Person with respect to which such specified Person
serves as a general partner or a trustee (or in a similar capacity).
For purposes of this definition, (a) the "Family" of an individual includes
(i) the individual, (ii) the individual's spouse and former spouses, (iii) any
other natural person who is related to the individual or the individual's
spouse within the second degree, and (iv) any other natural person who resides
with such individual, and (b) "Material Interest" means direct or indirect
beneficial ownership (as defined in Rule 13d-3 under the Exchange Act) of
voting securities or other voting interests representing at least 5% of the
outstanding voting power of a Person or equity securities or other equity
interests representing at least 5% of the outstanding equity securities or
equity interests in a Person.
"Release" -- any spilling, leaking, emitting, discharging, depositing,
escaping, leaching, dumping, or other releasing into the Environment (including
the abandonment or discarding of barrels, containers, tanks or other
receptacles).
"Restricted Employee" -- as defined in Section 7.16.
"Securities Act" -- the Securities Act of 1933 or any successor law, and
regulations and rules issued pursuant to that Act or any successor law.
"Seller" or "Sellers" -- as defined in the first paragraph of this
Agreement.
"Seller Representative"-- Xxxxxxx X. Xxxxxxxxxx, as representative of
all of the Sellers and the Stockholders.
"Subsidiary" -- with respect to any Person (the "Owner"), any
corporation or other Person of which securities or other interests having the
power to elect a majority of that corporation's or other Person's board of
directors or similar governing body, or otherwise having the power to direct the
business and policies of that corporation or other Person (other than securities
or other interests having such power only upon the happening of a contingency
that has not occurred), are held by the Owner or one or more of its
Subsidiaries.
"Survey" -- as defined in Section 2.10.
"Tax" -- any tax (including without limitation any income, capital
gains, gross receipts,
8
license, payroll, employment, excise, severance, stamp, occupation, premium,
windfall profits, environmental (including without limitation taxes under Code
Section 59A), customs duties, capital stock, franchise, profits, withholding,
social security (or similar), unemployment, disability, real property, personal
property, sales, use, transfer, registration, value added, alternative or add-on
minimum, estimated, or other tax, assessments or other fiscal charges of any
kind whatsoever, including any fine, interest, penalty, or addition thereto,
whether disputed or not), imposed, assessed, levied or collected by or under the
authority of any Governmental Body or payable pursuant to any tax-sharing
agreement or any other Contract relating to the sharing or payment of any such
tax.
"Tax Return" -- any return, declaration, report, claim for refund, or
information return or statement relating to Taxes, including without limitation
any schedule or attachment thereto, and any amendment thereof.
"Threat of Release" -- a substantial likelihood of a Release that may
require action in order to prevent or mitigate damage to the Environment that
may result from such Release.
"Threatened" -- a claim, Proceeding, dispute, action, or other matter
will be deemed to have been "Threatened" if any demand or statement has been
made (orally or in writing) or any notice has been given (orally or in writing),
or if any other event has occurred or any other circumstances exist, that would
lead a prudent Person to conclude that such a claim, Proceeding, dispute, action
or other matter is likely to be asserted, commenced, taken, or otherwise pursued
in the future.
"Title Company" -- as defined in Section 5.1.
"Title Policy" -- as defined in Section 5.1.
"Trust" -- as defined in Section 3.29.
"Trustee" -- as defined in Section 3.29.
"1995 Balance Sheet" -- as defined in Section 3.4.
"1995 Income Statements" -- as defined in Section 3.4.
2. SALE AND TRANSFER OF ASSETS; CLOSING
2.1 Sale of Assets. At the Closing, the Buyer shall purchase,
acquire and accept, and the Sellers shall assign, transfer, convey and deliver,
all of the Sellers' right, title and interest in and to, the assets, properties
and rights (contractual or otherwise) of every kind, nature and description
owned or used by the Sellers (collectively, the "Assets"). The Assets shall
include, without limitation, the following:
(a) Inventories. All inventories of raw materials, work-in-
process, finished
9
products and resale merchandise, scrap inventory, and expendable manufacturing
supplies.
(b) Machinery and Equipment. All machinery and equipment
used in the research and development, manufacture, production, assembly, test,
handling, distribution, demonstration and sale of products, together with the
spare-parts inventories and all manufacturing or production tools and
maintenance supplies pertaining thereto.
(c) Intellectual Property Rights and Trademarks. All
patents, trademarks, service marks, copyrights, trade names and applications
therefor, including without limitation, the names "Continental X-Ray
Corporation" and "Alphatek Corporation".
(d) Technical Information and Intangibles. All inventions,
discoveries (whether patentable or unpatentable), processes, designs, know-how,
trade secrets, proprietary data, software programs and intellectual property of
all kinds, including drawings, plans, specifications, processes, patents, dies,
designs, blue prints, records, data, product development records, production
outlines, diskettes, source code, object code, flow charts, information, media
or knowledge and procedures, and customer and supplier lists.
(e) Contracts. All real and personal property leases,
licenses, sales, distribution, and supply Contracts, purchase Contracts and
sales orders, and any prepaid items, warranties and all causes of action and
claims related thereto.
(f) Motor Vehicles. All cars, trucks and other motor
vehicles, automotive equipment and other rolling stock.
(g) Books and Records. All books, records and accounts,
correspondence, production records, technical, accounting, manufacturing and
procedural manuals, and customer lists; employment records, studies, reports or
summaries relating to any environmental conditions or consequences of any
operation, as well as all studies, reports or summaries relating directly to the
general condition of the Sellers; and any confidential information which has
been reduced to writing relating to or arising out of the business of the
Sellers.
(h) Permits and Approvals. To the extent transferable, all
Governmental Authorizations of the Sellers.
(i) Claims. All claims, deposits, prepayments, refunds,
security interests, causes of action, choses in action, rights of recovery,
rights of setoff, rights of recoupment, rights under warranties and other
similar assets.
(j) Furniture and Fixtures. All office furniture, office
equipment and supplies and computer hardware.
(k) Accounts Receivable. All trade and other accounts and
notes receivable and any rights of recovery or setoff of every type and
character.
10
(l) Real Property. All real property, including the property
located at 0000 Xxxxx 00xx Xxxxxx, Xxxxxxxxx, Xxxxxxxx, leaseholds and
subleaseholds in real property, and buildings, improvements, fixtures and
fittings thereon, easements, rights-of-way and other rights and privileges
appurtenant to such real property or leasehold or subleasehold estates.
(m) Miscellaneous Supplies. All catalogs, brochures, product
literature, product-related application notes, manuals, technical papers, other
printed materials, shipping and packaging materials and labels, cartons and
shipping containers, palettes, shipping equipment, graphics, artwork,
photographic film, slides, negatives, color separations, printer's and
photographer's plates and so-called "camera-ready materials" and sales and
advertising materials.
(n) Cash and Securities. All cash, bank accounts, money
market accounts, certificates of deposit, treasury bills, bonds, notes,
securities and similar assets.
(o) Assets in Subsidiaries. All of the assets of all
Subsidiaries of the Sellers.
Notwithstanding anything to the contrary herein, the Assets shall not
include the partnership interests of Haymarket held by Continental and Alphatek
(the "Excluded Assets").
2.2 Purchase Price for the Assets. Subject to Section 2.4, the
aggregate purchase price for the Assets shall be $13,050,500 (the "Purchase
Price") payable to Continental to be allocated to it and each of Alphatek,
Broadview, Haymarket, AMI, and Trans-Continental.
2.3 Assumption of Liabilities. At the Closing, the Buyer shall
assume all liabilities (the "Assumed Liabilities") of the Sellers arising out of
or relating primarily to the business of each such Seller (including but not
limited to claims, actions, Proceedings and liabilities for product warranty,
breach of contract, breach of warranty, tort or infringement), except the
Excluded Liabilities. The Buyer shall not assume any liabilities or obligations
of any Seller of any nature known or unknown, fixed, contingent or otherwise of
each such Seller (the "Excluded Liabilities"): (a) for any Environmental, Health
and Safety Liabilities resulting from the ownership, operation or condition of
the Facilities, or with respect to any site to which Hazardous Materials
generated by any Seller were transported, or for any liabilities or obligations
resulting from any Hazardous Activity conducted by any Seller, (b) for any Taxes
resulting from the conduct of the business of the Sellers, including all Taxes
on Real Property, except such Taxes on Real Property as are accrued and
reflected on the face of the Closing Balance Sheet, (c) for any violation by any
Seller of any Legal Requirement, (d) to any retired or other former employees of
any Seller including but not limited to pension payments to Xxxx and Xxxxx
Xxxxxx ($1,226 per month plus COLA), Xxxxxxxx Xxxxx ($335 per month), Xxxxx Held
($35 per month) and Xxxx Xxxx ($800 per month) or with respect to the note
payable to Xxxx and Xxxxx Xxxxxx in the principal amount of $120,000 due October
2007, (e) under any Plans maintained at any time by any Seller or to which or in
which any Seller contributes or participates, or relating to any termination of
any such Plan, (f) for any liabilities or obligations of any Seller arising
under this Agreement, including without limitation, for any obligations arising
under Section 6.2 hereof, for any breach of any representation or warranty made
by any Seller contained herein or for any other breach hereof, and (g) for any
liabilities (other than such liabilities described in (a) through (f) above) of
which
11
the Sellers have Knowledge on or prior to the Closing Date and which are not
reflected on the face of the Closing Balance Sheet or in the notes thereto, or
in the Disclosure Letter.
2.4 Post-Closing Adjustment. The Purchase Price set forth in Section
2.2 shall be subject to adjustment after the Closing Date as follows:
(a) Within 30 days after the Closing Date, the Buyer shall
prepare and deliver to the Seller Representative a combining balance sheet
reflecting the combined net assets of the Sellers as of the Closing Date (a
"Draft Closing Balance Sheet") at Buyer's expense. The Buyer shall prepare the
Draft Closing Balance Sheet in accordance with GAAP. For purposes of this
Agreement, "net assets" shall mean the Assets (other than Excluded Assets),
minus Assumed Liabilities reflected on such Balance Sheet in accordance with
GAAP applied on a basis consistent with the basis on which the 1995 Balance
Sheet was prepared with respect to excess and obsolete inventory and product
warranties.
(b) The Seller Representative shall deliver to the Buyer
within 15 days after receiving the Draft Closing Balance Sheet a detailed
statement describing its objections (if any) thereto. Failure of the Seller
Representative so to object to the Draft Closing Balance Sheet shall constitute
acceptance thereof, whereupon such Draft Closing Balance Sheet shall be deemed
to be the "Closing Balance Sheet." The Buyer and the Seller Representative shall
use reasonable efforts to resolve any such objections, but if they do not reach
a final resolution within 15 days after the Buyer has received the statement of
objections, the Buyer and the Seller Representative shall, within 5 days
thereafter, select one of the following nationally recognized accounting firms
(Coopers & Xxxxxxx, Deloitte & Touche, Ernst & Young, KPMG Peat Marwick and
Price Waterhouse) mutually acceptable to them (which shall not be the regular
accounting firm used by the Buyer or any Seller) (the "Neutral Auditors") to
resolve any remaining objections. If the Buyer and the Seller Representative are
unable to agree on the choice of Neutral Auditors within such 5-day period, they
shall select as Neutral Auditors one of such nationally recognized accounting
firms by lot within 5 days thereafter (after excluding their respective regular
independent accounting firms). The Neutral Auditors shall determine, within 30
days after their appointment, whether the objections raised by the Seller
Representative are valid. The Draft Closing Balance Sheet that is the subject of
objections by the Seller Representative shall be adjusted in accordance with the
Neutral Auditors' determination and, as so adjusted, shall be the Closing
Balance Sheet. Such determination by the Neutral Auditors shall be conclusive
and binding upon the Buyer and the Seller Representative. The Buyer, on the
other hand, and the Sellers, on the other hand, shall share equally the fees and
expenses of the Neutral Auditors.
