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ASSET
PURCHASE AGREEMENT
BETWEEN
HANGER PROSTHETICS & ORTHOTICS, INC.,
AS BUYER
AND
FORT XXXXXX ORTHOPEDIC, INC.,
AND
MOBILE LIMB & BRACE, INC.
AS SELLERS
AND
XXXXX XXXXXXX, XXXXXX XXXXXXX,
XXXXXX XXXXXXX, XXXXXX XXXXXXX,
AND
XXXXXXX XXX,
AS SOLE SHAREHOLDERS
MAY 8, 1997
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TABLE OF CONTENTS
SECTION NO. AND TITLE PAGE NO.
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1. Sale of Assets 2
2. Assumption of Liabilities 2
3. Closing 3
4. Purchase Price 3
5. Employment and Non-Competition Agreements 6
6. Instruments of Transfer; Payment of Purchase 7
Price; Further Assurances
7. Representations and Warranties of the Sellers 12
and Sole Shareholders
8. Representations and Warranties of the Buyer 22
9. Covenants of the Sellers and Sole Xxxxxxxxxxxx 00
00. Conditions Precedent to the Obligations of the 35
Sellers and Sole Shareholders
11. Conditions Precedent to the Obligations of the 38
Buyer
12. Termination and Survival of Covenants, 42
Representations and Warranties
13. Indemnification 43
14. Risk of Loss 47
15. Brokerage 48
16. Bulk Sales 49
17. Waivers and Notices 49
18. Assignment 50
19. Press Release 50
20. Use of Sellers' Financial Information 51
21. Costs and Expenses 51
22. Miscellaneous 51
23. Governing Law 52
Schedules
1.1 Purchased Assets
1.2 Excluded Assets
2.1 Assumed Liabilities
4.1 Earn-Out Payment Summary
4.2 Allocation of Purchase Price
7.1 Claims and Liabilities
7.2 Liens on Purchased Assets
7.3 Litigation
7.4 Consents
9.1 Working Capital
16.1 Compliance with Uniform Commercial Code - Bulk Transfers
B-7 List of Sellers' Employees to be Hired by Buyer
B-8 Accrued Vacation of Sellers' Employees
F-1 Environmental Report for 0000 Xxxxx Xxxxx Xxx, Xxxxxxxxx, FLA
F-2 Environmental Report for 00 Xxxxx Xxxxxx XX, Xxxx Xxxxxx
Xxxxx, XXX
Exhibits
A - Form of Promissory Note
B - Forms of Employment and Non-Competition Agreements
C - Form of Non-Competition Agreement
D - Form of Xxxx of Sale
E - Form of Lease Agreement
- ii -
ASSET PURCHASE AGREEMENT
ASSET PURCHASE AGREEMENT ("Agreement"), dated as of May 8, 1997, by and
between HANGER PROSTHETICS & ORTHOTICS, INC., a Delaware corporation with
executive offices at 0000 Xxx Xxxxxxxxxx Xxxx, Xxxxxx Xxxxx, Xxxxxxxx,
Xxxxxxxx 00000 (hereinafter referred to as "Buyer"); FORT XXXXXX ORTHOPEDIC,
INC., a Florida corporation with executive offices at 00 Xxxxx Xxxxxx XX, Xxxx
Xxxxxx Xxxxx, Xxxxxxx 00000, and MOBILE LIMB & BRACE, INC., an Alabama
corporation with executive offices at 0000 Xxxxxxxxxx Xxxxxx, Xxxxxx, Xxxxxxx
00000 (hereinafter referred to as "Sellers"); and XXXXX X. XXXXXXX, an
individual residing at 00 Xxxxxxxxxx, Xxxx Xxxxxx Xxxxx, Xxxxxxx 00000, XXXXXX
X. XXXXXXX, an individual residing at 000 Xxxxxxxxxx Xxxxx, Xxxx Xxxxxx Xxxxx,
Xxxxxxx 00000, XXXXXX X. XXXXXXX, an individual residing at 1 Dogwood,
Xxxxxxxx, Xxxxxxx 00000, XXXXXX X. XXXXXXX, an individual residing at 000
Xxxxxxxxxx Xxxxx, Xxxx Xxxxxx Xxxxx, Xxxxxxx 00000, and XXXXXXX X. XXX, an
individual residing at 0000 Xxxxxx Xxxx Xxxx, Xxxxxx, Xxxxxxx 00000
(hereinafter referred to as the "Sole Shareholders").
WHEREAS, the Sellers desire to sell substantially all of their assets to
the Buyer and the Buyer desires to purchase substantially all of said assets
of the Sellers.
NOW, THEREFORE, in consideration of the mutual covenants, promises and
understandings herein set forth and subject to the
terms and conditions hereof, the parties hereto agree as follows:
1. SALE OF ASSETS. At the Closing hereinafter referred to, the Sellers
will sell, transfer, assign, convey and deliver to the Buyer and the Buyer
will purchase, accept and acquire from the Sellers, free and clear of all
liens, claims, encumbrances, charges and restrictions whatsoever except as
noted herein, substantially all the assets of Sellers (excluding cash and
vehicles), including, without limitation, all inventory, work in progress,
accounts receivable, prepaid expenses, security deposits, leasehold
improvements, machinery, equipment, patents and trademarks, if any, customer
lists and files, all contracts, leases, furniture, supplies, trade fixtures,
trade names of the business conducted by Sellers, all telephone numbers
serving said business and access to, or copies of, books of accounts, files,
papers and records relating to the business of the Sellers, all as more fully
set forth on Schedule 1.1 hereto ("Purchased Assets"), but specifically
excluding all accounts due to Sellers from officers, directors and/or
affiliates of Sellers, as well as all other assets set forth on Schedule 1.2
hereto.
2. ASSUMPTION OF LIABILITIES. Except as set forth on Schedule 2.1 hereto
relating to the assumption by Buyer of certain liabilities of Sellers, Buyer
will not assume any liabilities whatsoever of Sellers.
2
3. CLOSING. The Closing ("Closing") shall take place either by mutually
agreeable mail or wire delivery of documents and funds or at the offices of
Freedman, Levy, Xxxxx & Xxxxxxx, 0000 Xxxxxxxxxxx Xxxxxx, X.X., Xxxxxxxxxx,
X.X. 00000 on May 9, 1997; provided, however, that the Closing may be
adjourned for any reason by either the Buyer, the Sellers or the Sole
Shareholders to a mutually agreeable date, up to the close of business on May
9, 1997. Any extension beyond May 9, 1997 must be agreed to in writing by the
Buyer, the Sellers and the Sole Shareholders.
