ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT dated as of this 28th day of May, 1997 by
and between Davol Inc., a Delaware corporation ("Seller"), and CONMED
Corporation, a New York corporation ("Buyer").
WITNESSETH:
WHEREAS, Seller is engaged in the business of developing, manufacturing
and selling certain disposable surgical suction instruments and tubing
identified and more particularly described in Exhibit A (the "Products") which
are manufactured at Seller's plants in Cranston, Rhode Island or Lawrence,
Kansas or at the plant of Seller's contractor in Juarez, Mexico (the
"Business"); and
WHEREAS, Seller desires to sell to Buyer, and Buyer desires to purchase
from Seller, on the terms set forth herein, all of the Purchased Assets, as
defined herein;
NOW, THEREFORE, in consideration of the mutual promises, covenants and
undertakings contained herein, and subject to and on the terms and conditions
herein set forth, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
1.1) Specific Definitions. As used in this Agreement, the following terms
have the meanings set forth or referenced below:
1.01) "Act" means the United States Food, Drug and Cosmetic Act of 1938, as
amended, and all regulations, promulgated thereunder.
1.02) "Ancillary Agreements " means the Guarantee, the K Resin Agreement, the
Lease Agreement, the License Agreement, the Sterilization Agreement and
the Assignment and Assumption Agreement. As used herein, "Guarantee"
means the guarantee in the form set forth in Exhibit L to be executed
at Closing. As used herein, the "K Resin Agreement," means the K Resin
Agreement in the form set forth in Exhibit M to be executed at Closing.
1.03) "Affiliate" of any entity means any other entity that directly, or
indirectly through one or more intermediaries, controls, or is
controlled by, or is under common control with, the first entity.
Control shall mean owning more than fifty percent (50%) of the total
voting power of the entity.
1.04) "Agreement" means this Agreement and all Exhibits and Schedules hereto.
1.05) "Assignment and Assumption Agreement" means the assignment and
assumption agreement in the form attached hereto as Exhibit B to be
executed at Closing.
1.06) "Authorizations" has the meaning set forth in Section 3.6.
1.07) "Business" has the meaning set forth in the Preamble.
1.08) "Buyer" has the meaning set forth in the Preamble.
1.09) "Claim Notice" has the meaning set forth in Section 9.3.
1.10) "Closing" has the meaning set forth in Section 2.3(a).
1.11) "Closing Date" has the meaning set forth in Section 2.3(a).
1.12) "Confidential Information" means know-how, trade secrets, and
proprietary or unpublished information disclosed by one of the parties
(the "disclosing party") to the other party (the "receiving party") or
generated under this Agreement or which is otherwise considered
Confidential Information under that certain "Confidentiality Agreement"
dated January 16, 1997 between the parties hereto, excluding
information which:
a) was already in the possession of the receiving party (on a
non-confidential basis and without limitations on the use thereof)
prior to its receipt from the disclosing party; provided that the
receiving party shall provide the disclosing party with reasonable
documentary proof thereof;
b) is or becomes part of the public domain through no fault of the
receiving party;
c) is or becomes available to the receiving party from a source other
than the disclosing party which source, to the best of the receiving
party's knowledge, has rightfully obtained such information and has no
obligation of nondisclosure or confidentiality with respect thereto; or
d) is made available by the disclosing party to a third party
unaffiliated with the disclosing party on an unrestricted basis.
1.13) "Consent" has the meaning set forth in Section 3.8.
1.14) "Contract" means the agreement listed on Schedule 3.10 hereto.
1.15) "Current Employees" means all persons who immediately prior to the
execution of this Agreement are employees of Seller engaged in the
operation of the Business at the Facility.
1.16) "Excluded Assets": means all cash and accounts receivable of the
Business, all trademarks, trade names, patents, copyrights, service
marks, logos, and trademark and patent applications and sterilization
specifications of the Seller and its Affiliates, and all other assets
of the Seller and its Affiliates not used exclusively in the Business.
1.17) "Facility" means Seller s manufacturing facility located in Lawrence,
Kansas.
1.18) "FDA" means the U.S. Food and Drug Administration.
1.19) "Finished Products" means Products which are packaged and ready for
immediate sale by Seller or any Affiliate of Seller.
1.20) "Finished Products Inventory" means that portion of Inventory
consisting of Finished Products.
1.21) "GAAP" means United States generally accepted accounting principles as
in effect from time to time.
1.22) "Indemnified Party" has the meaning set forth in Section 9.3.
1.23) "Indemnifying Party" has the meaning set forth in Section 9.3.
1.24) "Intellectual Property" means all know-how, manufacturing drawings,
instructions and processes, product specifications, and trade secrets
owned by Seller and its Affiliates and used exclusively in connection
with the Business.
1.25) "Inventory" means (i) Finished Products, and (ii) Raw Goods and
components allocated by Seller, in the normal course of Seller s
production planning, for use in the manufacture of Finished Products.
1.26) "Inventory Balance" means the dollar value of the Inventory as of the
date of measurement, based on such standard costs of Seller or an
Affiliate(s) of Seller as are specified herein for purposes of such
measurement.
1.27) The "knowledge" of a party or "known", when used with respect to a
party, means the actual knowledge of any of the officers or management
employees of such party who, because of their positions with such
party, would in the ordinary course of business have the knowledge
relevant to the subject matter at issue.
1.28) "Lease Agreement" means the Lease Agreement in the form attached hereto
as Exhibit C to be executed at Closing.
1.29) "License Agreement" means the license agreement in the form attached
hereto as Exhibit D to be executed at Closing.
1.30) "Liens" means liens, mortgages, pledges, encumbrances, or security
interests.
1.31) "Material Adverse Effect" means an effect on the Business which is
materially adverse to the Business and the Purchased Assets together or
separately.
1.32) "Obsolete Inventory" means (i) Finished Products which are no longer
offered for sale by Seller or any Affiliate of Seller, and (ii)
Products which would be Finished Products but for the fact Seller has
determined that such Products do not conform with Seller s
specifications as such specifications existed at the time of completion
of manufacture, and (iii) Finished Products for which neither Seller
nor any Affiliate of Seller has had sales during the six (6) month
period ending April 30, 1997, and (iv) Finished Products in excess of
the most recent one year s sales as set forth in the Sales Report, and
(v) Raw Goods and component portions of Inventory held by Seller
exclusively for use in the manufacture of items referred to in
subsection (i) or (iii) of this definition and (vi) Raw Goods and
component portions of Inventory which Seller has determined do not
conform with Seller s specifications as such specifications exist on
the Closing Date and (vii) Raw Goods and component portions of
Inventory in excess of eighteen (18) months supply based upon 1996
actual usage.
1.33) "Purchase Price" has the meaning set forth in Section 2.2.
1.34) "Purchased Assets " means (i) the tangible assets of the Business
described on Schedule 1.34(a); (ii) all other assets, other than
Excluded Assets, which are used or held for use or sale exclusively in
the Business whether tangible or intangible, wherever located,
including, without limitation, the Intellectual Property, Seller's
rights under the Contract to the extent assigned to Buyer under the
Assignment and Assumption Agreement and listed on Schedule 3.10, such
Authorizations as are transferrable under applicable governmental
regulations and listed on Schedule 3.6, and all goodwill of the
Business; and (iii) a certain sterilizer described on Schedule 1.34(b)
which is not used exclusively in the Business.
1.35) "Raw Goods" means the raw goods and the work in process necessary to
manufacture and assemble Finished Products.
1.36) "Raw Goods Inventory" means all Inventory except for Finished Products.
1.37) "Sales Report" has the meaning set forth in Section 3.3.
1.38) "Seller" has the meaning set forth in the Preamble.
1.39) "Sterilization Agreement" means the sterilization agreement in the form
attached hereto as Exhibit E to be executed at Closing.
1.40) "Transfer Taxes" means all taxes imposed by the United States or any
state of the United States, any foreign government or state or
political subdivision thereof, including sales taxes, use taxes, stamp
taxes, conveyance taxes, transfer taxes, recording fees, reporting fees
and other similar duties, taxes and fees, if any, imposed upon, or
resulting from, the transfer of the Purchased Assets hereunder and
under the Ancillary Agreements and the filing of any instruments
relating to such transfer.
1.41) "Variable Cost Report" has the meaning set forth in Section 3.3.
1.42) "Variable Costs" mean those costs relating to the Products set forth in
the Variable Cost Report, as defined in Section 3.3 previously
delivered to Buyer.
1.43) "VHA Assumption Agreement" means the consent agreement among Seller,
Buyer and VHA, Inc. in the form attached hereto as Exhibit N to be
executed at Closing.
1.2) Other Terms. Other terms may be defined elsewhere in the text of this
Agreement and shall have the meaning indicated throughout this
Agreement.
1.3) Other Definitional Provisions.
(a) The words "hereto", "herein", and "hereunder" and words of similar
import, when used in the Agreement, shall refer to this Agreement as a
whole and not to any particular provisions of this Agreement.
(b) The terms defined in the singular shall have a comparable meaning
when used in the plural, and vice versa.
(c) The term "Dollars" or "$" shall refer to the currency of the United
States of America.
ARTICLE II
PURCHASE AND SALE OF ASSETS AND INVENTORY
2.1) Purchase and Sale of Assets. Upon the terms and subject to the
conditions set forth in this Agreement and in reliance on the
representations and warranties of each party herein, effective as of
the Closing, Seller hereby agrees to sell, transfer and assign to
Buyer, and Buyer hereby agrees to purchase from Seller, all of the
Purchased Assets.
