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EXHIBIT 2.1
ASSET PURCHASE AGREEMENT
THIS AGREEMENT (the "Agreement") is made as of May 29, 2000, between
HEALTHTRONICS, INC., a Georgia corporation having an address at 1841 West Oak
Parkway, Suite A, Marietta, Georgia 30062 ("Seller"), and NEW JERSEY KIDNEY
STONE CENTER, LLC, a New Jersey limited liability company having an address at
c/o HEALTHTRONICS, INC., New Jersey Kidney Stone Center, LLC, One Robert Wood
Johnson Place, New Brunswick, NJ 08901, ("Purchaser").
RECITALS
A. Seller is a Georgia corporation which owns the assets and
properties composing the New Jersey Kidney Stone Center, LLC.
B. Seller has leased existing space in the One Robert Wood
Johnson Place, New Brunswick, New Jersey location (the "Premises") where it is
operating the facility known as the "New Jersey Kidney Stone Center" referred
hereinafter as the "Center". The Center, and all furniture, fixtures, equipment,
rights, assets and interests comprising a portion thereof used or useful in the
operation thereto or related thereto, are sometimes referred to collectively
hereinafter as the "Center". The development, ownership and operation of the
Center is referred to hereinafter as the "Business".
D. Seller desires to sell to Purchaser substantially all of
Seller's assets, properties and rights comprising the Center or otherwise
forming a part of or used or useful in the operation of the Business, other than
the Excluded Assets, as herein defined (the "Purchased Assets"), and Purchaser
desires to purchase the Purchased Assets, and all on the terms and subject to
the conditions contained in this Agreement.
AGREEMENTS
Therefore, for good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties agree as follows:
ARTICLE I
Purchase and Sale of Assets
1.1. Agreement to Purchase and Sell. On the terms and subject to
the conditions contained in this Agreement, Purchaser agrees to purchase from
Seller, and Seller agrees to sell to Purchaser, all of the Purchased Assets.
1.2. Enumeration of Purchased Assets. The Purchased Assets shall
include the following assets owned by Seller, but only to the extent the same
comprise a portion of the Center or otherwise relate exclusively to the
Business:
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(a) all licenses, licenses, registrations and
governmental or regulatory approvals, agreements and consents applied for or
issued to Seller with respect to the Center or the Business and all agreements
with governmental authorities (Federal, State or local) entered into by Seller
with respect to the Center or the Business, and any rights thereto or interests
therein, including without limitation: (i) the license for the Center issued to
Seller by the New Jersey Department of Health and Senior Services ("NJDOH"); and
(ii) any Medicare and Medicaid provider agreements for the Center to which
Seller is or may become a party (collectively, the "Licenses").
(b) all inventory, including, without limitation,
materials, work in process, finished goods, service parts and supplies
(collectively, the "Inventory");
(c) all furniture, fixtures, equipment (including without
limitation, medical, scientific and office equipment), machinery, parts,
computer hardware, tools, automobiles and trucks and all other tangible personal
property (other than the Inventory) (collectively, the "Equipment");
(d) all leasehold interests in personal property leased
to Seller (the "Leased Personalty");
(e) Seller's entire leasehold interest under that certain
lease for the Premises between Seller and Robert Wood Johnson University
Hospital, as the same may be modified, supplemented, or replaced (the "Lease");
(f) Seller's goodwill;
(g) all claims and rights (and benefits arising
therefrom) with or against all persons whomsoever, including without limitation,
all rights against contractors or subcontractors with respect to the
construction of the Center, or against suppliers under warranties covering any
of the Inventory or Equipment and any Licenses to the extent they are legally
transferable by Seller;
(h) all contracts, license agreements, distribution
agreements, service agreements, supply agreements, purchase orders, contracts or
bids, franchise agreements, computer software agreements and technical service
agreements to the extent they are legally transferable by Seller including,
without limitation all third party payor contracts relating to the Business;
(i) all patient lists, patient records and information to
the extent they are legally transferable by Seller;
(j) all books and records with respect to the Center
and/or the operation of the Business;
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(k) all insurance policies, not included in the Excluded
Assets;
(l) all rights in connection with deposits and prepaid
expenses with respect to the assets being sold hereunder;
(m) all performance, surety or fidelity bonds issued to
Seller;
(n) all computer software, including all documentation
and source codes with respect to such software and licenses and leases of
software to the extent they are legally transferable by Seller;
(o) the nonexclusive right to use the name "New Jersey
Kidney Stone Center, LLC", and any corresponding marks or designs, but only in
connection with the Center and its operation, and excluding any variations or
derivations thereof or any use thereof in connection with other properties or
businesses, and excluding any other trademarks, trade names, marks or designs of
Seller (together with associated goodwill) or its Affiliates, as hereafter
provided;
(p) all promotional materials and advertising literature
for the Business, in any medium whatsoever; and
(q) all telephone numbers of the Business.