4. PURCHASE PRICE. Subject to the provisions of paragraph 4(d) below, the
Purchase Price for the Purchased Assets and the non-competition agreement
referred to in paragraph 5 herein shall be Three Million Eight Hundred Fifteen
Thousand Dollars ($3,815,000), consisting of cash, a promissory note and
shares of common stock of Hanger Orthopedic Group, Inc. ("Hanger"), as set
forth below:
(a) The cash portion of the Purchase Price shall be Two Million Five
Hundred Sixty Five Thousand Dollars ($2,565,000), payable to the Sellers
at the Closing, with $38,150 of the Purchase Price being allocated to the
non-competition agreement referred to in paragraph 5 herein;
3
(b) The delivery at the Closing of Buyer's Promissory Note, in the
form attached hereto as Exhibit A, in the amount of Seven Hundred Fifty
Thousand Dollars ($750,000), payable to the Sellers in five (5) equal
annual installments of $150,000 on first, second, third, fourth and fifth
anniversary dates of the Closing, together with interest from the date of
Closing on the unpaid balance at the rate of eight and one-quarter
percent (8.25%) per annum; and
(c) The issuance of Five Hundred Thousand Dollars ($500,000) worth
of common stock of Hanger, based upon the closing sale price of such
stock on the American Stock Exchange on the date which is two (2) days
prior to the date of the Closing; provided, however, that in the event
such closing sale price of such stock is less than Six Dollars ($6.00)
per share, then in lieu of the issuance of such shares the Buyer shall
issue to the Seller at the Closing a promissory note in the principal
amount of $500,000, payable to the Sellers in three (3) equal annual
installments of $166,666 on the first and second anniversary dates of the
Closing and $166,667 on the third anniversary date of the Closing,
together with interest on the unpaid balance at the rate of eight and
one-quarter percent (8.25%) per annum.
4
(d) Notwithstanding anything else contained in this paragraph 4, in
the event the net sales of the business to be conducted with the
Purchased Assets in the counties of Escambia, Santa Rose, Okaloosa and
Xxxxxx in the State of Florida equal or exceed the following minimum
amounts during the following periods, together with wage and materials
expenses being no more than fifty eight and one-half percent (58.5%) of
the net sales during each such period and the average accounts receivable
during each such period being no more than seventy (70) days outstanding
for purposes of inclusion in such net sales amounts for that period, all
as set forth in greater detail in Schedule 4.1 hereto, then the Purchase
Price for the Purchased Assets shall be increased by up to One Hundred
Forty Thousand Dollars ($140,000) during each 12-month period in which
such minimum net sales amounts are achieved during the five-year period
immediately following the Closing, for a maximum possible increase of
Seven Hundred Thousand Dollars ($700,000): (i) during the first 12-month
period immediately following the Closing, the minimum net sales must be
at least $2,500,000; (ii) during the second 12-month period immediately
following the Closing, the net sales must be at least $2,750,000; (iii)
during the third 12-month period immediately following the Closing, the
minimum net sales must be at least $3,025,000; (iv) during the fourth
12-month period immediately following the Closing, the net sales must be
at least $3,327,500; and (v) during the
5
fifth 12-month period immediately following the Closing, the net sales
must be at least $3,660,250. Any such increases in the Purchase Price
shall be paid by the Buyer to the Seller within sixty (60) days after the
end of the 12-month period in which such an increase in the Purchase
Price was earned. For purposes of this paragraph 4(d), the term "net
sales" shall mean recorded gross revenues (excluding inter-company sales)
for orthotic and prosthetic services rendered with the Purchased Assets
in the above-referenced counties in the State of Florida, less reductions
in gross revenues for contractual, discounts, disallowances and bad
debts.
(e) The parties agree to allocate the Purchase Price for the
Purchased Assets and the non-competition agreement referred to in
paragraph 5 herein for all purposes (including financial accounting and
tax purposes) in accordance with Section 1060 of the Internal Revenue
Code of 1986, as amended, as reflected in the allocation schedule
attached hereto as Schedule 4.2.
5. EMPLOYMENT AND NON-COMPETITION AGREEMENTS. As of the date of the
Closing, Xxxxx Xxxxxxx shall enter into an employment and non-competition
agreement with the Buyer, substantially in the form of Exhibit B-1 hereto. As
of the date of the Closing, Xxxxxx Xxxxxxx shall enter into an employment and
non-competition
6
agreement with the Buyer, substantially in the form of Exhibit B-2 hereto. As
of the date of the Closing, Xxxxxx Xxxxxxx shall enter into an employment and
non-competition agreement with the Buyer, substantially in the form of Exhibit
B-3 hereto. As of the date of the Closing, Xxxxxx Xxxxxxx shall enter into an
employment and on-competition agreement with the Buyer, substantially in the
form of Exhibit B-4 hereto. As of the date of the Closing, Xxxxxxx Xxx shall
enter into an employment and non-competition agreement with the Buyer,
substantially in the form of Exhibit B-5 hereto The Sellers and the Sole
Shareholders shall cause the following four employees of Seller to each enter
into employment and non-competition agreements with the Buyer as of the date
of the Closing, substantially in the form of Exhibit B-6 hereto: Xxxxxxx
Xxxxxxx, Xxxx Pause, Xxxxxx Xxxxxx and Xxxx Xxxxxxxxxx. The Sellers and the
Sole Shareholders shall each enter into a five (5) year non-competition
agreement with the Buyer as of the date of the Closing, substantially in the
form of Exhibit C hereto.
6. INSTRUMENTS OF TRANSFER; PAYMENT OF PURCHASE PRICE; FURTHER
ASSURANCES.
(a) At the Closing, the Sellers and the Sole Shareholders shall
deliver to the Buyer:
(i) All executed documents required to be
7
delivered by the Sellers and/or the Sole Shareholders,
together with a xxxx of sale, substantially in the form
of Exhibit D hereto;
(ii) Such other instrument or instruments of transfer as
shall be necessary or appropriate to vest in the Buyer
good and marketable title to the Purchased Assets; and
(iii) To the extent reasonably possible, such other consents,
permissions, or other authorizations as shall, in the
opinion of Buyer's counsel, be necessary or appropriate
to permit Sellers to consummate the transaction
contemplated by this Agreement.
(b) At the Closing, the Buyer shall deliver to the Sellers:
(i) Cash, certified check, or wired funds, in the amount of
$2,565,000 representing the cash portion of the Purchase
Price for the Purchased Assets;
8
(ii) A Promissory Note, made by the Buyer and substantially
in the form of Exhibit A hereto, in the principal amount
of $750,000, payable annually over five (5) years with
interest from the date of Closing on the unpaid balance
at the rate of eight and one-quarter percent (8.25%) per
annum; and
(iii) Such further instruments as Sellers or any creditor or
other person to whom Sellers are, obligated on any
lease, agreement or instrument may timely and reasonably
request as a condition to the release of the Sellers
from their obligations, if any, being assumed by the
Buyer at the Closing, including lease obligations,
provided the Buyer shall not be required to deliver (and
it shall not be a condition of Sellers' obligation to
close that Buyer shall so deliver) any such instrument
if, in the reasonable opinion of the Buyer or the
Buyer's counsel, the effect of the delivery of such
instrument might be to modify, increase or otherwise
adversely affect the
9
Buyer's liability or obligation to such lessor,
sublessor, creditor or other person.