2.2) Purchase Price and Allocation. As the total consideration (the
"Purchase Price") for the Purchased Assets and the covenant not to
compete:
(a) Buyer shall pay Seller $24,000,000.00 in cash at the Closing as
described below, subject to adjustment after the Closing as set forth
in Section 2.4(a).
(b) The parties agree to allocate the Purchase Price among the covenant
not to compete and the Purchased Assets as set forth on Schedule
2.2(b), which schedule shall be amended post-closing to reflect any
Purchase Price Adjustments required pursuant to Section 2.4 below.
2.3) Closing and Closing Date; Delivery and Payment.
(a) Closing and Closing Date. The Closing of the transactions
contemplated by this Agreement (the "Closing") shall take place at the
offices of Winston & Xxxxxx in New York, New York on June 30, 1997 or
on such other date or at such other time as may be mutually agreed upon
in writing by Buyer and Seller (the "Closing Date") and the Closing
shall be deemed to be effective as of midnight on such Closing Date.
(b) Delivery and Payment. At the Closing, Buyer and Seller shall
deliver, each to the other, the Ancillary Agreements, and such other
documents as are required pursuant to Article VII hereof, and Buyer
shall pay $24,000,000.00 to Seller in immediately available funds by
bank wire transfer to an account designated by Seller, which account
shall be specified by Seller at least two (2) business days prior to
the Closing Date. The Purchased Assets shall be delivered to Buyer in
the manner contemplated in Article VI.
2.4) Post Closing Purchase Price Adjustment.
(a) Purchase Price Adjustment. The Purchase Price shall be adjusted
following the Closing (the "Purchase Price Adjustment") as follows:
(i) The Purchase Price shall be reduced by the amount by which the
Inventory Balance as of the Closing is less than $4,071,596 as
adjusted as provided in Section 2.4(a)(iii); or
(ii) The Purchase Price shall be increased by the amount by which
the Inventory Balance as of the Closing is greater than $4,071,596
as adjusted as provided in Section 2.4(a)(iii).
(iii) The amount set forth in Section 2.4(a)(i) and Section
2.4(a)(ii) shall be increased by an amount equal to: (1) the average
monthly value during the first four (4) calendar months of 1996 of
Raw Goods and components not allocated to, used or held for use
exclusively in connection with the production of the Products (the
"Shared Raw Goods and Components") in Inventory multiplied by (2) a
fraction the numerator of which is the number of units of Products
in which Shared Raw Goods and Components are incorporated or
utilized which were sold by Seller or its Affiliates during the
first four (4) calendar months of 1997 and the denominator of which
is the number of units of all products in which Shared Raw Goods and
Components are incorporated or utilized which were sold by Seller or
its Affiliates during the first four calendar months of 1997.
(b) Inventory Counting and Valuation. As part of the process of
establishing the Inventory Balance as of the Closing for purposes of
Section 2.4(a) above, Seller and Buyer agree as follows: (i) during the
weekend immediately preceding the Closing Date Seller and Buyer shall
jointly inspect and count that portion of the Inventory located at the
Facilities as defined below, and (ii) the Inventory count, taken in
accordance with Section 2.4(b)(i), shall be adjusted, based upon Seller
s shipping documentation, to take into account shipments of Finished
Products by Seller from such Inventory following completion of such
count through midnight of the Closing Date, and (iii) the Inventory
count, taken in accordance with Section 2.4(b)(i), shall be adjusted
based upon Seller's production of Products following completion of such
count through midnight of the Closing Date, and (iv) the Inventory
located outside of the United States (excluding Juarez, Mexico)
("Foreign Inventory") shall not be physically counted, and (v) Seller
will provide Buyer with a list of Foreign Inventory existing as of the
Closing for purposes of valuing the same no later than fifteen (15)
days following the Closing Date, and (vi) that portion of Inventory
consisting of Shared Raw Goods and Components shall, subject to
Seller's obligations under Section 6.14, be allocated by Seller in its
discretion to Buyer at Closing and (viii) Seller shall use its
reasonable efforts to have each vendor in possession of any Inventory
prepare for Seller a report showing Inventory on hand at such vendor as
of April 30, 1997 which report will be delivered to Buyer upon receipt,
and (viii) Seller and Buyer will cooperate to resolve any questions
which arise regarding such vendor prepared inventory reports; provided,
however, such vendor prepared inventory reports shall not be used for
any purpose in determining the Inventory Balance as of Closing, and
(ix) Seller will provide Buyer with a report showing Inventory on hand
at each vendor in possession of any such Inventory as of the Closing
within fifteen (15) days following the Closing. As used herein,
"Facilities" means Seller's, its Affiliates' or its contractor's
manufacturing or warehouse facilities at Cranston, Rhode Island,
Lawrence, Kansas, Covington, Georgia, Juarez, Mexico, and Xxxxxx Hill,
New Jersey. The Seller will provide the Buyer the following information
after the Closing Date: (i) a listing by item number of the Inventory
as of December 31, 1996, detailing the number of units on hand, 1996
standard cost and extended value; (ii) a report detailing any change in
standard cost from December 31, 1996 to January 1, 1997 for such
Inventory; and (iii) a report detailing the 1997 standard cost of such
Inventory listed by item number which shall be used to value such
Inventory as of the Closing Date. The Inventory Balance (excluding
Shared Raw Goods and Components) as of December 31, 1996 measured at
Seller's and its Affiliates' 1996 standard costs was $4,071,596. The
Inventory Balance as of the Closing, and for purposes of calculating
any Purchase Price Adjustment, shall be determined in accordance with
the same methodology as used by Seller or its Affiliate(s), as
applicable, to determine the Inventory Balance on December 31, 1996,
but shall be calculated at the applicable 1997 standard costs of Seller
or its Affiliate(s). If a Purchase Price Adjustment is required
following completion of the counting and valuation of the Inventory, in
accordance with the above provisions of Section 2.4(b), such adjustment
shall be made post-Closing by the Buyer or Seller, as the case may be,
making a payment by check to the other party within thirty (30) days
following the Closing Date.
(c) Inventory Counting and Valuation Disputes. Any disputes regarding
the counting of the Inventory or the adjustments, as described in
Section 2.4(b)(i), 2.4(b)(ii) or 2.4(b)(iii), will be resolved in good
faith by the Buyer and Seller during such count or immediately
following the completion of such count or following such adjustments as
the case may be. Buyer shall (absent material error) accept Seller's
accounting of Foreign Inventory as set forth on the list described in
Section 2.4(b)(v) and Seller's report of Inventory on hand at each
vendor in possession of any such Inventory as of the Closing as set
forth in Section 2.4(b)(ix). Notwithstanding anything in this Agreement
to the contrary, Buyer shall not be entitled to any adjustment in
Purchase Price or other credit for any Obsolete Inventory included in
Foreign Inventory. Buyer and Seller hereby expressly acknowledge and
agree that any dispute concerning the Inventory Balance, unrelated to
the Inventory count and adjustments referred to in the immediately
preceding sentence, shall be limited to the failure of the parties to
accurately calculate the Inventory Balance in accordance with Section
2.4(b) and in no event shall any such dispute involve the accuracy or
correctness of the 1997 standard cost(s) of Seller or those of any of
its Affiliate(s) pertaining to any Inventory. Subject to the foregoing
procedures of this Section 2.4(c), any dispute relating to the
Inventory Balance or Purchase Price Adjustment not resolved by Buyer
and Seller and their respective accountants within sixty (60) days
after the Closing shall, upon written request by either Buyer or
Seller, be referred to a "big six" accounting firm which shall be
selected by and from a list of such firms which neither Buyer or Seller
have had any business dealings during the three (3) year period
preceding selection, or such other independent public accounting firms
selected jointly by Buyer and Seller, for final resolution. Each party
shall, within twenty (20) business days after submission of such
dispute, deliver to such firm the information such party wishes to have
considered by such firm in making its determination. Such firm shall
present its determination and resolution of any such disputes within
thirty (30) business days after the submission of such dispute to the
firm. Buyer and Seller agree that the resolution reached by such firm
shall be binding and conclusive between the parties. The fees of the
accounting firm selected to resolve any such dispute shall be borne
one-half by Seller and one-half by Buyer.
2.5) Transfer Taxes. All Transfer Taxes and any interest and/or penalty
relating thereto shall be promptly paid by Buyer.
2.6) No Assumption of Liabilities. Except as expressly set forth in this
Agreement or otherwise expressly agreed to by the parties, there shall
be no assumption of any liability or liabilities by Buyer except that
Buyer hereby agrees to assume all liability for:
(a) all product liability claims directly arising out of and caused by
or resulting from the manufacture or sale of any Product or Purchased
Assets of the Business by Buyer after the Closing;
(b) liability for the rebate obligations allocated to Buyer in
accordance with Section 9.5; and
(c) those obligations listed in Section 6.11 for which Buyer is
responsible.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to Buyer as follows:
3.1) Organization of Seller. Seller has been duly incorporated and is
validly existing and in good standing under the laws of the State of
Delaware. Seller is duly qualified and in good standing as a foreign
corporation in each state where the nature of Seller's activities and
properties would require Seller to be so qualified and where the
failure to be so qualified would have a Material Adverse Effect.