1.3. Excluded Assets. The Excluded Assets shall consist of the
following items:
(a) Seller's cash on hand or in bank accounts, checkbooks
and canceled checks;
(b) claims (and benefits to the extent they arise
therefrom) that relate to liabilities other than the Assumed Liabilities (as
herein defined) and assets other than the Purchased Assets;
(c) insurance policies of Seller and rights in connection
therewith, unless they relate exclusively to the Center and/or the Business, are
by their terms transferable, and unless prior to the Closing, Purchaser elects,
by written notice delivered to Seller prior to the Closing Date, to accept
assignments of any such insurance policies;
(d) all trademarks, tradenames and associated designs or
marks, copyrights, and any registration or application for registration relating
to the foregoing, of Seller or any of its Affiliates, including without
limitation, the right to use the name "New Jersey Kidney Stone Center, LLC" or
"New Jersey Kidney Stone Center" or "Kidney Stone Center" with respect to
facilities other than the Center, (and any associated goodwill), except for the
right to use the non-exclusive name "New Jersey Kidney Stone Center, LLC" and
associated designs or marks, specifically for the Center and its operation as
provided in Section 1.2(o), above;
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(e) rights arising from prepaid expenses, if any, with
respect to assets not being sold hereunder;
(f) rights arising from any refunds due with respect to
insurance premium payments and tax refunds due from federal, state and local
taxing authorities;
(g) all rights of indemnification and claims which relate
to the conduct of the Business prior to the Closing Date;
(h) Seller's rights under this Agreement;
(i) Seller's corporate charter, minute and stock record
books, and corporate seal and tax returns;
(j) the agreements, if any, set forth on Schedule 1.3(j);
and
(k) any and all assets, properties or rights not
comprising a portion of the Center or otherwise used exclusively in the
operation of the Business.
ARTICLE II
Assumption of Liabilities
2.1. Agreement to Assume. At the Closing (as herein defined),
Purchaser shall assume and agree to discharge and perform when due, all
liabilities and obligations of Seller relating to the development, ownership and
operation of the Center or the conduct of the Business, of every kind and
description, other than the Excluded Liabilities, as herein defined (the
"Assumed Liabilities"). Assumed Liabilities shall include, but not be limited
to:
(a) Seller's obligations under the lease for the
Premises;
(b) trade and other accounts payable as of the Closing
Date (as herein defined);
(c) all accrued expenses as of the Closing Date, to the
extent incurred in connection with the ownership, development and/or operation
of the Center or the commencement or operation of the Business through the
Closing Date, including without limitation, salaries, vacation pay, rent, real
estate taxes, interest expense, utility charges, service fees and similar
operating expenses;
(d) Seller's obligations or liabilities under any of the
Licenses which are assigned or transferred to Purchaser pursuant to the
provisions hereof;
(e) any liabilities for legal, accounting, audit and
investment banking fees, brokerage commissions, and any other expenses incurred
by Seller in connection with the
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negotiation and preparation of this Agreement and the sale of the Purchased
Assets to Purchaser; and
(f) Seller's liabilities under any assigned agreements.
2.2. Excluded Liabilities. The following (and only the following)
liabilities and obligations of Seller shall constitute the "Excluded
Liabilities":
(a) any liabilities of Seller for income taxes; and
(b) any liabilities of Seller under those leases,
contracts, insurance policies, commitments, sales orders, purchase orders,
Licenses which are not assigned to Purchaser pursuant to this Agreement.
2.3. No Expansion of Third Party Rights. The assumption by
Purchaser of the Assumed Liabilities shall not expand the rights or remedies of
any third party against the Purchaser or the Seller as compared to the rights
and remedies which such third party would have had against the Seller had the
Purchaser not assumed the Assumed Liabilities.
