ASSET PURCHASE AGREEMENT
between
KEYSTONE DENTAL X-RAY, INC., as Seller
and
DISCOVERY X-RAY CORPORATION, as Purchaser
TABLE OF CONTENTS
Page
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ARTICLE 1. Sale and Purchase of Assets............................... 1
1.1 Assets to be Acquired..................................... 1
1.2 Purchase Price; Payment................................... 2
(a) Purchase Price...................................... 2
(b) Escrow Account for Creditors........................ 2
1.3 Assumption of Liabilities and Obligations................. 2
1.4 Allocation of Purchase Price.............................. 2
1.5 Guarantee of Guarantor.................................... 3
ARTICLE 2. Closing................................................... 3
2.1 Time and Place of Closing................................. 3
2.3 Further Assurances........................................ 3
ARTICLE 3. Representations and Warranties of the Seller.............. 3
3.1 Organization and Powers................................... 3
3.2 Power and Authorization................................... 3
3.3 Conflict with Other Agreements, Approvals................. 4
3.4 Compliance with Law....................................... 4
3.5 Financial Statements...................................... 4
3.6 Absence of Adverse Changes or Events...................... 5
3.7 Purchased Assets.......................................... 5
3.8 Contracts................................................. 6
3.9 Litigation................................................ 6
3.10 Employee Benefit Plans and Arrangements................... 6
3.11 Intellectual Property..................................... 7
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3.12 Franchises, Licenses, Permits, etc........................ 8
3.13 Inventory................................................. 8
3.14 Disclosure................................................ 8
3.15 Broker's and Finder's Fees................................ 8
3.16 Labor Matters............................................. 9
3.17 Tax Matters............................................... 9
3.18 Customers and Suppliers................................... 10
3.19 Records of Seller......................................... 10
3.20 Insurance................................................. 11
3.21 Environmental Matters..................................... 11
3.22 Product Warranty.......................................... 12
3.23 Product Liability......................................... 12
3.24 Bankruptcy................................................ 12
ARTICLE 4. Representations and Warranties of the Purchaser........... 13
4.1 Organization and Powers................................... 13
4.2 Power and Authorization................................... 13
4.3 Conflict with Other Agreements, Approvals................. 13
4.4 Broker's and Finder's Fees................................ 14
ARTICLE 5. Representations and Warranties of the Guarantor........... 14
5.1 Organization and Powers................................... 14
5.2 Power and Authorization................................... 14
5.3 Conflict with Other Agreements, Approvals................. 14
5.4 Broker's and Finder's Fees................................ 15
ARTICLE 6. ISRA...................................................... 15
ARTICLE 7. Consents.................................................. 16
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ARTICLE 8. Confidential Information.................................. 16
ARTICLE 9. Deliveries by Seller at Closing........................... 16
9.1 Officers Certificate...................................... 16
9.2 Opinion of Counsel for the Seller......................... 16
9.3 Employment Arrangement.................................... 16
9.4 Corestates Loan........................................... 17
9.5 Lease..................................................... 17
9.6 Consents.................................................. 17
9.7 ISRA...................................................... 17
9.8 Guarantor Assignment...................................... 17
9.9 UCC-3 Termination Statements.............................. 17
9.10 Closing Documents......................................... 17
ARTICLE 10. Deliveries by Purchaser at Closing........................ 17
10.1 Officer's Certificate..................................... 18
10.2 Employment Agreement...................................... 18
10.3 Closing Documents......................................... 18
ARTICLE 11. Warranty Claims........................................... 18
ARTICLE 12. Product Liability Claims.................................. 18
ARTICLE 13. Indemnification........................................... 18
13.1 Survival: Etc............................................. 18
13.2 Indemnities............................................... 19
(a) Indemnification of Purchaser........................ 19
(b) Indemnification of Seller........................... 19
(c) Limitation on Liability............................. 19
13.3 Notice and Opportunity to Defend.......................... 19
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ARTICLE 14. Bulk Sales Laws........................................... 20
ARTICLE 15. Waiver of Terms........................................... 20
ARTICLE 16. Payment of Expenses....................................... 20
ARTICLE 17. Cooperation............................................... 20
ARTICLE 18. Counterparts.............................................. 21
ARTICLE 19. Contents of Agreement, Parties in
Interest, Assignment, etc. ............................ 21
ARTICLE 20. Section Headings, Gender and "Person"..................... 21
ARTICLE 21. Notices................................................... 21
ARTICLE 22. Governing Law............................................. 22
ARTICLE 23. Non-Competition........................................... 22
ARTICLE 24. License................................................... 23
ARTICLE 25. Public Announcements...................................... 24
ARTICLE 26. Employees................................................. 24
ARTICLE 27. Post-Closing Covenants.................................... 24
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SCHEDULES*
---------
Schedule 1.1 Purchased Assets
Schedule 1.1(a) Retained Assets
Schedule 1.2(b) List of Creditors
Schedule 1.3 Assumed Purchase Orders
Schedule 1.4 Allocation of Purchase Price
Schedule 3.8 Contracts
Schedule 3.9 Litigation
Schedule 3.10 ERISA Plans
Schedule 3.11 Intellectual Property
Schedule 3.12 Franchises, Licenses, Permits, etc.
Schedule 3.16 Employees
Schedule 3.18(a) Customers
Schedule 3.18(b) Suppliers
Schedule 3.20 Insurance
Schedule 3.22 Standard Terms and COnditions
Schedule 9.9 UCC-3 Termination Statements
Schedule 27 Construction Plans
EXHIBITS*
--------
Exhibit A Escrow Agreement
Exhibit B Financial Statements
Exhibit C Xxxxxxxxx Employment Agreement
Exhibit X Xxxx Employment Agreement
Exhibit E Lease
Exhibit F License Agreement
* Omitted from this filing. Registrant agrees to furnish supplementally a
copy of any omitted schedule to the Securities and Exchange Commission upon
request.
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ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (the "Agreement") is made as of September 24,
1997 by and between Keystone Dental X-Ray, Inc., a Pennsylvania corporation (the
"Seller"), Discovery X-Ray Corporation., a Delaware corporation (the
"Purchaser") and Imaging Sciences, Inc., a Delaware corporation (the
"Guarantor").
WHEREAS, the Seller is engaged in the following two businesses: (1)
developing, manufacturing and selling intra-oral X-Ray tubes and related
components for the domestic and foreign markets (the "Acquired Business"), and
(2) servicing X-Ray and related equipment (the "Retained Business"); and
WHEREAS, the Seller desires to sell and the Purchaser desires to purchase
certain of the assets and properties of the Acquired Business on the terms and
conditions hereinafter set forth; and
WHEREAS, the Seller will continue to operate the Retained Business.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements contained herein, the parties hereto, intending to be
legally bound hereby, agree as follows:
ARTICLE 1. Sale and Purchase of Assets
1.1 Assets to be Acquired
The Seller hereby sells, assigns, transfers, conveys and delivers to the
Purchaser, and the Purchaser hereby purchases, acquires and accepts from the
Seller, all of Seller's right, title and interest in and to all property and
assets of the Seller which are used in the Acquired Business of whatever kind,
character or description, whether real, personal or mixed, tangible or
intangible, wherever situated, including, without limitation, those assets
listed on Schedule 1.1, free and clear of all mortgages, liens, pledges,
security interests, charges, claims, restrictions, and encumbrances of any
nature whatsoever ("Encumbrances") upon and subject to the terms and conditions
of this Agreement and in reliance on the representations, warranties and
covenants of Seller contained herein, in exchange for the Purchase Price (as
defined in Section 1.2 below). All of the property, assets, rights, business and
operations to be sold, assigned, transferred, conveyed and delivered by the
Seller to the Purchaser under this Agreement are hereinafter referred to
collectively as the "Purchased Assets". Purchaser shall not acquire any of
Seller's cash, accounts receivable, corporate records, trade names, the
trademark "Keystone," service marks, the assets of the Retained Business or any
other assets listed on Schedule 1.1(a) thereon (collectively, the "Retained
Assets").
