PURCHASE AGREEMENT
THIS PURCHASE AGREEMENT (hereinafter the "Agreement") is made,
executed and entered into on this 30th day of January, 1996 by and
between XXXXXX XXXXXX MEDICAL PRODUCTS, INC., a Texas corporation
(hereinafter "Xxxxxx Xxxxxx"), XXXXXX XXXXXX MEDICAL PRODUCTS, a
trading division of XXXXXX XXXXXX PACKAGING UK LTD., a company
registered in England (hereinafter "LM Whitehaven"), SBW
ACQUISITION CORP., a Delaware corporation (hereinafter
"Acquisition") and MEDICAL ACTION INDUSTRIES INC., a Delaware
corporation (hereinafter "Medical Action").
W I T N E S S E T H :
WHEREAS, Xxxxxx Xxxxxx is engaged in the business of marketing
a variety of sterilization packaging, monitoring and contamination
control products described in Exhibit "A" attached hereto for sale
in North America (hereinafter the "Products"); and
WHEREAS, Acquisition wishes to purchase or acquire from Xxxxxx
Xxxxxx, and Xxxxxx Xxxxxx wishes to sell, assign and transfer to
Acquisition, certain selected assets and properties held in
connection with, necessary for, or material to the business and
operations of Xxxxxx Xxxxxx, upon the basis of representations and
warranties of Xxxxxx Xxxxxx, subject to the exceptions set forth in
the disclosure schedule (hereinafter the "Schedule") ; and
EXHIBIT 2
WHEREAS, concurrently with the execution and delivery of this
Agreement, LM Whitehaven and Medical Action will enter into a
certain agreement providing for the purchase of the Products and
raw materials for a specified period after closing, and for the
provision of certain transitional services;
NOW, THEREFORE, in consideration of the mutual
representations, warranties, covenants, agreements and conditions
contained herein, and of the mutual benefits to be derived hereby,
the parties hereto agree as follows:
1. Transfer of Xxxxxx Xxxxxx.
(a) Xxxxxx Xxxxxx shall transfer and deliver to
Acquisition and Acquisition shall receive from Xxxxxx Xxxxxx, free
from all liabilities and encumbrances (except as to those assigned
to and assumed by Acquisition as specified in Exhibit "C" attached
hereto), certain of Xxxxxx Xxxxxx'x assets, owned and operated by
Xxxxxx Xxxxxx (hereinafter the "Assets") at the business premises
located at 0000 Xxxxxx Xxxx, Xxxxxxx, Xxxxx 00000 (hereinafter the
"Premises"), more particularly described as follows:
(i) All know-how, technology, formulae, trade
secrets, processes and confidential
information regarding manufacture, production,
quality control and government registrations
and documentations of those certain Products,
and patent documentation for the Products; and
(ii) All related marketing materials and brochures,
advertising rights and customer lists;
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(iii) All fixtures, furniture, business
equipment and all other tangible personal
property of Xxxxxx Xxxxxx used to
distribute the Products and product lists
sold herein;
(iv) Xxxxxx Xxxxxx'x rights under or to all
contracts, licenses, governmental permits,
trademarks, copyrights, patents and security
deposits, including all deposits on the
Premises, if any and if transferable, made by
or granted to Xxxxxx Xxxxxx in connection with
the Products; and
(v) Xxxxxx Xxxxxx'x rights to the name "SBW" in
North America for a period of twelve (12)
months, and all other trade names which it
owns or used in connection with the business
to the extent provided in a separate License
Agreement dated as of the closing between LM
Whitehaven and Medical Action;
(vi) An assignment of Xxxxxx Xxxxxx'x rights, title
and interest as lessee under the lease of the
Premises. Acquisition agrees to assume and
pay said lease. A copy of said lease is
attached hereto as Exhibit "B".
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(b) Excluded Assets. Xxxxxx Xxxxxx assets not subject
to transfer under Paragraph 1(a) above including the following:
(i) Xxxxxx Xxxxxx'x corporate records, minute
books, stock transfer records, etc;
(ii) Rights and interests obtained pursuant to the
terms of this Agreement;
(iii) All cash, certificates of deposit and
marketable securities as of the date of
closing; and
(iv) Any and all rights, title and interest held in
connection with the operations and business of
Sparco.
2. Closing. The closing of the sale and purchase of the
Assets (the "Closing") shall take place at 10:00 a.m. local time on
the 30th day of January, 1996 at the offices of Medical Action
Industries Inc., 000 Xxxxx Xxxxxxx, Xxxxxxxxx, Xxx Xxxx 00000 or
such other time and place upon which the parties may agree. The
day on which the Closing actually occurs in herein sometimes
referred to as the "Closing Date".
At the time of Closing, upon delivery by Acquisition of the
consideration as described in paragraph 3 hereof, Xxxxxx Xxxxxx
shall execute and deliver to Acquisition a Xxxx of Sale and such
other instruments as may be necessary to transfer to Acquisition
all of the Assets. Xxxxxx Xxxxxx shall also deliver possession of
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the Premises. The Xxxx of Sale and other instruments will contain
the usual warranties and affidavits of title and will effectively
transfer to Acquisition full title to the Assets, free and clear of
all liens, security interests and encumbrances (except to the
extent set forth in Exhibit "C").
3. Purchase Price. On the terms and subject to the
conditions set forth in this Agreement, Medical Action agrees to
pay or cause to be paid to Xxxxxx Xxxxxx an aggregate of U.S.