(c) Following the Closing:
(i) As promptly as practicable but subject to the provisions
of paragraph 4(c) hereof, Buyer shall cause the transfer
agent of Hanger common stock to deliver to Sellers that
number of shares of Hanger common stock equal to
$500,000. Based on the closing sale price per share of
Hanger common stock on the American Stock Exchange on
the date which is two (2) days immediately prior to the
date of Closing;
(ii) In the event the provisions of paragraph 4(d) apply in
the event the net sales of the business to be conducted
with the Purchased Assets exceed the minimum net sales
for any 12-month period during the five (5) years
immediately following the Closing, then the Buyer shall
pay to the Sellers the increased portion of the Purchase
Price as provided in paragraph 4(d) hereof within the
time period
10
specified in paragraph 4(d) hereof;
(iii) at the request of the Buyer, in addition to the
documents and instruments to be delivered at Closing,
Sellers shall deliver any further instruments of
transfer and take all reasonable action as may be
necessary or appropriate to transfer to the Buyer all
licenses and permits that are transferable that are
necessary for the operation of the Purchased Assets
listed on Schedule 1.1;
(iv) Sellers, at no cost or charge to Buyer, will provide
Buyer with access to, or copies of, all accounting
information (including schedules, analyses of accounts
and the like) for the past three (3) years and for the
current year period, to and including the Closing,
necessary for Buyer to conduct the on-going business
being purchased from Sellers; and
(v) As promptly as practicable, Sellers shall take all steps
necessary to change its corporate and trade names and
deliver to
11
Buyer proof of such change, with Buyer having the sole
and exclusive right from and after the Closing to use
the names "Fort Xxxxxx Orthopedic" and "Mobile Limb &
Brace."
Sellers agree to preserve with commercially reasonable efforts all books
and records of Sellers at Sellers' executive offices in Fort Xxxxxx Beach,
Florida, for a period of five years after the Closing.
7. REPRESENTATIONS AND WARRANTIES OF THE SELLERS AND SOLE SHAREHOLDERS.
The Sellers and the Sole Shareholders represent and warrant to the Buyer as
follows:
(a) POWER. Sellers are, and at the Closing shall be, duly
organized, validly existing and in good standing under the
laws of Florida and Alabama, respectively, and have all
requisite power and authority to own, operate and lease their
properties, to carry on their business as now being conducted,
and to enter into this Agreement and perform their obligations
hereunder.
11
(b) ABSENCE OF UNDISCLOSED LIABILITIES. Except as set forth on the
unaudited balance sheet, dated September 30, 1996, of the
Sellers or in Schedule 7.1 hereto, the Sellers and the Sole
Shareholders do not know, or have reasonable ground to know,
of any basis for assertion against the business conducted at
and by Sellers, as of the date of this Agreement, of any claim
or liability of any nature.
(c) NO ADVERSE CHANGE. Since September 30, 1996, Sellers and the
Sole Shareholders do not know of (i) any material adverse
change in the financial condition, or in the operations,
business, prospects, properties or assets of Sellers or (ii)
any damage, destruction or loss to any of the properties or
assets of Sellers, whether or not covered by insurance, which
has materially and adversely affected or impaired or which
does or may materially and adversely affect or impair the
ability of Sellers to conduct their business, except that the
landlord of Sellers at 0000 Xxxxxxxxxx Xxxxxx, Xxxxxx, Xxxxxxx
00000 has notified Sellers of the non-renewal of such lease
upon its expiration in July 1997. Except as otherwise shown on
Schedule 9.1 hereto, there has
13
been no material change in the working capital from that
reflected on the balance sheet of Sellers dated September 30,
1996, contained in the unaudited financial statements of
Sellers as of that date.
(d) TAX RETURNS AND PAYMENTS. Sellers has filed all required
Federal, state and local tax returns and reports and has duly
paid all taxes, including payroll taxes, and other
governmental charges upon it or its properties, assets,
income, franchises, licenses or sales, material to Sellers or
Sellers' operations, which are due, and will pay those that
will be due when they become due, except as set forth on
Schedule 7.1 hereto.
(e) TITLE TO PROPERTY AND ASSETS. Except as set forth on Schedule
7.2 hereto, Sellers have good title, free and clear of all
liens, claims, encumbrances, charges, easements and
restrictions whatsoever, to their properties and assets, real,
personal and intangible, listed in Schedule 1.1 hereto.
(f) CONDITION OF PROPERTY. The Purchased Assets are in good
operating condition and repair.
14
(g) INVENTORIES. The inventories of raw material, work in process
and finished goods (collectively called "Inventory") shown or
to be shown on the balance sheet of Sellers to be included in
financial statements for the period ended September 30, 1996
represent Inventory that is usable and salable at not less
than values reflected. Such Inventory, subject to increase and
decrease in the ordinary course of business since September
30, 1996, shall be transferred to Buyer at the Closing.
(h) LITIGATION, ETC. Except to the extent set forth in Schedule
7.3 hereto, there is no suit, action or litigation,
administrative, arbitration or other proceeding or
governmental investigation or inquiry or any change in the
environment, zoning or building laws, regulations or
ordinances affecting the real property or leasehold property
of Sellers or its business operations, pending or, to the
knowledge of the Sellers or the Sole Shareholders, threatened,
which might, severally or in the aggregate, adversely affect
the financial condition, business, property, assets, or
prospects of Sellers. Neither Sellers nor the
15
Sole Shareholders have received notice that the Sellers is in
violation in any material respect, of any laws, ordinances,
requirements, regulations or orders applicable to their
business and property.
(i) AUTHORITY. The Sole Shareholders are the only owners,
beneficially and of record, of all the outstanding shares of
capital stock of the Sellers and no other person or entity has
any right to acquire any interest whatsoever in, or vote any
shares of, the Sellers. Sellers and the Sole Shareholders have
taken, or will have taken prior to Closing, all necessary
corporate action to approve this Agreement and the performance
of their obligations hereunder.
(j) COMPLIANCE WITH OTHER INSTRUMENTS, ETC. Neither the execution
nor the delivery of this Agreement nor the consummation of the
transactions contemplated hereby, will conflict with or result
in any violation of or constitute a default under any term of
the respective Articles of Incorporation or Bylaws of the
Sellers or any agreement, mortgage, indenture, franchise,
16
license, permit, authorization, lease or other instrument,
judgment, decree, order, law or regulation by which the
Sellers are bound which is essential to the conduct, on an
ongoing basis by the Buyer, of the business of the Sellers.
(k) CONSENTS. Except as set forth on Schedule 7.4 hereto, no
consents of any Federal, state or local governmental body are
necessary in connection with this transaction or the
assignment to Buyer of any contracts held by Sellers.
(l) PATENTS AND TRADEMARKS. Neither the Sellers nor the Sole
Shareholders have any knowledge of any claim or reason to
believe that the Sellers are or may be infringing on or
otherwise acting adversely to the rights of any person under
or in respect of any patent, trademark, service xxxx, trade
name, copyright, license, or other similar intangible right.
Sellers are not obligated or under any liability to make any
payments by way of royalties, fees or otherwise to any owner
or licensee or other claimant to the patent, trademark, trade
name copyright or other intangible asset with respect to the
use thereof or in connection with the conduct of Sellers'
17
business.
(m) ADVERSE AGREEMENTS. Sellers are not a party to any agreement
or instrument or subject to any charter or other corporate
restriction or any judgment, order, writ, injunction, decree,
rule or regulation which materially and adversely affects or,
so far as the Sellers can now foresee, may in the future
adversely affect the business operations, prospects,
properties, assets or condition, financial or otherwise, of
the business conducted by the Sellers with the Purchased
Assets.
(n) BROKERS. Except for the services and related fees of O&P
Entrepreneur Network, for which Sellers and the Sole
Shareholders agree to be solely liable, all negotiations
relating to this Agreement and the transactions contemplated
hereby have been carried on without the intervention of any
other person in such manner as to give rise to any valid claim
against Sellers for a finder's fee, brokerage commission or
other like payment. The Sellers and the Sole Shareholders have
not done any act which gives rise to any valid claim against
the Buyer for a finder's fee, brokerage
18
commission or other like payment.