ARTICLE III
Purchase Price, Manner of Payment and Closing
3.1. Purchase Price. The purchase price for the Purchased Assets
("Purchase Price") is $850,000 (the "Cash Portion") plus the aggregate book
value of the Assumed Liabilities at the time of Closing.
3.2. Time and Place of Closing. The transaction contemplated by
this Agreement shall be consummated (the "Closing") at on or before 5:00 p.m. on
June 1, 2000 at the offices of Fox, Rothschild, O'Brien and Frankel, 1300
Atlantic Avenue, Suite 500, Atlantic City, New Jersey, 08401 provided that there
has been satisfaction of all conditions to Closing under Article VI hereof.
Notwithstanding the foregoing, if the Closing does not occur on or before
October 31, 2000 Purchaser shall have the right, but not the obligation, to
terminate the Agreement; PROVIDED, HOWEVER, that Seller and Purchaser may, upon
their mutual written agreement, extend such deadline for Closing. The date on
which the Closing occurs as provided above is referred to in this Agreement as
the "Closing Date". The Closing shall be deemed to be effective as of 12:01 a.m.
on the Closing Date at Atlantic City, New Jersey.
3.3. Manner of Payment of the Purchase Price. At the Closing,
Purchaser shall assume in writing the Assumed Liabilities and pay the Cash
Portion to Seller by execution and delivery to Seller of Purchaser's money
purchase promissory note in the amount of $600,000, together with a Security
Agreement and other security instruments as required by Seller, all in a form
and substance acceptable to Seller and its counsel.
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3.4. Closing Deliveries. At the Closing, the parties shall execute
and deliver such bills of sale, assignments, deeds, documents of title,
assumption agreements, closing certificates, searches, title insurance policies
and other documents as are reasonably required in order to effectuate the
consummation of the transaction contemplated hereby. All documents to be
delivered by a party shall be in form and substance reasonably satisfactory to
the other party.
3.5. Allocation of Purchase Price. The Purchase Price shall be
allocated among the Purchased Assets in the manner required by Section 1060 of
the Internal Revenue Code of 1986, as amended (the "Code") and in accordance
with the respective amounts specified in the Purchase Price Computation
submitted by Seller, which shall be conclusive and binding upon the parties for
all purposes hereunder. The Purchaser and the Seller shall each report the
federal, state, and local income and other tax consequences of the transactions
called for in this Agreement in a manner consistent with the foregoing
allocation of the Purchase Price, including but not limited to the preparation
and filing of Form 8594 under Section 1060 of the Code. Such allocations shall
be followed in all tax returns of the Purchaser and the Seller for the taxable
year that includes the Closing Date, and neither Purchaser nor Seller will take
any position inconsistent with the allocations unless otherwise required by
applicable law.
3.6. Possession. Seller shall deliver to Purchaser, at Closing,
possession of the Center, of any of the tangible Purchased Assets capable of
being so delivered, and originals or copies of any documents in Seller's
possession representing intangible Purchased Assets, if applicable.
ARTICLE IV
Representations and Warranties
4.1. Purchaser's Representations and Warranties. Purchaser
represents and warrants to Seller that:
(a) Purchaser is a limited liability company duly
organized, existing and in good standing, under the laws of the State of New
Jersey.
(b) Purchaser has full power and authority to enter into
and perform (i) this Agreement and (ii) all documents and instruments to be
executed by Purchaser pursuant to this Agreement (collectively, "Purchaser's
Ancillary Documents"). This Agreement has been, and Purchaser's Ancillary
Documents will be, duly executed and delivered by and on behalf of Purchaser.
(c) Except for: (i) approvals of the transfer to
Purchaser of the Licenses and third party payor contracts for the Business, or
issuance thereof directly to Purchaser; and (ii) any other Consents (as
hereinafter defined) required to carry out the transactions contemplated hereby,
no consent, authorization, order or approval of, or filing or registration with,
any governmental authority or other person is required for the execution and
delivery by Purchaser of
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this Agreement and Purchaser's Ancillary Agreements, and the consummation by
Purchaser of the transaction contemplated by this Agreement and Purchaser's
Ancillary Documents.