3.2) Authority of Seller. Seller has full corporate power to enter into this
Agreement and the Ancillary Agreements to which Seller is a party and
to perform its respective obligations hereunder and thereunder. This
Agreement has been duly authorized, executed, and delivered by Seller
and when duly authorized , executed and delivered by Buyer, will
constitute the legal, valid and binding agreement of Seller,
enforceable against it in accordance with its terms subject to
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium
and similar laws of general applicability relating to or affecting
creditors' rights and to general equity principles regardless of
whether considered at law or in equity. The Ancillary Agreements to
which Seller is a party will as of the Closing have been duly
authorized, executed and delivered by Seller and when duly authorized,
executed and delivered by the other parties thereto, will constitute
the legal, valid and binding agreements of Seller enforceable against
it in accordance with their terms subject to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar laws of
general applicability relating to or affecting creditors rights and to
general equity of principles regardless of whether considered at law or
in equity. No further proceeding on the part of Seller is necessary to
authorize this Agreement or is necessary to authorize the Ancillary
Agreements to which Seller is a party and the transactions contemplated
hereby and thereby. Except as disclosed in Schedule 3.2 or 3.8 neither
the execution and delivery of this Agreement or the Ancillary
Agreements to which Seller is a party nor compliance by Seller with
their terms and provisions will violate (i) any provision of the
certificate or articles of incorporation or by-laws of Seller, (ii) to
Seller's knowledge, the Contract to the extent assigned to Buyer or any
other license, franchise or permit to which Seller is a party or by
which it is bound, or (iii) to Seller's knowledge, any law, statute,
regulation, injunction, order or decree of any government agency or
authority or court to which Seller is subject, where, in all cases,
such violation would have a Material Adverse Effect.
3.3) Financial Information. Seller has delivered to Buyer: (i) a report that
sets forth the Finished Products sold by Seller's Affiliate in the
United States exclusive of its territories or possession (broken down
by units, gross sales in dollars and net sales in dollars) for the
fiscal year ending December 31, 1996 and the first four months of 1997
("Sales Report"), (ii) a report that represents Seller s 1997 Variable
Costs relating to Finished Products, by element and by catalog number,
inclusive of the Raw Goods and component standard costs ("Variable Cost
Report"), and (iii) a report which sets forth the total contribution
margin related to the Products for the year ending December 31, 1996
("Contribution Margin P&L"). The Contribution Margin P&L is attached
hereto as Schedule 3.3. The Sales Report has been derived from the
sales records of Seller s Affiliate for the applicable periods. The
Variable Cost Report represents the Seller s standard costs of the
Finished Products, Raw Goods and components of the Business for 1997
exclusive of the portion of the Seller s standard costs related to
fixed overhead. The Sales Report, the Variable Cost Report and
Contribution Margin P&L are accurate in all material respects and have
been derived from books and records of the Seller and those of Seller s
Affiliates which are maintained in accordance with GAAP, although the
variable costs and contribution margins contained in the Variable Cost
Report and in the Contribution Margin P&L are not themselves maintained
in accordance with GAAP. The Inventory Balance as of December 31, 1996
(exclusive of the amount of any increase therein occasioned by the
increase calculated pursuant to Section 2.4(a)(iii)) based upon
Seller's 1996 standard costs when adjusted to Seller's 1997 standard
costs will not exceed the amount calculated using 1996 standard costs
by more than $130,000.
3.4) Absence of Certain Changes and Events. Except as disclosed in Schedule
3.4, since December 31, 1996:
(a) To Seller's knowledge, there has not been any change in the general
affairs, management, or condition (financial or otherwise) of the
Business which has had or would have a Material Adverse Effect.
(b) Seller has not, other than in the ordinary course of business, (i)
entered into any material contract, license, franchise or commitment,
waived any material rights, or made any amendment or termination of any
material contract, license, franchise or agreement, relating to the
Purchased Assets or the Business; (ii) altered or revised, in any
material respect, its accounting principles, procedures, methods or
practices relating to the Purchased Assets or the Business; (iii)
transferred, disposed of, or otherwise removed from the Facility any
material amount of Purchased Assets; or (iv) incurred, discharged or
satisfied any material liability or Lien relating to the Purchased
Assets or the Business.
3.5) Litigation. Set forth on Schedule 3.5 hereto is a list which is
complete and accurate in all material respects of all currently pending
actions, suits, proceedings, audits and investigations involving the
Purchased Assets and the Business, as to which Seller, has received
written notice, and a brief description of the nature and status
thereof. Except as disclosed in Schedule 3.5 hereto, there are no other
actions, suits, or proceedings pending or threatened against Seller
with respect to the Business and/or the Purchased Assets, at law, in
equity or otherwise, in, before, or by, any court or governmental
agency or authority. Except as disclosed on Schedule 3.5 hereto, there
are no unsatisfied judgments or outstanding orders, injunctions,
decrees, stipulations or awards (whether rendered by a court or
administrative agency or by arbitration) against Seller with respect to
the Business or against any of the Purchased Assets
3.6) Compliance with Law. . Except with regard to compliance with the Xxxx
Xxxxx Xxxxxx Anti-trust Improvements Act of 1976 as amended (HSR Act),
to Seller's knowledge, (i) the Business is not in violation of any law,
ordinance or regulation of any governmental entity, which violation
would have a Material Adverse Effect, (ii) all governmental approvals,
permits, concurrences, licenses and other governmental authorizations
required in connection with the conduct of any material aspect of the
Business as presently conducted (collectively, "Authorizations") have
been obtained and are in full force and effect and are being complied
with in all material respects. Except as disclosed in Schedule 3.6
since December 31, 1996, Seller has not received any written
notification of any asserted past or present violation in connection
with the conduct of the Business of any law, ordinance or regulation,
which violation would have a Material Adverse Effect, or any written
complaint, inquiry or request for information from any governmental
entity relating thereto.
3.7) Taxes. Notwithstanding anything to the contrary herein, except for
Transfer Taxes, if any, Seller shall retain all responsibility for all
liabilities or obligations involving any taxes, or interest or
penalties related thereto, arising out of or relating to the operation
of the Business by the Seller prior to the Closing Date.
3.8) Consents. Subject to compliance by Seller with the HSR Act and except
as set forth in Schedule 3.8 no consent, approval, authorization,
order, filing, registration or qualification of or with any court,
governmental authority or third person is required to be made or
obtained by Seller in connection with the execution and delivery of
this Agreement by Seller or the consummation by Seller of the
transactions contemplated hereby, (including the transfer or assignment
of all Purchased Assets). Schedule 3.8 lists each consent, approval,
waiver or authorization (collectively, the "Consents"), that are
legally or contractually required on the part of Seller to duly and
validly transfer or assign any of the Purchased Assets as contemplated
hereby.
3.9) Title to and Condition of Purchased Assets. Seller has, and, upon
consummation of the transactions contemplated hereby will transfer to
Buyer title to the Purchased Assets free and clear of all Liens except
as disclosed on Schedule 3.9. The Purchased Assets constitute, in all
material respects, all assets necessary to, or used in, the conduct of
the Business as presently conducted by Seller except for Excluded
Assets. The Purchased Assets are, in all material respects, suitable
for the uses for which they are presently used by the Business, in
normal operating condition and free from any known significant defects,
excepting (i) ordinary wear and tear and (ii) conditions disclosed to
Buyer on Schedule 3.9. With respect to the manufacturing equipment and
tooling, on the Closing, Seller will provide to Buyer its most current
maintenance schedule.
3.10) Contract. Schedule 3.10 lists the sole contract that Seller shall
assign to Buyer and Buyer shall assume pursuant to the Assignment and
Assumption Agreement. Except as expressly set forth on Schedule 3.10
the Contract listed on Schedule 3.10 is fully assignable to Buyer
without the consent of a third party and is valid and in full force and
effect in accordance with its terms, subject to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar laws of
general applicability relating to or affecting creditors rights and to
general equity principles, and there have been no material amendments,
modifications, or supplements to the Contract and, to Seller's
knowledge, Seller is not in default under the Contract, the result of
which would cause a Material Adverse Effect.
3.11) Infringement of Intellectual Property. Except as disclosed in Schedule
3.11, to Seller's knowledge; (i) Seller owns no patents, or trademarks,
trade names, copyrights, service marks, logos, or trademark or patent
applications, which are used exclusively in connection with the
Business and none of the Products are covered by any patent owned by or
licensed to Seller or any Affiliate of Seller; (ii) Seller owns or has
the right to use and transfer each item of know-how or trade secret
currently used in the Business; (iii) Seller's operation of the
Business does not infringe, misuse or misappropriate any intellectual
property rights not owned by or licensed to Seller; and (iv) no third
party is infringing any Intellectual Property rights of Seller used in
connection with the Business.
3.12) Brokers and Finders. Seller has not employed any broker, finder,
consultant or intermediary in connection with the transactions
contemplated by this Agreement or any Ancillary Agreement who would be
entitled to a brokers, finders or similar fee or commission in
connection therewith or upon the consummation thereof or if the Closing
does not occur.
3.13) Current Manufacturing and Product Drawings. Within ten (10) days
following the Closing, Seller shall deliver to Buyer copies of all
Product drawings and specifications, manufacturing and process
instructions for the Products and copies of the latest revision thereof
at the Facility or other location as specified by Buyer prior to the
Closing. Nothing contained herein shall be construed to transfer to
Seller any rights in or with respect to specifications of Seller for
its sterilization process or in any drawings, specifications,
manufacturing process instructions, know-how, and trade secrets which
are not related exclusively to or used exclusively in connection with
the Products.
3.14) FDA 510(K) Documents. All Finished Products have concurrences for sale
by the FDA under Section 510(K) of the Act or are pre-amendment devices
(as evidenced by the documents listed and described on Schedule 3.14,
copies of which have been delivered to Buyer) which may be legally
marketed without Section 510(K) premarket notification clearance and
any changes to the Finished Products which have been made from May,
1976 to the present are not significant changes within the meaning of
the applicable regulations.
3.15) Customers. The sales history documents furnished to Buyer prior to the
Closing are true and accurate in all material respect and reflect the
sales history of the Products for the past three (3) fiscal years and
the first quarter of 1997.