(c) If the net assets as shown on the Closing Balance Sheet
are less than the Net Asset Benchmark, the Sellers shall pay to the Buyer, by
wire transfer in immediately available funds, within ten business days after the
date on which the Closing Balance Sheet is finally determined pursuant to this
Section 2.4, an amount equal to such deficiency (plus interest thereon from the
Closing Date at the interest rate equal to the base rate of the Bank of Boston
as announced from time to time).
(d) As used in this Section 2.4, "Net Asset Benchmark" means
$3,000,500.
12
2.5 Allocation of Purchase Price. The Sellers and the Buyer agree
that the consideration paid by the Buyer under Sections 2.3 and 2.4 hereof shall
be provisionally allocated among the Assets as provided on Exhibit C attached
hereto. The final allocation of the Purchase Price shall differ from the
provisional allocation only to reflect changes in the book value of the net
Assets as shown on the Closing Balance Sheet. The Buyer and the Sellers each
shall report the federal, state, provincial, foreign and local income and other
tax consequences of the transaction contemplated hereby in a manner consistent
with such allocation.
2.6 The Closing. The closing of the transactions contemplated by
this Agreement (the "Closing") shall occur at the offices of Hedberg, Tobin,
Xxxxxxxx & Xxxxxx, Three First National Plaza, Chicago, Illinois, at 10:00 a.m.
on the date set forth in the first paragraph of this Agreement (the "Closing
Date").
2.7 Deliveries by the Sellers to the Buyer. At the Closing, the
Sellers shall deliver, or cause to be delivered, to the Buyer:
(a) such executed assignments, patent assignments, trademark
assignments, bills of sale, certificates of title, or other documents, each
dated the Closing Date, as shall be necessary, in the opinion of the Buyer and
its counsel to transfer to the Buyer all of the Sellers' right, title and
interest in and to the Assets;
(b) an opinion of Hedberg, Tobin, Xxxxxxxx & Xxxxxx, counsel
to the Sellers, in the form attached hereto as Exhibit D;
(c) consents to the assignment of the Contracts listed on
Exhibit E; and
(d) executed copies of such other agreements contemplated
hereunder to which any of the Sellers is party.
2.8 Deliveries by the Buyer to the Sellers. At the Closing, the
Buyer shall deliver to the Sellers:
(a) Subject to Section 2.9 hereof, the Purchase Price by
wire transfer to the account designated by the Sellers; and
(b) an executed assumption agreement and such other
documents, each dated as of the Closing Date, as shall be necessary, in the
opinion of the Sellers and their counsel, for the assumption by the Buyer of all
of the Assumed Liabilities.
2.9 Escrow. For the purpose of providing security for the
obligations of the Sellers under Section 6.2 hereof, $1,250,000 (the "Escrow
Amount") shall be withheld from the Purchase Price delivered at Closing and
shall be placed in an escrow account with BayBank, N.A. as escrow agent (the
"Agent"). The Agent shall hold the Escrow Amount pursuant to the terms of an
escrow agreement among the Sellers, the Buyer and the Agent substantially in the
form
13
attached hereto as Exhibit F. On the first anniversary of the Closing Date, the
Seller Representative may withdraw 50% of the Escrow Amount, together with
interest earned thereon, for distribution to the Sellers, as their interests
appear, less the amount of any unsatisfied claims for indemnification made by
the Buyer prior to such first anniversary. On the second anniversary of the
Closing Date, the Seller Representative may withdraw the remainder of the Escrow
Amount, together with any interest thereon, for distribution to the Sellers, as
their interests appear, less the amount of any unsatisfied claims for
indemnification made by the Buyer on or prior to such second anniversary. Any
portion of the Escrow Amount that cannot be withdrawn from the escrow account
due to pending claims by the Buyer for indemnification, shall remain in the
escrow account until the resolution of such claims by judgment of a court from
which no appeal can be made, decision of an arbitrator or agreement of the Buyer
and the Seller Representative.
2.10 Survey. Buyer may procure, either before or after Closing, at
Sellers' sole cost and expense, a current spotted, staked ALTA/ACSM Land Title
Survey (the "Survey") of the Real Property drawn to scale, containing a metes
and bounds description of the Real Property, prepared and executed by a
registered Illinois land surveyor acceptable to Buyer, and certified to Buyer,
the Title Company and any lenders or other parties Buyer may designate. The
Survey shall show recording data where applicable, shall in all respects meet
or exceed the Minimum Standard Detail Requirements for Land Title Surveys
(urban surveys), as adopted in 1992 by the American Land Title Association and
American Congress on Surveying and Mapping, and shall include items 1, 2, 3,
4, (6, as to record matters only), 7, 8, 9, 10 and 11 from Table A of such
requirements. Sellers shall provide the surveyor with all information
necessary to properly prepare the Survey provided for in this Section.
2.11 Payment of Certain Loans. Buyer agrees to pay at Closing all
real estate mortgage and bank loans and other loans of the Sellers as listed on
Exhibit B hereto and timely present Sellers evidence of discharge of such
obligations.
3. REPRESENTATIONS AND WARRANTIES OF THE SELLERS
The Sellers, jointly and severally, represent and warrant to the Buyer
as follows:
3.1 Organization and Good Standing.
(a) Each of the Sellers is a corporation (other than
Haymarket which is a partnership) duly organized, validly existing, and in good
standing under the laws of the state or other jurisdiction of its incorporation
or organization, with full corporate or partnership power and authority to
conduct its business as it is now being conducted, to own or use the properties
and assets that it purports to own or use, and to perform all its obligations
under Applicable Contracts. Each of the Sellers is duly qualified to do business
as a foreign corporation or partnership, as the case may be, and is in good
standing under the laws of each state or other jurisdiction in which either the
ownership or use of the properties owned or used by it, or the nature of the
activities conducted by it, requires such qualification, except where the
failure to so qualify, individually or in the aggregate, would not have a
Material Adverse Effect. Set forth in
14
Part 3.1 of the Disclosure Letter is a list of the jurisdictions of
incorporation or organization of each Seller and a list of all states in which
each Seller is qualified to do business.
(b) The Sellers have delivered to the Buyer complete and
correct copies of all of the Sellers' Organizational Documents, as currently in
effect.
3.2 Authority; No Conflict.
(a) Each of the Sellers has the absolute and unrestricted
right, power and authority to execute and deliver this Agreement and to perform
its obligations hereunder. All corporate and other actions and proceedings to be
taken by or on the part of each of the Sellers to authorize and permit the
execution and delivery by each Seller of this Agreement and the instruments
required to be executed and delivered by each Seller pursuant hereto, the
performance by each Seller of the obligations hereunder and the consummation by
each Seller of the transactions contemplated herein, have been duly and properly
taken. This Agreement has been duly executed and delivered by each Seller and
constitutes the legal, valid and binding obligation of each Seller, enforceable
against each Seller in accordance with its terms.
(b) Except as set forth in Part 3.2 of the Disclosure
Letter, neither the execution and delivery of this Agreement nor the
consummation or performance of any of the Contemplated Transactions will,
directly or indirectly (with or without notice or lapse of time): (i)
contravene, conflict with, or result in a violation of (A) any provision of the
Organizational Documents of any Seller, or (B) any resolution adopted by the
board of directors, partners or the stockholders of any Seller; (ii) contravene,
conflict with, or result in a violation of, or give any Governmental Body or
other Person the right to challenge any of the Contemplated Transactions or to
exercise any remedy or obtain any relief under, any Legal Requirement or any
Order to which any Seller, or any of the assets owned or used by any Seller, may
be subject; (iii) contravene, conflict with, or result in a violation or breach
of any provision of, or give any Person the right to declare a default or
exercise any remedy under, or to accelerate the maturity or performance of, or
to cancel, terminate, or modify, any Applicable Contract; (iv) result in the
imposition or creation of any Encumbrance upon or with respect to any of the
assets owned or used by any Seller; or (v) entitle any employee or other person
to severance or other payments by any Seller or create any other obligation to
an employee or other person, including any increase in benefits.
(c) Except as set forth in Part 3.2 of the Disclosure
Letter, no Seller will be required to give any notice to, make any filing with,
or obtain any Consent from any Person in connection with the execution and
delivery of this Agreement or the consummation or performance of any of the
Contemplated Transactions.
3.3 Subsidiaries. Set forth in Part 3.3 of the Disclosure Letter is
a list of all Subsidiaries of each Seller, including, with respect to each
Subsidiary, its jurisdiction of incorporation. All of the outstanding capital
stock of each Subsidiary has been duly authorized and validly issued, is fully
paid, nonassessable and free of preemptive rights, and is owned beneficially and
of record by the respective Seller or by another Subsidiary of a Seller free and
15
clear of any Encumbrance or restriction of any nature, including, without
limitation, any restriction on transfer or voting. No shares of any Subsidiary's
capital stock are reserved for issuance, and there are no options, warrants,
convertible instruments or other rights, agreements or commitments, contingent
or otherwise, obligating a Subsidiary to issue, sell or purchase shares of
capital stock. No Seller is a partner or joint venturer with any other person.
No Seller is subject to any obligation, contingent or otherwise, to provide
funds to or make an investment (in the form of a loan, capital contribution or
otherwise) in any entity. No Seller has any equity interest in any corporation,
partnership or other business entity other than the Subsidiaries listed on the
Disclosure Letter. Each Subsidiary is in good standing under the laws of its
jurisdiction of incorporation and has all requisite power and authority to own,
operate and lease its properties and to carry on its business as it is now being
conducted. The Sellers have delivered to the Buyer complete and correct copies
of the Organizational Documents of each Subsidiary, as amended. Each Subsidiary
is duly qualified as a foreign corporation to do business, and is in good
standing, in each jurisdiction in which the character of the properties owned,
operated or leased by it or the nature of its activities is such that
qualification is required by applicable laws, except where the failure to so
qualify would not, individually or in the aggregate, have a Material Adverse
Effect. All jurisdictions where the Subsidiaries are qualified as foreign
corporations or are required to be so qualified are listed on Part 3.3 of the
Disclosure Letter.
3.4 Financial Statements. The Sellers have delivered to the Buyer:
(a) an audited combining balance sheet (the "1995 Balance Sheet") of the Sellers
as at December 31, 1995, (the "Balance Sheet Date") and the related audited
combining statements of income, stockholders' equity/partners' deficit and cash
flows for the fiscal year then ended (the "1995 Income Statements") and (b) an
unaudited combining balance sheet of the Sellers (the "June Balance Sheet") as
at June 30, 1996 and the related unaudited combining statements of income,
stockholders' equity/partners' deficit and cash flows for the six month period
then ended (the "June Income Statements"). The 1995 Balance Sheet and the 1995
Income Statements are referred to collectively as the "Financial Statements".
The Financial Statements fairly present the financial condition and the results
of operations and cash flows of the Sellers as at the respective dates of and
for the periods referred to therein all in accordance with GAAP and reflect the
consistent application of such accounting principles throughout the periods
involved. The Financial Statements, the June Balance Sheet and the June Income
Statements are consistent with the books and records of the Sellers.