(d) Neither the execution and delivery of this Agreement
and Purchaser's Ancillary Documents by Purchaser, nor the consummation by
Purchaser of the transaction contemplated hereby, will conflict with or result
in a breach of any of the terms, conditions or provisions of Purchaser's
Certificate of Formation or Operating Agreement.
(e) Purchaser is not a party to any unexpired,
undischarged or unsatisfied written or oral contract, agreement, indenture,
mortgage, debenture, note or other instrument under the terms of which
performance by Purchaser according to the terms of this Agreement will be a
default, or whereby timely performance by Purchaser according to the terms of
this Agreement may be prohibited, prevented or delayed.
(f) Neither Purchaser, nor any of its Affiliates has
dealt with any person or entity who is or may be entitled to a broker's
commission, finder's fee, investment banker's fee or similar payment for
arranging the transaction contemplated hereby or introducing the parties to each
other. As used herein, an "Affiliate" means (i) any person or entity directly or
indirectly controlling, controlled by, or under common control with another
person or entity, (ii) any person or entity owning or controlling 10% or more of
the outstanding voting securities of another person or entity, (iii) any
officer, director, partner or employee of any person or entity, and (iv) any
company for which a person, classified as an Affiliate by virtue of (i) , (ii),
or (iii) supra, acts as an officer, director, partner or employee.
(g) Purchaser understands that the Business is newly
formed and has limited operating history. Purchaser, therefore, has entered into
this Agreement in reliance solely on the description of the Business set forth
in the offering documents to investors.
(h) Purchaser is familiar with the Purchased Assets,
including the Licenses, and shall acquire the same subject to all conditions and
restrictions set forth therein, and all obligations and liabilities of Seller
thereunder or in connection therewith, except for those specified herein as
Excluded Liabilities.
4.2. Seller's Representations and Warranties. Seller represents and
warrants to Purchaser that, except as set forth in the schedule delivered by
Seller to Purchaser concurrently herewith and identified as the "Disclosure
Schedule":
(a) Seller is a corporation duly organized, existing and
in good standing, under the laws of the State of Georgia.
(b) Seller has full corporate power and authority to
enter into and perform (i) this Agreement and (ii) all documents and instruments
to be executed by Seller pursuant to this Agreement (collectively, "Seller's
Ancillary Documents"). This Agreement has been, and
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Seller's Ancillary Documents will be, duly executed and delivered by duly
authorized officers of Seller.
(c) Neither the execution and delivery of this Agreement
and Seller's Ancillary Documents by Seller, nor the consummation by Seller of
the transaction contemplated hereby, will conflict with or result in a breach of
any of the terms, conditions or provisions of Seller's Certificate of
Incorporation or By-laws.
(d) No default by Seller has occurred under any material
contracts, leases or agreements to which Seller is a party and which relate to
the Center or the conduct of the Business; and, to Seller's knowledge, no
default by the other contracting parties has occurred thereunder, which default
would have a Material Adverse Effect. For the purposes of this Agreement,
"Material Adverse Effect" means a material adverse effect on the assets,
liabilities, financial condition or results of operations of the Business, taken
as a whole.
(e) There is no litigation or proceeding, at law or in
equity, and there are no proceedings or governmental investigations before any
commission or other administrative authority, pending, or, to Seller's
knowledge, overtly threatened, against Seller or its Affiliates, relating to the
Center or the Business, which if decided adversely to Seller would prohibit,
prevent or delay Seller's performance hereunder.
(f) The Premises are leased to Seller pursuant to a Lease
with Robert Wood Johnson University Hospital. Seller is not in default under any
material term of the Lease or of any other agreement relating to the Premises
nor, to Seller's knowledge, is any other party thereto in material default
thereunder.
(g) Neither Seller, nor any of its Affiliates, has dealt
with any person or entity who is or may be entitled to a broker's commission,
finder's fee, investment banker's fee or similar payment from Purchaser for
arranging the transaction contemplated hereby or introducing the parties to each
other.
4.3. Limitation on Warranties. Except as expressly set forth in
Section 5.1, Seller makes no express or implied warranty of any kind whatsoever,
including, without limitation, any representation as to physical condition or
value of any of the Purchased Assets or the future profitability or future
earnings performance of the Business. ALL IMPLIED WARRANTIES OF MERCHANTABILITY
AND FITNESS FOR A PARTICULAR PURPOSE ARE EXPRESSLY EXCLUDED, THE BENEFIT(S)
THEREOF BEING HEREBY WAIVED BY PURCHASER.