$880,793.44 (the "Purchase Price"). The Purchase Price shall be
payable at the Closing, as follows:
(a) Twenty Five Thousand ($25,000.00) Dollars by way of
certified or cashier's check payable to Xxxxxx Xxxxxx'x order;
and
(b) By the execution and delivery to Xxxxxx Xxxxxx of a
Non-Negotiable Promissory Note (the "Promissory Note") of
Medical Action in the principal amount of $855,793.44 together
with interest thereon at the rate set forth in the Wall Street
Journal as the prime rate. Such Promissory Note shall be
substantially in the form of Exhibit "D" annexed hereto and
shall provide for payment in four (4) equal monthly
installments of $213,948.36 each, commencing thirty (30) days
after Closing. However, such installments due under the
Promissory Note shall be reduced to the extent that any (i)
accounts receivable relating to the Products, shipped prior to
the Closing Date which remain outstanding for more than one
hundred twenty (120) days from the date of invoice net of
unapplied credits ("Expiration Date") or (ii) such account
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receivable is reduced as the result of validly issued credits,
tracing fees, rebates or authorized returns consistent with
the past practices of Xxxxxx Xxxxxx. In the event Medical
Action receives payments on account of such sales after the
Expiration Date, it shall hold such payments in trust and
promptly forward such payments to Xxxxxx Xxxxxx. All accounts
receivable relating to Products shipped by Medical Action on
or after the Closing Date shall belong to Medical Action.
3.1. Excluded Liabilities. Notwithstanding any provision
hereof or any schedule or exhibit hereto and regardless of any
disclosure to Acquisition or Medical Action, Acquisition and
Medical Action shall not assume any liabilities, obligations or
commitments of Xxxxxx Xxxxxx (other than those assigned and assumed
by Acquisition on Exhibit "C") relating to or arising out of the
operation of the business or the ownership of the Assets prior to
the Closing.
4. Consignment.
4.1 On the Closing Date, Xxxxxx Xxxxxx shall consign and
deliver to Acquisition the "Consigned Inventory", as hereinafter
defined.
4.2 For the purposes of this Agreement, "Inventory"
shall mean the inventory of Xxxxxx Xxxxxx comprised of the
following:
(a) heat seal pouches, multi-pouch reels, heat seal
reels, self-seal pouches, gussetted heat seal pouches,
sterilization monitors, autoclave indicator tape steam, sterility
maintenance covers - self-seal, sterilization maintenance covers -
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heat seal, autoclavable bags for steam sterilization with indicator
bio hazard red collection bags, laboratory transport bags,
sterilization integrators and indicators and unassembled components
and raw materials used for the assembly or manufacture thereof.
For the purposes of this Agreement, "Consigned Inventory"
shall mean the Inventory which is accepted by and loaded onto
Medical Action trucks as hereinafter described.
4.3 On the Closing Date, or as soon thereafter as
practicable, Xxxxxx Xxxxxx shall assemble the Inventory at the
Premises for loading onto Medical Action's trucks. The parties
shall physically count the Inventory as it is accepted by and
loaded onto Medical Action's trucks and prepare and initial a
schedule (the "Inventory Schedule") of the Inventory so delivered
to Medical Action, with a specific description of the type and
quantities of each type of the Inventory loaded onto Medical
Action's trucks; provided, however, that Medical Action shall have
the right to reject such of the Inventory which it, in its
reasonable discretion, feels is defective, obsolete or unsalable.
Inventory accepted by Medical Action and loaded onto its trucks as
aforesaid shall constitute the Consigned Inventory. Medical Action
shall bear all risk of loss for the Inventory once it is accepted
and loaded onto Medical Action's trucks.
5. Terms of Consignment.
5.1 All Consigned Inventory shall be held by Medical
Action at its premises and at no other place without Xxxxxx
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Mardon's prior written approval, which shall not be unreasonably
withheld. Medical Action shall not charge Xxxxxx Xxxxxx for
storage of the Consigned Inventory.
5.2 Medical Action agrees that:
(a) Xxxxxx Xxxxxx shall retain title to the
Consigned Inventory until sold or paid for by Medical Action;
(b) Medical Action will be liable and responsible
for all loss or damage to the Consigned Inventory and shall insure
the same against fire and extended loss in an amount at least equal
to the Consigned Inventory price to be paid by Medical Action to
Xxxxxx Xxxxxx;
(c) Xxxxxx Xxxxxx shall not be liable for payment
of local, state or county taxes assessed or levied on the Consigned
Inventory held in Medical Action's possession;
(d) Medical Action shall have sole responsibility
and authority (subject to the terms of this Agreement) for the
storing and manner of selling of the Consigned Inventory and shall
bear the costs thereby incurred, including delivery expense from
Medical Action's place of business to Medical Action's customers.
5.3 Medical Action shall pay for the Consigned Inventory
pursuant to Sections 6 and 7.
5.4 All of the Consigned Inventory delivered to Medical
Action shall be of good, usable and merchantable quality in all
material respects, and will not include obsolete or discontinued
items. Except as set forth on Exhibit "E", all Consigned Inventory
will be (i) of such quality as to meet the quality control
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standards of Xxxxxx Xxxxxx and any applicable government quality
control standards; (ii) salable as current inventories at the
current prices thereof in the ordinary course of business; and
(iii) recorded on the books of Xxxxxx Xxxxxx at the lower of cost
or market value.
6. Consigned Inventory Price. The price ultimately to be
paid by Medical Action to Xxxxxx Xxxxxx for the Consigned Inventory
delivered to Medical Action pursuant to Section 4 hereof will be an
amount (the "Amount") derived by applying the prices set forth on
Exhibit "F" attached hereto for each type of Consigned Inventory
against the quantities set forth for each such type of Consigned
Inventory on the Inventory Schedule.