3.5 Books and Records. The books of account, minute books, and other
records of the Sellers, all of which have been made available to the Buyer, are
complete and correct.
3.6 Title to Properties; Encumbrances. Except as set forth in Part
3.6 of the Disclosure Letter, the Sellers have valid and legally enforceable
title to all of the Assets free and clear of any Encumbrances whatsoever, and
the consummation of the Contemplated Transactions will vest in the Buyer all of
the Sellers' right, title and interest in and to the Assets.
3.7 Condition and Sufficiency of Assets. Except as set forth in Part
3.7 of the Disclosure Letter, to the Knowledge of the Sellers, the Assets are
structurally sound, are in good operating condition and repair, normal wear and
tear excepted, and are adequate for the uses to
16
which they are being put, and are not in need of maintenance or repairs except
for ordinary, routine maintenance and repairs that are not material in nature or
cost. The Assets are the only assets necessary for the continued conduct of the
business of the Sellers after the Closing in substantially the same manner as
conducted prior to the Closing.
3.8 Accounts Receivable. All accounts receivable of the Sellers are
reflected properly on the Sellers' books and records in accordance with GAAP.
All accounts receivable of the Sellers that are reflected on the June Balance
Sheet (except for those collected in full prior to the Closing Date) or on the
accounting records of the Sellers as of the Closing Date (collectively, the
"Accounts Receivable") represent or will represent valid obligations arising
from sales actually made or services actually performed in the Ordinary Course
of Business. Unless paid prior to the Closing Date and except as set forth on
Part 3.8 of the Disclosure Letter, the Accounts Receivable are or will be as of
the Closing Date current and collectible within 90 days net of the respective
reserves shown on the June Balance Sheet or on the accounting records of the
Sellers as of the Closing Date. There is no contest, claim, or right of
set-off with any maker of an Account Receivable relating to the amount or
validity of such Account Receivable.
3.9 No Undisclosed Liabilities. To the Knowledge of the Sellers, the
Sellers have no liabilities or obligations of any nature (whether absolute,
accrued, contingent, or otherwise), and, there is no basis for the assertion
against any of the Sellers of any such liability or obligation, except for
liabilities or obligations set forth on the face of (rather than in any notes
thereto), or reserved against in, the 1995 Balance Sheet, current liabilities
incurred in the Ordinary Course of Business since the Balance Sheet Date or
liabilities or obligations pursuant to the Applicable Contracts assumed by the
Buyer hereunder or as reflected in Parts 3.6, 3.7, 3.10 3.11, or 3.13 of the
Disclosure Letter.
3.10 Taxes. Except as set forth in Part 3.10 of the Disclosure
Letter, to the Knowledge of the Sellers each of the Sellers has accurately
prepared and duly and timely filed all Tax Returns that it was required to file
and all such Tax Returns were correct and complete in all material respects.
None of the Sellers is the beneficiary of any extension of time within which to
file any Tax Return. All Taxes owed by the Sellers have been paid when due,
other than those being contested in good faith and where adequate reserves
(determined in accordance with GAAP) have been established therefor. All Taxes
of the Sellers attributable to Tax periods or portions thereof ending on or
prior to the Closing Date, including Taxes that may become payable by the
Sellers in future periods in respect of any transactions or sales occurring on
or prior to the Closing Date, that have not yet been paid have, in the
aggregate, been adequately reflected as a liability on the books of the Sellers
in accordance with GAAP. None of the Sellers is currently being audited or
examined by any Governmental Body, and no deficiencies for any Tax have been
asserted against any of the Sellers. No claim or inquiry with respect to any
material amount of Taxes has been made within the past seven years against any
Seller by an authority in a jurisdiction where any such Seller did not file Tax
Returns that such Seller is or may be subject to any Tax by that jurisdiction.
Without limiting the generality of the foregoing, the Sellers have withheld or
collected and duly paid all Taxes required to have been withheld or collected
and paid in connection with payments to foreign persons, sales and use Tax
obligations, and amounts paid or owing to any employee, independent contractor,
creditor, stockholder or other person. Except as
17
set forth in Part 3.10 of the Disclosure Letter, none of the Sellers are party
to any Tax allocation or sharing agreement or a member of an affiliated group
filing a consolidated federal income Tax Return.
3.11 Employee Benefits. Part 3.11 of the Disclosure Letter contains a
true, correct and complete list of all benefit plans (as defined in Section 3(3)
of ERISA) and all pension, benefit, profit sharing, retirement, deferred
compensation, welfare, insurance, disability, bonus, vacation pay, severance pay
and other similar plans, programs and agreements, whether reduced to writing or
not, relating to any current or former employees of any of the Sellers (the
"Plans") and, except as set forth in Part 3.11 of the Disclosure Letter, none of
the Sellers has any obligations, contingent or otherwise, past or present, under
applicable law or the terms of any Plan. With respect to all Plans, each of the
Sellers is in compliance with all applicable Legal Requirements, including
ERISA. Each of the Sellers has performed all obligations required to be
performed by it under, and is not in violation of, and there has been no default
or violation by any other party with respect to, any of the Plans. There are no
pending or, to the Knowledge of the Sellers or the Stockholders, Threatened
Proceedings by employees or former employees of any Seller, or beneficiaries or
spouses of any of the above, involving any Plan. The Sellers have provided the
Buyer with copies of each Plan that is in writing and with a written summary of
each oral Plan. No Plan is an "employee pension benefit plan" as such term is
defined in Section 3(2) of ERISA. None of the Sellers nor any ERISA Affiliate
(as defined below) contributes to or has an obligation to contribute to or has
contributed to or had an obligation to contribute to within the past six years,
a "multi-employer" plan as defined in Section 4001(a)(3) of ERISA. None of the
Sellers nor any ERISA Affiliate has withdrawn from a multi-employer plan in a
complete or partial withdrawal that resulted in any unsatisfied employer
liability. None of the Sellers has contributed to an employee pension benefit
plan that is subject to Section 412 of the Code or Title IV of ERISA. "ERISA
Affiliate" means an entity which is a member of (i) a controlled group of
corporations (as defined in Section 414(b) of the Code), (ii) a group of trades
or businesses under common control (as defined in Section 414(c) of the Code),
or (iii) an affiliated service group (as defined in Section 414(m) of the Code
or the regulations under Section 414(o) of the Code), any of which includes any
of the Sellers.
3.12 Compliance with Legal Requirements;
(a) Except as set forth in Part 3.12 of the Disclosure
Letter: (i) to the Knowledge of the Sellers or the Stockholders, each of the
Sellers is, and at all times since January 1, 1991 has been, in compliance with
each Legal Requirement that is or was applicable to it or to the conduct or
operation of its business or the ownership or use of any of its assets; (ii) to
the Knowledge of the Sellers or the Stockholders, no event has occurred or
circumstance exists that (with or without notice or lapse of time) may
constitute or result in a violation by any Seller of, or a failure on the part
of any Seller to comply with, any Legal Requirement; (iii) none of the Sellers
has received, at any time since January 1, 1991, any notice or other
communication (whether oral or written) from any Governmental Body or any other
Person regarding any actual, alleged, possible, or potential violation of, or
failure to comply with, any Legal Requirement.
(b) To the Knowledge of the Sellers or the Stockholders,
each of the Sellers
18
has obtained all Governmental Authorizations necessary for the conduct
of its business as currently conducted. To the Knowledge of the Sellers or the
Stockholders, except as set forth in Part 3.12 of the Disclosure Letter: (i)
each of the Sellers is, and at all times since January 1, 1991 has been, in
compliance in all material respects with each such Governmental Authorization,
(ii) no event has occurred or circumstance exists that may (with or without
notice or lapse of time) constitute or result directly or indirectly in a
violation of or a failure to comply with any term or requirement of any such
Governmental Authorization; (iii) none of the Sellers has received, at any time
since January 1, 1991, any notice or other communication (whether oral or
written) from any Governmental Body or any other Person regarding (A) any
actual, alleged, possible, or potential violation of or failure to comply with
any term or requirement of any such Governmental Authorization, or (B) any
actual, proposed, possible, or potential revocation, withdrawal, suspension,
cancellation, termination of, or modification to any such Governmental
Authorization; (iv) the rights of each of the Sellers under all such
Governmental Authorizations shall not be affected by the consummation of the
Contemplated Transactions, and (v) all such Governmental Authorizations are
fully-assignable to the Buyer.
(c) For purposes of this Section 3.12(c), the "Products"
shall mean x-ray products and all other products sold by the Sellers. To the
Knowledge of the Sellers or the Stockholders, each of the Sellers, and each
Product in current commercial distribution, is currently duly registered (in the
case of each Seller) and listed (in the case of each Product) with the Federal
Food and Drug Administration ("FDA") under section 360 of the Federal Food,
Drug, and Cosmetic Act, 21 U.S.C. 301 et seq. (the "FDC Act"), and the
applicable rules and regulations thereunder. Each Product in current commercial
distribution is either a Class I or a Class II medical device as defined under
21 U.S.C. 360c (a) (1) (A), (B) and the applicable rules and regulations
thereunder and to the Knowledge of the Sellers or the Stockholders, was first
marketed under, and is covered by, a premarket notification submission to the
FDA in compliance with 21 U.S.C. 360 (k) and the applicable rules and
regulations thereunder. To the Knowledge of the Sellers or the Stockholders,
each of the Sellers is currently in compliance with, and each Product in current
commercial distribution is manufactured, prepared, assembled and processed in
compliance with Good Manufacturing Practice for Medical Devices set forth in 21
C.F.R. part 820. To the Knowledge of the Sellers or the Stockholders, each of
the Sellers is in full compliance with the written procedures, recordkeeping and
FDA reporting requirements for Medical Device Reporting set forth in 21 C.F.R.
part 803. The premises of each of the Sellers and their records relating to the
Products were most recently inspected by the FDA in April, 1993, with a follow-
up inspection on April 7, 1994, and a true and complete copy of the report of
such inspections has been furnished to the Buyer. The Sellers have corrected all
deficiencies noted therein and have implemented all recommendations made
therein. Since April, 1994, the FDA has not inspected such premises and records.
To the Knowledge of the Sellers or the Stockholders, none of the Sellers is
subject to any enforcement proceedings by the FDA and no proceedings have been
threatened. To the Knowledge of the Sellers or the Stockholders, none of the
Sellers has introduced in commercial distribution during the period of six
calendar years immediately preceding the date hereof any Products which were
upon their shipment by the Sellers adulterated or misbranded in violation of 21
U.S.C. 331.
3.13 Legal Proceedings; Orders.
19
(a) Except as set forth in Part 3.13 of the Disclosure
Letter, there is no pending Proceeding: (i) that has been commenced by or
against any Seller or that otherwise relates to or may affect, the business of,
or any of the assets owned or used by, any Seller, or (ii) that challenges, or
that may have the effect of preventing, delaying, making illegal, or otherwise
interfering with, any of the Contemplated Transactions. To the Knowledge of the
Sellers or the Stockholders, (A) no such Proceeding has been Threatened, and (B)
no event has occurred or circumstance exists that may give rise to or serve as a
basis for the commencement of any such Proceeding.
(b) Except as set forth in Part 3.13 of the Disclosure
Letter there is no Order to which any Seller, or any of the assets owned or used
by any Seller, is subject. Each of the Sellers is in full compliance with all of
the terms and requirements of each Order to which it, or any assets owned or
used by it, is subject.