3.16) Real Property. Seller has:
(a) Good and valid title to the Facility, free and clear of all
mortgages, liens, charges, encumbrances, easements, security interests
or title imperfections other than:
(i) Those listed in Schedule 3.16;
(ii) Liens for current taxes, assessments or governmental charges
not yet due and delinquent or that are being contested in good
faith;
(iii) Liens that do not materially interfere with the present use of
the Facility or materially detract from its value to Seller as
currently used by Seller;
(iv) Liens of mechanics, material men, laborers, landlords,
suppliers, vendors, workers, work housemen, carriers and other
similar common law or statutory liens arising in the ordinary course
of business securing amounts that are not due or payable or, if due
and payable, have been aggregately bonded or are being contested in
good faith;
(v) Zoning, entitlement and other land use environmental regulations
by governmental agencies
(vi) Easements, reservations and restrictions of record; and
(vii) Liens that do not, individually or in the aggregate,
materially interfere with the use of such Facility or materially
detract from its value as currently used by Seller (collectively,
referring collectively to (i) - (vii) as the "Permitted
Encumbrances"). To the best knowledge of Seller, there is no
condemnation pending or threatened effecting the Facility owned by
Seller.
3.17) Environmental Compliance. Except as disclosed in Schedule 3.17, since
January 1, 1990:
(a) In connection with the Business, and to Seller's knowledge Seller
is not in material violation, or alleged material violation, of any
applicable judgment, decree, order, law, license, rule or regulation
pertaining to the environment, including without limitation, those
arising under the Resource Conservation and Recovery Act ("RCRA"), the
Comprehensive Environmental Response, Compensation and Liability Act of
1980, as amended ("CERCLA"), the Superfund Amendments and
Reauthorization Act of 1986 ("XXXX"), the Federal Clean Water Act, the
Federal Clean Air Act, the Toxic Substances Control Act, or any state
or local statute, regulation, ordinance, order or decree relating to
health, or the environment (hereinafter "Environmental Laws").
(b) Seller has not received written notice from any third party,
including, without limitation, any federal, state or local governmental
authority, (i) that Seller has been identified by the United States
Environmental Protection Agency ("EPA") as a potentially responsible
party under CERCLA with respect to the Facility being listed on the
National Priorities List, 40 C.F.R. Part 000 Xxxxxxxx X (1986), (ii)
that any hazardous waste, as defined by 42 U.S.C. 9601(5), any
hazardous substances, as defined by 42 U.S.C. 9601(14), any pollutant
or contaminant, as defined by 42 U.S.C. 9601(33), and any toxic
substances, oil or hazardous materials or other chemicals or substances
regulated, defined or designated as hazardous, extremely or imminently
hazardous, dangerous or toxic by any Environmental Laws ("Hazardous
Substances") that it has generated, transported or disposed of has been
found at the Facility, or (iii) that Seller is or shall be a named
party to any claim, action, cause of action, complaint, or legal or
administrative proceeding (in each case, contingent or otherwise)
arising out of any third party's incurrence of costs, expenses, losses
or damages of any kind whatsoever in connection with the release of
Hazardous Substances at the Facility.
3.18) Finished Products. The Finished Products Inventory held by Seller or
any Affiliate of Seller as of the Closing shall consist of items of a
quality usable or salable in the ordinary course of business. The
Finished Products Inventory referred to in the immediately preceding
sentence: (i) has been manufactured in accordance with Seller s
specifications therefor in effect at the time of manufacture; and (ii)
does not contain any Obsolete Inventory.
3.19) Raw Goods Inventory. None of the Raw Goods Inventory as of the Closing
shall contain any Obsolete Inventory.
3.20) Current Employees. With respect to each Current Employee, Seller has
delivered to Buyer a complete and accurate list of each Current
Employee s years of service, position, salary or wages. To Seller s
knowledge, there are no union organizing activities occurring among the
Current Employees or collective bargaining agreements and no proceeding
to such effect before the National Labor Relations Board.
3.21) Disclaimer of Other Representations and Warranties. With the exception
of the representations and warranties expressly contained in this
Article III, Seller makes no other representations and warranties,
express or implied, with respect to any of the Purchased Assets being
purchased hereunder or with respect to the Business.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Seller as follows:
4.1) Organization of Buyer. Buyer is duly incorporated, validly existing and
in good standing under the laws of the State of New York. Buyer is duly
qualified and in good standing as a foreign corporation in each other
state where the nature of Buyer's activities and properties would
require Buyer to be so qualified and, where the failure to be so
qualified, would have a material adverse effect on Buyer or Buyer s
ability to consummate the transactions contemplated by this Agreement
and the Ancillary Agreements.
4.2) Authority of Buyer. Buyer has full corporate power and authority to
enter into this Agreement and the Ancillary Agreements and to perform
its obligations hereunder and thereunder. This Agreement has been duly
authorized, executed, and delivered by Buyer and when duly authorized,
executed and delivered by Seller, will constitute the legal, valid and
binding agreement of Buyer, enforceable against Buyer in accordance
with its terms, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors' rights and to general equity
principles regardless of whether considered at law or in equity. The
Ancillary Agreements to which Buyer is a party will as of the Closing
have been duly authorized, executed, and delivered by Buyer and when
duly authorized, executed and delivered by the other parties thereto,
will constitute the legal, valid and binding agreements of Buyer,
enforceable against it in accordance with their terms subject to
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium
and similar laws of general applicability relating to or affecting
creditors rights and to general equity principles regardless of whether
considered at law or in equity. No further proceeding on the part of
Buyer is necessary to authorize this Agreement or is necessary to
authorize the Ancillary Agreements and the transactions contemplated
hereby and thereby. Neither the execution and delivery of this
Agreement and the Ancillary Agreements nor compliance by Buyer with the
terms and provisions will violate (i) any provision of the certificate
or articles of incorporation or by-laws of Buyer, (ii) to Buyer's
knowledge, any contract provision, license, franchise or permit to
which Buyer is a party or by which it is bound, or (iii) to Buyer's
knowledge, any law, statute, regulation, injunction, order or decree of
any government agency or authority or court to which Buyer is subject,
where, in all cases, such violation would have a material adverse
effect upon Buyer or Buyer s ability to consummate the transactions
contemplated by this Agreement and the Ancillary Agreements.
4.3) Brokers and Finders. Buyer has not employed any broker, finder,
consultant or intermediary in connection with the transactions
contemplated by this Agreement or any Ancillary Agreement who would be
entitled to a broker's, finder's or similar fee or commission in
connection therewith or upon the consummation thereof or if the Closing
does not occur.
4.4) Financial Capacity. Buyer has the power, authority, and sufficient
currently available financial resources to consummate the transactions
contemplated hereby and by the Ancillary Agreements. Such financial
resources are, and will continue to be, currently available to enable
Buyer to consummate the transactions contemplated hereby and thereby.
4.5) Litigation. To Buyer's knowledge, there are no actions, suits, or
proceedings pending or threatened against Buyer at law, in equity or
otherwise in, before, or by, any court or government agency or
authority which would have a material adverse effect on Buyer or Buyer
s ability to consummate the transactions contemplated hereby and by the
Ancillary Agreements.
4.6) Compliance With Law. To Buyer's knowledge, Buyer is not in violation of
any law, ordinance, or regulation of any governmental entity, which
violation would have a material adverse effect on Buyer or Buyer s
ability to consummate the transactions contemplated hereby and by the
Ancillary Agreements. Buyer has not received any written notification
of any asserted past or present violation of any law, ordinance or
regulation, which violation would have a material adverse effect on
Buyer or its ability to consummate the transactions contemplated by
this Agreement and the Ancillary Agreements or any written complaint,
inquiry or request for information from any governmental entity
relating thereto which would have a material adverse effect on Buyer or
its ability to consummate the transactions contemplated hereby and by
the Ancillary Agreements.
4.7) Consents. Except with regard to compliance with the HSR Act, to Buyer s
knowledge, there are no consents, approvals, waivers or authorizations
that are legally or contractually required on the part of Buyer to duly
and validly purchase and receive any of the Purchased Assets
contemplated hereby, or to perform its obligations under this Agreement
or the Ancillary Agreements, where the failure to obtain such consents,
approvals, waivers or authorizations would have a material adverse
effect on Buyer or its respective ability to consummate the
transactions contemplated hereby and by the Ancillary Agreements.
4.8) Disclaimer of Other Representations and Warranties. Buyer makes and has
made no warranties or representations other than those expressly set
out in this Article IV.
ARTICLE V
PRE-CLOSING COVENANTS AND AGREEMENTS
5.1) Access and Information. Commencing upon execution of this Agreement and
continuing to the Closing Date, Seller shall permit Buyer and its
representatives to have access, during regular business hours and upon
reasonable advance notice to Seller, to the Facility, subject to
Seller's reasonable rules and regulations, and shall furnish, or cause
to be furnished, to Buyer such additional information to the extent
available with respect to the Business and the Purchased Assets, which
information shall consist of and be limited to (i) supporting data for
information previously delivered to Buyer by Seller prior to execution
hereof, and (ii) quality assurance and regulatory affairs records
(including, compliance records, FDA Section 483 letters, "Medical
Device Reports" and "Warning Letters") as Buyer shall from time to time
reasonably request. Buyer shall have the right to copy the foregoing
information at Buyer's expense.
5.2) Registrations, Filings and Consents. Seller and Buyer will cooperate
and use all reasonable efforts to make all registrations, filings and
applications, to give all notices and to obtain any governmental or
other consents, transfers, approvals, orders, qualifications and
waivers necessary or desirable for the consummation of the transactions
contemplated hereby.