7. Payment of Consigned Inventory Price. (a) The
Consigned Inventory price payable under this Section 7 shall be
paid as follows: Within seven (7) business days following the end
of each week, Medical Action shall (i) deliver to Xxxxxx Xxxxxx a
complete accounting of all sales of the Consigned Inventory to
others for such week, setting forth the quantities of the various
products sold and the purchasers involved; (ii) pay Xxxxxx Xxxxxx
for that part of the Consigned Inventory sold in such week (based
on the prices set forth in Exhibit "F"). Xxxxxx Xxxxxx shall have
the right upon reasonable notice to Medical Action to enter the
premises of Medical Action for the purposes of ascertaining the
quantity of Consigned Inventory remaining on hand, and in this
respect, Medical Action shall keep and make available to Xxxxxx
Xxxxxx accurate and complete records of Consigned Inventory sold
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by it so as to enable Xxxxxx Xxxxxx to accurately determine the
amounts due for Consigned Inventory.
(b) Notwithstanding the provisions of Section 8(a) and
except for those items set forth on Exhibit "G", the entire unpaid
balance of the purchase price due for the Consigned Inventory shall
be paid no later than August 1, 1996.
8. Xxxxxx Xxxxxx'x Representations and Warranties. Xxxxxx
Xxxxxx represents and warrants to Medical Action as follows:
(a) Organization of Xxxxxx Xxxxxx. Xxxxxx Xxxxxx is
duly incorporated and is validly existing as a corporation in good
standing under the laws of the State of Texas with full corporate
power and authority to own its properties and to conduct its
business as now conducted. Xxxxxx Xxxxxx is duly qualified to do
business as a foreign corporation in good standing in all
jurisdictions where the nature of its assets or business requires
such qualification and such jurisdictions are listed in Part A of
the Schedule. Xxxxxx Xxxxxx does not own, directly or indirectly,
shares of capital stock in any corporation. The Certificate of
Incorporation and the By-Laws of Xxxxxx Xxxxxx, heretofore
delivered by Xxxxxx Xxxxxx to Acquisition, are complete and correct
and contain all amendments thereto.
(b) Authority of Xxxxxx Xxxxxx. Xxxxxx Xxxxxx has the
corporate power to enter into this Agreement and to carry out the
transactions contemplated hereby, and to execute and deliver all of
the agreements described herein (the "Related Agreements"). The
execution and delivery of this Agreement, the Related Agreements
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and the consummation of the transactions contemplated hereby have
been duly approved and authorized by the Board of Directors of
Xxxxxx Xxxxxx and has been approved by its stockholders; except for
the adoption of this Agreement, Related Agreements and approval of
the transactions contemplated hereby by its stockholders, no other
corporate acts or proceedings on the part of Xxxxxx Xxxxxx are
necessary to authorize this Agreement, Related Agreements or the
consummation of the transactions contemplated hereby. This
Agreement and the Related Agreements constitute valid and legally
binding obligations of Xxxxxx Xxxxxx and each is enforceable
against Xxxxxx Xxxxxx in accordance with its terms. Except as set
forth in Part B of the Schedule, the execution and delivery of this
Agreement and the Related Agreements by Xxxxxx Xxxxxx do not, and
the consummation of the transactions contemplated hereby will not,
violate or constitute a default under (i) any provision of the
Certificate of Incorporation or By-Laws of Xxxxxx Xxxxxx, (ii) any
provision of (or result in acceleration of any obligation under)
any mortgage, note, lien, lease, agreement, instrument, arbitration
award, judgment or decree to which Xxxxxx Xxxxxx is a party or by
which Xxxxxx Xxxxxx is subject or (iii) any laws of the United
States or any state or jurisdiction in which Xxxxxx Xxxxxx conducts
business.
(c) Consents, etc.. To the best of their knowledge, no
consent, authorization, order or approval or, or filing or
recording with, any governmental commission, board or other
regulatory body is required for or in connection with the execution
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and delivery of this Agreement by Xxxxxx Xxxxxx and the
consummation by Xxxxxx Xxxxxx of the transactions contemplated
hereby.
(d) Financial Statements. Xxxxxx Xxxxxx has previously
furnished Acquisition with a true and complete copy of the
unaudited balance sheets of Xxxxxx Xxxxxx as of December 31, 1995
and the related unaudited statement of operations, shareholders'
equity and cash flows for the twelve months then ended ("Xxxxxx
Xxxxxx Financial Statements").
(e) Absence of Certain Changes or Events. Since
December 31, 1995 there has not been any material adverse change in
the properties or business of operations of Xxxxxx Xxxxxx.
(f) Governmental Authorization and Compliance with Laws.
Xxxxxx Xxxxxx is in compliance in all material respects with all
applicable material requirements of all governmental authorities
(Federal, state, municipal or other) with respect to the business
engaged in by it and is not in default in any material respect
under any judgment, order, injunction, rule, ruling or regulation
of any governmental commission, agency or instrumentality. There
are no Products sold by Xxxxxx Xxxxxx which would require any
approval of the Food and Drug Administration ("FDA") or any other
United States governmental body, whether Federal, state or local,
prior to distribution of such Products, for which such approval has
not been obtained. All Products sold by Xxxxxx Xxxxxx in any
jurisdiction meet the applicable legal requirements of such
jurisdiction and all requisite governmental approvals have been
12
duly obtained and are in full force and effect, and there is no
basis known to Xxxxxx Xxxxxx for the FDA or any other governmental
body to deny or rescind any approval for any commercially
distributed Product of Xxxxxx Xxxxxx. There is no action or
proceeding by the FDA or any other governmental body, including,
but not limited to, recall procedures, pending or threatened
against Xxxxxx Xxxxxx relating to the safety or efficacy of any of
the Products of Xxxxxx Xxxxxx, and, to the best knowledge of Xxxxxx
Xxxxxx, there is no basis therefor. Xxxxxx Xxxxxx has all material
permits, certificates, licenses, approval and other authorizations
required in connection with the operation of their business, a
complete list of which are set forth in Part F of the Schedule.