1.2 Purchase Price; Payment
(a) The aggregate purchase price to be paid for the Purchased Assets (the
"Purchase Price") shall be one million four hundred fifty thousand dollars
($1,450,000). The Purchase Price shall be payable in immediately available funds
as follows: (a) $930,261 to Seller; (b) $280,799.00 to Corestates N.A.
("Corestates") in payment in full of all outstanding principal and interest on
the loan made by
Corestates to Seller in the original principal amount of $300,000 (the
"Corestates Loan"); and (c) $238,940.00 to Corestates Bank pursuant to the terms
of the Escrow Agreement attached hereto as Exhibit A.
1.3 Assumption of Liabilities and Obligations
The Purchaser will assume and perform the Seller's obligations under the
open purchase orders listed in Schedule 1.3. Purchaser shall not assume any
other liabilities or obligations of the Acquired Business, the Retained Business
or Seller whatsoever.
1.4 Allocation of Purchase Price
The Purchase Price shall be allocated among the Purchased Assets in the
manner set forth on Schedule 1.4 for all purposes including financial accounting
and tax purposes and the filing of Form 8594 with the Internal Revenue Service.
1.5 Guarantee of Guarantor
Guarantor hereby unconditionally and irrevocably guarantees to Purchaser
the full observation and performance of all obligations, representations,
warranties, covenants, agreements and commitments of any kind or nature whatever
contained in this Agreement which are assumed or made by the Seller herein.
ARTICLE 2. Closing
2.1 Time and Place of Closing
Subject to the terms and conditions hereof, the closing (the "Closing") of
the sale and purchase of the Purchased Assets shall take place on the date
hereof (the "Closing Date") at the offices of Windels, Marx, Davies & Ives,
located at 000 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx, or at such other time and
place as the parties shall mutually agree in writing.
2.3 Further Assurances
Following the Closing, at the request of the Purchaser, the Seller will
from time to time execute, acknowledge and deliver to the Purchaser such other
assignments, consents, agreements and other instruments or documents of
conveyance and transfer, and will take such other actions and execute and
deliver such other documents, certifications and further assurances, as the
Purchaser may reasonably require in order to vest more effectively in the
Purchaser, or to put the Purchaser more fully in possession of, any of the
Purchased Assets.
ARTICLE 3. Representations and Warranties of the Seller
The Seller represents and warrants to the Purchaser as follows:
3.1 Organization and Powers
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The Seller is a corporation duly organized, validly existing and in good
standing under the laws of the State of Pennsylvania and has all requisite
right, power and authority to lease, use, maintain or operate its properties and
assets and carry on the Acquired Business as now conducted, and is in all
respects duly licensed, authorized, qualified and registered (and has duly filed
all notifications required) to conduct the Acquired Business as it is currently
being conducted and is in good standing in each jurisdiction in which it does
business.
3.2 Power and Authorization
The Seller has all requisite right, power and authority to execute, deliver
and perform its obligations under this Agreement and to carry out the
transactions contemplated hereby. The execution and delivery of this Agreement
by the Seller have been duly authorized by all necessary corporate and other
action. This Agreement has been duly executed and delivered by Seller and
constitutes Seller's legal, valid and binding obligation enforceable against
Seller in accordance with its terms. Any person who has executed this Agreement
on behalf of the Seller, or who will execute on behalf of Seller any agreement,
document, or instrument contemplated by this Agreement, has been or will, at the
time of such execution, be duly authorized to do so by all necessary corporate
action.
3.3 Conflict with Other Agreements, Approvals
With respect to the following:
(a) the Articles of Incorporation or bylaws of Seller,
(b) any applicable law, statute, ordinance, rule or regulation,
(c) any Contract or instrument to which the Seller is a party or may
be bound, or
(d) any judgment, writ, consent, decree, order, injunction, ruling or
mandate of any court or governmental authority to which the Seller is a
party or subject, the execution, delivery and performance by the Seller of
this Agreement and the consummation of the transactions contemplated hereby
will not, (i) result in any violation, conflict or default, give to others
any interest or rights, including rights of termination, cancellation or
acceleration, or create any Encumbrance, or (ii) require any authorization,
consent, approval, exemption or other action by, or notice to or filing
with, any person, including without limitation any court or administrative
or governmental body which has not been obtained (collectively "Consents"),
given or done.
3.4 Compliance with Law
The Seller's conduct of the Acquired Business and Seller's ownership, use,
lease, maintenance and operation of its properties and the Purchased Assets are
and have been in material compliance with any and all applicable federal, state,
local or other governmental laws, statutes or ordinances, foreign or domestic,
and any judgment, order, writ, consent, decree, injunction, ruling, mandate,
rule or regulation of any federal, state, local or other governmental agency or
body, foreign or domestic (including, without limitation, all environmental,
energy, safety, health, zoning, anti-discrimination, antitrust, wage and hour
and price and wage control laws, ordinances, orders, rules or regulations to the
extent any or all of the foregoing are applicable).
3.5 Financial Statements
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(a) The Seller has delivered to the Purchaser true, correct and complete
copies of the following financial statements of the Seller attached hereto as
Exhibit B, including all notes, comments and schedules thereto:
(i) Reviewed Financial Statements for the years ended December 31,
1994 and 1995;
(ii) Reviewed Financial Statement for the year ended December 31,
1996;
(iii) Unaudited Balance Sheet as of June 30, 1997; and
(iv) Unaudited income statements for the period ended June 30, 1997.
(b) Such financial statements have been prepared in accordance with
generally accepted accounting principles (including, but not limited to, the
allocation of expenses between or among the Seller and other businesses,
operations and affiliates of the Seller), consistently applied, and fairly
present the financial condition, assets and liabilities of the Seller at each
respective date indicated. The balance sheet as of June 30, 1997 is referred to
herein as the "June 30 Balance Sheet". The Purchaser acknowledges that such
financial statements relate to both the Acquired Business and the Retained
Business and therefore such financial statements do not reflect the operations
of the Acquired Business as though it had operated as a separate entity.
(c) Except for liabilities and obligations reflected in the June 30 Balance
Sheet, and liabilities and obligations incurred since June 30, 1997 in the
ordinary course of Acquired Business consistent with prior practice, which in
the aggregate are not materially different from the amounts set forth on the
June 30 Balance Sheet, neither the Acquired Business nor the Seller has any
indebtedness, liability or obligation, accrued or contingent, which should be
disclosed in its financial statements or the notes, comments or schedules
thereto.
3.6 Absence of Adverse Changes or Events
Since June 30, 1997, there has been no change in the Purchased Assets,
financial condition, results of operations or business prospects of the Acquired
Business which has materially adversely affected or might materially adversely
affect, the Purchased Assets, financial condition, results of operations or
business prospects of the Acquired Business, including, but not limited to: (i)
the borrowing or agreement or commitment to borrow any funds; (ii) the
incurrence of any obligation or liability, whether absolute, accrued, contingent
or otherwise, whether due or to become due, except for obligations which are of
a nature similar to those which are currently reflected on the June 30 Balance
Sheet and which have been or will be incurred in the ordinary course of business
and consistent with prior practice; (iii) any extraordinary or unusual losses;
or (iv) a reduction in the Sellers's inventories or supplies below normal and
adequate levels for the continuation of the Acquired Business in the ordinary
course consistent with prior practice. Since June 30, 1997, the Seller has
conducted the Acquired Business only in the ordinary course of business and
consistent with prior practice.