(o) MISLEADING, FALSE OR OMITTED STATEMENTS. No representation or
warranty by Sellers or the Sole Shareholders herein or in any
document attached hereto or supplied to Buyer by Sellers or
the Sole Shareholders contains or will contain any untrue
statement of material fact or omits or will omit to state a
material fact (of which Sellers or the Sole Shareholders have
knowledge or notice) required to make the statements herein or
therein made, in the light of the circumstances under which
such statements were made, not misleading.
(p) ENVIRONMENTAL COMPLIANCE. Neither the Sellers nor any of their
past owned or leased real properties or operations, are
subject to or the subject of, any proceeding, order,
settlement, or other contract or agreement arising under any
environmental laws, rules or regulations, nor has any
investigation been commenced or is any proceeding threatened
against the Sellers under any environmental laws, rules or
regulations with regard to the Sellers' business activities.
Except as set forth in Schedules F-1 and F-2, the Sellers have
not received any written notice, report or
19
other written information regarding any actual or alleged
violation of any environmental laws, rules or regulations, or
any liabilities or potential liabilities, including any
investigatory remedial or corrective obligations, relating to
the Sellers' business activities or the real properties owned
or operated by the Sellers and arising under any environmental
laws, rules or regulations. Except as set forth in Schedules
F-1 and F-2, none of the following exists, nor has ever
existed, at any real property previously owned by the Sellers
or currently operated by the Sellers: (1) underground storage
tanks, (2) asbestos-containing material in any form or
condition, (3) materials or equipment containing
polychlorinated biphenyls or (4) landfills, surface
impoundments or disposal areas. The Sellers have not treated,
stored, disposed of, arranged for or permitted the disposal
of, transported, handled or released any substance, or owned
or operated any real property (and no such real property is
contaminated by any such substance) in a manner that has given
or could reasonably be expected to give rise to onsite or
offsite liabilities pursuant to any environmental laws, rules
or regulations, including any
20
liability for response costs, corrective action costs,
personal injury, property damage, natural resources damage or
attorney fees, or any investigative, corrective or remedial
obligations. The Sellers have provided, as set forth in
Schedules F-1 and F-2, Buyer with correct and complete copies
of all reports and studies within the possession or control of
the Sellers with respect to past or present environmental
conditions or events at any of real properties presently or
previously owned or operated by the Sellers.
8. REPRESENTATIONS AND WARRANTIES OF THE BUYER. Buyer represents and
warrants to the Sellers and the Sole Shareholders as follows:
(a) ORGANIZATION; GOOD STANDING. The Buyer is a corporation duly
organized, validly existing and in good standing under the
laws of the State of Delaware and authorized to do business in
the States of Florida and Alabama, with all requisite
corporate power to own, operate and lease its properties and
assets and to enter into and perform its obligations
hereunder. At the
21
Closing, the Buyer will be qualified to do business and will
be in good standing as a foreign corporation in Florida and
Alabama.
(b) LITIGATION. There is no suit, action, or litiga tion,
administrative, arbitration or other proceeding or
governmental investigation pending or, to the knowledge of the
officers of the Buyer, threatened, which might, severally or
in the aggregate, materially and adversely affect the
financial condition or prospects of the Buyer.
(c) AUTHORITY. The Buyer has taken, or will have taken prior to
the Closing, all necessary corporate action to approve this
Agreement and the performance of its obligations hereunder.
(d) BROKERS. All negotiations relating to this Agree ment and the
transactions contemplated hereby have been carried on without
the intervention of any other person in such manner as to give
rise to any valid claim against the Buyer for a finder's fee,
brokerage commission or other like payment. The Buyer has not
done any act which gives rise to any valid claim against the
Sellers or the Sole Shareholders for a finder's fee, brokerage
22
commission or other like payment.
(e) COMPLIANCE WITH OTHER INSTRUMENTS, ETC. Neither the execution
nor the delivery of this Agreement nor the consummation of the
transactions contemplated hereby, will conflict with or result
in any violation of or constitute a default under any term of
the Articles of Incorporation or Bylaws of Buyer or any
agreement, mortgage, indenture, franchise, license, permit,
authorization, lease or other instrument, judgment, decree,
order, law or regulation by which Buyer is bound which is
essential to the conduct of the business of the Buyer on an
ongoing basis.
(f) ADVERSE AGREEMENTS. Buyer is not a party to any agreement or
instrument or subject to any charter or other corporate
restriction or any judgment, order, writ, injunction, decree,
rule or regulation which materially and adversely affects or,
so far as the Buyer can now foresee, may in the future
adversely affect the ability of Buyer to perform its
obligations hereunder.
23
(g) EMPLOYMENT OF SELLERS' EMPLOYEES. Buyer agrees to hire, as of
the date of Closing, those employees of the Sellers as set
forth in Schedule B-7 hereto.
9. COVENANTS OF THE SELLERS AND THE SOLE SHAREHOLDERS. The Sellers and
the Sole Shareholders agree that, prior to the Closing:
(a) CONSENTS. Sellers and the Sole Shareholders shall obtain all
consents and authorizations of third parties and make all
filings with and give all notices to third parties which may
be necessary or reasonably required in order to effect the
transaction contemplated hereby and to assign all contracts
and all licenses described in Schedule 1.1 hereto.
(b) BUSINESS ORGANIZATION. Up to the time of Closing, Sellers and
the Sole Shareholders will use their best efforts to preserve
Sellers' business organization intact and to keep available
the services of its employees and representatives and will
preserve the goodwill of its employees, customers, suppliers
and others having business
24
relations with them. Sellers and Sole Shareholders shall cause
each of the following to occur as of the Closing: (i) Xxxxx
Xxxxxxx shall enter into an employment and non-competition
agreement with the Buyer, substantially in the form of Exhibit
B-1 hereto; (ii) Xxxxxx Xxxxxxx shall enter into an employment
and non-competition agreement with the Buyer, substantially in
the form of Exhibit B-2 hereto; (iii) Xxxxxx Xxxxxxx shall
enter into an employment and non-competition agreement with
the Buyer, substantially in the form of Exhibit B-3 hereto;
(iv) Xxxxxx Xxxxxxx shall enter into an employment and
non-competition agreement with the Buyer, substantially in the
form of Exhibit B-4 hereto; (v) Xxxxxxx Xxx shall enter into
an employment and non-competition agreement with the Buyer,
substantially in the form of Exhibit B-5 hereto; and (vi)
Xxxxxxx Xxxxxxx, Xxxx Pause, Xxxxxx Xxxxxx and Xxxx Xxxxxxxxxx
shall each enter into an employment and non-competition
agreement with the Buyer, substantially in the form of Exhibit
B-6 hereto. The Sellers and the Sole Shareholders shall each
enter into a five (5) year non-competition agreement with the
Buyer as of the date of the Closing, substantially in the form
of Exhibit C
25
hereto.
(c) TRANSACTIONS OUT OF ORDINARY COURSE OF BUSINESS. Except with
the prior written consent of the Buyer, the Sellers shall not
enter into any transaction out of the ordinary course of the
businesses conducted by Sellers.