4.4. Definition of Knowledge. For purposes of this Agreement, a
representation and warranty made to the best of a party's "knowledge" (or any
variation of the foregoing) shall refer only to the conscious awareness of any
officer or management-level employee of such party, having supervisory or
administrative responsibility in respect of the fact(s) or circumstance(s)
described therein.
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ARTICLE V
Conduct Prior to the Closing
5.1. General. Between the date hereof and the Closing Date:
(a) Seller shall give to Purchaser's manager, officers,
employees, attorneys, consultants, accountants and lenders reasonable access
during normal business hours to all of the properties, books, contracts,
documents, records and personnel of Seller and shall furnish to Purchaser such
information as Purchaser may at any time and from time to time reasonably
request.
(b) Seller shall use reasonable efforts and make every
good faith attempt (and Purchaser shall cooperate with Seller) to obtain such
consents as are necessary for the assignment to Purchaser of, the assumption of
Seller's obligations under, and the release of Seller under, the contracts,
leases, insurance policies, agreements, purchase orders, sales orders or other
instruments (including without limitation the Lease, and Licenses comprising
Purchased Assets or Assumed Liabilities hereunder, all as may be necessary to
carry out the transactions contemplated hereby (the "Consents").
(c) Seller shall carry on the Business in a manner
consistent with past practices and shall use its reasonable efforts and make
every good faith attempt to establish and preserve its business and the goodwill
of its patients, suppliers and others having business relations with Seller,
including keeping available the services of its present employees,
representatives and agents.
(d) No party shall intentionally perform any act which,
if performed, or omit to perform any act which, if omitted to be performed,
would prevent or excuse the performance of this Agreement by any party hereto or
which would result in any representation or warranty herein contained of said
party being untrue in any material respect as if originally made on and as of
the Closing Date.
ARTICLE VI
Conditions to Closing
6.1. Conditions to Seller's Obligations. The obligation of Seller
to consummate the transaction contemplated hereby is subject to the fulfillment
of all of the following conditions on or prior to the Closing Date, upon the
non-fulfillment of any of which this Agreement may, at Seller's option, be
terminated pursuant to and with the effect set forth in Article X:
(a) Each and every representation and warranty made by
Purchaser shall have been true and correct in all material respects when made
and shall be true and correct in all material respects as if originally made on
and as of the Closing Date.
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(b) All obligations of Purchaser to be performed
hereunder through, and including, the Closing Date (including, without
limitation, all obligations which Purchaser would be required to perform at the
Closing if the transaction contemplated hereby was consummated) shall have been
performed.
(c) No suit or proceeding shall have been commenced by
any governmental authority on any grounds to restrain, enjoin or hinder the
consummation of the transaction contemplated hereby.
(d) Seller shall have received all Licenses necessary for
the operation of the Center or the conduct of Business.
(e) NJDOH shall have approved in writing Purchaser as
license-holder for the Center.
(f) Seller shall have obtained all of the Consents
specified in paragraph 5.1(b).
6.2. Conditions to Purchaser's Obligations. The obligation of
Purchaser to consummate the transaction contemplated hereby is subject to the
fulfillment of all of the following conditions on or prior to the Closing Date,
upon the non-fulfillment of any of which this Agreement may, at Purchaser's
option, be terminated pursuant to and with the effect set forth in Article X:
(a) Each and every representation and warranty made by
Seller shall have been true and correct in all material respects when made and
shall be true and correct in all material respects as if originally made on and
as of the Closing Date.
(b) All obligations of Seller to be performed hereunder
through, and including on, the Closing Date (including, without limitation, all
obligations which Seller would be required to perform at the Closing if the
transaction contemplated hereby was consummated) shall have been performed.
(c) No suit or proceeding shall have been commenced by
any governmental authority on any grounds to restrain, enjoin or hinder the
consummation of the transaction contemplated hereby.
(d) Seller shall have received all Licenses necessary for
the operation of the Center or the conduct of Business.
(e) NJDOH shall have approved in writing Purchaser as
license-holder for the Center and Purchaser.