5.3) Conduct of Business. Prior to the Closing, and except as otherwise
contemplated by this Agreement or consented to or approved by Buyer,
Seller covenants and agrees that:
(a) Seller shall operate the Business only in the ordinary and usual
course and use reasonable efforts to preserve the business and
relationships with suppliers, and customers of the Business;
(b) Seller shall not permit the Business, other than in the ordinary
and usual course of business, to (i) acquire or dispose of any
Purchased Assets, (ii) materially encumber any of the Purchased Assets,
or enter into any other material transaction or incur any other
material liabilities with respect to the Purchased Assets, or (iii)
enter into any material contract, agreement, commitment or arrangement
with respect to any of the foregoing without the consent of the Buyer.
ARTICLE VI
CLOSING AND POST-CLOSING COVENANTS AND AGREEMENTS
6.1) Delivery and Risk of Loss. All of the Purchased Assets shall be
delivered to Buyer in accordance with the schedule for such delivery
set forth in Schedule 6.1. Title and risk of loss to the Purchased
Assets shall pass to Buyer upon the effective time of the Closing.
6.2) Non-Competition Agreement. For a period of five (5) years following the
Closing Date, neither Seller nor any Affiliate of Seller shall: (A)
manufacture or sell, directly or indirectly, anywhere within the United
States or U.S. territory and any foreign country any: (i) Products of
the Business, or (ii) products that are substantially equivalent to
Products in design and current application as set forth in Seller's
applicable current labeling of Finished Products; provided, however,
that nothing contained in this Section 6.2 shall be construed to
prevent Seller or any Affiliate of Seller from incorporating into
products any Products or any components thereof which are the same as
or substantially similar to Products or any components thereof,
provided that the products into which such Products or components are
incorporated are not substantially equivalent to Products in design and
current application as set forth in Seller's applicable current
labeling of Finished Products, and, (B) joint venture, contract, or
enter into any other business arrangement with any competitor of Buyer
for Products where such joint venture, contract or business arrangement
directly relates to or promotes the sale of products which are
substantially equivalent to Products in design and current application
as set forth in Seller's applicable current labeling of Finished
Products (collectively, "Restricted Activities"). The parties agree
that this Agreement shall not limit Seller or Seller s Affiliates from
effecting transactions that may result in the acquisition of businesses
or assets that might fall within the scope of Restricted Activities,
provided, however, that: (i) Seller shall promptly notify Buyer of such
acquisition, (ii) Seller or its Affiliates shall offer to sell to Buyer
that portion of such acquired businesses and assets which constitute
Restricted Activities (the "Offered Assets") on commercially reasonable
terms as soon as reasonably practicable, (iii) Buyer shall by written
notice to Seller, within thirty (30) days of receipt of Seller's offer,
either accept such offer, reject such offer or request an appraisal of
the Offered Assets, (iv) if Buyer requests an appraisal, the parties
shall agree upon an appraiser and shall jointly bear the cost of any
such appraisal, (v) Buyer shall, within thirty (30) days of the receipt
of such appraisal, notify Seller whether or not Buyer will purchase the
Offered Assets at the appraised value thereof, (vi) in the event Buyer
elects not to purchase the Offered Assets, Seller and its Affiliates
shall have no further obligations to Buyer with respect to such Offered
Assets under this Section 6.2 and Buyer shall reimburse Seller and its
Affiliates for the portion of the cost of any such appraisal paid for
by Seller or its Affiliates. Nothing contained in this Section 6.2
shall be construed to prevent Seller or its Affiliates, as the case may
be, from continuing to operate any such Offered Assets pending Buyer's
decision whether or not to purchase such Offered Assets. Seller or its
Affiliates, as the case may be, shall provide Buyer with all
information reasonably requested by Buyer in connection with the
offering for sale to Buyer of the Offered Assets. If at the time of
enforcement of this Section 6.2, the court shall hold that the
duration, scope or area restrictions stated herein are unreasonable
under circumstances then existing, the parties agree that the maximum
duration, scope or area reasonable under such circumstances shall be
substituted for the stated duration, scope or area, but in no event in
excess of the stated duration, scope or area. In an action in law or in
equity for breach or enforcement of this Section 6.2 brought in any
court having competent jurisdiction over the parties to such an action,
the prevailing party shall be entitled to recover from the other party
or parties its reasonable attorneys fees, costs and expenses associated
with prosecuting or defending such an action to its final disposition
(including final dispositions by summary adjudication, judge or jury
verdict or final appeal).
6.3) Further Assurances. For a period of five (5) years following the
Closing Date, Seller shall promptly execute, acknowledge and deliver
any further assignments, conveyances and other instruments of transfer
reasonably requested by Buyer and necessary to effectuate the transfer
of title to the Purchased Assets to Buyer and, at Buyer's expense, will
take any other action consistent with the terms of this Agreement that
may reasonably be requested by Buyer for the purpose of assigning,
transferring, granting, and confirming ownership in or to Buyer, or
reducing to Buyer's possession, any or all of the Purchased Assets.
6.4) Other Agreements. With respect to those agreements listed on Schedule
6.4, during the sixty (60) day period following the Closing Date,
Seller shall use its reasonable efforts or shall cause its
Affiliate(s), as the case may be, to use their reasonable efforts, to
procure the consent of the third parties listed on Schedule 6.4 to the
assignment to Buyer of said agreements but only to the extent they
relate to any of the Products.
6.5) Bulk Sales. Buyer and Seller specifically waive compliance under all
laws relating to the sale of assets in bulk, (the "Bulk Sales Law")
including Article VI of the Uniform Commercial Code, if applicable. The
Buyer and Seller acknowledge and agree that no filings with respect to
any Bulk Sales Laws or similar laws have been made, nor are they
intended to be made, nor are such filings a condition precedent to the
Closing; and, in consideration of such waiver by Buyer, Seller shall
defend and indemnify Buyer, and its successors and assigns, against any
loss, liability, or damage resulting or arising from such waiver and
failure to comply with the applicable Bulk Sales Laws.
6.6) No Third Party Beneficiaries. None of the provisions of this Agreement
are intended or shall be deemed to confer upon any person or entity not
a party to this Agreement any rights or benefits, including the status
of third party beneficiary of any provision hereof.
6.7) Access to Records and Information. During the five (5) year period
immediately following the Closing, Buyer shall cooperate with Seller in
providing Seller all information reasonably requested and permitting
access to all records relating to the period of ownership of the
Purchased Assets by Seller prior to the Closing, when requested in
writing by Seller to provide or permit the same for all legitimate
purposes. The cost and expense in providing information hereunder shall
be borne by Seller.
6.8) Customer/Distributor Notification Letter. Promptly following the
Closing, Seller and Buyer shall send a letter signed by both parties to
customers of the Business informing customers that Buyer has purchased
the Business of Seller. Said letter shall be substantially in the form
of Exhibit F-1. Promptly following the Closing, Seller and Buyer shall
send a letter signed by both parties to distributors of the Products
informing such distributors that Buyer has purchased the Business of
Seller. Said letter shall be substantially in the form of Exhibit F-2.
6.9) Vendor Notification Letter. Promptly following the Closing, Seller and
Buyer shall send a letter signed by both parties to vendors of the
Business informing vendors that Buyer has purchased the Business of
Seller. Said letter shall be substantially in the form of Exhibit G.
6.10) Employees. Following the execution of this Agreement and prior to
Closing, Buyer and Seller shall jointly develop a list of Current
Employees to whom Buyer will offer employment immediately following the
Closing. Such Current Employees of Seller to whom Buyer will offer
employment shall be listed on Schedule 6.10, which Schedule shall be
delivered jointly by the parties at Closing. Such list shall be
developed having due regard for the needs of Seller for its continuing
operations at the Facility as well as those of Buyer for its operation
of the Business. Immediately following the Closing, Buyer agrees to
offer employment to Current Employees of Seller who are listed on
Schedule 6.10 ("New Buyer Employees") at wages and salary levels not
less than and in positions substantially similar to such Current
Employees' current wages and salary levels and positions. Seller is not
aware of any plans on the part of the Buyer to carry out within 60 days
of the Closing a plant closing or mass layoff within the meaning of the
Worker Adjustment and Retraining Notification Act (WARN Act), Pub.L.
100-379, 000 Xxxx. 000, 00 X.X.X.0000 et seq. The Buyer is and shall be
responsible for giving any notice to employees or governmental entities
required under WARN or any analogous state or local law in connection
with or as a result of the transactions contemplated by this Agreement.
Current Employees not listed on Schedule 6.10 shall remain employees of
Seller. The New Buyer Employees will serve in such capacities and have
such salaries, wages and other compensation and benefit agreements as
shall be agreed upon between them and Buyer. Subject to the
requirements of law, the employment of all New Buyer Employees will be
at will.
6.11) Employee Benefit Matters and Notice.
(a) Pension Plans. Effective as of the Closing, New Buyer Employees
shall cease to accrue benefits under Seller s pension plans. The Seller
shall pay the New Buyer Employees the benefits under Seller s pension
plans if accrued and owing in accordance to the terms of the applicable
plan.
(b) Welfare Plans. Effective as of the Closing, all New Buyer Employees
shall cease to be covered on an ongoing basis by Seller s welfare plans
including plans, programs, policies and arrangements which provide
medical and dental coverage, life and accident insurance, disability
coverage, and vacation and severance pay. Buyer agrees to offer New
Buyer Employees the opportunity to participate in those fringe benefit
plans of Buyer customarily made available to Buyer's other employees in
similar positions and levels of seniority.