(d) MAINTENANCE OF PROPERTIES, ETC. Subject to Section 7(f),
Sellers will maintain all of the assets described in Schedule
1.1 in reasonable operating repair, order and condition,
reasonable wear excepted, and will maintain insurance upon all
of such properties up through the date of Closing and, with
respect to the conduct of its business, in such amounts and of
such kinds comparable to that in effect on the date of this
Agreement.
(e) MAINTENANCE OF BOOKS, ETC. Sellers will maintain its books,
accounts and records in the usual manner on a basis consistent
with prior years, unless otherwise directed by the Buyer.
Sellers will duly comply in all material respects with all
laws and regulations applicable to the conduct of its
business.
26
(f) ACCESS TO PROPERTIES, ETC. Sellers will give to the Buyer and
to its counsel, accountants, investment advisors and other
representatives, full access during normal business hours to
all of the properties, books, tax returns, contracts,
commitments and records of Sellers, and will furnish to the
Buyer all such documents, certified if requested, and
information with respect to its affairs as the Buyer may from
time to time reasonably request.
(g) LEASES. Sellers and Sole Shareholders covenant to lease to
Buyer from and after the Closing the Sellers' premises located
at 00 Xxxxx Xxxxxx, XX, Xxxx Xxxxxx Xxxxx, Xxxxxxx for an
initial term of five (5) years at a monthly rental rate of
$4,000 plus utilities, together with such other terms and
conditions as contained in the form of lease agreement as
attached hereto as Exhibit X. Xxxxxxx and Sole Shareholders
further covenant to cause the landlords of Sellers to transfer
to Buyer, as the new tenant, as of the Closing the leases,
without any material changes, for the Sellers offices located
at (i) 000 Xxxxxxxxx Xxxx, Xxxxx X-000, Xxxxxxxxx, Xxxxxxx
00000; (ii) 8333
00
Xxxxx Xxxxx Xxxxxxx, Xxxxxxxxx, Xxxxxxx 00000; and (iii) 0000
Xxxxxxxxxx Xxxxxx, Xxxxxx, Xxxxxxx 00000, which lease will
expire in July 1997.
(h) MINIMUM NON-CASH WORKING CAPITAL AMOUNT. Sellers and the Sole
Shareholders covenant that the aggregate minimum non-cash
working capital of Sellers at Closing will be $400,000. In the
event the aggregate minimum non-cash working capital of
Sellers at Closing is less than $400,000, then Sellers and the
Sole Shareholders shall contribute at Closing the additional
amount of cash necessary to satisfy such minimum working
capital requirement. In the event the aggregate minimum
non-cash working capital of Sellers at Closing appears to be
more than $400,000, then such excess working capital amount
shall be conclusively determined on or about the date which is
nine (9) months after the Closing, being at the same time of
the accounts receivable adjustment under Paragraph 9(j)
hereof, and with such determination being made in accordance
with the method shown in the examples contained in Schedule
9.1 hereto, with any actual excess amount of such working
capital over $400,000 being payable by Buyer to Sellers at
that time.
28
(i) NAME CHANGE. Immediately after the Closing, Sellers change its
corporate, business and trade names and consent to whatever
action is necessary for Buyer to exclusively use the names
"Fort Xxxxxx Orthopedic" and "Mobile Limb & Brace."
(j) ACCOUNTS RECEIVABLE. The Sole Shareholders agree to guarantee
the accounts receivable of Sellers as of the date of Closing
("Accounts Receivable"), as evidenced by a list prepared by
Sellers and delivered to, and accepted by, Buyer at the
Closing, or as soon as possible thereafter, with such
guarantee of the Accounts Receivable being up to the amount of
Accounts Receivable necessary for the Sellers to satisfy the
$400,000 minimum non- cash working capital requirement under
Paragraph 9(h) hereof. If, by a date nine (9) months after the
Closing, Buyer has not collected an amount of Accounts
Receivable sufficient to satisfy the Sellers' minimum non-cash
working capital requirement of $400,000 under Paragraph 9(h)
hereof as of the date of Closing, then in such event the Sole
Shareholders shall pay Buyer the difference between the
Sellers' minimum non-cash
29
working capital requirement of $400,000 under Paragraph 9(h)
hereof and the amount of collected Accounts Receivable, with
notice from Buyer of the amount of said difference and upon
assignment of all then uncollected Accounts Receivable back to
Sellers.
(k) EQUIPMENT LEASES. Sellers and the Sole Shareholders shall
assign to Buyer at the Closing all equipment leases held by
the Sellers or the Sole Shareholders which relate to the
conduct of the Sellers' business.
(l) PURCHASE FOR INVESTMENT. With respect to the common stock of
Hanger ("Hanger Stock") being delivered at the Closing, the
Sole Shareholders represent and warrant to the Buyer and
Hanger as follows:
(i) EXPERIENCE. The Sole Shareholders are capable of
evaluating the merits and risks of this investment, have
the capacity to protect their own respective interests,
and have the financial ability to bear the economic
risks of the investment.
30
(ii) INVESTMENT. The Sole Shareholders are acquiring the
Hanger Stock for investment for their own account and
not as a nominee or agent, and not with a view to, or
for resale in connection with, any distribution thereof.
The Sole Shareholders understand that the Hanger Stock
to be delivered has not been and may not be registered
under the Securities Act of 1933 (the "Securities Act")
by reason of an exemption from the registration
provisions of the Securities Act, the availability of
which depends upon, among other things, the bona fide
nature of the investment intent and the accuracy of its
representations as contained herein. The following Sole
Shareholders are domiciled in the State of Florida:
Xxxxx Xxxxxxx, Xxxxxx Xxxxxxx, Xxxxxx Xxxxxxx and Xxxxxx
Xxxxxxx. Xxxxxxx Xxx is domiciled in the State of
Alabama.
(iii) HOLDING PERIOD. The Sole Shareholders acknowledge that
the Hanger Stock may not be sold in the absence of an
effective registration statement under the Securities
31
Act or unless an exemption from such registration is
available.
(iv) ACCESS TO INFORMATION. The Sole Shareholders have had an
unlimited opportunity to discuss Hanger's business,
management and financial affairs with its management and
the opportunity to review in detail Hanger's property,
books, accounts, records, contracts and documents and
all other information related to the Sole Shareholders'
investment in Hanger. The Sole Shareholders' questions
pertaining to Hanger were answered fully and to the Sole
Shareholders' satisfaction.
(v) SECURITIES ADMINISTRATORS. The Sole Shareholder
understands that no securities administrator of any
state has made any finding or determination relating to
the fairness of the investment and that no securities
administrator of any state has or will recommend or
endorse the purchase of the Hanger Stock.
(vi) TRANSFER AND LEGEND. The Hanger Stock shall not be sold,
pledged, hypothecated or
32
otherwise transferred unless it is registered under the
Securities Act and applicable state securities laws or
is exempt therefrom. The Sole Shareholders acknowledge
that each certificate representing the Hanger Stock
shall be endorsed with a legend which provides
substantially as follows:
The securities evidenced hereby have not been registered
under the Securities Act of 1933, or the laws of any
other jurisdiction, and may not be sold, transferred,
assigned, pledged or otherwise distributed unless there
is an effective registration statement under such Act
and applicable securities laws covering such securities
or Hanger receives an opinion of counsel for the holder
of the securities (concurred in by counsel for Hanger)
stating that such sale, transfer, assignment, pledge or
distribution is exempt from the registration and
prospectus delivery requirements of such Act and
applicable securities laws.