(g) Tax Matters.
(A) The amounts shown as tax liabilities on the
balance sheet of Xxxxxx Xxxxxx as of December 31, 1995 included in
the Xxxxxx Xxxxxx Financial Statements will be sufficient for the
payment of all federal, state, county, local and foreign Taxes (as
hereinafter defined) of Xxxxxx Xxxxxx, whether or not disputed,
which were properly accruable at that date. There are no
agreements by Xxxxxx Xxxxxx for the extension of the time for the
assessment of any Taxes. Neither the Internal Revenue Service (the
"IRS") nor any other taxing authority is now asserting, or to the
knowledge of Xxxxxx Xxxxxx threatening to assert, against Xxxxxx
Xxxxxx any claim for additional Taxes, nor to Xxxxxx Xxxxxx'x
knowledge is the IRS or any other taxing authority auditing any tax
return filed by Xxxxxx Xxxxxx.
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(B) Xxxxxx Xxxxxx has timely filed (or received
appropriate extensions to file) (and until the Closing will timely
file) all returns, declarations, reports, estimates, information
returns and statements ("Returns") required to be filed or sent by
or with respect to them in respect of any Taxes;
(C) Xxxxxx Xxxxxx has timely paid or provided (and
until the Closing will timely pay or in good faith contest) all
Taxes that are due and payable;
(D) Xxxxxx Xxxxxx has complied in all material
respects with all applicable laws, rules and regulations relating
to the payment and withholding of Taxes and have timely withheld
from employee wages and paid over to the proper governmental
authorities all amounts required to be so withheld and paid over
under all applicable laws;
For purposes of this Agreement, "Taxes" shall mean all
taxes, charges, fees, levies or other assessments, including,
without limitation, all net income, gross income, gross receipts,
sales, use, ad valorem, transfer, franchise, profits, license,
withholding, payroll, employment, excise, severance, stamp,
occupation, property or other taxes, customs duties, fees,
assessments or changes of any kind whatsoever, together with any
interest and any penalties, additions to tax or additional amounts
imposed by any tax authority (domestic or foreign) upon Xxxxxx
Xxxxxx.
(h) Title to Properties; Absence of Liens and
Encumbrances, etc. Except for leased properties, Xxxxxx Xxxxxx has
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good and marketable title to the tangible properties and assets,
real, personal and mixed, to be transferred hereunder, including
without limitation those referred to in the balance sheet as of
December 31, 1995 referred to in Paragraph (e) of this Section 8
(other than properties or assets disposed of in the ordinary course
of business since the date of such balance sheet), free and clear
of all liens, charges, pledges, security interests or other
encumbrances, except as reflected in the Xxxxxx Xxxxxx Financial
Statements or in Part H of the Schedule.
(i) Contracts, etc. Part I of the Schedule contains a
true and complete list of all of the following described contracts
and Leases:
(i) all sales contracts of Xxxxxx Xxxxxx
having a sales price of $5,000.00 or more or not to be
performed within one year regardless of amount and all
purchase orders having a purchase price of $2,500.00 or more;
(ii) all other contracts of Xxxxxx Xxxxxx
(other than sales contracts and purchase orders), employment,
consulting, agency, collective bargaining or other similar
contracts and agreements, leases, mortgages, indentures,
promissory notes, deeds loan or credit agreements, or similar
instruments involving amounts in excess of $25,000 or more or
not to be performed within one year regardless of amount;
(iii) all pension, profit-sharing or employee
benefit plans, employment contracts, contracts with unions and
other agreements relating to employees of Xxxxxx Xxxxxx;
15
(iv) all Xxxxxx Xxxxxx policies of insurance
issued during the past five years; and
(v) all deeds to real property owned by Xxxxxx
Xxxxxx.
(vi) all license, licensing arrangements and
other contracts providing in whole or in part for the use of, or
limiting the use of, any intellectual property.
(vii) joint venture, partnership and
similar contracts involving a sharing of profits or expenses.
(viii) asset purchase agreements and other
acquisition or divestiture agreements, including but not limited to
any agreements relating to the sale, lease or disposal of any
assets (other than sale of inventory in the ordinary course of
business).
Except as set forth in Part I of the Schedule, Xxxxxx
Xxxxxx is not in default, and no event has occurred which (whether
with or without notice, lapse of time or the happening or
occurrence of any other event) would constitute a default under any
of the above described contracts and leases, and all such contracts
and leases are valid and legally binding.
(j) Litigation. Except as set forth in Part J of
the Schedule, there is no claim, action, suit or proceeding in or
before any court or administrative or regulatory agency pending, or
the knowledge of Xxxxxx Xxxxxx contemplated or threatened, against
Xxxxxx Xxxxxx or any of its properties.
(k) Patents, Copyrights, Trademarks, etc. Xxxxxx Xxxxxx
has good and marketable title to all patents, patent applications,
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copyrights, trademarks and trade names, brand names, proprietary
and other technical information, technology, inventions,
discoveries, improvements, processes, know-how, formulae, drawings,
specifications, production data, trade secrets and computer
software and programs, and licenses thereof, which are necessary
for the operation of its businesses as presently conducted, a true
and complete list of which is included in Part K of the Schedule
and there are no claims or proceedings threatened or pending
against Xxxxxx Xxxxxx asserting that Xxxxxx Xxxxxx is infringing
any such intellectual property rights of any other person.