3.7 Purchased Assets
(a) Schedule 1.1 sets forth a true, correct and complete list of all the
Purchased Assets and constitutes all of the Assets of the Seller in connection
with the operation of the Acquired Business other than the Retained Assets. The
Seller is the owner of and has good and marketable title to
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all of the Purchased Assets, free and clear of all Encumbrances or other third
party interests of any nature whatsoever.
(b) The Purchased Assets are in good operating condition in all material
respects and are suitable for the purpose used and intended in the ordinary
course of business, subject to ordinary wear and tear, and are adequate and
sufficient for all of the current operations of the Acquired Business.
3.8 Contracts
All written or oral contracts, agreements, instruments, guaranties, leases,
mortgages, purchase orders, sales orders and commitments ("Contracts"), to
which, with respect to the Acquired Business or Seller, the Seller is a party or
may be bound, are listed in Schedule 3.8. All Contracts and purchase orders to
be assumed by the Purchaser are the legal, valid and binding obligation of
Seller and in full force and effect on the date hereof and the Seller has not
violated any provision of, or committed or failed to perform any act, which,
with or without any notice, lapse of time or both, would constitute a default
under the provisions of any such Contract or purchase order the termination of
which would have a material adverse effect upon the Purchased Assets, financial
condition, results of operations or business prospects of the Business. Except
as set forth on Schedule 3.8, to the Seller's knowledge, there is no (i)
existing default by any party to such Contract or purchase order or any event
which, with or without any notice, lapse of time or both, would constitute a
default under or result in any right to accelerate by any other party to such
Contract or purchase order or (ii) valid defense or counterclaim which may be
asserted against Seller.
3.9 Litigation
Except as disclosed on Schedule 3.9, (a) no claim, litigation, proceeding,
action, suit, arbitration, investigation or other judicial, regulatory or
administrative proceeding ("Litigation") is in progress, pending or in effect,
or threatened or known to be contemplated, against the Seller with respect to
the Acquired Business, the Retained Business or any of the Purchased Assets,
before any court, governmental agency, authority or commission, arbitrator or
mediator, (b) there are no judgments, orders, writs, consents, decrees,
injunctions, rulings, or any other mandates of any court or governmental
authority outstanding against the Seller with respect to the Acquired Business,
the Retained Business or the Purchased Assets, (c) no Litigation has been
brought or threatened, or is known to be contemplated, respecting or in
connection with the transactions contemplated by this Agreement and (d) no
proceeding under any bankruptcy or insolvency law is currently pending by or
against Seller. No Litigation described in Schedule 3.9, if adversely
determined, would, individually or in the aggregate, have a material adverse
effect on the Acquired Business or the Purchased Assets.
3.10 Employee Benefit Plans and Arrangements
(a) Schedule 3.10 contains a true, correct and complete list of all
employee benefit plans sponsored or maintained by the Seller with respect or
relating to the Acquired Business. For the purposes hereof, the term "employee
benefit plan" includes all employee welfare benefit plans within the meaning of
section 3(1) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), and all employee pension benefit plans within the meaning of section
3(2) of ERISA.
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(b) None of Seller's employees will participate in any of the Purchaser's
employee benefit plans unless and until such person becomes an employee of the
Purchaser, in which case participation in the Purchaser's plans will be governed
by the terms of such plans. The Seller retains all liabilities and
responsibilities under ERISA or the Internal Revenue Code of 1986, as amended
(the "Code"), for all employee benefit plans or compensation practices of the
Seller ("Seller's Plans") regardless of when such liabilities or
responsibilities arose. The Purchaser shall have no obligations whatsoever with
respect to Seller's Plans.
(c) The Seller is not and has never been a member of a "controlled group of
corporations" as defined in Section 1563(a) of the Code.
(d) None of the Seller, any Seller Plan, any trust created thereunder, or
any trustee, administrator, or fiduciary (as defined in Section 3(21) of Title I
of ERISA) thereof, has engaged in a "prohibited transaction" as such term is
defined in Section 4975 of the Code or Section 406 of ERISA.
(e) There exists no condition or set of circumstances which could result in
the imposition of any liability under ERISA, and there are no threatened or
pending claims, suits or other proceedings by present or former employees of the
Seller, plan participants, beneficiaries or spouses of any of the above, the
Internal Revenue Service, or any other person or entity involving any Seller
Plan including claims against the assets of any trust, involving any Seller
Plan, or any rights or benefits thereunder, other than ordinary and usual claims
for benefits by participants or beneficiaries.
(f) Seller has not maintained, adopted or established, contributed or been
required to contribute to, or otherwise participated in or been required to
participate in, and as of the date of this Agreement, has not adopted or
established, does not maintain, does not contribute to and is not required to
contribute to, and does not otherwise participate in and is not required to
participate in any "multiemployer plan" (as defined in Section 3(37) of ERISA).
No amount is due or owing from the Seller on account of a "multiemployer plan"
(as defined in Section 3(37) of ERISA), or on account of any withdrawal
therefrom.
3.11 Intellectual Property
(a) Other than the rights of Guarantor, the Seller owns free and clear or
has the sole and exclusive right to use, or has entered into a subsisting
license agreement granting it the right to use, all computer programs, systems
and software, foreign and United States patents, trademarks, service marks,
trade names, copyrights, and all other intellectual property rights and any
applications with respect thereto ("Intellectual Property") which is necessary
for the conduct of the Acquired Business as now conducted and as heretofore
conducted, with no known conflict with, or infringement of, any Intellectual
Property of any other person, including, without limitation, United States
Patent Nos. 4,317,040 and 4,127,776 and Registered Trademarks "Intrex,"
"Spacemaker" and "Marksman."
(b) In connection with the operation of the Acquired Business, Seller has
not interfered with, infringed upon, misappropriated, or otherwise come into
conflict with any Intellectual Property rights of third parties. Seller and the
directors and officers (and employees with responsibility for Intellectual
Property matters) of Seller have not received any charge, complaint, claim,
demand, or notice alleging any such interference, infringement, misappropriation
or violation (including any claim that Seller must license or refrain from using
any Intellectual Property rights of any third party). To the knowledge of
Seller, no third party has interfered with, infringed upon, misappropriated or
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otherwise come into conflict with any Intellectual Property rights of Seller
used in connection with, or necessary for the operation of the Acquired
Business.
(c) Schedule 3.11 contains a true, complete and correct listing of all
Seller's Intellectual Property.
3.12 Franchises, Licenses, Permits, etc.
The Seller owns or possesses all franchises, licenses, permits, consents,
orders, variances, approvals, exemptions, waivers and other authorizations,
governmental or otherwise, which are necessary for or related to the operation
of the Acquired Business as now or heretofore conducted or to the ownership,
maintenance or operation of the Purchased Assets ("Authorizations"), all of
which are listed on Schedule 3.12 and are in full force and effect. The Seller
has been in compliance with and is not in default and has not received any
notice of any claim of default, with respect to any such Authorizations, or any
notice of any other claim or proceeding or threatened proceeding relating to any
such Authorizations or claimed lack of any necessary Authorizations. Neither the
execution or delivery of this Agreement nor the consummation of the transactions
contemplated hereby will have any materially adverse effect upon any such
Authorizations.
3.13 Inventory
The inventories of goods included in the Purchased Assets ("Inventory")
consist of raw materials and supplies, manufactured and purchased parts, goods
in process, and finished goods, all of which is merchantable and fit for the
purpose for which it was processed or manufactured, and none of which is
slow-moving, obsolete, damaged or defective. Inventory included in the Purchased
Assets has been manufactured in accordance with good manufacturing practices and
is properly reflected and valued in accordance with generally accepted
accounting principles, consistently applied, on the June 30 Balance Sheet. Since
that time, there has been no disposition of Inventory other than in the ordinary
course of business of the Acquired Business.