3.14 Absence of Certain Changes and Events. Except as set forth in
Part 3.14 of the Disclosure Letter, since the Balance Sheet Date, each of the
Sellers has conducted its business only in the Ordinary Course of Business and
there has not been any:
(a) except in the Ordinary Course of Business, payment or
increase by any Seller of any bonuses, salaries, commissions or other
compensation to any stockholder, director, officer, or employee or entry into
any employment, severance, or similar Contract with any stockholder, director,
officer, or employee;
(b) adoption of, or increase in the payments to or benefits
under, any profit sharing, bonus, deferred compensation, savings, insurance,
pension, retirement, or other employee benefit plan for or with any employees of
any Seller;
(c) damage to or destruction or loss of any asset or
property of any Seller, whether or not covered by insurance, having a Material
Adverse Effect;
(d) except in the Ordinary Course of Business, sale (other
than sales of inventory in the Ordinary Course of Business), lease, or other
disposition of any asset or property of any Seller or mortgage, pledge, or
imposition of any Encumbrance on any asset or property of any Seller;
(e) cancellation or waiver of any claims or rights with a
value to any Seller in excess of $25,000;
(f) material change in the accounting methods used by any
Seller;
(g) material adverse change in the financial condition,
assets, liabilities, earnings, business or prospects of the Sellers, taken as a
whole;
(h) indebtedness or other liability or obligation (whether
absolute, accrued,
20
contingent or otherwise) incurred, or other transaction (except that reflected
in this Agreement) engaged in, by any Seller, except those in the Ordinary
Course of Business which are, individually and in the aggregate, less than
$25,000 in amount;
(i) acquisition of any assets other than in the Ordinary
Course of Business;
(j) material reduction in the rate of, or gross margins
associated with, bookings or orders for the products or services of any Seller;
or
(k) agreement, whether oral or written, by any Seller to do
any of the foregoing.
3.15 Contracts; No Defaults.
(a) The Sellers have delivered to the Buyer true and
complete copies of all of the Applicable Contracts. Part 3.15(a) of the
Disclosure Letter contains a complete and accurate list of each of the following
Applicable Contracts, whether oral or written, along with a description of all
oral Applicable Contracts: (i) each agreement that involves aggregate future
payments by any Seller of more than $25,000; (ii) each distributorship, sales
agency, franchise, joint venture or partnership agreement; (iii) each agreement
not made in the Ordinary Course of Business which is to be performed after the
Closing; (iv) each outstanding commitment to make a capital expenditure, capital
addition or capital improvement involving an amount in excess of $20,000; (v)
each real or personal property lease; (vi) each agreement relating to the loan
of money or availability of credit to or from any Seller; (vii) each agreement
limiting the freedom of any Seller to compete in any line of business or with
any Person; (viii) each agreement, contract, arrangement or understanding
between any Seller and any present or former employee, or other agreements
relating to the provision of services; (ix) each license agreement relating to
patents, trademarks, know-how or other intellectual property, whether as
licensee or licensor; (x) each collective bargaining agreement or other contract
or commitment to or with any labor union or other group of employees; (xi) each
mortgage, pledge, security, title retention, or similar agreement encumbering
any of the Assets; (xii) each agreement providing for payments to or by any
Person based on sales, purchases, revenues, profits or assets; (xiii) each
guaranty or similar undertaking with respect to the obligations of any other
Person; (xiv) each agreement relating to the acquisition or disposition of
significant assets, businesses or companies within the past five years; and (xv)
each other agreement which cannot be terminated by any Seller within one year
after the date hereof without penalty or under which the consequences of a
default or termination would have a Material Adverse Effect.
(b) Except as set forth in Part 3.15(b) of the Disclosure
Letter, each Contract identified or required to be identified in Part 3.15(a) of
the Disclosure Letter is in full force and effect and is valid and enforceable
in accordance with its terms. Except as set forth in Part 3.15(b) of the
Disclosure Letter: (i) each Seller is, and at all times since January 1, 1991
has requirements of each Applicable Contract to which it is a party; (ii) each
other Person that has any obligation or liability under any Applicable Contract
is, and at all times since January 1, 1991 has been, in compliance in
21
all material respects with all applicable terms and requirements of such
Applicable Contract; and (iii) none of the Sellers has given to or received from
any other Person, at any time since January 1, 1991, any notice or other
communication (whether oral or written) regarding any actual, alleged, possible,
or potential violation or breach of, or default under, any Applicable Contract.
(c) There are no renegotiations of, attempts to renegotiate,
or outstanding rights to renegotiate any material amounts paid or payable to any
Seller under any Applicable Contract with any Person having the contractual or
statutory right to demand or require such renegotiation and no such Person has
made written demand for such renegotiation.
3.16 Insurance. Part 3.16 of the Disclosure Letter sets forth a list
(including the name of the insurer, the name of the policyholder, the name of
each insured, the policy number and periods of coverage, and the scope of
coverage) of all policies of fire, theft, casualty, liability, burglary,
fidelity, workers compensation, business interruption, environmental, product
liability, automobile and other forms of insurance under which any Seller is
the beneficiary, including any self-insurance arrangement affecting any Seller.
No Seller has received any notice from any insurer under any such policy
disclaiming coverage or canceling or materially amending any such policy. Such
policies or extensions or renewals thereof in such amounts will be outstanding
and in full force and effect without interruption until the Closing Date. Each
of the Sellers has paid all premiums due, and has otherwise performed all of
its obligations under, each such policy. Each of the Sellers has given proper
and timely notice to the insurer of all claims that may be insured under such
policies. The Sellers have delivered true and complete copies of all such
insurance policies to the Buyer.
3.17 Environmental Matters. Except as set Disclosure Letter:
(a) Each of the Sellers is in full compliance with all
Environmental Laws. None of the Sellers or the Stockholders has any basis to
expect, nor has any Seller or any other Person for whose conduct any Seller is
or may be held to be responsible received, any actual or Threatened order,
notice, or other communication from (i) any Governmental Body or private citizen
acting in the public interest, (ii) the current or prior owner or operator of
any Facilities, or (iii) any other Person, of any actual or potential violation
or failure to comply with any Environmental Law, or of any actual or Threatened
obligation to undertake or bear the cost of any Environmental, Health and Safety
Liabilities with respect to any of the Facilities or any other properties or
assets (whether real, personal, or mixed) in which any Seller (or any
predecessor) has or had an interest, or with respect to any property or facility
at or to which Hazardous Materials were generated, manufactured, refined,
transferred, imported, used, transported or processed by any Seller (or any
predecessor), or any other Person for whose conduct any Seller is or may be held
responsible, or from which Hazardous Materials have been transported, treated,
stored, handled, transferred, disposed, recycled, or received.
(b) There are no pending or, to the Knowledge of the Sellers
or the Stockholders, Threatened claims, Encumbrances, or other restrictions of
any nature, resulting from any Environmental, Health and Safety Liabilities or
arising under or pursuant to any Environmental Law, with respect to or affecting
any of the Facilities or any other properties and
22
assets (whether real, personal, or mixed) in which any Seller (or any
predecessor) has or had an interest.
(c) None of the Sellers nor any other Person for whose
conduct any Seller is or may be held responsible, has any Environmental, Health
and Safety Liabilities with respect to the Facilities or any other properties
and assets (whether real, personal, or mixed) in which any Seller (or any
predecessor) has or had an interest, or at any property geologically or
hydrologically adjoining the Facilities or any other such property or assets.
(d) There has been no Release or, to the Knowledge of the
Sellers or the Stockholders, Threat of Release, of any Hazardous Materials at or
from the Facilities or at any other locations where any Hazardous Materials were
generated, manufactured, refined, transferred, transported, produced, imported,
used, or processed at, from or by the Facilities, or at, from or by any other
properties and assets (whether real, personal, or mixed) in which any Seller (or
any predecessor) has or had an interest, or to the Knowledge of the Sellers or
the Stockholders any geologically or hydrologically adjoining property, whether
by any Seller or any other Person.
(e) The Sellers have delivered to the Buyer true and
complete copies and results of any reports, studies, analyses, tests, or
monitoring possessed or initiated by any Seller pertaining to Hazardous
Materials or Hazardous Activities in, on, or under the Facilities, or concerning
compliance by any Seller, or any other Person for whose conduct any Seller is or
may be held responsible, with Environmental Laws or Occupational Safety and
Health Laws.
(f) Part 3.17 of the Disclosure Letter sets forth or
describes in reasonable detail: (i) all landfills, surface impoundments, pits,
underground injections xxxxx, waste piles, incinerators and any other units used
by any Seller (or any predecessor) for the handling, treatment, recycling,
storage or disposal of Hazardous Materials and (ii) all underground or above-
ground storage tanks at the Facilities or on any property owned or operated at
any time by any Seller (or any predecessor).
3.18 Labor Disputes; Compliance. Since January 1, 1991, none of the
Sellers have been a party to any collective bargaining or other labor Contract.
Since January 1, 1991, there has not been, there is not presently pending or
existing, and to the Knowledge of the Sellers or the Stockholders there is not
Threatened, any strike, slowdown, picketing, work stoppage, labor arbitration
or proceeding in respect of the grievance of any employee, application or
complaint filed by an employee or union with the National Labor Relations Board
or any comparable Governmental Body, organizational activity, or other labor
dispute against or affecting any Seller or any Sellers' premises, and no
application for certification of a collective bargaining agent is pending or to
the Knowledge of the Sellers or the Stockholders is Threatened. To the
Knowledge of the Sellers or the Stockholders, no event has occurred or
circumstance exists that could provide the basis for any work stoppage or other
labor dispute. There is no lockout of any employees by any Seller, and no such
action is contemplated by any Seller.
3.19 Intellectual Property. Except as may be limited by the last
four sentences of this
23
Section 3.19, the Sellers own or have adequate licenses to use, free and clear
of any Encumbrance or obligation of payment, all patents, trademarks, trade
names, service marks, branch names and copyrights, and applications therefor,
used in the conduct of the business or the use of which is necessary for the
conduct of the business of the Sellers as presently conducted (the
"Intangibles"). Set forth in Part 3.19 of the Disclosure Letter is a complete
list and summary description of all Intangibles and licenses or sublicenses
entered into or granted by or to the Sellers with respect thereto and the
countries of registration. The Sellers own or possess adequate rights to use,
free and clear of any Encumbrance or obligation of payment, all inventions,
technology, technical know-how, processes, designs, trade secrets, vendor and
customer lists and other confidential information required for or used in the
business of the Sellers as presently conducted ("Trade Secrets"). Except as
disclosed in Part 3.19 of the Disclosure Letter, no Person has made any claim or
demand upon any Seller pertaining to, and no Proceedings are pending, or to the
Knowledge of the Sellers or the Stockholders Threatened, which challenge the
rights of any Seller in respect of any Intangibles or Trade Secrets. No
Intangible owned or used by any Seller is subject to any Order. To the Sellers'
or the Stockholders' Knowledge, none of the Sellers has infringed or engaged in
the unauthorized use of, or violated any confidentiality agreement that pertains
to, any patent, trademark, trade name, service xxxx, brand name or copyright, or
any invention, technology, technical know-how, process, design, trade secret or
other intellectual property of another Person. To the Knowledge of the Sellers
or the Stockholders, there has been no infringement or unauthorized use of any
Intangible or Trade Secret by any other Person.