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(f) Seller shall have obtained all of the Consents
specified in paragraph 5.1(b); and
(g) Purchaser shall have completed its offering of
limited liability company ownership interests pursuant to certain offering
documents (the "Offering") for at least the Minimum Number of Units (as defined
in the Offering) and the Offering shall not have been terminated by Purchaser
before the sale of any Units thereunder, for any reason prior to completion of
Closing hereunder.
ARTICLE VII
Post-Closing Agreements
7.1. Post-Closing Agreements. From and after the Closing, the
parties shall have the respective rights and obligations which are set forth in
the remainder of this Article VII.
7.2. Payments of Accounts Receivable. In the event Seller shall
receive any instrument of payment of any of the Accounts Receivable, Seller
shall forthwith deliver it to Purchaser, endorsed where necessary, without
recourse, in favor of Purchaser.
7.3. Non-Assignment. Notwithstanding any provision to the contrary
contained herein, Seller shall not be obligated to assign to Purchaser any
contract, purchase order, sales order, lease or other instrument which provides
that it may not be assigned without the consent of the other party thereto and
for which such consent is not obtained, but in any such event, Seller shall
cooperate with Purchaser in any reasonable arrangement designed to provide the
benefits thereof to Purchaser.
7.4. Further Assurances. The parties shall execute such further
documents, and perform such further acts, as may be necessary to transfer and
convey the Purchased Assets to Purchaser, on the terms herein contained, and to
otherwise comply with the terms of this Agreement and consummate the transaction
contemplated hereby.
ARTICLE VIII
Employees and Employee Benefit Plans
8.1. Employment of Seller's Employees. Purchaser shall have no
obligation to employ or to continue to employ as of the Closing Date any of
Seller's employees in the Business, or if such employees are employed by
Purchaser, to employ any of them in positions, at compensation, with benefits or
upon terms and conditions which are each separately as favorable to the employee
as the position, compensation, benefit or terms or conditions in effect on the
date hereof. Purchaser shall comply, at its sole cost and expense, with any
Federal or state worker notification, retraining, relocation or similar
employment law, rule or regulation, applicable to the transaction contemplated
hereby.
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ARTICLE IX
Indemnification
9.1. General. From and after the Closing, the parties shall
indemnify each other as provided in this Article IX. As used in this Agreement,
the term "Damages" shall mean all liabilities, demands, claims, actions or
causes of action, regulatory, legislative or judicial proceedings or
investigations, assessments, levies, losses, fines, penalties, damages, costs
and expenses, including, without limitation, reasonable attorneys',
accountants', investigators', and experts' fees and expenses, sustained or
incurred in connection with the defense or investigation thereof.
9.2. Indemnification Obligations of Seller. Subject to the
provisions of Section 9.3, Seller shall indemnify, save and keep harmless
Purchaser and its successors and permitted assigns ("Purchaser Indemnitees")
against and from all Damages sustained or incurred by any of them, to the extent
of its insurance policies which provide payment for damages and not in addition
to or in excess thereof resulting from or arising out of or by virtue of:
(a) any material inaccuracy in or breach of any
representation and warranty made by Seller in this Agreement or in any closing
document delivered to Purchaser in connection with this Agreement;
(b) any material breach by Seller of, or failure by
Seller to comply with, any of its covenants or obligations under this Agreement
(including, without limitation, its obligations under this Article IX); and
(c) the failure to discharge any liability or obligation
of Seller other than the Assumed Liabilities.