3.14 Disclosure
No representation, warranty or statement made or to be made by Seller
contained in this Agreement, in any of the Schedules or in any certificate or
other writing signed and delivered by Seller to Purchaser pursuant to this
Agreement or in connection with the transactions contemplated hereby contains
any untrue statement of material fact or omits to state any material facts
necessary in order to make the statements contained therein not misleading.
3.15 Broker's and Finder's Fees
Seller is not obligated to pay, and has not retained any broker or finder
or any other person who is entitled to, any broker's or finder's fee or any
other commission or financial advisory fee based on any agreement or undertaking
made by or for the benefit of Seller in connection with the consummation of the
transactions contemplated herein. Seller will indemnify and hold Purchaser
harmless from and against any and all claims from any person or entity for any
and all such fees and commissions through Seller.
3.16 Labor Matters
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(a) There are no collective bargaining agreements or any written or oral
consultant agreements or written or oral contracts of employment with any of the
Seller's employees, or commitments or agreements to increase the wages or
benefits or to modify the conditions or terms of employment of any of such
employees.
(b) The Seller has no obligations or arrangements with employees with
respect to bonuses, commissions, incentive compensation, supplementary
compensation, vacations, severance, sick pay, sick leave, insurance, service
awards, relocation, disability, tuition refunds or other benefits, whether oral
or written.
(c) Within the past five years, there have been no union organizing
activities, work stoppages, picketing, slowdowns or lockouts or any other labor
dispute trouble with respect to the employees of the Seller or of any of
Seller's suppliers, service providers, vendors or customers. Nor, to the
Seller's knowledge, are any such activities currently pending or threatened.
(d) Schedule 3.16 sets forth the names, titles and functions of, and
current compensation and other benefits payable to, all persons employed by
Seller on the date hereof who will be employed by the Purchaser after the
Closing.
3.17 Tax Matters
(a) The Seller has filed all returns, declarations, reports, claims for
refunds, or information returns or statements relating to Taxes (as defined
below), including any schedules or attachments thereto, and including any
amendments thereof ("Tax Returns") that it was required to file with respect to
the Acquired Business or which, if not filed, could affect the Acquired
Business. All such Tax Returns were correct and complete in all material
respects. All Taxes owed by the Seller with respect to the Acquired Business
(whether or not shown on any Tax Return) have been fully paid. The Seller is not
currently the beneficiary of any extension of time within which to file any Tax
Return with respect to the Acquired Business. There are no Encumbrances on any
of the property or assets of the Acquired Business that arose in connection with
any failure (or alleged failure) to pay any Taxes.
(b) There is no material dispute or claim concerning any Tax liability of
the Seller either (i) claimed or raised by any authority in writing or (ii) as
to which the Seller (or any representative of the Seller) has knowledge based
upon personal contact with any agent of such authority.
(c) The Seller has delivered to the Purchaser true, correct and complete
copies of all Tax Returns, examination reports, and statements of deficiencies
assessed against or agreed to with respect to the Seller within the previous
five (5) years. The Seller has not waived any statute of limitations in respect
of Taxes or agreed to any extension of time with respect to any Tax assessment
or deficiency.
(d) The unpaid Taxes of the Seller (i) did not, as of the most recent
fiscal month end, exceed by any material amount the reserve for Tax liability
set forth on the face of the June 30 Balance Sheet (rather than in any notes
thereto) and (ii) will not exceed by any material amount that reserve as
adjusted for operations and transactions through the Closing Date in accordance
with the past custom and practice of the Seller filing its Tax Returns.
(e) Neither Seller nor any affiliates of Seller is a "foreign person" (as
such term is defined in Section 1445(f) of the Code).
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(f) The word "Tax" or "Taxes" shall mean any federal, state, local or
foreign income, gross receipts, license, payroll, employment, excise, severance,
stamp, occupation, premium, windfall profits, environmental (including taxes
under Internal Revenue Code ss.59A), customs duties, capital stock, franchise,
profits, withholding, social security (or similar), unemployment, disability,
real property, personal property, sales, use, transfer, registration, value
added, alternative or add-on minimum, estimated or other tax of any kind
whatsoever, including any interest, penalty or addition thereto, whether
disputed or not.
3.18 Customers and Suppliers
(a) Schedule 3.18(a) sets forth a true, correct and complete list of the
customers of the Acquired Business by net sales for each such customer having
net sales of at least 10% of the Seller's gross revenues for the period ended
September 21, 1997. Except as set forth on Schedule 3.18(a), the Seller has not
been informed by or become aware that any current customer of the Acquired
Business intends to purchase products of the Acquired Business on terms less
favorable than those currently in effect or reduce the number of products
purchased.
(b) Schedule 3.18(b) sets forth a true, correct and complete list of all of
the suppliers of the Acquired Business of (i) any finished goods, raw materials
or components that comprise the inventory of the Acquired Business or (ii) any
service or other material item necessary for the operation of the Acquired
Business. Except as set forth on Schedule 3.18(a), Seller has not been informed
that any such supplier intends to discontinue to supply to Seller or that such
supplier intends to supply Seller goods or services on terms less favorable than
those currently in effect.
3.19 Records of Seller
Seller has furnished to Purchaser true, accurate and complete copies of (i)
the certificate of incorporation of the Seller, and all amendments thereto,
certified by the Pennsylvania Secretary of State, (ii) a certificate of good
standing of the Seller, duly certified by the Pennsylvania Secretary of State
not earlier than 10 days prior to the date hereof and (iii) all filings made
with the Food and Drug Administration, including audit summaries and responses
thereto, and to the extent feasible, all engineering notes and drawings related
to the Intrex 60/70 DC, a list of all drawings, and the drawings for all tubes,
arms, controllers, and remotes; provided, however, if Seller is unable to
deliver any such notes or drawings prior to Closing after using its best
efforts, Seller hereby covenants to deliver such notes and drawings to the
Purchaser as soon as possible after the Closing. There have been no material
transactions involving the Acquired Business or the Purchased Assets which
properly should have been set forth in such books and records and which have not
been so set forth.
3.20 Insurance
Schedule 3.20 contains a true, correct and complete list of all policies of
life, fire, casualty, liability, product liability, workers' compensation,
title, officer's liability, fidelity, business interruption, error and omission
and all other forms of insurance (collectively, the "Insurance Policies") owned
by the Seller relating to the Acquired Business or the Purchased Assets,
together with a brief summary of the type of coverage thereof (including,
without limitation, information with respect to available coverage per year,
deductibles, exclusions from coverage, expiration dates, annual premiums and
outstanding claims against existing coverages) . Each of the Insurance Policies
is in full force and effect, provides adequate coverage for all normal risks
covered by the subject matter thereof incident to the business and service by
individuals as officers or key employees thereof, is to Seller's knowledge in
character and amount at least equivalent to that carried by persons engaged in a
business subject to the
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same or similar risks, perils or hazards as the Acquired Business and are and as
of the Closing will be duly in force and effect. The Seller is not in default
with respect to any material term or condition of any of the Insurance Policies,
and there are no circumstances existing which would enable any insurance carrier
to avoid liability under any of the Insurance Policies issued by it. The Seller
has furnished to the Purchaser true, correct and complete copies of all
Insurance Policies set forth on Schedule 3.20. The Seller has not been denied or
rejected for any insurance coverage which any of them requested or applied for
within the past five years.