3.20 Disclosure. No representation or warranty of the Sellers or the
Stockholders in this Agreement and no statement in the Disclosure Letter omits
to state a material fact necessary to make the statements herein or therein, in
light of the circumstances in which they were made, not misleading.
3.21 Relationships with Related Persons. Except as set forth in Part
3.21 of the Disclosure Letter, no Related Person of any Seller has, or at any
time after January 1, 1994 has had, any interest in any property (whether real,
personal, or mixed and whether tangible or intangible) used in or pertaining to
the business of the Sellers. Except as set forth in Part 3.21 of the Disclosure
Letter, none of the Sellers nor any Related Person of any Seller owns, or has
owned, of record or as beneficial owner, an equity interest or any other
financial or profit interest in any Person that has (i) had business dealings or
a financial interest in any transaction with any Seller, or (ii) engaged in a
Competing Business except for ownership of less than one percent of the
outstanding capital stock of any Competing Business that is publicly traded on
any recognized exchange or in the over-the-counter market. Except as set forth
in Part 3.21 of the Disclosure Letter, no Related Person of any Seller is a
party to any Contract with, or has any claim or right against, any Seller.
3.22 Brokers or Finders. None of the Sellers nor any officers or
agents thereof have incurred any obligation or liability, contingent or
otherwise, for brokerage or finders' fees or agents' commissions or other
similar payment in connection with the Contemplated Transactions. The Sellers
and the Stockholders will indemnify and hold the Buyer harmless from any such
payments alleged to be due by or through any Seller as a result of the actions
of any Seller or its officers or agents.
24
3.23 No Termination of Relationship. Except as set forth in Part
3.23 of the Disclosure Letter, to the Knowledge of the Sellers or the
Stockholders no distributor, customer, supplier, lender, employee or other
person which has an existing relationship with the Seller intends not to
continue such relationship with the Buyer substantially on the same terms after
the Closing as a result of the execution of this Agreement or the performance of
the Contemplated Transactions.
3.24 Customers and Suppliers. No unfilled customer orders or
commitments obligating any Seller to process, manufacture or deliver products or
perform services, which orders or commitments are material, individually or in
the aggregate, to the Sellers will result in a material loss to the business of
the Sellers upon completion of performance. No purchase orders or commitments of
any Seller, which orders or commitments are material, individually or in the
aggregate, to any Seller, are materially in excess of normal requirements for
any such Seller, nor are prices provided therein materially in excess of current
market prices for the products or services to be provided thereunder. No
material supplier of any Seller has indicated within the past year that it will
stop, or materially decrease the rate of supplying materials, products, or
services to any Seller and no material customer of any Seller has indicated
within the past year that it will stop, or materially decrease the rate of,
buying materials, products or services from any Seller. Part 3.24 of the
Disclosure Letter sets forth a list of (a) each customer that accounted for more
than 5% of the combined revenues of the Sellers during the last fiscal year and
(b) each supplier that is the sole supplier of any significant product or
component to any Seller.
3.25 Recalls. No products of any Seller have been recalled since
January 1, 1991 and, to the Knowledge of the Sellers or the Stockholders, there
is no basis for any such recall.
3.26 Backlog. The backlog of the Sellers as of the Closing Date is
greater than or equal to $2,500,000. For purposes of this Section 3.26,
"backlog" means all firm orders and commitments for the Sellers' products and
services which orders and commitments contain terms and conditions that are
consistent with the Sellers' practices over the past year.
3.27 Inventories. As of the Closing Date, the book value of
Inventory (as defined below) that is of a quality and quantity usable and
salable in the Ordinary Course of Business of the Sellers is at least
$4,500,000. Items included in such Inventories are carried on the books of the
Sellers at the lower of cost or market and with respect to Inventories existing
as of the Balance Sheet Date, are reflected on the 1995 Balance Sheet net of
adjustments for excess and obsolete items. The term "Inventories" includes all
stock of raw materials, work-in-process and finished goods held by the Sellers,
for manufacturing, assembly, processing, finishing, and sale or resale to
others.
3.28 Product and Service Warranties. The Sellers have provided the
Buyer with copies of the current standard warranty used for each of the products
and services of the Sellers. Part 3.28 of the Disclosure Letter describes any
and all other product or service warranties made by or on behalf of the Sellers
that deviate materially from the current standard warranties and which remain in
effect on the date hereof, or pursuant to which any Seller has any remaining
obligations. Part 3.28 of the Disclosure Letter sets forth the aggregate
warranty costs of the Sellers in each of
25
the last three full fiscal years.
3.29 Property, Plant and Equipment.
(a) Part 3.29(a) of the Disclosure Letter lists the common
street address for and legally describes all real property that any of the
Sellers and their Subsidiaries owns (together with all buildings, improvements,
fixtures and appurtenances located thereon and all rights and privileges which
are appurtenant thereto, the "Real Property"). Except as set forth in Part 3.29
of the Disclosure Letter, with respect to each such parcel of the Real Property:
(i) Boulevard Bank National Association, a national
banking association, as trustee (the "Trustee") under trust agreement dated
December 21, 1993 and known as trust number 9757 (the "Trust"), is the sole
holder of record fee simple title to the Real Property and Haymarket is the
owner of 100% of the beneficial interest in the Trust. The Trust has good and
marketable title to the Real Property, free and clear of any Encumbrance,
easement, covenant, or other restriction, except for installments of general
taxes and special assessments not yet delinquent and recorded easements,
covenants, and other restrictions which do not impair the current use,
occupancy, or value, or the marketability of title, of the property subject
thereto;
(ii) there are no pending or threatened condemnation
proceedings, lawsuits, or administrative actions relating to the Real Property
or other matters adversely affecting, or which would adversely affect the
current use, occupancy, or value thereof;
(iii) the legal description for the land comprising a
part of the Real Property (the "Land") contained in Part 3.29 of the Disclosure
Letter and in the deed to be delivered pursuant to this Agreement describes the
Land fully and accurately. The survey attached hereto as Exhibit H, which
geographically depicts the Land, is accurate. The buildings and improvements
comprising a part of the Real Property are located within the boundary lines of
the Land, are not in violation of applicable setback requirements, zoning laws,
and ordinances (and none of the properties or buildings or improvements thereon
are subject to "permitted non-conforming use," "permitted non-conforming
structure" or other similar classifications), and do not encroach on any
easement which may burden the Land, and the Land does not serve any adjoining
property for any purpose inconsistent with the current use of the Land, and the
Real Property is not located within any flood plain or subject to any similar
type restriction for which any Governmental Authorization necessary to the use
thereof has not been obtained;
(iv) all facilities comprising a part of the Real
Property have received all final, non-appealable and unconditional approvals of
Governmental Bodies (including Governmental Authorizations) required in
connection with the ownership, occupancy or operation thereof and have been
operated and maintained in material accordance with applicable Legal
Requirements;
(v) other than leases with one or more of the
Sellers, which leases shall be canceled by Sellers and all other parties thereto
effective no later than Closing, there are no leases, subleases, licenses,
concessions, or other agreements, written or oral, granting to any party
26
or parties the right of use or occupancy of any portion of the Real Property;
(vi) there are no outstanding options or rights of
first refusal or offer to purchase the Real Property, or any portion thereof or
interest therein;
(vii) there are no parties (other than the Sellers and
their Subsidiaries) in possession of the Real Property;
(viii) all facilities located on the Real Property are
supplied with utilities and other services necessary for the operation of such
facilities, including gas, electricity, water, telephone, sanitary sewer, and
storm sewer, all of which services are adequate to operate the Real Property at
its current rate of production, in accordance with all applicable Legal
Requirements and are provided via public roads or via permanent, irrevocable,
appurtenant easements benefiting the Real Property; and
(ix) the eastern boundary line of the Real Property
is contiguous to, and the Real Property has direct vehicular access to, a public
road, or has access to a public road, and access to the Real Property is
provided by paved public right-of-way with adequate curb cuts available.
(x) neither the Sellers nor any of their
Subsidiaries have received any notice that the real estate tax assessment of the
Real Property made by the County Assessor has been, or is proposed to be,
increased above the assessment applicable to the 1995 general real estate taxes;
(xi) no permanent real estate index number assigned
to the Real Property for real estate tax purposes by the County Assessor or
County Collector is applicable to any property other than the Real Property and
the only permanent real estate index numbers applicable to the Real Property are
15-16-000-000-0000 and 15-16-412-037-0000;
(xii) no part of the Real Property is part of any
area, lot, "zoning lot" or "lot of record" pursuant to any ordinances of the
municipality in which the Real Property is located concerning zoning, planning,
subdivision or development, any part of which area, lot, zoning lot or lot of
record is not part of the Real Property;
(xiii) no special taxes or assessments have been
levied, assessed or imposed against any part of the Real Property and Sellers
have no Knowledge of any pending or contemplated special taxes or assessments
with respect to any part of the Real Property;
(xiv) other than with respect to utility lines which
enter the Real Property directly from a public right-of-way or through perpetual
and irrevocable easements of record which are appurtenant to the Real Property,
no part of the Real Property is dependent upon any other real property or any
facilities located on other real property (a) for the continued use, occupancy
and enjoyment of the Real Property consistent with its current use, occupancy
and enjoyment, or (b) to satisfy any applicable zoning or other Legal
Requirements;
27
(xv) no buildings, structures or other improvements
situated on other real property encroach on the Real Property; and
(xvi) there is no fact or circumstance concerning any
portion of the Real Property that (a) would be disclosed by an accurate survey
of the Real Property complying with the requirements of the Survey, as set forth
in Section 2.10 above, (b) is not disclosed by that certain survey of a portion
of the Real Property and certain other adjacent property prepared by Gremley &
Xxxxxxxxx, Inc., dated November 21, 1986, having a last revision date of
December 12, 1986, and bearing order no. 863455, and (c) either (1) materially
and adversely affects either the value of, or marketability of title to, the
Real Property, or the Buyer's or its successors' or assigns' ability or right to
occupy, use and enjoy the Real Property as it currently is being used, or (2)
causes the Title Company to refuse, upon delivery to it of the Survey, to
provide to Buyer or Buyer's designee, as part of the Title Policy, extended
coverage over matters of survey, or the endorsements described in Section 5.1(k)
below.
(b) Part 3.29(b) of the Disclosure Letter lists and briefly
describes all real property leased or subleased to any of the Sellers and their
Subsidiaries. The Sellers have delivered to the Buyer correct and complete
copies of the leases and subleases listed in Section 3.29(b), which have not
been amended or modified since the date thereof, of the Disclosure Letter. With
respect to each lease and sublease listed in Section 3.29(b) of the Disclosure
Letter:
(i) the lease or sublease is legal, valid, binding,
enforceable, and in full force and effect;
(ii) the lease or sublease will continue to be legal,
valid, binding, enforceable, and in full force and effect on identical terms
following the consummation of the transactions contemplated hereby (including
the assignments and assumptions referred to in Section 2 above);
(iii) no party to the lease or sublease is in breach
or default, and no event has occurred which, with notice or lapse of time, could
constitute a breach or default or permit termination, modification, or
acceleration thereunder;
(iv) no party to the lease or sublease has repudiated
any provision thereof;
(v) there are no disputes, oral agreements, or
forbearance programs in effect as to the lease or sublease;
(vi) with respect to each sublease, the
representations and warranties set forth in subsections (i) through (v) above
are true and correct with respect to the underlying lease;
(vii) none of the Sellers of their Subsidiaries has
assigned, transferred, conveyed, mortgaged, deeded in trust, or encumbered any
interest in the leasehold or
28
subleasehold;
(viii) all facilities leased or subleased thereunder
have received all approvals of Governmental Bodies (including Governmental
Authorizations) required in connection with the operation thereof and have been
operated and maintained in accordance with applicable Legal Requirements; and
(ix) all facilities leased or subleased thereunder
are supplied with utilities and other services necessary for the operation of
said facilities.