9.3. Limitation on Seller's Indemnification Obligations. Seller's
obligations pursuant to the provisions of Section 9.2 are subject to the
following limitations:
(a) the Purchaser Indemnitees shall not be entitled to
recover under Section 9.2(a): (i) until the total amount which Purchaser would
recover under Section 9.2(a), but for this Section 9.3(a), exceeds $10,000.00,
and then only for the excess over $10,000.00; (ii) unless a claim for Damages
has been asserted by written notice, specifying the details of the alleged
misrepresentation or breach of warranty, delivered to Seller on or prior to the
date which is sixty (60) days after the Closing Date; or (iii) if at or before
the time of Closing Purchaser had actual knowledge of the misrepresentation or
breach of warranty;
(b) the Purchaser Indemnitees shall not be entitled to
recover under Section 9.2(b) or (c) hereof if indemnification is also available
under Section 9.2(a) hereof;
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(c) the Purchaser Indemnitees shall not be entitled to
recover under Section 9.2:
(i) WITH RESPECT TO CONSEQUENTIAL DAMAGES,
INCLUDING CONSEQUENTIAL DAMAGES CONSISTING OF BUSINESS INTERRUPTION OR LOST
PROFITS, OR WITH RESPECT TO PUNITIVE DAMAGES;
(ii) to the extent aggregate Damages under
Section 9.3(a) exceed $50,000.00;
(iii) to the extent the Damages are covered by
insurance (including title insurance) held by Purchaser; or
(iv) with respect to the nonassignability or
nontransferability of any of the Purchased Assets or Assumed Liabilities or the
failure to obtain any consent, or conditions imposed incident to the giving of
any consent, required in connection with, or as a consequence of, the transfer
of any of the Purchased Assets to, or the assumption of the Assumed Liabilities
by, Purchaser;
(d) the amount of any recovery pursuant to Section 9.2
shall be net of any income tax benefits inuring to the Purchaser Indemnitees as
a result of the state of facts which entitled the Purchaser Indemnitees to
recover from Seller pursuant to Section 9.2.
9.4. Purchaser's Indemnification Covenants. Purchaser shall
indemnify, save and keep harmless Seller and its successors and permitted
assigns against and from all Damages sustained or incurred by any of them
resulting from or arising out of or by virtue of:
(a) any material inaccuracy in or breach of any
representation and warranty made by Purchaser in this Agreement or in any
closing document delivered to Seller in connection with this Agreement;
(b) any material breach by Purchaser of, or failure by
Purchaser to comply with, any of its covenants or obligations under this
Agreement (including, without limitation, its obligations under this Article
IX); or
(c) Purchaser's failure to pay, discharge and perform any
of the Assumed Liabilities.
9.5. Indemnification Exclusive Remedy. Indemnification pursuant to
the provisions of this Article IX shall be the exclusive remedy of the parties
for any misrepresentation or breach of any warranty or covenant contained herein
or in any closing document executed and delivered pursuant to the provisions
hereof with respect to any matter which is the subject of this Article IX.
Without limiting the generality of the preceding sentence, no legal action
sounding in tort or strict liability may be maintained by any party.
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ARTICLE X
Effect of Termination/Proceeding
10.1. Right to Terminate. This Agreement and the transaction
contemplated hereby may be terminated at any time prior to the Closing by prompt
notice given in accordance with Section 11.4:
(a) by the mutual written consent of Purchaser and
Seller; or
(b) by either of such parties if the Closing shall not
have occurred at or before 11:59 p.m. on October 31, 2000, or such later
deadline for Closing as to which the parties may mutually agree as provided
above; provided, however, that the right to terminate this Agreement under this
Section 10.1(b) shall not be available to any party whose failure to fulfill any
of its obligations under this Agreement has been the cause of or resulted in the
failure of the Closing to occur on or prior to the aforesaid date.
10.2. Remedies. In the event of a breach of this Agreement, the
non-breaching party shall not be limited to the remedy of termination of this
Agreement, but shall be entitled to pursue a claim against the defaulting party
under the indemnity provisions of Article IX hereof
ARTICLE XI
Miscellaneous
11.1. Omitted.
11.2. Sales and Transfer Taxes. Purchaser shall pay all sales, use,
transfer and conveyance taxes, if any, arising in connection with the sale and
transfer of the Purchased Assets to Purchaser pursuant to this Agreement.
11.3. Publicity. Except as otherwise required by law, press releases
concerning this transaction shall be made only with the prior agreement of both
Seller and Purchaser.
11.4. Notices. All notices required or permitted to be given
hereunder shall be in writing and may be delivered by hand, by facsimile, by
nationally recognized private courier, or by United States mail. Notices
delivered by mail shall be deemed given three (3) business days after being
deposited in the United States mail, postage prepaid, registered or certified
mail. Notices delivered by hand by facsimile, or by nationally recognized
private carrier shall be deemed given on the first business day following
receipt, provided, however, that a notice delivered by facsimile shall only be
effective if such notice is also delivered by hand, or deposited in the United
States mail, postage prepaid, registered or certified mail, on or before two (2)
business days after its delivery by facsimile. All notices shall be addressed as
follows:
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If to Seller
Addressed to:
HEALTHTRONICS, INC.