(m) TAX RETURNS. Sellers and the Sole Shareholders agree to
provide Buyer, prior to the Closing, with
33
complete copies of the Sellers' state and federal tax returns
for the Sellers' fiscal years of 1994, 1995 and 1996.
10. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF THE SELLERS AND SOLE
SHAREHOLDERS. All obligations of the Sellers and the Sole Shareholders under
this Agreement are subject to the fulfillment, at the option of the Sellers
and the Sole Shareholders, at or prior to the date of the Closing, of each of
the following conditions:
(a) The representations and warranties of Buyer herein contained
shall be true on and as of the date of Closing with the same
force and effect as though made on and as of said date, except
as affected by the transaction contemplated hereby.
(b) The Buyer shall have performed all its obligations and
agreements and shall have complied with all its covenants in
this Agreement to be performed and complied with by the Buyer
at or prior to the Closing, including the payment of the
Purchase Price provided for herein.
34
(c) Sellers shall have received a certificate of the Buyer,
executed on behalf of the Buyer by its President, dated the
date of Closing, in form and substance satisfactory to counsel
for the Sellers, certifying as to the fulfillment of the
matters specified in paragraphs (a) and (b) of this Section
10.
(d) Freedman, Levy, Xxxxx & Xxxxxxx ("FLK&S"), counsel to the
Buyer, shall have delivered to Sellers, an opinion, dated the
date of the Closing, in form and substance satisfactory the
Sellers, to the following effect:
(i) Buyer is a corporation duly organized, validly existing
and in good standing under the laws of the State of
Delaware, authorized to do business in the States of
Florida and Alabama, with all requisite corporate power
and authority to own, operate and lease their property
and assets;
(ii) Buyer has corporate power and authority to execute and
deliver this Agreement, and has taken all action
required by law, its Certificate of Incorporation,
By-Laws or
35
otherwise to authorize such execution and delivery and
to consummate the acquisition contemplated hereby, and
this Agreement have been duly executed and delivered by
Buyer and are valid and binding obligations of the
Buyer, enforceable in accordance with their terms,
except as enforcement may be limited by bankruptcy,
insolvency, reorganization or similar laws affecting
creditors' rights generally and general principals of
equity;
(iii) After reasonable investigation, the extent of which may
be specifically set forth, it is not aware of any
action, suit or proceeding at law or in equity or by or
before any government instrumentality or agency now
pending or threatened against or affecting Buyer, or any
property or rights of Buyer; and
(iv) To the best of its knowledge, the Buyer is not in
default with respect to any judgment, writ, injunction
or decree of any court or government agency and the
Buyer is not in default in the performance, observance
or fulfillment of any material obligation,
36
covenant or agreement by which it is bound or by which
any of its assets are affected.
In giving such opinion, such counsel may rely, as to
matters of fact, upon certificates of officers of the
Buyer.
(e) Sellers shall have received a certificate of Buyer as to the
incumbency of its officers.
11. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF THE BUYER. All obligations
of the Buyer under this Agreement are subject to the fulfillment, at the
option of the Buyer, at or prior to the date of the Closing, of each of the
following conditions:
(a) The representations and warranties of the Sellers and the Sole
Shareholders herein contained shall be true on as of the date
of the Closing, with the same force and effect as though made
on and as of said date, except as affected by transactions
contemplated hereby.
(b) The Sellers and the Sole Shareholders shall have performed all
of their obligations and agreements and complied with all of
the covenants contained
37
in this Agreement to be performed and complied with by them
prior to the date of the Closing.
(c) The Buyer shall have received a certificate of the Sellers,
executed by its President, dated the date of the Closing, in
form and substance satisfactory to FLK&S, certifying as to the
fulfillment of the matters mentioned in paragraphs (a) and (b)
of this Section 11.
(d) The Buyer shall have received evidence, reasonably
satisfactory to the Buyer and FLK&S, that all of the consents
set forth in Schedule 7.4 hereto, if any, have been duly
obtained, and that all permits, licenses, patents, franchises,
contracts and other authorizations necessary to the operation
of Sellers' business and described in Schedule 1.1 hereto and
that are transferable, have been transferred to or issued to
the Buyer.
(e) Chesser, Wingard, Barr, Whitney, Flowers and Fleet, P.A.
("CWBWFF"), counsel to the Sellers and the Sole Shareholders,
shall have delivered to Buyer, an opinion, dated the date of
the Closing, in form and substance satisfactory to FLK&S, to
the following effect:
38
(i) The Sellers are corporations duly organized, validly
existing and in good standing under the laws of the
States of Florida and Alabama, respectively, with all
requisite corporate power and authority to own, operate
and lease their properties and assets;
(ii) Sellers have all requisite power to execute and perform
their obligations under this Agreement;
(iii) The execution, delivery and performance by the Sellers
of this Agreement (a) has been duly authorized by all
necessary action of Sellers and the Sole Shareholders,
(b) does not violate any provision of law and (c) to the
best of CWBWFF's knowledge, will not result in a breach
in, or constitute a default under, any indenture,
agreement or other instrument to which the Sellers are
party or by which Sellers or any of their properties or
assets are bound;
(iv) This Agreement has been duly executed and delivered by
Sellers and the Sole
39
Shareholders. Assuming due execution by the Buyer, this
Agreement constitutes the valid and binding obligation
of the parties thereto enforceable in accordance with
its terms, except as enforcement may be limited by
bankruptcy, insolvency, reorganization or similar laws
affecting creditors' rights generally and general
principals of equity;
(v) After reasonable investigation, the extent of which may
be specifically set forth, CWBWFF is not aware of any
action, suit or proceeding at law or in equity or by or
before any government instrumentality or agency now
pending or threatened against or affecting the ownership
or operation of Sellers' business, or any property or
rights of Sellers, except as set forth in Schedule 7.4
hereto; and
(vi) To the best of CWBWFF's knowledge, the Sellers are not
in default with respect to any judgment, writ,
injunction or decree of any court or government agency
which affects the ownership or operation of the business
operated by Sellers and the Sellers are not
40
in default in the performance, observance or fulfillment
of any material obligation, covenant or agreement by
which they are bound or by which any of the Purchased
Assets are affected.
In giving such opinion, such counsel may rely, as to
matters of fact, upon certificates of officers of the
Sellers.
(f) Buyer shall have received a certificate of the Sellers
as to the incumbency of its officers.
12. TERMINATION AND SURVIVAL OF COVENANTS, REPRESENTATIONS AND
WARRANTIES. The covenants, representations and warranties contained in
Sections 7 and 9 of this Agreement shall survive for a period of three years
following the Closing.