(c) Continuation Coverage. Seller shall be responsible for providing
Current Employees who terminate employment prior to the Closing
election of group health coverage required by Section 4980(b) of the
Internal Revenue Code of 1986, as amended ("Continuation Coverage")
under the terms of the applicable health plans maintained by Seller.
(d) Retiree Health Benefits. Seller shall be responsible for payment of
retiree health benefits, if any, accrued by those Current Employees who
are eligible for retiree health benefits under Sellers applicable
retiree health plan and who elect retirement prior to Closing.
(e) Past Service Credit. With regard to Buyer s severance policy, sick
pay policy and vacation policy only, effective as of the Closing, Buyer
shall credit New Buyer Employees for their past service with Seller.
(f) Severance. Buyer agrees that any New Buyer Employees who are
terminated by Buyer for any reason except for just cause will be paid
severance payments and termination benefits by Buyer which are
equivalent to the severance payments and termination benefits they
would have been entitled to receiver under the severance policy of
Seller in effect on the date of execution of this Agreement.
6.12) Use of Seller s Name or Logo. Buyer shall not use any trademark, trade
name, copyright, service xxxx, logo, or any other intellectual property
of Seller or its Affiliates except as specifically provided in the
License Agreement.
6.13) Misdirected Payment. Each of the parties agree that if and to the
extent it receives any payment for Finished Products sold by the other
that it will promptly remit such payment to the other party.
6.14) Manufacturing and Supply of Raw Goods and Finished Products. On the
Closing, Seller agrees: (i) to have all manufacturing equipment used
exclusively in connection with the Yankauer product line, as described
in Exhibit A attached hereto, in place and in operating condition at
the Seller's plant located in Cranston, Rhode Island; (ii) to have all
manufacturing equipment located at the plant of Seller's contractor
located in Juarez, Mexico to be in place and in operating condition at
such plant; (iii) to have the sterilizer which is included as a
Purchased Asset and which is more specifically described in Exhibit
1.34(b) attached hereto, to be in place and in operating condition at
the Seller's plant located in Cranston, Rhode Island; (iv) to have all
molds used exclusively in connection with the Business by third party
vendors pursuant to any contract or agreement between Seller or its
Affiliates and such third party vendors to be in operating condition at
the location where such third party vendor possesses any of such molds;
(v) to have two (2) injection molding presses in place and in operating
condition at the portion of the Facility leased to Buyer pursuant to
the Lease Agreement; and (vi) to have all manufacturing equipment used
exclusively in connection with the Business other than the
manufacturing equipment described in sections (i) through (v) above to
be in place and in operating condition at the Facility together with an
adequate amount of Raw Goods Inventory sufficient to continue
manufacture of Finished Products for a period of a minimum of two (2)
weeks and open purchase orders for Raw Goods and scheduled deliveries
for ten (10) weeks following the Closing. Seller shall stock an
inventory of Finished Products not less than an aggregate of four (4)
week quantity at shipping levels depicted in the 1997 portion of the
Sales Report.
6.15) Customer Service, Referrals and Assistance. Following the Closing
Seller agrees to make all reasonable efforts to assist Buyer in
maintaining the customers of the Business who contact Seller seeking to
purchase Finished Products.
6.16) Ancillary Agreements. Buyer and Seller agree to execute the Ancillary
Agreements on the Closing.
ARTICLE VII
CONDITIONS TO THE PURCHASE AND SALE
7.1) Conditions to the Purchase and Sale Relating to Buyer. The obligation
of Buyer to consummate the transactions contemplated hereby shall be
subject to the satisfaction, or waiver by Buyer, at or prior to the
Closing, of each of the following conditions:
(a) The representations and warranties of Seller contained in this
Agreement shall be true in all material respects when made and as of
the Closing, with the same effect as though such representations and
warranties had been made at and as of the Closing; the covenants and
agreements of Seller to be performed at or prior to the Closing shall
have been duly performed in all material respects; and, Buyer shall
have received at the Closing a certificate to that effect dated as of
the Closing Date and executed on behalf of Seller by the President or
any Vice President.
(b) There shall not have been issued and be in effect any order, decree
or judgment of or in any court or tribunal of competent jurisdiction
which makes the consummation of the transactions contemplated hereby
illegal; all governmental consents required to consummate the
transactions contemplated by this Agreement shall have been received
and all governmentally imposed waiting periods required to consummate
such transactions shall have expired or terminated.
(c) Seller shall deliver to Buyer the Consent.
(d) Buyer shall have received from Seller an opinion from legal counsel
for Seller, dated as of the Closing Date and substantially in the form
shown in Exhibit H.
(e) Buyer shall have received from Seller:
(i) A Xxxx of Sale in the form of Exhibit I.
(ii) Certificate of Good Standing for Seller dated within 14 days
prior to the Closing Date.
(iii) Certified copies of Seller's corporate resolutions authorizing
the transactions contemplated hereby and by the Ancillary
Agreements.
(iv) The appropriate HSR Act confirmation of filing letter.
(v) Seller s most current maintenance schedule for the machinery and
equipment included in the Purchased Assets, exclusive of molds in
the possession of third-party vendors.
(vi) The Ancillary Agreements executed by Seller and, as applicable,
its Affiliates who are parties to such agreements.
(vii) A copy of Seller's sterilization specifications and protocols
for the Products.
(viii) An incumbency certificate of Seller, X.X. Xxxx, Inc. and BCR,
Inc.
(ix) The VHA Assumption Agreement executed by Seller and VHA.
7.2) Conditions to the Purchase and Sale Relating to Seller. The obligation
of Seller to consummate the transactions contemplated hereby shall be
subject to the satisfaction, or waiver by Seller, at or prior to the
Closing of each of the following conditions:
(a) The representations and warranties of Buyer contained in this
Agreement shall be true in all material respects when made and as of
the Closing, with the same effect as though such representations and
warranties had been made at and as of the Closing the covenants and
agreements of Buyer to be performed at or prior to the Closing shall
have been duly performed in all material respects; and Seller shall
have received at the Closing a certificate to that effect dated as of
the Closing Date and executed on behalf of Buyer by the President or
Vice President.
(b) There shall not have been issued and be in effect any order, decree
or judgment of or in any court or tribunal of competent jurisdiction
which makes the consummation of the transactions contemplated hereby
illegal; all governmental consents required to consummate the
transactions contemplated by this Agreement shall have been received
and all governmentally imposed waiting periods required to consummate
such transactions shall have expired or terminated.
(c) Seller shall have received from Buyer:
(i) The Purchase Price;
(ii) An opinion from Xxxxxx X. Xxxxxxxxx, legal counsel for Buyer,
dated as of the Closing Date and substantially in the form shown on
Exhibit J.
(iii) A Certificate of Good Standing for Buyer dated within 14 days
prior to the Closing Date.
(iv) Certified copies of Buyer's corporate resolutions authorizing
the transactions contemplated hereby and by the Ancillary
Agreements.
(v) The appropriate HSR Act confirmation of filing letter.
(vi) The Ancillary Agreements executed by Buyer.
(vii) An incumbency certificate of Buyer.
(viii) The VHA Assumption Agreement executed by Buyer.
ARTICLE VIII
AMENDMENT AND WAIVER
8.1) Amendment and Modification. This Agreement may only be amended or
modified in writing, signed by Seller and Buyer, with respect to any of
the terms contained herein.
8.2) Waiver. At any time prior to the Closing either Seller or Buyer may (i)
extend the time for the performance of any of the obligations or other
acts due to it from the other party, (ii) waive any inaccuracies in the
representations and warranties of the other party contained herein or
in any document delivered pursuant hereto, and (iii) waive compliance
with any of the agreements or conditions of the other party contained
herein. Any agreement on the part of a party hereto to any such
extension or waiver shall be valid if set forth in an instrument in
writing signed by the party granting such extension or waiver;
provided, however, that Closing shall be a waiver of any unfulfilled
condition precedent which is required by this Agreement or by any
Ancillary Agreement.
ARTICLE IX
SURVIVAL AND INDEMNIFICATION
9.1) Survival of Representations and Warranties; Knowledge of Breach.
(a) The representations and warranties set forth in this Agreement
shall survive for a period of three (3) years following the Closing
Date.
(b) Except for any claim which: (i) is based on Seller's "covenant not
to compete" in Section 6.2, (ii) is based on Seller's "further
assurance" obligations stated in Section 6.3, (iii) is based on Buyer's
"access to records" obligations stated in Section 6.7, or (iv) is based
on a breach by Seller of the "environmental compliance" representation
made in Section 3.17, neither party shall be liable for any claim or
cause of action arising out of this Agreement except pursuant to the
provisions of this Article IX and unless the other party shall have
given written notice of such claim or cause of action within three (3)
years following the Closing Date; any such claim not so asserted within
such time period shall be unenforceable against the party against whom
it is asserted. The claims described in subsections (i) through (iv) of
this Section 9.1(b) may be asserted at any time within the applicable
statutes of limitation.
9.2) Indemnification Against Claims.
(a) Seller shall indemnify and hold Buyer harmless from and against
damages, costs or expenses (including reasonable attorneys' fees and
costs) suffered by Buyer (except to the extent caused by the acts or
omissions of Buyer and net of any insurance proceeds received by Buyer
in respect thereof ) as a direct result of or directly arising from:
(i) (A) any breach of representation or warranty hereunder on the
part of Seller and (B) any failure by Seller to perform or otherwise
fulfill any undertaking or other agreement or obligation of Seller
hereunder;
(ii) (A) any product liability claim for death, personal injury,
other injury to persons, property damage, loss or deprivation of
rights, or other product liability claim (whether based on statute,
negligence, breach of warranty, strict liability or any other
theory) directly caused by or resulting from Finished Products sold
by Seller prior to the Closing and (B) any recall of Finished
Products sold by Seller; and
(iii) any and all actions, suits, proceedings, claims or demands by
third parties, or assessments or judgments in their favor, directly
resulting or arising from any of the foregoing.