(l) Employee Benefit Plans. Other than those set forth
in Part L of the Schedule, Xxxxxx Xxxxxx does not maintain,
administer or contribute to any bonus, profit-sharing, pension,
retirement, stock purchase, stock options, deferred compensation,
hospitalization, medical, life insurance, disability, severance pay
or other benefit plan arrangement or program, including, but not
limited to, any employee benefit plan within the meaning of Section
3(3) of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), covering any of Xxxxxx Xxxxxx'x employees (the
"Plans").
Xxxxxx Xxxxxx has furnished Acquisition with (i) complete
and accurate copies of all documents comprising or pertaining to
each Plan, including each amendment and any trust agreement,
insurance contract, or other arrangement for the funding of
benefits under such Plan, (ii) copies of all determination letters
or private rulings issued by the IRS with respect to each Plan and
17
copies of all applications and requests filed with the IRS for such
determination or rulings, (iii) a copy of the three (3) most recent
annual reports (Form 5500) for each Plan and (iv) a copy of the
most recent summary plan description ("SPD"), and all summaries of
material modifications to such SPD, for each Plan.
Each Plan is, and at all times since its inception has
been, in compliance in all material respects with all the
provisions of ERISA applicable to such Plan, and with all other
laws, rules and regulations applicable to such Plan.
There are no pending, or to the best of the knowledge of
Xxxxxx Xxxxxx, threatened, legal actions, proceedings or
investigations against Xxxxxx Xxxxxx, or any Plan, other than
routine claims for benefits, which could result in liability being
imposed upon any of the Plans or upon Xxxxxx Xxxxxx with respect to
any of the Plans and there is no basis for any such legal action or
proceeding ("Benefit Liabilities").
Except as set forth in Part L of the Schedule, there are
no agreements between Xxxxxx Xxxxxx and any labor union and Xxxxxx
Xxxxxx is not, and has never been, a participating employer in any
multi-employer plan, as such term is defined in Section 3(37) of
ERISA, or in any multiple employer plan described in Section 413(c)
of the Code. To the extent that Xxxxxx Xxxxxx is or has been a
participating employer in any multi-employer plan (as so defined),
Xxxxxx Xxxxxx is not now, or would upon withdrawal therefrom
become, liable for any withdrawal liability to or in respect of
such multi-employer plan.
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The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby will not
result in any payment (whether of severance pay or otherwise)
becoming due from any of the Plans, or from Xxxxxx Xxxxxx with
respect to any of the Plans, to any individual, or result in the
vesting, acceleration or payment or increases in the amount of any
benefit payable under any of the Plans to any individual.
(m) Finder's Fee. No brokers or finders were employed
by Xxxxxx Xxxxxx in connection with any of the transactions
contemplated by this Agreement.
(n) No Failure to Disclose. Xxxxxx Xxxxxx has not
failed to disclose to Acquisition any material agreement,
arrangement, event or occurrence, or threatened or anticipated
event or occurrence known to Xxxxxx Xxxxxx, which would or might
reasonably be deemed to have a material and adverse effect on the
business of Xxxxxx Xxxxxx.
(o) Insider Interests. No officer or director of Xxxxxx
Xxxxxx has any agreement with Xxxxxx Xxxxxx or any interest in any
property, real, personal or mixed, tangible or intangible
(including, without limitation, patents, patent applications,
trademarks, trade names or other intellectual property), used in or
pertaining to the business of Xxxxxx Xxxxxx except as a stockholder
or employee and except as set forth in Part O of the Schedule.
(p) Labor Controversies. Except as set forth in Part P
of the Schedule, there are no controversies between Xxxxxx Xxxxxx
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and any employees of Xxxxxx Xxxxxx or any unresolved labor union
grievances or unfair labor practices or labor arbitration
proceedings pending or threatened relating to Xxxxxx Xxxxxx and
there are not any organizational efforts presently being made or
threatened involving any of Xxxxxx Xxxxxx'x employees. Xxxxxx
Xxxxxx has not received notice of any claim that it has not
complied with any laws relating to wages, hours, collective
bargaining, the payment of social security and similar taxes, equal
employment opportunity, employment discrimination or employment
safety, or that it is liable for any arrears of wages or any taxes
or penalties for failure to comply with any of the foregoing.
(q) Use of Real Property. The real properties leased by
Xxxxxx Xxxxxx are used and operated in compliance and conformity in
all material respects with all applicable leases, contracts,
commitments, licenses and permits. Xxxxxx Xxxxxx has not received
notice of violation of any applicable zoning or building
regulation, ordinance or other law, order, regulation or
requirement relating to the operations of Xxxxxx Xxxxxx and to
Xxxxxx Xxxxxx'x knowledge there is no such violation.
(r) Accounts Receivable. The accounts receivable are
reflected on the Xxxxxx Xxxxxx Financial Statements, and all
accounts receivable of Xxxxxx Xxxxxx arising since the date of such
balance sheet arose from bona fide transactions in the ordinary
course of business, and the materials or services involved have
been provided to the account obligor, and, except as contemplated
by the relevant contract, no further materials or services are
20
required to be provided in order to complete the sales and to
entitle Xxxxxx Xxxxxx, or its assignees, to collect the accounts
receivable in full. Except as set forth in Part R of the Schedule,
no such account receivable has been assigned or pledged to any
other person, firm or corporation, and except for unapplied
credits, no defense or setoff to any such account has been asserted
by the obligor.
(s) Compliance with Environmental Laws. Except as set
forth in Part S of the Schedule:
(i) Xxxxxx Xxxxxx is in compliance with all
environmental laws, regulations, permits and orders applicable
to them, and with all laws, regulations, permits and orders
governing or relating to asbestos removal or abatement.