3.30 Illinois Responsible Property Transfer Act. The provisions of
the Illinois Responsible Property Transfer Act of 1988, as amended are not
applicable to the transfer of Real Property as contemplated by this Agreement.
3.31 Post-August 31 Activities. Since August 31, 1996, none of the
Sellers has billed any customers or booked any accounts receivable.
4. REPRESENTATIONS AND WARRANTIES OF THE BUYER
The Buyer represents and warrants to the Sellers as follows:
4.1 Organization and Good Standing. The Buyer is a corporation duly
organized, validly existing, and in good standing under the laws of the State
of Delaware.
4.2 Authority; No Conflict.
(a) The Buyer has the absolute and unrestricted right,
power, and authority to execute and deliver this Agreement and to perform its
obligations under this Agreement. All corporate and other actions and
proceedings to be taken by or on the part of the Buyer to authorize and permit
the execution and delivery by the Buyer of this Agreement and the instruments
required to be executed and delivered by the Buyer pursuant hereto, the
performance by the Buyer of its obligations hereunder and the consummation by
the Buyer of the transactions contemplated herein, have been duly and properly
taken. This Agreement has been duly executed and delivered by the Buyer and
constitutes the legal, valid, and binding obligation of the Buyer, enforceable
against the Buyer in accordance with its terms.
(b) Except as set forth in Exhibit G, neither the execution
and delivery of this Agreement by the Buyer nor the consummation or performance
of any of the Contemplated Transactions by the Buyer will give any Person the
right to prevent, delay, or otherwise interfere with any of the Contemplated
Transactions pursuant to: (i) any provision of the Buyer's Organizational
Documents; (ii) any resolution adopted by the board of directors or the
stockholders of the Buyer; (iii) any Legal Requirement or Order to which the
Buyer may be subject; or (iv) any Contract to which the Buyer is a party or by
which the Buyer may be bound.
Except as set forth in Exhibit G, the Buyer is not and will not be required
to obtain any Consent
29
from any Person in connection with the execution and delivery of this Agreement
by the Buyer or the consummation or performance of any of the Contemplated
Transactions by the Buyer.
4.3 Certain Proceedings. There is no pending Proceeding that has
been commenced against the Buyer that challenges, or may have the effect of
preventing, delaying, making illegal, or otherwise interfering with, any of the
Contemplated Transactions. To the Buyer's Knowledge, no such Proceeding has been
Threatened.
4.4 Brokers and Finders. The Buyer and its officers and agents have
incurred no obligation or liability, contingent or otherwise, for brokerage or
finders' fees or agents' commissions or other similar payment in connection
with this Agreement and the Buyer will indemnify and hold the Sellers harmless
from any such payment alleged to be due by or through the Buyer as a result of
the action of the Buyer or its officers or agents.
5. CONDITIONS TO OBLIGATIONS
5.1. Conditions to Obligations of the Buyer. The obligations of the
Buyer to consummate the transactions contemplated hereby are subject to the
satisfaction, on or before the Closing, of the following conditions (unless
waived in writing by the Buyer in the manner provided in Section 7.6 hereof):
(a) Representations, Warranties and Performance of the
Sellers. The representations and warranties set forth in Section 3 hereof shall
be accurate on and as of the date hereof, and on and as of the Closing Date as
though made on and as of the Closing Date, and the Sellers shall have performed
all obligations and complied with all covenants required to be performed or to
be complied with by them under this Agreement prior to the Closing.
(b) No Material Adverse Changes. There shall have been no
material adverse change in the financial condition, properties, assets,
liabilities, earnings, business, operations or prospects of any of the Sellers
since December 31, 1995, whether or not in the Ordinary Course of Business.
(c) Authorization. The Sellers shall have furnished the
Buyer with a copy of all resolutions adopted by their Board of Directors and
shareholders in connection with such actions, certified by the Secretary or an
Assistant Secretary of the relevant Seller, together with copies of such other
instruments and documents as the Buyer shall have reasonably requested.
(d) Consents. Any Governmental Body having jurisdiction
over any Seller or over the Buyer, to the extent that its consent or approval is
required by applicable Legal Requirements for the performance of this Agreement
or the consummation of the transactions contemplated hereby shall have granted
any necessary consent or approval.
(e) Permits and Approvals. Any and all consents, permits,
approvals or other actions of any person, jurisdiction or authority required in
the reasonable opinion of the Buyer for lawful consummation of the transactions
contemplated hereby shall have been obtained, and shall
30
be in full force and effect, and no such consent, permit, approval or other
action shall contain any provision that in the reasonable judgment of the Buyer
is unduly burdensome.
(f) Good Standing Certificates. Each Seller shall have
delivered to the Buyer a corporate good standing certificate from its
jurisdiction of incorporation (or equivalent evidence of each such entity's
status in the case of certain foreign jurisdictions).
(g) Officer's Certificate. Each Seller shall have delivered
to the Buyer a certificate executed by an officer of such Seller, dated the
Closing Date, certifying to the fulfillment of the conditions specified in
Sections 5.1(a) and 5.1(b).
(h) Legal Opinion. The Buyer shall have received from
Hedberg, Tobin, Xxxxxxxx & Xxxxxx, counsel to the Sellers, an opinion
substantially in the form of Exhibit D attached hereto.
(i) Approvals. The Buyer shall have obtained all necessary
approvals from its Board of Directors to enter into this Agreement and to
consummate the transactions contemplated hereby;
(j) Deed. Sellers shall have delivered to Buyer a trustee's
deed executed by the Trustee and conveying marketable fee simple title to the
Real Property to Buyer or Buyer's designee subject only to the Permitted
Exceptions. In addition, Haymarket shall have executed and delivered to Buyer or
Buyer's designee a certificate of warranties containing those warranties that
are contained in an Illinois statutory form of general warranty deed.
(k) Title Insurance. Sellers, at their sole cost and
expense, shall have delivered or shall have caused to be delivered to Buyer an
American Land Title Association owner's policy of title insurance (the "Title
Policy"), standard form B (1992), covering the Real Property and issued to Buyer
or Buyer's designee by Chicago Title Insurance Company (the "Title Company").
The Title Policy shall be in an amount of not less than $2,800,000, and shall
cover the Closing Date, provide extended coverage over the general exceptions
commonly appearing in said standard form, and contain access, contiguity,
location, survey, zoning 3.1 (including parking) endorsements and such other
endorsements as may be reasonably requested by Buyer. The Title Policy shall
show good marketable fee simple title to the Real Property in Buyer or Buyer's
designee subject only to the following title exceptions (collectively, the
"Permitted Exceptions"): (i) general real estate taxes for the Real Property for
calendar year 1996 and subsequent years; (ii) the rights of persons unrelated to
Sellers arising by, through or under Buyer; and (iii) such additional exceptions
to title as Buyer may have specifically agreed in writing to accept. The Title
Policy shall state the tax parcel number(s) relating to the real property as
then shown on the County Assessor's records and whether or not other Real
Property is included within such number(s). Sellers acknowledge that, on August
20, 1996, Buyer ordered from Gremley & Xxxxxxxxx, Inc., preparation of the
Survey and further acknowledge that the Survey may not be completed by the
surveyor and available to the Buyer prior to the Closing. Accordingly, if Buyer
elects to proceed with the Closing without having first received the Survey,
then Sellers shall not be obligated to cause the Title Company to provide to
Buyer at Closing
31
extended coverage over matters of survey or any other endorsement or affirmative
insurance for which the Title Company requires a current ALTA/ACMS Land Title
Survey of the Real Property. The provisions of the preceding sentence shall not,
however, be deemed to constitute a waiver by Buyer of, or otherwise diminish,
Sellers' obligations to cause the Title Company to provide to Buyer title
insurance satisfying the requirements of this subparagraph promptly following
the Buyer's and the Title Company's receipt of the Survey.
(l) Documents Satisfactory. The form and substance of all
legal matters contemplated herein and of all papers used or delivered hereunder
shall be reasonably acceptable to the Buyer, and the Buyer or its designee shall
have received all documents that it may have reasonably requested in connection
with the transactions contemplated hereby, in form and substance reasonably
satisfactory to it.
Section 5.2. Conditions to Obligations of the Sellers. The obligations
of the Sellers to consummate the transactions contemplated hereby are subject to
the satisfaction, on or before the Closing, of the following conditions (unless
waived by the Seller Representative in writing in the manner provided in Section
7.6 hereof):
(a) Representations, Warranties and Performance of the
Buyer. The representations and warranties set forth in Section 4 hereof shall be
accurate on and as of the date hereof, and on and as of the Closing Date as
though made on and as of the Closing Date, and the Buyer shall have performed
all obligations and complied with all covenants required to be performed or to
be complied with by it under this Agreement prior to the Closing.
(b) Authorization. The Buyer shall have furnished the
Sellers with a copy of all resolutions adopted by its Board of Directors in
connection with such actions, certified by the Secretary or an Assistant
Secretary of the Buyer, together with copies of such other instruments and
documents as the Seller shall have reasonably requested.
(c) Consents. Any Governmental Body having jurisdiction
over any Seller, to the extent that its consent or approval is required by
applicable Legal Requirements for the performance of this Agreement or the
consummation of the transactions contemplated hereby shall have granted any
necessary consent or approval.
(d) Permits and Approvals. Any and all consents, permits,
approvals or other actions of any person, jurisdiction or authority required in
the reasonable opinion of the Sellers for lawful consummation of the
transactions contemplated hereby shall have been obtained.
(e) Good Standing Certificates. The Buyer shall have
delivered to the Sellers a corporate good standing certificate from its
jurisdiction of incorporation.
(f) Officer's Certificate. The Buyer shall have delivered to
the Sellers a certificate executed by an officer of the Buyer, dated the Closing
Date, certifying to the fulfillment of the conditions specified in Section
5.2(a).
32
(g) Documents Satisfactory. The form and substance of all
legal matters contemplated herein and of all papers used or delivered hereunder
shall be reasonably acceptable to the Sellers, and the Sellers shall have
received all documents that they may have reasonably requested in connection
with the transactions contemplated hereby, in form and substance reasonably
satisfactory to them.
(h) Severance Agreements. Each of Xxxxxx Xxxxxx, Xxxxx
Xxxxxxxxxxxx and Xxxx Xxxxxx shall have executed and delivered to the Buyer
severance agreements in form and substance satisfactory to the Buyer which
provide for the payment of one year's base salary and fringe benefits in the
event such person's employment with the Buyer is terminated without cause prior
to the third anniversary of the Closing Date, and upon such other terms mutually
agreeable to the Buyer and each of Messrs. Xxxxxx, Xxxxxxxxxxxx and Xxxxxx. Each
of Xx. Xxxxxxx X. Xxxxxxxxxx and Xx. Xxxxx Xxxxxx, collectively, shall have
agreed to indemnify and reimburse the Buyer for fifty percent (50%) of all
payments made by the Buyer under these severance agreements.