(b) Buyer shall indemnify and hold Seller harmless from and against
damages, costs or expenses (including reasonable attorneys' fees and
costs) suffered by Seller (except to the extent caused by the acts or
omissions of Seller and net of any insurance proceeds received by
Seller in respect thereof) as a direct result of or directly arising
from:
(i) (A) any breach of representation and warranty hereunder on the
part of Buyer; and (B) any failure by Buyer to perform or otherwise
fulfill any undertaking or agreement or obligation hereunder;
(ii) (A) any product liability claim for death, personal injury,
other injury to persons, property damage, loss or deprivation of
rights, or other product liability claim (whether based on statute,
negligence, breach of warranty, strict liability or any other
theory) directly caused by or resulting from Finished Products sold
by Buyer after the Closing and (B) any recall of Finished Products
sold by Buyer after the Closing;
(iii) any and all actions, suits, proceedings, claims or demands by
third parties, or assessments or judgments in their favor, directly
resulting or arising from any of the foregoing; and
(iv) any and all actions, suits, proceedings, claims or demands,
investigations, or causes of action, under the WARN Act or any
successor or similar statute related to the transactions
contemplated by this Agreement notwithstanding that such damage,
cost or expense was caused by Seller's act or omission.
9.3) Third Party Claims.
(a) In the event that any claim for which a party hereto (the
"Indemnifying Party") would be liable hereunder to the other party
hereto (the "Indemnified Party") is asserted against or sought to be
collected from the Indemnified Party by a third party, the Indemnified
Party shall promptly notify the Indemnifying Party of such claim
specifying the nature of such claim and the amount or the estimated
amount thereof to the extent then feasible (which estimate shall not be
conclusive of the final amount of such claim (the "Claim Notice"). The
Indemnifying Party shall have ten (10) days from the personal delivery
or mailing of the Claim Notice (the "Notice Period") to notify the
Indemnified Party, (A) whether or not it disputes its liability to the
Indemnified Party hereunder with respect to such claim and (B)
notwithstanding any such dispute, whether or not it desires, at its
sole cost and expense, to defend the Indemnified Party against such
claim. No failure or delay by the Indemnified Party in the performance
of the foregoing shall reduce or otherwise affect the obligations of
the Indemnifying Party to indemnify and hold the Indemnified Party
harmless, except to the extent that such failure or delay shall
adversely affect the Indemnifying Party's ability to defend against,
settle or satisfy any liability, damage, loss, claim or demand for
which the Indemnified Party is entitled to indemnification hereunder.
(b) In the event of any third party claim for which indemnification is
sought from the Indemnifying Party, the Indemnifying Party will have
the right at its expense to assume the defense thereof using counsel
reasonably acceptable to the Indemnified Party. The Indemnified Party
shall have the right to participate, at its own expense, with respect
to any such third party claim; the parties shall cooperate with each
other and provide each other with access to relevant books and records
in their possession. No such third party claim shall be settled without
the prior written consent of the Indemnified Party, which consent shall
not be unreasonably withheld. Provided that the Indemnifying Party has
not disputed its liability to the Indemnified Party with respect to
such claim, as a condition precedent to the Indemnified Party's right
to be indemnified from such claim, the Indemnifying Party shall have
the right to approve the terms of any settlement between the
Indemnified Party and any third party with respect to a claim for which
indemnification is sought. If a firm written offer is made to settle
any such third party claim which provides for full release of the
Indemnified Party and its Affiliates and does not otherwise impose any
burdens on any of the foregoing, and the Indemnifying Party proposes to
accept such settlement, then, if the Indemnified Party rejects such
settlement offer: (i) the Indemnifying Party shall be excused from, and
the Indemnified Party shall be solely responsible for, all further
defense of such third party claim; (ii) the maximum liability of the
Indemnifying Party relating to such third party claim shall be the
amount of the proposed settlement if the amount thereafter recovered
from the Indemnified Party on such third party claim is greater than
the amount of the proposed settlement; and (iii) the Indemnified Party
shall pay all attorneys' fees and legal costs and expenses incurred
after rejection of such settlement by the Indemnified Party.
(c) In the event either party hereto should have a claim against the
other hereunder that does not involve a claim being asserted against or
sought to be collected from it by a third party, the Indemnified Party
shall promptly send a Claim Notice with respect to such claim to the
Indemnifying Party. If the Indemnified Party is not notified by the
Indemnifying Party within thirty (30) days of receipt of notice of a
claim that the Indemnifying Party disputes such claim, the amount of
such claim shall be conclusively deemed a liability of the Indemnifying
Party hereunder.
9.4) Payment. Upon the determination of the liability under Section 9.3, the
appropriate party shall pay to the other, as the case may be, within
ten (10) days after such determination, the amount of any claim for
indemnification made hereunder. In the event that the Indemnified Party
is not paid in full for any such claim pursuant to the foregoing
provisions promptly after the other party's obligation to indemnify has
been determined in accordance herewith, it shall have the right,
notwithstanding any other rights that it may have against any other
person, firm or corporation, to set-off the unpaid amount of any such
claim against any amounts owed by it under any agreements entered into
pursuant to this Agreement or the Ancillary Agreements. Upon the
payment in full of any claim, either by setoff or otherwise, the entity
making payment shall be subrogated to the rights of the Indemnified
Party against any person, firm or corporation with respect to the
subject matter of such claim.
9.5) Damage Limitation. The parties' liability under this Article IX shall
expire pursuant to Section 9.1 and, except for the matters addressed in
Section 9.1(b)(i) through (iv), and in Sections 3. 18, 3.19, 6.5, 9.6
and 9.2(b)(iv), no claim for indemnity shall be made by a party
pursuant to this Article IX unless the aggregate amount of such claims
exceeds $100,000. Notwithstanding anything herein to the contrary, no
claims or causes of action arising out of or related to the
transactions contemplated by this Agreement may be asserted by either
party for punitive, presumptive, special, exemplary, incidental, or
consequential damages (including without limitation, loss of profits or
business interruption loss), or for any other damages other than actual
damages. Nothing contained in the immediately preceding sentence is
intended to or shall preclude any party from obtaining indemnification
with respect to third party claims pursuant to Section 9.3.
9.6) Returned Goods; Rebates.
(a) Following the Closing Date for a period of six (6) months, Buyer
shall promptly notify Seller in writing of all claims made by end users
of a Product manufactured by Seller concerning alleged quality or
manufacturing defects and Buyer shall deliver to Seller any Products
giving rise to any such claim which are returned to Buyer. Seller shall
review all such returned Products and, for those returned Products
which Seller determines to have quality or manufacturing defects,
Seller shall reimburse Buyer (at Seller's 1997 standard costs) for any
replacement Products given without charge to end-users making such
claim and returning such Products to Buyer.
(b) Following the Closing Date, Seller retains the rebate expense for
all rebates to all customers who claim rebate credit on or before
thirty (30) days following the Closing Date with respect to Products
sold by customers prior to the Closing Date. Buyer and Seller agree
that Seller retains the rebate expense for all Products held by
customers in their inventory on the Closing Date for which customers
seek rebates during the second month following the Closing Date. Buyer
and Seller agree to cooperate to assure that Seller incurs rebate
expenses for those Products sold to customers prior to the Closing Date
and that Buyer incurs rebate expenses for those Products sold to
customers after the Closing Date. Prior to the Closing, the parties
shall agree upon a methodology to effectuate the intent of this Section
9.6(b).
ARTICLE X
MISCELLANEOUS
10.1) Termination Prior to Closing. Notwithstanding any contrary provisions
of this Agreement, the respective obligations of the parties hereto to
consummate the Closing may be terminated and abandoned at any time at
or before the Closing only as follows:
(a) By and at the option of Buyer if, through no fault of Buyer, the
Closing shall not have occurred by July 31, 1997.
(b) By and at the option of Seller if, through no fault of Seller, the
Closing shall not have occurred by July 31, 1997.
(c) At any time, without liability of any party to the others, upon the
mutual written consent of Buyer and Seller.
Nothing contained in this Section shall be construed
as a release or waiver by any party hereto of any of its
rights against any other party arising out of any breach of
this Agreement by the other party.
10.2) Return of Information. If for any reason whatsoever this Agreement is
terminated prior to Closing, (i) each party shall promptly deliver
(without retaining any copies thereof) to the other respective party,
or certify to the other party that it has destroyed, all documents,
work papers and other material obtained by such party or on its behalf
from the other party or any of its agents, employees or representatives
as a result hereof or in connection herewith, whether so obtained
before or after the execution hereof, and (ii) each party shall cause
any Confidential Information obtained from the other party pursuant to
this Agreement or otherwise to be kept confidential and will not use,
or permit the use of such Confidential Information in its business or
in any other manner or for any other purpose.
10.3) Non-Solicitation of Employees.
(a) For a period of three (3) years following the Closing Date, Seller
agrees to refrain from the direct or indirect solicitation of, and
shall not employ, any New Buyer Employees; provided, however, that
nothing herein shall prohibit Seller from (i) hiring those former
employees of Seller who have become employees of Buyer and thereafter
have been terminated by Buyer or (ii) performing Seller's obligations
under any of its existing contracts with its employees.
(b) For a period of three (3) years following the Closing Date, Buyer
agrees to refrain from the direct or indirect solicitation of, and
shall not employ, any Current Employees other than those Current
Employees listed on Schedule 6.10; provided, however, that nothing
herein shall prohibit Buyer from (i) hiring those former employees of
Buyer who have become employees of Seller and thereafter have been
terminated by Seller or (ii) performing Buyer's obligations under any
of its existing contracts with its employees.