(ii) Except for temporary storage on premises
pending arrangements for removal, Xxxxxx Xxxxxx has not
transported, stored, treated or disposed of, nor has it
allowed or arranged for any third parties to transport, store,
treat or dispose of, hazardous substances or other waste to or
at any location other than a site lawfully permitted to
receive such hazardous substances or other waste for such
purposes; and Xxxxxx Xxxxxx has not performed, arranged for or
allowed by any method or procedure such transportation,
storage, treatment or disposal in contravention of any laws or
regulations. Xxxxxx Xxxxxx has not disposed, or allowed or
arranged for any third parties to dispose, of hazardous
substances or other waste upon property owned or leased by it.
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(iii) There has not occurred, nor is there
presently occurring, a Release of any hazardous substance on,
into or beneath a surface of any parcel of real property in
which Xxxxxx Xxxxxx has or has had an ownership interest or
any leasehold interest. For purposes of this Section, the
term "Release" shall mean releasing, spilling, leaking,
pumping, pouring, emitting, emptying, discharging, injecting,
escaping, leaching, disposing or dumping.
(iv) Xxxxxx Xxxxxx has not transported or disposed
of, nor have they allowed or arranged for any third parties to
transport or dispose of, any hazardous substance or other
waste to or at a site which, pursuant to the U.S.
Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended ("CERCLA") or any similar
state law, (A) has been placed on the National Priorities List
or its state equivalent, or (B) the Environmental Protection
Agency or the relevant state agency has proposed or is
proposing to place on the National Priorities List or its
state equivalent. Xxxxxx Xxxxxx has not received notice, or
has knowledge, of any facts which could give rise to any
notice that Xxxxxx Xxxxxx is a potentially responsible party
for a federal or state environmental cleanup site or for
corrective action under CERCLA or any other applicable law or
regulation. Xxxxxx Xxxxxx has not submitted nor was required
to submit any notice pursuant to Section 103(c) of CERCLA.
Xxxxxx Xxxxxx has not received any written or oral request for
22
information in connection with a federal or state
environmental cleanup site or has undertaken (or been
requested to undertake) any response or remedial actions or
cleanup actions of any kind at the request of any federal,
state or local government entity, or at the request of any
other person or entity ("Environmental Liabilities").
(v) There are no laws, regulations, ordinances,
licenses, permits or orders relating to environmental or
worker safety matters requiring any work, repairs,
construction or capital expenditures with respect to the
assets or properties of Xxxxxx Xxxxxx.
(vi) Part S of the Schedule identifies (A) all
environmental audits, assessments or occupational health
studies undertaken by Xxxxxx Xxxxxx or its agents or by any
governmental agencies with respect to the operations or
properties of Xxxxxx Xxxxxx; (B) the results of any
groundwater, soil, air or asbestos monitoring undertaken with
respect to any real property owned or leased by Xxxxxx Xxxxxx;
(C) all written communications of Xxxxxx Xxxxxx with
environmental agencies; and (D) all citations issued with
respect to Xxxxxx Xxxxxx under the Occupational Safety and
Health Act (29 U.S.C. Sections 651 et seq.).
(t) Representations and Warranties. All representations
and warranties set forth herein and each certificate furnished or
to be furnished to Medical Action or Acquisition pursuant hereto
contains complete, accurate and true statements of all material
facts stated therein and do not omit to state any material facts
23
necessary to make the statements contained therein not misleading.
(u) Suppliers's Raw Materials. Part U of the Schedule
in connection with the Products sets forth (a) the name and
addresses of all suppliers (including, without limitation, Xxxxxx
Xxxxxx and any facilities thereof) from which Xxxxxx Xxxxxx ordered
raw materials, supplies, merchandise and other goods and services
with an aggregate purchase price for each such supplier of
$2,500.00 or more during the twelve month period ended December 31,
1995, and (b) the amount for which each such supplier invoiced
Xxxxxx Xxxxxx during such period. Xxxxxx Xxxxxx has not received
any notice or has any reason to believe that there has been any
material adverse change in the price of such raw materials,
supplies, merchandise or other goods or services, or that any such
supplier will not sell raw materials, supplies, merchandise and
other goods to Acquisition at any time after the Closing Date on
terms and conditions similar to those used in its current sales to
Xxxxxx Xxxxxx, subject to general and customary price increases.
(v) Product Warranties. Except as set forth in Part V
of the Schedule, and for warranties under applicable law, (a) there
are no warranties, express or implied, written or oral, with
respect to the Products and (b) there are no pending or threatened
claims with respect to any such warranty, and Xxxxxx Xxxxxx has no
liability with respect to such warranty, whether known or unknown,
absolute, accrued, contingent or otherwise and whether due or to
become due.
24
(w) Liability for Transfer Taxes. Xxxxxx Xxxxxx shall
be responsible for the timely payment of, and shall indemnify and
hold harmless Acquisition and Medical Action against, all sales
(including, without limitation, bulk sales) use, value added,
documentary, stamp, gross receipts, convenience, excise, license
and other similar taxes and fees (the "Transfer Taxes") arising out
of or in connection with or attributable to the transactions
affected pursuant to this Agreement and the Related Agreements.
Xxxxxx Xxxxxx shall prepare and timely file all tax returns
required to be filed in respect of the Transfer Taxes.
9. Medical Action and Acquisition Representations and
Warranties. Each of Acquisition and Medical Action jointly and
severally represents and warrants to Xxxxxx Xxxxxx as follows:
(a) Organization of Acquisition and Medical Action.