6. INDEMNIFICATION; REMEDIES
6.1 Survival. All representations, warranties, covenants, and
obligations in this Agreement, the Disclosure Letter and any other certificate
or document delivered pursuant to this Agreement will survive the Closing; the
right to indemnification, reimbursement, or other remedy based on such
representations, warranties, covenants, and obligations will not be affected by
any investigation conducted with respect to, or any Knowledge acquired (or
capable of being acquired) about the accuracy or inaccuracy of or compliance
with, any such representation, warranty, covenant, or obligation.
6.2 Indemnification and Reimbursement by the Sellers and the
Stockholders. The Sellers and the Stockholders will, jointly and severally,
indemnify and hold harmless the Buyer, its representatives, stockholders,
controlling persons, and affiliates (collectively, the "Indemnified Persons"),
and will reimburse the Indemnified Persons, for any loss, liability, claim,
damage, expense (including costs of investigation and defense and reasonable
attorneys' fees) or diminution of value, whether or not involving a third-party
claim (collectively, "Damages"), arising from or in connection with:
(a) any Breach of any representation or warranty made by any
Seller or Stockholder in this Agreement, the Disclosure Letter, or any other
certificate or document delivered by any Seller pursuant to this Agreement;
(b) any Breach by any Seller or Stockholder of any covenant
or obligation of any Seller or Stockholder in this Agreement;
(c) any Excluded Liability;
(d) any claim by any Person for brokerage or finder's fees
or commissions or similar payments based upon any agreement or understanding
alleged to have been made by any
33
such Person with any Seller or Stockholder; or
(e) any non-compliance by the Sellers of any applicable
Illinois Bulk Sales Law.
6.3 Indemnification and Reimbursement by the Buyer. The Buyer will
indemnify and hold harmless each of the Sellers and the Stockholders, and each
of their respective representatives, stockholders, controlling persons and
affiliates, and will reimburse each of the Sellers and the Stockholders, and
each of their respective representatives, stockholders, controlling persons and
affiliates for any Damages arising from or in connection with (a) any Breach of
any representation or warranty made by the Buyer in this Agreement or in any
certificate delivered by the Buyer pursuant to this Agreement, (b) any Breach
by the Buyer of any covenant or obligation of the Buyer in this Agreement, (c)
any claim by any Person for brokerage or finder's fees or commissions or
similar payments based upon any agreement or understanding alleged to have been
made by such Person with the Buyer (or any Person acting on its behalf) in
connection with any of the Contemplated Transactions or (d) any Assumed
Liabilities.
6.4 Limitations on Indemnification. None of the Sellers or the
Stockholders will have any liability for indemnification under Section 6.2(a)
with respect to any representation or warranty in Section 3, other than those
in Sections 3.1, 3.2, 3.3, 3.6, 3.10, 3.12, 3.17, 3.29(a)(i) or 3.30 unless on
or before the second anniversary of the Closing Date the Seller Representative
is given notice of a claim specifying the factual basis of that claim in
reasonable detail to the extent then known by the Buyer. None of the Sellers
or the Stockholders will have any liability for indemnification under Section
6.2(a) with respect to Section 3.1, 3.2, 3.3, 3.6, 3.10, 3.12, 3.17,
3.29(a)(i) or 3.30, or under Sections 6.2(b), 6.2(d) or 6.2(e), unless on or
before thirty (30) days after the expiration of the statute of limitations
applicable to the underlying claim giving rise to indemnification the Seller
Representative is given notice of a claim specifying the factual basis of that
claim in reasonable detail to the extent then known by the Buyer. The Buyer
will have no liability for indemnification under Section 6.3(a) with respect to
any representation or warranty in Section 4 unless on or before the second
anniversary of the Closing Date the Buyer is given notice of a claim specifying
the factual basis of that claim in reasonable detail to the extent then known
by the Seller Representative. The Buyer will have no liability for
indemnification under Sections 6.3(b) or 6.3(c) unless on or before thirty (30)
days after the expiration of the statute of limitations applicable to the
underlying claim giving rise to indemnification the Buyer is given notice of a
claim specifying the factual basis of that claim in reasonable detail to the
extent then known by the Seller Representative. Notwithstanding the foregoing,
a claim for indemnification or reimbursement under Section 6.2(c) or Section
6.3(d) may be made at any time. None of the Sellers or the Stockholders shall
have any indemnity obligations to the Buyer under Section 6.2(a) until the
aggregate cumulative amount of the Buyer's indemnity claims against the Sellers
and the Stockholders exceeds $50,000, and then only for such aggregate
indemnity claims in excess of $50,000.
6.5 Procedures for Indemnification -- Third Party Claims.
(a) Subject to any limitations provided in Section 6.4,
promptly after receipt by
34
an indemnified party under Section 6.2 or Section 6.3 of notice of the
commencement of any Proceeding against it, such indemnified party will, if a
claim is to be notice to the indemnifying party of the commencement of such
claim, but the failure to notify the indemnifying party will not relieve the
indemnifying party of any liability that it may have to any indemnified party,
except to the extent that the indemnifying party demonstrates that the defense
of such action is prejudiced by the indemnified party's failure to give such
notice.
(b) If any Proceeding referred to in Section 6.5(a) is
brought against an indemnified party and it gives notice to the indemnifying
party of the commencement of such Proceeding, the indemnifying party will,
unless the claim involves Taxes, be entitled to participate in such Proceeding
and, to the extent that it wishes (unless (i) the indemnifying party is also a
party to such Proceeding and the indemnified party determines in good faith that
joint representation would be inappropriate, or (ii) the indemnifying party
fails to provide reasonable assurance to the indemnified party of its financial
capacity to defend such Proceeding and provide indemnification with respect to
such Proceeding), to assume the defense of such Proceeding with counsel
satisfactory to the indemnified party and, after notice from the indemnifying
party to the indemnified party of its election to assume the defense of such
Proceeding, the indemnifying party will not, as long as it diligently conducts
such defense, be liable to the indemnified party under this Section 6 for any
fees of other counsel or any other expenses with respect to the defense of such
Proceeding, in each case subsequently incurred by the indemnified party in
connection with the defense of such Proceeding, other than reasonable costs of
investigation. If the indemnifying party assumes the defense of a Proceeding,
(i) it will be conclusively established for purposes of this Agreement that the
claims made in that Proceeding are within the scope of and subject to
indemnification; (ii) no compromise or settlement of such claims may be effected
by the indemnifying party without the indemnified party's consent unless (A)
there is no finding or admission of any violation of Legal Requirements or any
violation of the rights of any Person and no effect on any other claims that may
be made against the indemnified party, and (B) the sole relief provided is
monetary damages that are paid in full by the indemnifying party; and (iii) the
indemnified party will have no liability with respect to any compromise or
settlement of such claims effected without its consent. If notice is given to an
indemnifying party of the commencement of any Proceeding and the indemnifying
party does not, within ten days after the indemnified party's notice is given,
give notice to the indemnified party of its election to assume the defense of
such Proceeding, the indemnifying party will be bound by any determination made
in such Proceeding or any compromise or settlement effected by the indemnified
party. Notwithstanding the foregoing, if a customer or a supplier of any Seller
asserts that the Buyer is liable to such customer or supplier for a monetary
obligation which may constitute or result in Damages for which the Buyer may be
entitled to indemnification pursuant to this Section 6 and the Buyer reasonably
determines that it has a valid business reason to fulfill such obligations, then
(i) the Buyer shall be entitled to satisfy such obligation without prior notice
to or consent from the Sellers or the Seller Representative, (ii) the Buyer may
make a claim for indemnification pursuant to this Section 6 and (iii) the Buyer
shall be reimbursed, in accordance with the provisions of this Section 6, for
any such Damages for which it is entitled to indemnification pursuant to the
provisions of this Section 6; provided, however, that if the Buyer makes a claim
for indemnification in accordance with this sentence the Sellers and the
Stockholders shall not be
35
deemed to have waived any defense to such claim by the Buyer, notwithstanding
the Buyer's prior satisfaction of the obligation for which indemnification is
sought, and it shall not be a defense to the Buyer's claim for indemnification
that the Buyer has satisfied the obligation for which indemnification is sought.
(c) Notwithstanding the foregoing, if an indemnified party
determines in good faith that there is a reasonable probability that a
Proceeding for which it would be entitled to affect it or its affiliates other
than solely as a result of monetary damages the indemnified party may, by notice
to the indemnifying party, assume the exclusive right to defend, compromise, or
settle such Proceeding, and the indemnifying party shall be liable to the
indemnified party under this Section 6 for any reasonable fees of counsel and
any other costs or expenses incurred by the indemnified party as a result of its
assumptions of the defense of such proceeding, but the indemnifying party will
not be bound by any determination of a Proceeding so defended or any compromise
or settlement effected without its consent (which may not be unreasonably
withheld).
(d) Each of the Sellers and the Stockholders hereby consents
to the non-exclusive jurisdiction of any court in which a Proceeding is brought
against any Indemnified Person for purposes of any claim that an Indemnified
Person may have under this Agreement with respect to such Proceeding or the
matters alleged therein, and agrees that process may be served on the Sellers
and the Stockholders with respect to such a claim anywhere in the world.
(e) For purposes of providing any notice required under this
Section 6, the Buyer may treat the Seller Representative as the authorized
representative of all of the Sellers and the Stockholders and any notice given
to the Seller Representative shall be deemed given to each Seller and
Stockholder.
6.6 Procedure for Indemnification -- Other Claims. A claim for
indemnification for any matter not involving a third-party claim may be
asserted by notice to the party from whom indemnification is sought.
7. GENERAL PROVISIONS
7.1 Expenses. Except as otherwise expressly provided in this
Agreement, each of the Buyer and the Sellers will bear its respective expenses
incurred in connection with the preparation, execution, and performance of this
Agreement and the Contemplated Transactions, including all fees and expenses of
agents, representatives, counsel, and accountants. In the event of termination
of this Agreement, the obligation of each party to pay its own expenses will be
subject to any rights of such party arising from a breach of this Agreement by
another party.
7.2 Public Announcements. Any public announcement or similar
publicity with respect to this Agreement or the Contemplated Transactions will
be issued, if at all, by the Buyer only with the consent of the Seller
Representative, and by any of the Sellers or the Stockholders, only with the
consent of the Buyer, none of which consents will unreasonably be withheld. The
content of any public announcement by the Buyer will be subject to review and
approval by the
36
Seller Representative, and the content of any public announcement by any of the
Sellers or the Stockholders will be subject to review and approval by the Buyer,
none of which approvals will unreasonably be withheld. The Seller Representative
and the Buyer will consult with each other concerning the means by which the
Sellers' employees, customers, and suppliers and others having dealings with the
Sellers will be informed of the Contemplated Transactions, and the Buyer will
have the right to be present for any such communication.
7.3 Notices. All notices, consents, waivers, and other
communications under this Agreement must be in writing and will be deemed to
have been duly given when actually received or if earlier, one day after deposit
with a nationally recognized overnight delivery service, charges prepaid, or
three days after deposit in the U.S. mail by certified mail, return receipt
requested, postage prepaid, in each case to the appropriate addresses and
telecopier numbers set forth below (or to such other addresses and telecopier
numbers a party may designate by notice to the other party): Seller
Representative:
Xxxxxxx X. Xxxxxxxxxx
c/o Continental X-Ray Corporation
0000 Xxxxx 00xx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Telecopy No.: (000)000-0000
with a copy to:
Xxxx X. Xxxxxxxx, Esq.