13. INDEMNIFICATION.
(a) Sellers and the Sole Shareholders shall, and hereby agree to,
indemnify and hold harmless, the Buyer at all times from and
after the Closing date against and in respect to any damages,
as hereinafter defined. Damages, as used herein, shall include
any claims, actions, demands,
41
losses, costs, reasonable expenses, liabilities (joint or
several), penalties, and damages, including reasonable counsel
fees incurred in investigation or in attempting to avoid the
same or oppose the imposition thereof, resulting to Buyer from
(i) any material inaccuracy of a representation made by the
Sellers or the Sole Shareholders in or under this Agreement;
(ii) a material breach of any of the warranties made by the
Sellers or the Sole Shareholders in or under this Agreement;
(iii) breach or default in the performance by Sellers or the
Sole Shareholders of any of the covenants to be performed by
either of them hereunder; and (iv) any non-assumed debts,
liabilities, or obligations of the Sellers, whether accrued,
absolute, contingent, or otherwise, due or to become due. The
parties agree that the Sellers and the Sole Shareholders shall
be responsible to deliver to the Buyer at the Closing the
executed employment and non-competition agreements of each of
Xxxxxxx Xxxxxxx, Xxxx Pause, Xxxxxx Xxxxxx and Xxxx
Xxxxxxxxxx, but that the Sellers and the Sole Shareholders
shall not be liable for the possible breach of such employment
and non-competition agreements by such four employees in the
future after the Closing so
42
long as neither of the Sellers nor any of the Sole
Shareholders directly or indirectly participated in or
encouraged any such breach. Notwithstanding anything else
contained herein to the contrary, the parties hereto agree
that Xxxxx Xxxxxxx, Xxxxxx Xxxxxxx, Xxxxxx Xxxxxxx and Xxxxxx
Xxxxxxx (the "Xxxxxxx Shareholders") shall not be liable for a
breach of this Agreement by Xxxxxxx Xxx, unless the Xxxxxxx
Shareholders have participated, directly or indirectly, in
such breach, and likewise Xxxxxxx Xxx shall not be liable for
a breach of this Agreement by the Xxxxxxx Shareholders unless
Xxxxxxx Xxx has participated, directly or indirectly, in such
breach.
(b) Buyer agrees that, promptly on receipt by it of notice of any
demand, assertion, claim or action, or proceeding, judicial or
otherwise, with respect to any matter as to which Sellers and
the Sole Shareholders have agreed to indemnify Buyer under the
provisions of this Agreement, Buyer will give prompt notice
thereof in writing to Sellers and the Sole Shareholders,
together, in each instance, with a statement of such
information respecting such demand, assertion, claim, action
or proceeding as Buyer shall then have. Sellers and
43
the Sole Shareholders reserve the right to contest and defend
by all appropriate legal or other proceedings any demand,
assertion, claim, action or proceeding with respect to which
Sellers and the Sole Shareholders have been called upon to
indemnify Buyer under the provisions of this Agreement;
provided, however, that:
(1) Notice of intention to so contest shall be delivered to
Buyer within thirty (30) calendar days from the date of
receipt by Sellers and the Sole Shareholders of notice
of the assertion of such demand, assertion, claim,
action, or proceeding;
(2) Sellers or the Sole Shareholders shall pay all costs and
expenses of such contest, including all attorneys' and
accountants' fees and the cost of any bond required by
law to be posted in connection with such contest; and
(3) Such contest shall be conducted by reputable attorneys
employed by Sellers or the Sole Shareholders with the
written approval of Buyer, which approval shall not be
unreason-
44
ably withheld, at Sellers' and the Sole Shareholders'
cost and expense, but the Buyer shall have the right to
participate in such proceedings and to be represented by
attorneys of its own choosing, at its own cost and
expense.
If after such opportunity, Buyer does not elect to participate, or does
not participate, in any such proceedings, Buyer shall be bound by the results
obtained by Sellers or the Sole Shareholders, including without limitation any
out-of-court settlement or compromise.
If Sellers or the Sole Shareholders elects to contest any demand,
assertion, or claim, they shall not be obligated to make any payments to Buyer
with respect thereto until the legal remedies available to Sellers, the Sole
Shareholders or Buyer, as the case may be, with respect to such demand,
assertion, or claim, shall have been exhausted.
If requested by Sellers or the Sole Shareholders, Buyer agrees to
cooperate with Sellers and the Sole Shareholders in contesting any demand,
assertion, or claim that Sellers or the Sole Shareholders elect to contest,
or, if appropriate, in the making of any counterclaim against the person
asserting such demand, assertion, or claim or any cross-complaint against any
45
person; but Sellers or the Sole Shareholders will reimburse Buyer for any
expenses incurred by Buyer in so cooperating with the Sellers and the Sole
Shareholders. If such counterclaim or cross-complaint results in receipt by
the Buyer of amounts in excess of the amount that is subject to any such
demand, assertion, or claim, such excess shall first be applied to the payment
of the reasonable costs and expenses of the Sellers incurred in connection
with such contest, counterclaim, or cross-complaint, and the balance shall be
retained by Buyer.
14. RISK OF LOSS. Sellers assume all risk of destruction, loss, or damage
due to fire or other casualty up to the date of Closing. On said destruction,
loss, or damage due to fire or other casualty of substantially all of the
assets listed in Schedule 1.1 hereto, Buyer shall have the option to terminate
this Agreement and all rights of Buyer, Sellers and the Sole Shareholders
shall terminate. The Buyer shall notify Sellers within seven (7) days after
receiving written notice of said destruction, loss, or damage due to fire or
other casualty, of its decision to terminate this Agreement. If Buyer does not
timely notify Sellers of termination, this Agreement shall remain in full
force and effect; provided, however, that the Purchase Price shall be adjusted
at the Closing to reflect such destruction, loss, or damage, and if Buyer and
Sellers are unable to agree on the amount of such adjustment, the dispute
shall be determined by an
46
independent appraiser and such determination shall be binding on Buyer,
Sellers and the Sole Shareholders.
15. BROKERAGE. The Sellers and the Sole Shareholders agree to indemnify
the Buyer and hold it harmless from and against any and all claims for any
broker's or finder's fee or commission arising out of or based on any act of
the Sellers or the Sole Shareholders. The Buyer agrees to indemnify the
Sellers and the Sole Shareholders and hold them harmless from and against any
and all claims for any broker's or finder's fee or commission arising out of
or based on any act of the Buyer.
16. BULK SALES. Sellers and the Sole Shareholders agree to do all acts
necessary to fully comply with all applicable provisions of the Uniform
Commercial Code - Bulk Transfers with respect to the transaction forming the
subject matter of this Agreement, and to provide Buyer with satisfactory
evidence, as set forth in Schedule 16.1 hereto, of the full compliance by
Sellers and the Sole Shareholders with respect thereto. Sellers and the Sole
Shareholders hereby agree to indemnify Buyer against and save Buyer harmless
of and from all liabilities and obligations arising from any failure to fully
comply with said Uniform Commercial Code - Bulk Transfers provisions.
17. WAIVERS AND NOTICES. Any failure by any party to this
47
Agreement to comply with any of its obligations, agreements or covenants
hereunder may be waived by the Sellers or the Sole Shareholders in the case of
a default by the Buyer, and by the Buyer in the case of a default by the
Sellers or the Sole Shareholders. All waivers under this Agreement and all
notices, consents, demands, requests, approvals and other communications which
are required or may be given hereunder shall be in writing and shall be deemed
to have been duly given if personally delivered or mailed certified first
class mail, postage prepaid:
(a) If to Sellers or the Sole Shareholders:
Xxxxx Xxxxxxx
00 Xxxxxxxx
Xxxx Xxxxxx Xxxxx, Xxxxxxx 00000
with a copy to:
D. Xxxxxxx Xxxxxxx, Esq.
Chesser, Wingard, Barr, Whitney, Flowers
and Fleet, P.A.
0000 Xxxxx Xxxxxxx
Xxxxxxxx, Xxxxxxx 00000
(b) If to the Buyer:
Hanger Prosthetics & Orthotics, Inc.