Acquisition and Medical Action are corporations duly organized,
validly existing and in good standing under the laws of their
respective jurisdictions of incorporation.
(b) Authority of Acquisition and Medical Action.
Acquisition and Medical Action each individually have the corporate
power to enter into this Agreement and to carry out the
transactions contemplated hereby. The execution and delivery of
this Agreement, Related Agreements and the consummation of the
transactions contemplated hereby have been duly authorized by the
Board of Directors of Acquisition and Medical Action, as the sole
stockholder of Acquisition and by the Board of Directors of Medical
Action; and (i) no other corporate acts or proceedings on the part
25
of Acquisition or Medical Action are necessary to authorize this
Agreement, Related Agreements or the consummation of the
transactions contemplated hereby, and (ii) this Agreement and the
Related Agreements constitute the valid and legally binding
obligations of Acquisition and Medical Action enforceable against
Acquisition and Medical Action in accordance with their terms. The
execution and delivery of this Agreement and the Related Agreements
do not, and the consummation of the transactions contemplated
hereby will not, violate or constitute a default under any
provision of the Certificate of Incorporation or By-Laws of
Acquisition or Medical Action or any provision of (or result in the
acceleration of any obligation under) any mortgage, note, lien,
lease, agreement, instrument, arbitration award, judgment or decree
to which either of Acquisition or Medical Action is a party or by
which they are bound or to which any of their property is subject,
or any laws of the United States or any state or jurisdiction in
which Acquisition or Medical Action conducts business.
(c) Consents, etc. No consent, authorization, order or
approval of, or filing or registration with, any governmental
commission, board or other regulatory body is required for or in
connection with the execution and delivery of this Agreement by
Acquisition and Medical Action and the consummation by Acquisition
and Medical Action of the transactions contemplated hereby.
(d) Finder's Fee. No brokers or finders were employed
by Acquisition or Medical Action in connection with any of the
transactions contemplated by this Agreement.
26
10.1 Xxxxxx Xxxxxx covenants and agrees with Acquisition as
follows:
(a) Certification of Stockholder Vote. Prior to the
Closing, Xxxxxx Xxxxxx shall deliver to Acquisition a certificate
of its secretary setting forth the unanimous approval by Xxxxxx
Xxxxxx Stockholders of (i) the adoption of this Agreement and (ii)
the transactions contemplated hereby.
11. Conditions to Obligations of Each Party. The obligations
of the parties to consummate the transactions contemplated hereby
shall be subject to the fulfillment on or prior to the Closing Date
of the following conditions:
11.1 No Injunction, etc. Consummation of the
transactions contemplated hereby shall not have been restrained,
enjoined or otherwise prohibited by any applicable law, including
any order, injunction, decree or judgment of any court or other
Governmental Authority and no proceeding with respect to the
application of any such applicable law to such effect shall be
pending.
11.2 Asset Acquisition Statement. Medical Action and
Xxxxxx Xxxxxx shall, within sixty (60) days of Closing, complete
and execute a Form 8594, Asset Acquisition Statement, under Section
1060 of the Internal Revenue Code, and deliver a copy of such form
to the other party. In addition, each party will file such form in
its tax returns for all periods which include the Closing Date.
11.3 Conditions to Obligations of Acquisition and Medical
Action. The obligations of Acquisition and Medical Action to
27
consummate the transactions contemplated hereby shall be subject to
the fulfillment (or waiver by Acquisition and Medical Action) on or
prior to the Closing Date of the following conditions, which Xxxxxx
Xxxxxx agrees to use reasonable good faith efforts to cause to be
fulfilled.
(i) Representations, Performance. The
representations and warranties of Xxxxxx Xxxxxx contained in this
Agreement (a) shall be true and correct in all material respects on
and as of the date hereof, and (b) shall be repeated and shall be
true and correct in all material respects on and as of the Closing
Date with the same effect as though made on and as of the Closing
Date. Xxxxxx Xxxxxx shall have duly performed and complied in all
material respects with all agreements and conditions required to be
performed or complied with by it prior to or on the Closing Date.
Xxxxxx Xxxxxx shall have delivered to Acquisition a certificate,
dated the Closing Date and signed by its duly authorized officers,
to the foregoing effect.
(ii) Consents. Xxxxxx Xxxxxx shall obtain such
governmental permits, orders or consents, if any, as may be
required in connection with the transactions contemplated by this
Agreement or the Related Agreements, including but not limited to
the consent of the lessor of the Premises to the assignment of such
lease to Acquisition. Acquisition shall also have received an
estoppel certificate addressed to Acquisition from the lessor,
dated as of the Closing Date, identifying the lease documents and
any amendments thereto, stating that the lease is in full force and
28
effect and, to the best knowledge of the lessor, that Xxxxxx Xxxxxx
is not in default under the lease and no event has occurred that,
with notice or lapse of time or both, would constitute a default by
Xxxxxx Xxxxxx under the lease and containing any other information
reasonably requested by Acquisition.
(iii) No Material Adverse Effect. No event,
occurrence, fact, condition, change, development or effect shall
have occurred since December 31, 1995 that, individually or in the
aggregate, has constituted or resulted in, or could reasonably be
expected to constitute or result in, a material adverse effect to
the business of Xxxxxx Xxxxxx.