3.21 Environmental Matters
(a) Seller has been and is currently in compliance in all material respects
with all applicable Environmental Laws with respect to Acquired Business, the
Purchased Assets or the premises at which the Acquired Business is currently
operated (the "Premises"). For purposes of this Agreement, "Environmental Law"
means any and all laws, statutes, ordinances, rules, regulations and other legal
requirements imposing liability or standards of conduct for or relating to
Hazardous Materials or the discharge of Hazardous Materials (as hereinafter
defined) into the environment, including, but not limited to, the Resource
Conservation and Recovery Act of 1976, as amended by the Hazardous and Solid
Waste Amendments of 1984, the Comprehensive Environmental Response Compensation
and Liability Act, as amended by the Superfund Amendments and Reauthorization
Act of 1986, the Hazardous Materials Transportation Act of 1975, the Toxic
Substances Control Act, the Federal Water Pollution Control Act, the Clear Air
Act and the Safe Drinking Water Act, and the Industrial Site Recovery Act,
N.J.S.A. S.13:1 K-6, et seq., together with all other laws (including rules,
regulations, codes, plans, injunctions, judgments, orders, decrees, rulings, and
charges thereunder) of federal, state, local, and foreign governments (and all
agencies thereof) concerning pollution or protection of the environment, public
health and safety, or employee health and safety, including laws relating to
emissions, discharges, releases or threatened releases of pollutants,
contaminants or chemical, industrial, hazardous or toxic materials or wastes
into ambient air, surface water, ground water or lands or otherwise relating to
the manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of pollutants, contaminants or chemical, industrial,
hazardous or toxic materials or wastes.
(b) There are no material liabilities relating to any Hazardous Materials
asserted against the Seller. The Seller has not agreed to or been ordered to
assume any liability or obligation of any third party for cleanup, compliance or
required capital expenditures in connection with any liability or obligation
relating to any Hazardous Materials. For purposes of this Agreement, "Hazardous
Material" means any hazardous substance, toxic substance, pollutant,
contaminant, hazardous waste, hazardous chemical or any other substance,
regardless of physical form, defined pursuant to, or subject to, any
Environmental Law.
(c) No Hazardous Materials are or were stored or otherwise located on or
released from any part of the premises while owned, used, leased, or maintained
by Seller, or any affiliate of Seller, or in connection with the Acquired
Business or the Retained Business.
(d) No storage tanks, asbestos containing materials or polychlorinated
biphenyl transformers and capacitors were or are located on any part of any
premises while owned, used, leased, or maintained by Seller or in connection
with the premises. Any such storage tanks, materials, transformers and
capacitors were during such periods and are operated and maintained in
compliance in all material respects with applicable Environmental Laws, and
there has been no release of Hazardous Materials from such storage tanks,
materials, transformers and capacitors during such periods.
3.22 Product Warranty
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Each product manufactured, sold, leased or delivered by Seller has been in
conformity with all applicable contractual commitments and all express and
implied warranties, and Seller has no liability (and there is no basis for any
present or future action, suit, proceeding, hearing, investigation, charge,
complaint, claim or demand against it giving rise to any liability) for
replacement or repair thereof or other damages in connection therewith, subject
only to the reserve for product warranty claims set forth on the face of the
June 30 Balance Sheet (rather than in any notes thereto) as adjusted for the
passage of time through the Closing Date in accordance with the past custom and
practice of Seller. No product manufactured, sold, leased or delivered by Seller
is subject to any guaranty, warranty or other indemnity beyond the applicable
standard terms and conditions of sale or lease. Schedule 3.22 contains copies of
the standard terms and conditions of sale or lease for Seller (containing
applicable guaranty, warranty and indemnity provisions).
3.23 Product Liability
Seller has no liability (and, to the best of Seller's knowledge, there is
no basis for any present or future action, suit, proceeding, hearing,
investigation, charge, complaint, claim or demand against Seller giving rise to
any liability) arising out of any injury to individuals or property as a result
of the ownership, possession or use of any product manufactured, sold, leased or
delivered by Seller.
3.24 Bankruptcy
The Second Amended Plan of Reorganization In re: Keystone Dental X-Ray,
Inc., f/d/b/a Keystone X-Ray Inc. and the Modification of Second Amended Plan of
Reorganization (collectively, the "Plan") and the Order Confirming the Plan
dated May 10, 1995 (the "Order") have not been modified or amended since such
date. There is no motion, proceeding, appeal, stay or other action pending or,
to the best knowledge of the Seller, threatened in connection with the Plan or
the Order and the Seller has not received any notice of default in connection
therewith. The Seller has complied with all of the material conditions of the
Plan and the Order and has made all payments required to have been made under
the Plan, including all administrative expenses. The Seller will have adequate
resources following the closing to make all additional payments required to be
made under the Plan. The transactions contemplated by the Agreement are
authorized by, and do not violate, the terms of either the Plan or the Order.
ARTICLE 4. Representations and Warranties of the Purchaser
The Purchaser represents and warrants to the Seller as follows:
4.1 Organization and Powers
The Purchaser is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware and has all requisite right,
power and authority to own its properties and assets and carry on the Acquired
Business as now conducted.
4.2 Power and Authorization
The Purchaser has all requisite right, power and authority to execute and
deliver this Agreement and carry out the transactions contemplated hereby. The
execution and delivery of this Agreement by the Purchaser have been duly
authorized by all necessary corporate action. This
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Agreement has been duly executed and delivered by Purchaser and constitutes
Purchaser's legal, valid and binding obligation enforceable against Purchaser in
accordance with its terms.
4.3 Conflict with Other Agreements, Approvals
With respect to the following:
(a) the Articles of Incorporation or Bylaws of the Purchaser,
(b) any applicable law, statute, ordinance, rule or regulation,
(c) any Contract or instrument to which the Purchaser is a party or
may be bound, or
(d) any judgment, order, injunction, decree or ruling of any court or
governmental authority to which the Purchaser is a party or subject,
(e) the execution and delivery by the Purchaser of this Agreement and
the consummation of the transactions contemplated hereby will not (i)
result in any violation, conflict or default or (ii) require any
authorization, consent, approval, exemption or other action by any court or
administrative or governmental body which has not been obtained, or any
notice to or filing with any court or administrative or governmental body
which has not been obtained or any notice to or filing with any court or
administrative or governmental body which has not been given or done.
4.4 Broker's and Finder's Fees
Purchaser is not obligated to pay, and has not retained any broker or
finder or any other person who is entitled to, any broker's or finder's fee or
any other commission or financial advisory fee based on any agreement or
undertaking made by or for the benefit of Purchaser in connection with the
consummation of the transactions contemplated herein. Purchaser will indemnify
and hold Seller harmless from and against any and all claims from any person or
entity for any and all such fees and commissions through Purchaser.
ARTICLE 5. Representations and Warranties of the Guarantor
The Guarantor represents and warrants to the Purchaser as follows:
5.1 Organization and Powers
The Guarantor is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware and has all requisite right,
power and authority to own its properties and assets and carry on its business
as now conducted.
5.2 Power and Authorization
The Guarantor has all requisite right, power and authority to execute and
deliver this Agreement and carry out its obligations hereunder subject to
bankruptcy, reorganization, insolvency, fraudulent conveyance and other similar
laws affecting the rights of creditors generally. The execution and delivery of
this Agreement by the Guarantor have been duly authorized by all necessary
corporate
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action. This Agreement has been duly executed and delivered by Guarantor and
constitutes Guarantor's legal, valid and binding obligation enforceable against
Guarantor in accordance with its terms.
5.3 Conflict with Other Agreements, Approvals
With respect to the following:
(a) the Articles of Incorporation or Bylaws of the Guarantor,
(b) any applicable law, statute, ordinance, rule or regulation,
(c) any Contract or instrument to which the Guarantor is a party or
may be bound, or
(d) any judgment, order, injunction, decree or ruling of any court or
governmental authority to which the Guarantor is a party or subject,
(e) the execution and delivery by the Guarantor of this Agreement and
the consummation of the transactions contemplated hereby will not (i)
result in any violation, conflict or default or (ii) require any
authorization, consent, approval, exemption or other action by any court or
administrative or governmental body which has not been obtained, or any
notice to or filing with any court or administrative or governmental body
which has not been obtained or any notice to or filing with any court or
administrative or governmental body which has not been given or done.