Hedberg, Tobin, Xxxxxxxx & Xxxxxx
Suite 0000
Xxxxx Xxxxx Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Telecopy No.: (000) 000-0000
Buyer:
CXR Acquisition Corp.
c/o Trex Medical Corporation
00 Xxxxx Xxxxx Xxxx
Xxxxxxx, Xxxxxxxxxxx 00000
Attention: President
Telecopy No.: 203-790-1188
with a copy to:
Thermo Electron Corporation
00 Xxxxx Xxxxxx
Xxxxxxx, XX 00000-0000
Attention: General Counsel
37
Telecopy No.: (000) 000-0000
7.4 Jurisdiction; Service of Process. Any action or proceeding
seeking to enforce any provision of, or based on any right arising out of, this
Agreement may be brought against any of the parties in the courts of the
Commonwealth of Massachusetts, County of Middlesex, or, if it has or can acquire
jurisdiction, in the United States District Court for the District of
Massachusetts and each of the parties consents to the jurisdiction of such
courts (and of the appropriate appellate courts) in any such action or
proceeding and waives any objection to venue laid therein. Process in any action
or proceeding referred to in the preceding sentence may be served on any party
anywhere in the world.
7.5 Further Assurances. The parties agree (a) to furnish upon
request to each other such further information, (b) to execute and deliver to
each other such other documents, and (c) to do such other acts and things, all
as the other party may reasonably request for the purpose of carrying out the
intent of this Agreement and the documents referred to in this Agreement.
7.6 Waiver. The rights and remedies of the parties to this
Agreement are cumulative and not alternative. Neither the failure nor any delay
by any party in exercising any right, power, or privilege under this Agreement
or the documents referred to in this Agreement will operate as a waiver of such
right, power, or privilege, and no single or partial exercise of any such right,
power, or privilege will preclude any other or further exercise of such right,
power, or privilege or the exercise of any other right, power, or privilege. To
the maximum extent permitted by applicable law, (a) no claim or right arising
out of this Agreement or the documents referred to in this Agreement can be
discharged by one party, in whole or in part, by a waiver or renunciation of the
claim or right unless in writing signed by the other party; (b) no waiver that
may be given by a party will be applicable except in the specific instance for
which it is given; and (c) no notice to or demand on one party will be deemed to
be a waiver of any obligation of such party or of the right of the party giving
such notice or demand to take further action without notice or demand as
provided in this Agreement or the documents referred to in this Agreement.
7.7 Entire Agreement and Modification. This Agreement supersedes
all prior agreements between the parties with respect to its subject matter and
constitutes (along with the documents referred to in this Agreement) a complete
and exclusive statement of the terms of the agreement between the parties with
respect to its subject matter. This Agreement may not be amended except by a
written agreement executed by the party to be charged with the amendment.
7.8 Disclosure Letter. In the event of any inconsistency between
the statements in the body of this Agreement and those in the Disclosure Letter
(other than an exception expressly set forth as such in the Disclosure Letter
with respect to a specifically identified representation or warranty), the
statements in the body of this Agreement will control.
7.9 Assignments, Successors, and Third-Party Rights. No party
hereto may assign any of its rights under this Agreement without the prior
written consent of the other party except that the Buyer may assign any of its
rights under this Agreement to any Subsidiary of the Buyer. Subject to the
preceding sentence, this Agreement will apply to, be binding in all respects
upon,
38
and inure to the benefit of the successors and permitted assigns of the parties.
Nothing expressed or referred to in this Agreement will be construed to give any
Person other than the parties to this Agreement any legal or equitable right,
remedy, or claim under or with respect to this Agreement or any provision of
this Agreement. This Agreement and all of its provisions and conditions are for
the sole and exclusive benefit of the parties to this Agreement and their
successors and assigns.
7.10 Severability. If any provision of this Agreement is held
invalid or unenforceable by any court of competent jurisdiction, the other
provisions of this Agreement will remain in full force and effect. Any provision
of this Agreement held invalid or unenforceable only in part or degree will
remain in full force and effect to the extent not held invalid or unenforceable.
7.11 Section Headings; Construction. The headings of Sections in
this Agreement are provided for convenience only and will not affect its
construction or interpretation. All references to "Sections" refer to the
corresponding Sections of this Agreement. All words used in this Agreement will
be construed to be of such gender or number as the circumstances require. Unless
otherwise expressly provided, the word "including" does not limit the preceding
words or terms.
7.12 Time of Essence. With regard to all dates and time periods set
forth or referred to in this Agreement, time is of the essence.
7.13 Governing Law. This Agreement will be governed by and construed
under the laws of the Commonwealth of Massachusetts without regard to conflicts
of laws principles.
7.14 Relief. In the event of a breach of the provisions of this
Agreement by any Seller, in addition to any other rights and remedies that the
Buyer may have under law or in equity, the Buyer shall have the right to
specific performance and injunctive relief, it being acknowledged and agreed
that money damages will not provide an adequate remedy. In the event litigation
is maintained by a party to this Agreement against any other party to enforce
this Agreement or to seek any remedy for breach, then the party prevailing in
such litigation shall be entitled to recover from the non-prevailing party
reasonable attorneys' fees and costs of suit.
7.15 Access to Historical Financial Information. The Sellers shall
make available, and direct and authorize their respective independent public
accountants to make available, to the Buyer and to the independent public
accountants representing the Buyer (at no cost to the Buyer), all working papers
pertaining to the examination by the Sellers' accountants of the accounting
records of the Sellers, and shall provide such cooperation as the Buyer shall
reasonably request in connection with the Buyer's preparation of any financial
statements relating to the businesses of the Sellers required to be included in
any filing made by the Buyer or any affiliate of the Buyer with the Securities
and Exchange Commission pursuant to the Securities Act or the Exchange Act. For
seven years from the date hereof, upon written request of a Seller or
Stockholder, Buyer or its successor shall make or cause to be made available to
such Seller or Stockholder, as the case may be, all books and records included
in the Assets that are needed by such Seller or Stockholder for a valid business
or financial purpose, and permit such Seller or Stockholder to inspect and copy
such books and records upon reasonable notice and at such reasonable times as
39
may be mutually agreed upon by such Seller or Stockholder and Buyer and shall be
at such Seller's or Stockholder's sole cost and expense.
7.16 Solicitation. For a period of two years after the Closing Date,
none of the Sellers nor any Stockholders shall, either directly or indirectly as
a stockholder, investor, partner, director, officer, employee or otherwise,
solicit or attempt to induce any Restricted Employee to terminate his or her
employment with the Buyer or any affiliate of the Buyer; provided, however, that
it shall not be a breach of this Section 7.16 for any Seller or Stockholder to
solicit Restricted Employees by means of general public advertisements. For
purposes of this agreement, a "Restricted Employee" shall mean any person, other
than employees terminated involuntarily by the Buyer, who (i) either (A) hold or
have access to trade secrets or other confidential information relating to the
business of any Seller or (B) had annual base salary in 1995 of at least
$50,000, and (ii) either (X) was an employee of the Buyer or any affiliate of
the Buyer on either the date of this Agreement or the Closing Date or (Y) was an
employee of any Seller on either the date of this Agreement or the Closing Date
and who is employed by the Buyer immediately after the Closing.
7.17 Non-Competition.
(a) For a period of five years after the Closing Date, none
of the Sellers nor any Stockholder shall, either directly or indirectly as a
stockholder, investor, partner, director, officer, employee, consultant or
otherwise, (i) develop, manufacture, market or sell any product or perform any
services which compete with any existing or proposed medical diagnostic imaging
product manufactured or proposed to be manufactured or any services performed or
proposed to be performed by the Sellers on or prior to the Closing Date, or (ii)
engage in any business competitive with the business of the Sellers in the field
of medical diagnostic imaging as conducted on the Closing Date, anywhere in the
world. The preceding sentence shall apply to Xxxx Xxxxxx only as it relates to
the manufacture, sales and service of X-ray film processors.
(b) Each of the Sellers and the Stockholders agree that the
duration and geographic scope of the non-competition provision set forth in this
Section 7.17 are reasonable. In the event that any court determines that the
duration or the geographic scope, or both, are unreasonable and that such
provision is to that extent unenforceable, the parties agree that the provision
shall remain in full force and effect for the greatest time period and in the
greatest area that would not render it unenforceable. The parties intend that
this non-competition provision shall be deemed to be a series of separate
covenants, one for each and every county of each and every state of the U.S. and
each and every political subdivision of each and every country outside the U.S.
where this provision is intended to be effective.
7.18 Certificate of Amendment. On or prior to Closing, Continental
and Alphatek shall deliver to the Buyer a duly executed and acknowledged
articles or certificate of amendment to Continental's and Alphatek's articles or
certificate of incorporation or other appropriate document which is required to
change Continental's and Alphatek's corporate name to a new name bearing no
resemblance to its present name so as to make Continental's or Alphatek's
present name available to the Buyer. The Buyer is hereby authorized to file such
certificate or other document (at the Sellers' expense) in order to effectuate
such change of name at or after the Closing as the
40
Buyer shall elect.
7.19 Transfer Taxes. The Sellers shall pay all state, county and
municipal sales, use, excise, real property transfer or other taxes which may be
payable in the State of Illinois in connection with the sale and transfer of the
Assets.
7.20 Counterparts. This Agreement may be executed in one or more
counterparts, each of which will be deemed to be an original copy of this
Agreement and all of which, when taken together, will be deemed to constitute
one and the same agreement.
7.21 Guarantee. Trex Medical hereby guarantees the prompt and
complete performance by the Buyer of all of the Buyer's covenants, obligations
and conditions hereunder, which guarantee shall continue until all of the terms
of this Agreement to be performed by the Buyer have been performed or otherwise
discharged.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
BUYER:
CXR ACQUISITION CORPORATION
By: /s/ Xxx Xxxxxxxx
Name: Xxx Xxxxxxxx
Title: President
SELLERS:
CONTINENTAL X-RAY CORPORATION
By: /s/ Xxxxxxx X. Xxxxxxxxxx
Name: Xxxxxxx X. Xxxxxxxxxx
Title: President
ALPHATEK CORPORATION
By: /s/ Xxxxxxx X. Xxxxxxxxxx
Name: Xxxxxxx X. Xxxxxxxxxx
Title: Vice President
BROADVIEW MANUFACTURING
CORPORATION
By: /s/ Xxxxxxx X. Xxxxxxxxxx
Name: Xxxxxxx X. Xxxxxxxxxx
Title: President
00
XXXXXXXXX XXXXXX ASSOCIATES
By: /s/ Xxxxxxx X. Xxxxxxxxxx
Name: Xxxxxxx X. Xxxxxxxxxx
Title: Administrative Partner
ADVANCED MEDICAL IMAGING, INC.
By: /s/ Xxxxxxx X. Xxxxxxxxxx
Name: Xxxxxxx X. Xxxxxxxxxx
Title: President
TRANS-CONTINENTAL X-RAY
CORPORATION
By: /s/ Xxxxxxx X. Xxxxxxxxxx
Name: Xxxxxxx X. Xxxxxxxxxx
Title: President
STOCKHOLDERS:
/s/ Xxxxx Xxxxxx
Xxxxx Xxxxxx
/s/ Xxxxxxxxx Xxxxxxxxxx
Xxxxxxxxx Xxxxxxxxxx
/s/ Xxxxxxx Xxxxxxxxxx
Xxxxxxx Xxxxxxxxxx
/s/ Xxxx Xxxxxx
Xxxx Xxxxxx
As to Section 7.21 only: TREX MEDICAL CORPORATION
By: /s/ Xxx Xxxxxxxx
Name: Xxx Xxxxxxxx
Title: President
42