10.4) Expenses. Unless otherwise provided herein, the parties shall bear
their own respective expenses (including, but not limited to, all
compensation and expenses of counsel, financial advisers, consultants,
actuaries and independent accountants) incurred in connection with the
preparation and execution of this Agreement and the Ancillary
Agreements and consummation of the transactions contemplated hereby and
thereby.
10.5) Public Disclosure. Buyer and Seller agree that upon execution of this
Agreement Buyer may immediately issue a press release in the form of
Exhibit K-1, and Seller may issue a press release in the form of
Exhibit K-2 and Seller's Affiliate may issue a memorandum to its and
Seller's employees in the form of Exhibit K-3. Buyer and Seller will
mutually agree on the content and timing of any additional public
disclosures concerning the execution and performance of this Agreement
and the Ancillary Agreements; provided, however, nothing contained
herein shall be construed to prevent a party from disclosing
information related to this Agreement and the Ancillary Agreements to
the extent required by law, governmental regulations or the rules of
the stock exchange(s) upon which such party's securities are listed or
registered.
10.6) Entire Agreement. This Agreement: (a) constitutes the entire agreement
between the parties related to the subject matter hereof and supersedes
all prior agreements and understandings, both written and oral, among
the parties, with respect to such subject matter; (b) is not intended
to confer upon any other persons any rights or remedies hereunder; and
(c) shall inure to the benefit of, and be binding upon, the parties
hereto and their respective permitted successors and assigns.
10.7) Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original, but all
of which shall be considered one and the same instrument.
10.8) Interpretation. The section and article headings contained in this
Agreement are for reference purposes only and shall not in any way
affect the meaning or interpretation of this Agreement. This Agreement
shall be construed without regard to any presumption or other rule
requiring construction hereof against the party causing this Agreement
to be drafted.
10.9) Notices. All notices hereunder shall be deemed given if in writing and
delivered personally or sent by telecopy (with confirmation of
transmission) or certified mail (return receipt requested) to the
parties at the following addresses (or at such other addresses as shall
be specified by like notice):
(a) if to Seller:
DAVOL, INC.
000 Xxxxxxxxxxxx Xxxxxxxxx
Xxxxxxxx, Xxxxx Xxxxxx 00000
with a copy to:
X.X. XXXX, INC.
000 Xxxxxxx Xxxxxx
Xxxxxx Xxxx, Xxx Xxxxxx 00000
Attn: General Counsel
(b) if to Buyer:
CONMED Corporation
000 Xxxxx Xxxxxx
Xxxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxxxx, President
Any party may change the above-specified recipient and/or mailing
address by notice to the other party given in the manner herein prescribed. All
notices shall be deemed given on the day when actually delivered as provided
above (if delivered personally or by telecopy) or on the second business day
after date postmarked (if delivered by mail).
10.10) Governing Law. This Agreement shall be governed by, and interpreted and
construed in accordance with, the laws of the State of New York,
without reference to the conflict of law principles thereof, provided,
however, that the Xxxx of Sale shall be governed by the laws of the
State of Kansas, without reference to the conflict of law principles
thereof.
10.11) Illegality. In case any provision in this Agreement shall be invalid,
illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired
thereby.
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, this Agreement has been signed on behalf of each of
the parties hereto as of the date first above written.
DAVOL INC.
By:_________________________________
Its_____________________________
CONMED CORPORATION
By:_________________________________
Its____________________________
AMENDMENT
THIS AMENDMENT, made this day of June, 1997, by and between Davol Inc.,
a Delaware corporation, having its principal place of business at 000
Xxxxxxxxxxxx Xxxxxxxxx, Xxxxxxxx, Xxxxx Xxxxxx 00000 (hereinafter referred to as
"Seller") and CONMED Corporation, a New York corporation, having its principal
place of business at 000 Xxxxx Xxxxxx, Xxxxx, Xxx Xxxx 00000 (hereinafter
referred to as "Buyer").
WITNESSETH:
WHEREAS, Seller and Buyer entered into a certain asset purchase
agreement dated May 28, 1997 (hereinafter referred to as the "Purchase
Agreement") pursuant to which Seller agreed to sell to Buyer and Buyer agreed to
purchase from Seller the "Purchased Assets" as defined in the Purchase
Agreement, and
WHEREAS, Seller inadvertently failed to include on Exhibit A to the
Purchase Agreement a number of items, and
WHEREAS, Seller and Buyer are mutually desirous of amending the
Purchase Agreement.
NOW THEREFORE, for good and valuable consideration, the receipt and
legal sufficiency of which is acknowledged by the execution and delivery of this
instrument, Seller and Buyer hereby agree to the entry of amendments to the
Purchase Agreement as follows:
1. Exhibit A is hereby amended to include the following: (i) bulk Yankauer
suction instruments product code numbers 0934870, 0934880, 0934970 and
0934980, and (ii) bulk non-sterile 9' x 3/16" tube without connector,
product code number 9036760.
2. Section 2.3(a) of the Purchase Agreement is hereby deleted in its
entirety and the following is hereby substituted in its stead:
Closing and Closing Date. The Closing of the transactions contemplated
by this Agreement (the "Closing") shall take place at 000 Xxxxxxx
Xxxxxx, Xxxxxx Xxxx, Xxx Xxxxxx on July 1, 1997 (the "Closing Date")
and the Closing shall be deemed to be effective upon confirmation by
Seller of receipt of the wire transfer referred to in Section 2.3(b).
3. Article III of the Purchase Agreement is hereby amended by adding a new
Section 3.22 as follows:
Cessation of Sales - Neither Seller nor any Affiliate of Seller shall
sell any Product to any third party after 11:59 P.M. on June 30, 1997.
4. Other than as amended hereby all terms and conditions of the Purchase
Agreement shall remain in full force and effect.
5. The amendments contained herein shall be retroactive to May 28, 1997.
IN WITNESS WHEREOF, the respective parties have caused this instrument
to be executed by their respective duly authorized officers on the dates
indicated below.
Davol Inc.
By:________________________
Title:_____________________
Dated:_____________________
CONMED Corporation
By:________________________
Title:_____________________
Dated:_____________________
SECOND AMENDMENT
THIS AMENDMENT, made this 1st day of July, 1997, by and between Davol
Inc., a Delaware corporation, having its principal place of business at 000
Xxxxxxxxxxxx Xxxxxxxxx, Xxxxxxxx, Xxxxx Xxxxxx 00000 (hereinafter referred to as
"Seller") and CONMED Corporation, a New York corporation, having its principal
place of business at 000 Xxxxx Xxxxxx, Xxxxx, Xxx Xxxx 00000 (hereinafter
referred to as "Buyer").
WITNESSETH:
WHEREAS, Seller and Buyer entered into a certain asset purchase
agreement dated May 28, 1997, which agreement was amended by instrument dated
June 20, 1997 (hereinafter referred to as the "Purchase Agreement") pursuant to
which Seller agreed to sell to Buyer and Buyer agreed to purchase from Seller
the "Purchased Assets", as defined in the Purchase Agreement, and
WHEREAS, Seller inadvertently failed to include a number of items on
Schedule 1.34(a) to the Purchase Agreement, and
WHEREAS, Seller and Buyer are mutually desirous of amending the
Purchase Agreement to include such items and are further desirous of amending
the Purchase Agreement to clarify certain sick pay and vacation pay obligations.
NOW THEREFORE, for good and valuable consideration, the receipt and
legal sufficiency of which is acknowledged by the execution and delivery of this
instrument, Seller and Buyer hereby agree to the entry of amendments to the
Purchase Agreement as follows:
1. Capitalized terms used but not defined herein shall have the same
meaning as set forth in the Purchase Agreement.
2. Schedule 1.34(a) is hereby amended to include those items set forth on
Appendix 1 which is attached hereto and incorporated herein.
3. Notwithstanding anything to the contrary contained in the Purchase
Agreement, Seller, no later than seven (7) business days following the
Closing Date, shall pay directly to each New Buyer Employee that
accepts Buyer's offer of employment on the Closing Date (each
hereinafter referred to as a "New Hire"), sick pay which, under
Seller's current sick pay plan, which is incorporated herein by
reference, has accrued to but remains unused by each such New Buyer
Employee as of the close of business on June 30, 1997.
4. Notwithstanding anything to the contrary contained in the Purchase
Agreement, Buyer hereby expressly assumes all of Seller's vacation and
vacation pay obligations, applicable to the period June 1, 1997 through
May 31, 1998, which, under Seller's current vacation and vacation pay
policy, which is incorporated herein by reference, has accrued to but
remains unused, as of the close of business on June 30, 1997, by each
New Buyer Employee who becomes a New Hire. Seller hereby agrees to pay
Buyer, within sixty (60) days of the Closing Date, a sum equal to
one-half of eleven-twelfths of the vacation pay obligations assumed by
Buyer under the preceding sentence, which sum shall be calculated based
upon the June 30, 1997 base salary or hourly wage, as applicable, of
each New Hire.
5. Other than as amended hereby all terms and conditions of the Purchase
Agreement shall remain in full force and effect.
6. The amendments contained herein shall be retroactive to May 28, 1997.
IN WITNESS WHEREOF, the respective parties have caused this instrument
to be executed by their respective duly authorized officers on the date and year
first above written.
Davol Inc.
By: /s/Xxxxxxx X. Xxxx
------------------
Xxxxxxx X. Xxxx
Vice-President - Finance
CONMED Corporation
By: _______________________
Title:_______________________