5.4 Broker's and Finder's Fees
Guarantor is not obligated to pay, and has not retained any broker or
finder or any other person who is entitled to, any broker's or finder's fee or
any other commission or financial advisory fee based on any agreement or
undertaking made in connection with the consummation of the transactions
contemplated herein. Guarantor will indemnify and hold Purchaser harmless from
and against any and all claims from any person or entity for any and all such
fees and commissions.
ARTICLE 6. ISRA
(a) The Seller shall, at the Seller's own expense, comply with the
requirements of the Industrial Site Recovery Act, N.J.S.A. S. 13.1 K-6, et seq.
("ISRA") including, without limitation, the preparation and submission of all
required information to the New Jersey Department of Environmental Protection
("NJDEP") and the performance of any and all investigation and remediation of
the Assets and the Facility required for compliance with ISRA. However, the
Purchaser shall pay for any and all environmental consultants and legal advisers
it may retain.
(b) The Seller shall promptly furnish to Purchaser true and complete copies
of all documents, submissions, correspondence and written communications
provided to or received from the NJDEP or any other governmental agency. Such
documents shall include without limitation, complete copies of all assessments,
site investigations, sampling, test results and final reports obtained and
prepared from samples and test taken at and around the Facility, remedial
investigations and remedial workplans. The Seller shall notify Purchaser in
advance of all meetings scheduled between the Seller and NJDEP and Purchaser may
attend any such meetings.
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(c) The Seller shall prepare and file with the NJDEP applications under
ISRA and shall use its reasonable best efforts to obtain, not later than
forty-five (45) after Closing, the written approval of the NJDEP for a de
minimis exemption, negative declaration or such other NJDEP action reasonably
acceptable to the parties. If the NJDEP shall decline to approve such
application or shall fail to act to approve such application within forty-five
(45) days after Closing, Seller shall prepare a remedial investigation and
remedial action workplan for submission to the NJDEP which remedial action
workplan shall be subject to review and approval by Purchaser, which approval
shall not unreasonably be withheld and timely provided.
(d) If NJDEP requires the implementation of a remedial action workplan, the
Purchaser will allow such agents, licensees and employees of the Seller as the
Seller may designate and representatives of NJDEP to enter upon the Facility.
Further, Purchaser will permit the aforementioned individuals to inspect the
Facility and to conduct such sampling, engineering and remediation as may be
necessary or useful in the completion of the process of complying with ISRA. The
Seller agrees to take all reasonable steps to prevent interference between the
ISRA compliance activities and operations on the property. If the Seller is
required to disturb the surface of the ground in the process of undertaking any
necessary compliance, the Seller will restore or regrade the same upon obtaining
the ISRA approval from NJDEP and will defend, indemnify and hold harmless the
Purchaser against any costs, penalties, damages, claims, losses, liabilities and
expenses of Purchaser arising directly therefrom.
ARTICLE 7. Consents
The parties shall each use their best efforts to obtain all Consents which
may be necessary or reasonably desired for consummation of the transactions
contemplated by this Agreement.
ARTICLE 8. Confidential Information
After the Closing, the Seller will treat and hold as confidential all
information relating to the Acquired Business confidential and refrain from
using any such information (unless ascertainable from public or published
information or trade sources) except as necessary to fulfill the purposes of
this Agreement or except as may be necessary for the completion of Tax Returns
or in compliance with other applicable laws, regulations, and orders of courts
or regulatory authorities.
ARTICLE 9. Deliveries by Seller at Closing
At Closing, the Seller shall deliver to the Purchaser the following
documents.
9.1 Officers Certificate
The Seller shall deliver one or more certificates from the President of the
Seller and the Guarantor to effect that (i) the representations and warranties
of the Seller herein contained and the information contained in the Schedules
and any closing and other documents delivered by the Seller or the Guarantor in
connection with this Agreement are true, correct and complete in all material
respects; (ii) the Financial Statements are true and correct in all material
respects, and (iii) that the transactions contemplated hereby have been approved
by all requisite corporate action on the part of the Seller and the Guarantor.
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9.2 Opinion of Counsel for the Seller
The Seller shall deliver an opinion of Wolf, Block, Xxxxxx, Xxxxx-Xxxxx,
LLP counsel for the Seller, satisfactory to the Purchaser and its counsel.
9.3 Employment Arrangement
The Seller shall cause to be delivered an employment agreement with each of
Xxxxxx Xxxxxxxxx and Xxxx Xxxx, each on terms acceptable to Purchaser
substantially in the form attached hereto as Exhibits C and D (collectively, the
"Employment Agreements").
9.4 Corestates Loan
The Seller shall deliver (i) a payoff letter from Corestates setting forth
the outstanding principal and interest as of the Closing Date on the Corestates
Loan and (ii) either UCC-3 Termination Statements duly executed by Corestates or
a letter from Corestates confirming that appropriate UCC-3 Termination
Statements will be recorded within 15 days of payment in full of the Corestates
Loan. The Seller shall not make any drawdowns on the Corestates Loan after the
date of the payoff letter.
9.5 Lease
Purchaser shall enter into lease with Xxxxxx Xxxx and Xxxxx Xxxxxxxx in the
form attached hereto as Exhibit E.
9.6 Consents
The Seller shall cause to be delivered all third-party consents and
governmental consents necessary or appropriate to carry out the transactions
contemplated hereby.
9.7 ISRA
The Seller shall deliver evidence satisfactory to the Purchaser to the
effect that the NJDEP will allow the transfer of the Acquired Business.
9.8 Guarantor Assignment
Guarantor shall deliver an assignment in a form acceptable to the Purchaser
assigning to the Purchaser all of Guarantor's rights in and to the Intellectual
Property.
9.9 UCC-3 Termination Statements
The Seller shall deliver UCC-3 Termination Statements executed by each
secured party in connection with the UCC-1 Financing Statements referenced on
Schedule 9.9.
9.10 Closing Documents
The Seller shall deliver such other certificates, instruments, agreements
and other closing documentation, as Windels, Marx, Davies & Ives, special
counsel for the Purchaser, may
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reasonably request including, without limitation, bills of sale and assignments
of contracts and intellectual property rights.
ARTICLE 10. Deliveries by Purchaser at Closing
At Closing, the Purchaser shall deliver to the Seller the following
documents:
10.1 Officer's Certificate
The Purchaser's shall deliver one or more certificates from an officer of
the Purchaser to effect that (i) the representations and warranties of the
Purchaser herein contained and the information contained in any closing and
other documents delivered by the Purchaser in connection with this Agreement are
true, correct and complete in all material respects and (ii) that the
transactions contemplated hereby have been approved by all requisite corporate
action on the part of the Purchaser.
10.2 Employment Agreement
Purchaser shall deliver the Employment Agreements.
10.3 Closing Documents
The Purchaser shall deliver such certificates and other closing
documentation as Wolf, Block, Xxxxxx, Xxxxx-Xxxxx, LLP, counsel for the Seller,
may reasonably request.
ARTICLE 11. Warranty Claims
Seller shall be responsible for resolving all warranty claims regarding any
product shipped by Seller provided Purchaser promptly notifies Seller of the
existence of any such claims after receiving actual notice thereof.
ARTICLE 12. Product Liability Claims
(a) Seller hereby agrees to indemnify and hold Purchaser harmless from and
against any and all claims, liabilities, losses, damages, injury to persons or
property of any nature, costs and expenses, including fees and disbursements of
counsel (collectively, "Product Liability Claims") arising out of, based on, or
caused by, any actual or alleged accident or event relating to any product
manufactured and shipped by or on behalf of Seller or any of its affiliates.