1841 West Oak Parkway, Suite A
Marietta, Georgia 30062
Attention: Argil Wheelock, M.D., Chairman
Telecopier: 770 419-9490
If to Purchaser
Addressed to:
NEW JERSEY KIDNEY STONE CENTER, LLC
c/o HealthTronics, Inc.
One Robert Wood Johnson Place
New Brunswick, NJ 08901
Attention: Argil Wheelock, M.D., Chairman of Operations
Committee
Telecopier: 743 418-8491
and/or to such other respective addresses and/or addressees as may be designated
by notice given in accordance with the provisions of this Section 11.4.
11.5. Expenses. Except for Organizational Costs to be reimbursed to
Seller, each party hereto shall bear all fees and expenses incurred by such
party in connection with, relating to or arising out of the execution, delivery
and performance of this Agreement and the consummation of the transaction
contemplated hereby, including, without limitation, attorneys', accountants' and
other professional fees and expenses.
11.6. Entire Agreement. This Agreement and the instruments to be
delivered by the parties pursuant hereto constitute the entire agreement between
the parties. Each exhibit and the Disclosure Schedule shall be considered
incorporated into this Agreement. Any matter which is disclosed in any portion
of the Disclosure Schedule is deemed to have been disclosed for the purposes of
all relevant provisions of this Agreement. The inclusion of any item in the
Disclosure Schedule is not evidence of the materiality of such item for the
purposes of this Agreement and Seller's Ancillary Documents. The parties make no
representations or warranties to each other, except as contained in this
Agreement. Purchaser acknowledges that it has conducted an independent
investigation of the financial condition, assets, liabilities, properties and
operations of the Business in making its determination as to the propriety of
the transaction contemplated by this Agreement, and in entering into this
Agreement has relied solely on the results of said investigation, on the
representations and warranties of Seller expressly contained in this Agreement,
and in the Memorandum.
11.7. Non-Waiver. The failure in any one or more instances of a
party to insist upon performance of any of the terms, covenants or conditions of
this Agreement, to exercise any right or privilege in this Agreement conferred,
or the waiver by said party of any breach of any of the
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terms, covenants or conditions of this Agreement, shall not be construed as a
subsequent waiver of any such terms, covenants, conditions, rights or
privileges, but the same shall continue and remain in full force and effect as
if no such forbearance or waiver had occurred. No waiver shall be effective
unless it is in writing and signed by an authorized representative of the
waiving party.
11.8. Applicable Law. This Agreement shall be governed and
controlled as to validity, enforcement, interpretation, construction, effect and
in all other respects by the internal laws of the State of New Jersey applicable
to contracts made in that State.
11.9. Binding Effect, Benefit. This Agreement shall inure to the
benefit of and be binding upon the parties hereto, and their successors and
permitted assigns. Nothing in this Agreement, express or implied, is intended to
confer on any person other than the parties hereto, and their respective
successors and permitted assigns any rights, remedies, obligations or
liabilities under or by reason of this Agreement, including, without limitation,
third party beneficiary rights.
11.10. Assignability. This Agreement shall not be assignable by
either party without the prior written consent of the other party.
11.11. Amendments. This Agreement shall not be modified or amended
except pursuant to an instrument in writing executed and delivered on behalf of
each of the parties hereto.
11.12. Heading. The headings contained in this Agreement are for
convenience of reference only and shall not affect the meaning or interpretation
of this Agreement.
[Space intentionally left blank]
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IN WITNESS WHEREOF, the parties have executed this Agreement
on the date first above written.
SELLER:
HEALTHTRONICS, INC.
a Georgia corporation
By: /s/ Argil J. Wheelock
------------------------------------------
Name: Argil J. Wheelock
Title: Chief Executive Officer
PURCHASER:
NEW JERSEY KIDNEY STONE CENTER, LLC, a New Jersey
limited liability company
By: /s/ Argil J. Wheelock
------------------------------------------
Name: Argil J. Wheelock for HealthTronics, Inc.
Title: Manager
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SCHEDULE 1.3(J)
Excluded Assets: Agreements
[NONE]
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DISCLOSURE SCHEDULE
LICENSES NOT OBTAINED OR APPLIED FOR
[NONE]
COPIES OF THE LEASE
[Attached]
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