0000 Xxx Xxxxxxxxxx Xxxx (Xxxxxx Xxxxx)
Xxxxxxxx, Xxxxxxxx 00000
Attention: Xxxx X. XxXxxxx, President
with a copy to:
Xxx X. Xxxxxxxx, Esq.
Freedman, Levy, Xxxxx & Xxxxxxx
0000 Xxxxxxxxxxx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000
48
or to such other person or persons at such address as may be designated by
written notice to the other parties hereunder.
18. ASSIGNMENT. Buyer may assign all or any part of its obligation
hereunder to Hanger Orthopedic Group, Inc. or any corporation controlled by or
controlling Hanger Orthopedic Group, Inc.; provided that such assignment shall
not release, revoke, amend or modify any of the obligations of Buyer under
this Agreement or any other instrument to be made by Buyer at Closing.
19. PRESS RELEASE. Sellers, the Sole Shareholders and Buyer acknowledge
that, as a public company, Hanger Orthopedic Group, Inc. will be required to
issue a press release or other public communication, including appropriate
filings with the Securities and Exchange Commission ("SEC"), concerning this
transaction.
20. USE OF SELLERS' FINANCIAL INFORMATION. The Sellers acknowledge that
upon execution of this Agreement, the financial statements relating to its
operations for the past three fiscal years will be required to be included in
certain filings with the SEC. Sellers and the Sole Shareholders hereby consent
to the use of said financial statements in said filings.
21. COSTS AND EXPENSES. The Buyer, the Sellers and the
49
Sole Shareholders shall pay all of their own respective costs and expenses
including, without limitation, legal, accounting and professional fees
incurred or to be incurred by such party in negotiating and preparing this
Agreement and in closing and carrying out the transaction contemplated by this
Agreement.
22. MISCELLANEOUS. This Agreement can be amended only by a written
instrument approved by the Sellers, the Sole Shareholders and the Buyer and
signed by the duly authorized officers of all parties. This Agreement,
together with the other writings delivered in connection herewith, including
the Schedules and Exhibits, which are an integral part of this Agreement,
embodies the entire agreement and understanding of the parties hereto and
supersedes any prior agreement and understanding between the parties. This
Agreement shall be binding upon and shall inure to the benefit of the parties
hereto and their respective successors and assigns.
23. GOVERNING LAW. This Agreement shall be governed by the laws of the
State of Delaware; provided, however, that the parties hereby consent to
subject matter jurisdiction, personal jurisdiction and venue in the
appropriate federal courts located in the Northern District, Pensacola
Division, in the State of Florida.
50
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
SELLERS:
Attest (Seal): FORT XXXXXX ORTHOPEDIC, INC.
___________________________ By:_____________________________
Secretary Xxxxxx X. Xxxxxxx, President
Attest (Seal): MOBILE LIMB & BRACE, INC.
___________________________ By:_____________________________
Secretary Xxxxxxx X. Xxx, President
SOLE SHAREHOLDERS:
________________________________ ______________________________
Name: Xxxxx X. Xxxxxxx, Individually
Witness
________________________________ ______________________________
Name: Xxxxxx X. Xxxxxxx, Individually
Witness
________________________________ ______________________________
Name: Xxxxxx X. Xxxxxxx, Individually
Witness
51
________________________________ ______________________________
Name: Xxxxxx X. Xxxxxxx, Individually
Witness
________________________________ ______________________________
Name: Xxxxxxx X. Xxx, Individually
Witness
BUYER:
Attest (Seal): HANGER PROSTHETICS
& ORTHOTICS, INC.
___________________________ By:_____________________________
Xxxxxxx X. Xxxxx Xxxx X. XxXxxxx
Secretary President
52
AMENDMENT NO. 1 TO ASSET PURCHASE AGREEMENT BETWEEN
FORT XXXXXX ORTHOPEDIC, INC. AND MOBILE LIMB & BRACE, INC.,
AS SELLERS, AND HANGER PROSTHETICS & ORTHOTICS, INC., AS BUYER
THIS AMENDMENT NO. 1 is dated as of May 12, 1997 (the "Amendment"), to
the Asset Purchase Agreement, dated as of May 8, 1997 (the "Agreement"),
between HANGER PROSTHETICS & ORTHOTICS, INC. ("Buyer"); FORT XXXXXX
ORTHOPEDIC, INC. and MOBILE LIMB & BRACE, INC. ("Sellers"); and XXXXX X.
XXXXXXX, XXXXXX X. XXXXXXX, XXXXXX X. XXXXXXX, XXXXXX X. XXXXXXX and XXXXXXX
X. XXX ("Sole Shareholders"). All capitalized terms used herein shall have the
same meanings ascribed to them under the Agreement unless otherwise provided
herein.
WHEREAS, the Agreement provides that the Closing thereunder shall be on
May 9, 1997, unless otherwise agreed to by the parties; and
WHEREAS, certain closing documents could not be executed and delivered by
or on behalf of the Sellers on May 9, 1997, and, as a result the Closing could
not occur on May 9, 1997; and
WHEREAS, as of May 12, 1997, all previously undelivered closing documents
have been duly and executed and delivered by or on behalf of the Sellers and
Sole Shareholders to the Buyer and, as a result, the parties desire to conduct
the Closing as of May 12, 1997.
NOW, THEREFORE, the parties hereto, intending to be legally bound, do
hereby agree as follows:
1. The foregoing introductory paragraphs are hereby incorporated as if
set forth herein.
2. The parties hereby agree that the Closing shall occur on May 12, 1997.
3. Each of the parties hereby represents and warrants that all
representations and warranties of such party that were to be true as of the
Closing on May 9, 1997, including all documents dated as of May 9, 1997, are
true and accurate as of the new Closing date of May 12, 1997, without any
separate need to change the date on all such documents from May 9, 1997 to May
12, 1997. The parties agree that all such closing documents shall be deemed to
be dated May 12, 1997, unless otherwise provided herein.
4. The only Closing documents that shall be reissued and dated May 12,
1997, shall be the legal opinions of the respective legal counsels for the
parties.
53
5. Unless otherwise provided in this Amendment, all other terms of the
Agreement shall remain unchanged. In the event of any inconsistency between
the terms of the Agreement and this Amendment, the terms of this Amendment
shall control.
IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of
May 12, 1997.
SELLERS:
Attest (Seal): FORT XXXXXX ORTHOPEDIC, INC.
___________________________ By:_____________________________
Secretary Xxxxxx X. Xxxxxxx, President
Attest (Seal): MOBILE LIMB & BRACE, INC.
___________________________ By:_____________________________
Secretary Xxxxxxx X. Xxx, President
SOLE SHAREHOLDERS:
________________________________ ______________________________
Name: Xxxxx X. Xxxxxxx, Individually
Witness
________________________________ ______________________________
Name: Xxxxxx X. Xxxxxxx, Individually
Witness
________________________________ ______________________________
Name: Xxxxxx X. Xxxxxxx, Individually
Witness
54
________________________________ ______________________________
Name: Xxxxxx X. Xxxxxxx, Individually
Witness
________________________________ ______________________________
Name: Xxxxxxx X. Xxx, Individually
Witness
BUYER:
Attest (Seal): HANGER PROSTHETICS
& ORTHOTICS, INC.
___________________________ By:_____________________________
Xxxxxxx X. Xxxxx Xxxx X. XxXxxxx
Secretary President
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