(b) Purchaser hereby agrees to indemnify and hold Seller harmless from and
against any and all Product Liability Claims arising out of, based on or caused
by any actual or alleged accident or event relating to any product manufactured
and shipped by Purchaser or any of its Affiliates for its own account after the
Closing Date.
ARTICLE 13. Indemnification
13.1 Survival Etc.
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Survival. The representations and warranties of Purchaser and Seller made
in this Agreement shall survive the execution of this Agreement for a period of
two years from the Closing Date, provided, however, that the representations,
warranties and covenants by Seller made in ss. 3.7, 3.10, 3.21, 3.22, 3.23 and
3.24, the representations, warranties and covenants of Purchaser made in ss. 4.1
and 4.2 and the representations, warranties and covenants Guarantee made in ss.
5.1 and 5.2 shall survive indefinitely.
13.2 Indemnities
(a) Indemnification of Purchaser. Subject to the other provisions of this
Article 13, Seller shall defend, indemnify and hold Purchaser harmless from and
against, and promptly reimburse Purchaser for, any loss, expense, damage,
deficiency, liability, claim or obligation, including reasonable investigative
costs, reasonable costs of defense, settlement costs (subject to approval as
provided below) and reasonable attorneys' fees (collectively, "Losses") that
Purchaser incurs or to which Purchaser becomes subject, which Losses arise out
of or in connection with (i) any breach by Seller of this Agreement, (ii) any
claim asserted by any third party that, assuming the truth thereof, would
constitute a breach by Seller of this Agreement, (iii) Seller's failure to
perform prior to the Closing Date its obligations under any Contract assumed by
Purchaser, (iv) the manufacture and sale of any product or the ownership or
operation of the Acquired Business or (v) any Liability arising out of, or in
connection with, the Plan or the Creditors.
(b) Indemnification of Seller. Subject to the other provisions of this
Article 13, Purchaser shall defend, indemnify and hold Seller harmless from and
against, and promptly reimburse Seller for, any Losses that Seller incurs or to
which Seller becomes subject, which Losses arise out of or in connection with
(i) any breach by Purchaser of this Agreement, (ii) any claim asserted by any
third party that, assuming the truth thereof, would constitute a breach by
Purchaser of this Agreement, or (iii) Purchaser's failure to perform the
obligations which is has assumed under any Contract after the Closing Date, or
(iv) the ownership of the Acquired Business or the Purchased Assets or the
operation of the Acquired Business from and after the Closing Date.
(c) Limitation on Liability. Neither the Seller nor the Purchaser shall
have any obligation to indemnify the other party hereunder for any Losses until
such indemnifiable Losses incurred by the other party or to which the other
party becomes subject exceed $20,000, and then the first party shall indemnity
the other party pursuant to the terms hereof for the amount of all Losses.
13.3 Notice and Opportunity to Defend
If either party (the "Indemnified Party") receives notice of any
third-party claim or commencement of any third party action or proceeding (an
"Asserted Liability") with respect to which the other party hereto (an
"Indemnifying Party") is obligated to provide indemnification pursuant to
Section 13.2(a) (Indemnification of Purchaser) or Section 15.2(b)
(Indemnification of Seller), the Indemnified Party shall promptly give the
Indemnifying Party notice thereof. The Indemnified Party's failure so to notify
the Indemnifying Party shall not cause the Indemnified Party to lose its right
to indemnification under this Article 13, except to the extent that such failure
materially prejudices the Indemnifying Party's ability to defend against an
Asserted Liability that such Indemnified Party has the right to defend against
hereunder. Such notice shall describe the Asserted Liability in reasonable
detail, and shall indicate the amount (which may be estimated) of the Losses
that have been or may be asserted by the Indemnified Party. The Indemnifying
Party may defend against an Asserted Liability on behalf of the Indemnified
Party utilizing counsel reasonably acceptable to the Indemnified Party, unless
(i) the Indemnified Party reasonably objects to such assumption on the ground
that counsel for such
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Indemnifying Party cannot represent both the Indemnified Party and the
Indemnifying Party because such representation would be reasonably likely to
result in a conflict of interest or because there may be defenses available to
the Indemnified Party that are not available to such Indemnifying Party, (ii)
the Indemnifying Party is not, in the reasonable judgment of the Indemnified
Party, capable (by reason of insufficient financial capacity, bankruptcy,
receivership, liquidation, managerial deadlock, managerial neglect or similar
events) of maintaining a reasonable defense of such action or proceeding, or
(iii) the action or proceeding seeks injunctive or other equitable relief
against the Indemnified Party. If the Indemnifying Party defends an Asserted
Liability, it shall do so at its own expense and shall not be responsible for
the costs of defense, investigative costs, attorney's fees or other expenses
incurred to defend the Asserted Liability (collectively, "Defense Costs") of the
Indemnified Party (which may continue to defend, at its own expense). If the
Indemnified Party assumes the defense of an Asserted Liability by reason of
clauses (i), (ii) or (iii) above, or because the Indemnifying Party has not
elected to assume the defense, then such Indemnifying Party shall indemnify the
Indemnified Party for its reasonable Defense Costs. The Indemnifying Party may
settle any Asserted Liability only with the consent of the Indemnified Party,
which consent shall not be unreasonably withheld.
ARTICLE 14. Bulk Sales Laws
The parties hereby waive compliance with the bulk sales law and any other
similar laws in any applicable jurisdiction in respect of the transactions
contemplated by this Agreement.
ARTICLE 15. Waiver of Terms
Any of the terms or conditions of this Agreement may be waived at any time
by the party which is entitled to the benefit thereof but only by a written
notice signed by a duly authorized representative of such party and no such
waiver shall be deemed a waiver of any subsequent breach or default of the same
or similar nature.
ARTICLE 16. Payment of Expenses
The parties to this agreement shall each pay their own expenses, including,
without limitation, the expenses of their own counsel and accountants and any
broker's, finder's or similar agent's fee, incurred in connection with this
Agreement and the transactions contemplated hereby.
ARTICLE 17. Cooperation
Subject to the terms and conditions herein provided, each of the parties
hereto shall use its or their best efforts to take, or cause to be taken, such
action, to execute and deliver, or cause to be executed and delivered, such
governmental notifications and additional documents and instruments and to do,
or cause to be done, all things necessary, proper or advisable under the
provisions of this Agreement and under applicable law to consummate and make
effective the transactions contemplated by this Agreement.
ARTICLE 18. Counterparts
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This Agreement may be executed in multiple counterparts, each of which
shall be deemed an original, but all of such counterparts together shall be
deemed to be one and the same instrument. It shall not be necessary in making
proof of this Agreement or any counterpart hereof to produce or account for any
other counterpart.
ARTICLE 19. Contents of Agreement, Parties in Interest, Assignment, etc.
This Agreement, together with the Exhibits hereto and any side letters
executed by the parties in connection herewith, set forth the entire
understanding of the parties with respect to the subject matter hereof. Any
previous agreements or understandings between the parties regarding the subject
matter hereof are merged into and superseded by this Agreement. All
representations, warranties, covenants, terms and conditions of this Agreement
shall be binding upon and inure to the benefit of and be enforceable by the
respective successors and assigns of the parties hereto. Nothing herein express
or implied is intended or shall be construed to confer upon or to give any
person, other than the Purchaser, the Guarantor and the Seller and their
respective successors or assigns, any rights or remedies under or by reason of
this Agreement. This Agreement may not be assigned by any party hereto without
the express written consent of the other party hereto, and any purported
assignment without such consent shall be null and void.
ARTICLE 20. Section Headings, Gender and "Person"
The section headings herein have been inserted for convenience of reference
only and shall in no way modify or restrict any of the terms or provisions
hereof. The use of the masculine or any other pronoun herein when referring to
any party has been for convenience only and shall be deemed to refer to the
particular party intended regardless of the actual gender of such party or
whether such party is a corporate or other entity. Any reference to a "person"
herein shall include an individual, firm, corporation, partnership, trust, joint
venture, government or political subdivision or agency or instrumentality
thereof, association, unincorporated organization or any other entity.
ARTICLE 21. Notices
All notices, consents, waivers or other communications which are required
or permitted hereunder shall be sufficient if given in writing and delivered
personally, by Federal Express or similar overnight delivery, by facsimile
transmission, or by registered or certified mail, return receipt requested,
postage prepaid, as follows (or to such other addressee or address as shall be
set forth in a written notice given in the same manner):
If to the Seller:
Keystone Dental X-Ray, Inc.
000 Xxxxxxxx Xxxxxx
Xxxxxxxx, Xxx Xxxxxx 00000
Attention: Xxxxxx Xxxxxxxxx
Fax: (000) 000-0000
With a copy to:
Wolf, Block, Xxxxxx and Xxxxx - Xxxxx LLP
at its then current principle office
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Philadelphia, PA
Attention: Xxxx X. Xxxxxxxxx, Esq.
Fax: (000) 000-0000
If to the Purchaser:
c/o Schick Technologies, Inc.
00-00 00xx Xxxxxx
Xxxx Xxxxxx Xxxx, XX 00000
Attention: General Counsel
Fax: (000) 000-0000
With a copy to:
Xxxxxxx Xxxx Xxxxxx and Xxxx
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx X. Xxxxx, Esq.
Fax: (000) 000-0000
All such notices shall be deemed to have been given on the date delivered,
sent by facsimile or mailed in the manner provided above.
ARTICLE 22. Governing Law
This Agreement and all amendments thereof shall, in all respects, be
governed by and construed and enforced in accordance with the internal laws
(without regard to principles of conflicts of law) of the State of New York. The
parties agree to and accept the exclusive jurisdiction of any court in New York
City or the U.S. District Court for the Southern District of New York in respect
of any action or proceeding, expressly waiving any defense relating to
jurisdiction, venue or forum non conveniens hereof in any action or proceeding
with respect to this Agreement in any such court or any other court of competent
jurisdiction.
ARTICLE 23. Non-Competition
(a) For three years from and after the Closing Date, the Seller and the
Guarantor shall not and shall not permit any of their respective officers,
directors, employees, partners, subsidiaries, divisions, affiliates, successor,
transferees or assigns (including without limitation any person that purchases
or acquires any other division, business, property or assets from the Seller or
the Guarantor), directly or indirectly, in the United States of America, to own,
manage, operate, join, control or participate in the ownership, management,
operation or control of, any business whether in corporate, proprietorship or
partnership form or otherwise, which competes in any manner with (i) the
Acquired Business as presently conducted, including, but not limited to the
manufacture or sale of intra-oral x-ray tubes or (ii) the business of the
Purchaser as it is presently conducted, or with respect to (a) the manufacture
or sale of instrumentation and devices for the evaluation of bone mineral
density or (b) the application of such instrumentation and devices in the field
of mammography.
(b) For a period beginning on the date of this Agreement and ending one
year after the date hereof, the Seller shall not and will not permit any of its
officers, directors, employees, partners, subsidiaries, divisions, affiliates,
successors, transferees or assigns (including without limitation
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any person that purchases or acquires any other division, business, property or
assets from the Seller), to solicit for employment, discuss possible employment
with or hire any person who at any time since January 1, 1996 was an officer,
director, employee, consultant or independent contractor of Seller and who
accepted employment with the Purchaser without the Purchaser's prior written
consent.
(c) Without limiting any provisions of this Agreement, Seller shall (i)
require any person who purchases or acquires any division, business, property or
assets from Seller to execute and deliver to Purchaser a writing, in form and
substance satisfactory to Purchaser, agreeing to be bound by this Section 23 and
(ii) notify each of its officers, directors, employees, partners, subsidiaries,
divisions and affiliates of this Section 27 and obtain their written agreement
to be bound by this Section 23.
(d) Seller acknowledges that the restrictions contained in this Section 23
are reasonable and necessary to protect the legitimate interests of Purchaser,
that Purchaser shall not have an adequate remedy at law for any actual or
attempted breach or violation of this Section 23, and that Purchaser shall, in
addition to any other rights or remedies, be entitled to specific performance,
injunction or any other equitable remedy for any such actual or attempted breach
or violation.
(e) Notwithstanding anything in this Agreement to the contrary, nothing
herein shall limit the right of the Seller or its successors to continue to
operate the Retained Business.
ARTICLE 24. License
Seller and Guarantor shall be granted a royalty-free license to use and
otherwise exploit the Intellectual Property, including but not limited to the
patents referred to in Section 3.11, solely in connection with the operation of
the Retained Business or the business of the Guarantor as it is presently
conducted pursuant to the terms of the License Agreement in the form annexed
hereto as Exhibit F.
ARTICLE 25. Public Announcements
Except as required by law, any public announcement or similar publicity
with respect to the Agreement or the transactions contemplated hereby shall be
issued if at all, at such time and in said manner as Purchaser shall determine.
ARTICLE 26. Employees
(a) Any employees of the Seller who are employed by the Purchaser shall be
entitled to participate in all insurance and benefit plans of the Purchaser on
the same basis as comparable employees of the Purchaser. For purposes of
satisfying any waiting or vesting period under any such plans, the period of
employment by any such employees with the Seller shall be deemed to be a period
of employment with the Purchaser.
(b) The Seller shall pay the cost of any compensation, severance or other
benefits which may be payable through the Closing Date to the Seller's employees
or to such other persons as shall claim compensation, severance or other
benefits in connection with the consummation of the transactions contemplated
hereby. The Seller shall (i) be responsible for providing the appropriate
notices to the employees pursuant to COBRA, if any, necessary as a result of
these transactions, (ii)
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continue to be responsible after the Closing Date for any benefit claims
incurred by any employees hired by the Purchaser (or their eligible dependents)
on or prior to the Closing Date which become payable under the terms of any
medical, hospitalization, disability, workers' compensation, or life insurance
plan, coverage, obligation, practice, arrangement or any other employee benefit
plan affecting such employees maintained by the Seller, and (iii) continue to be
responsible for liabilities, if any, arising on or prior to the Closing Date in
connection with any employee benefit plan.
ARTICLE 27. Post-Closing Covenants
(a) The Seller and the Purchaser shall cooperate in determining liability
for expenses incurred at the Premises and the sharing of costs in general
between the Purchaser and the Seller for certain shared services and equipment,
including and without limitation, telephone, facsimile, heating and cooling
services and fork lifts. In connection therewith the Seller shall make available
to the Purchaser its books and records relating to the Retained Business and the
Premises necessary in making the foregoing determinations.
(b) Seller shall deliver to the Purchaser not later than one week from the
date hereof, plans for such construction at the premises as agreed to by the
parties and summarized in Schedule 27(b) annexed hereto.
(c) Seller shall make available to Purchaser and its Affiliates and agents
all books of account relating to the Acquired Business or the Purchased Assets.
IN WITNESS WHEREOF, this Asset Purchase Agreement has been executed as of
the day and year first above written.
SELLER:
KEYSTONE DENTAL X-RAY, INC.
By:______________________________
Name:
Title:
PURCHASER:
DISCOVERY X-RAY CORPORATION
By:______________________________
Name:
Title:
GUARANTOR:
IMAGING SCIENCES, INC.
By:______________________________
Name:
Title:
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