(iv) Related Agreements. Xxxxxx Xxxxxx and/or LM
Whitehaven, as the case may be, shall have entered into each of the
following agreements with Acquisition and/or Medical Action, as the
case may be;
(a) A Supply Agreement in the form attached hereto as
Exhibit "H", pursuant to which LM Whitehaven will sell to
Medical Action for a period of one (1) year following the
Closing Date, at least the same volume of Products produced by
LM Whitehaven as would have been purchased by Xxxxxx Xxxxxx
and the necessary raw materials required to produce the
Products for a two (2) year period commencing on the first
anniversary date of the Closing;
(b) A Trademark License Agreement in the form attached
hereto as Exhibit "I", pursuant to which LM Whitehaven will
grant to Acquisition and Medical Action, on a royalty-free
29
basis, the right to use in connection with the business
certain trademarks and other intellectual property specified
therein in North America for a period of one (1) year
following the Closing;
(c) A Non-Competition Agreement in the form attached
hereto as Exhibit "J", pursuant to which LM Whitehaven agrees
not to, directly or indirectly, engage, either directly or
indirectly, in any business competitive with the assets
acquired hereunder in North America, and Medical Action agrees
not to directly or indirectly engage, either directly or
indirectly, in any business competitive with the assets
acquired hereunder anywhere in the world, except for North
America, for a period of five (5) years.
(v) Xxxxxx Xxxxxx Legal Opinion. Acquisition shall have
received an opinion dated the Closing from Xxxxxxx X. Xxxxxxxx
& Associates, counsel for Xxxxxx Xxxxxx that:
(a) Xxxxxx Xxxxxx is a corporation validly organized,
legally existing and in good standing under the laws of the
jurisdiction of its incorporation with corporate power and
authority to own its properties and to conduct its business as
then being conducted;
(b) Xxxxxx Xxxxxx has full corporate power to carry out
the transactions contemplated by this Agreement; this
Agreement has been duly executed and delivered by Xxxxxx
Xxxxxx; all necessary corporate action has been taken by
Xxxxxx Xxxxxx and its Board of Directors and stockholders to
30
authorize Xxxxxx Xxxxxx to execute and deliver this Agreement
and to consummate the transactions contemplated hereby; and
this Agreement is a valid and legally binding obligation of
Xxxxxx Xxxxxx, enforceable against Xxxxxx Xxxxxx in accordance
with its terms, except as may be limited by applicable
bankruptcy, insolvency, moratorium or other similar laws
affecting creditors' rights generally or by general principles
of equity;
(c) The execution, delivery and performance by Xxxxxx
Xxxxxx of this Agreement and the consummation of the
transactions contemplated by this Agreement will not
constitute a violation of any provision of the Certificate of
Incorporation or By-Laws of Xxxxxx Xxxxxx.
(vi) LM Whitehaven Legal Opinion. Acquisition shall have
received an opinion dated the Closing from Xxxx Xxxxxxx Xxxxxxxxx,
counsel for LM Whitehaven, that:
(a) LM Whitehaven has full corporate power to carry out
the transactions contemplated by this Agreement; this Agreement and
the Related Agreements have been duly executed and delivered by LM
Whitehaven; all necessary corporate action has been taken by LM
Whitehaven and its Board of Directors to authorize LM Whitehaven to
execute and deliver this Agreement and the Related Agreements and
to consummate the transactions contemplated hereby; and this
Agreement and the Related Agreements are valid and legally binding
obligations of LM Whitehaven.
31
(vii) Corporate Proceedings. All corporate
proceedings of Xxxxxx Xxxxxx and LM Whitehaven in connection with
this Agreement and the Related Agreements and the transactions
contemplated hereby, and all documents and instruments incidental
thereto, shall be reasonably satisfactory in substance and form to
Acquisition and its counsel, and Acquisition and its counsel shall
have received all such documents and instruments, or copies thereof
(certified, if requested), as may be reasonably requested.
11.4 Conditions to Obligations of Xxxxxx Xxxxxx. The
obligations of Xxxxxx Xxxxxx to consummate the transactions
contemplated hereby shall be subject to the fulfillment (or waiver
by Xxxxxx Xxxxxx), on or prior to the Closing Date, of the
following additional conditions, which Acquisition and Medical
Action agree to use reasonable good faith efforts to cause to be
fulfilled.
(i) Representations, Performance. The
representations and warranties of Acquisition and Medical Action
contained in this Agreement shall be true and correct in all
material respects on and as of the date hereof, and (b) shall be
repeated and shall be true and correct in all material respects on
and as of the Closing Date with the same effect as though made on
and as of the Closing Date. Acquisition and Medical Action shall
have duly performed and complied in all material respects with all
agreements and conditions required by its respective agreement to
be performed or complied with by them prior to or on the Closing
32
Date. Acquisition and Medical Action shall have delivered to
Xxxxxx Xxxxxx a certificate, dated the Closing Date and signed by
its duly authorized officers, to the foregoing effect.
(ii) Permits, Orders and Consents. Medical Action
and Acquisition shall, in connection herewith, comply with all
applicable securities laws and will obtain such governmental
permits, orders or consents, if any, as may be required in
connection with the transactions contemplated by this Agreement.
(iii) No Material Adverse Effect. No event,
occurrence, fact, condition, change, development or effect shall
have occurred since December 31, 1995 that, individually or in the
aggregate, has constituted or resulted in, or could reasonably be
expected to constitute or result in, a material adverse effect.
(iv) Related Agreements. Acquisition or Medical
Action, as the case may be, shall have entered into the Related
Agreements with LM Whitehaven.
(v) Legal Opinion. Xxxxxx Xxxxxx shall have
received an opinion dated the Closing Date from Xxxxxxx X.
Satin, Esq., General Counsel of Medical Action and
Acquisition, that:
(a) Each of Medical Action and Acquisition is a
corporation validly organized, legally existing and in good
standing under the laws of its respective jurisdiction of
incorporation with full corporate power and authority to own their
properties and to conduct their businesses as they are then being
conducted;
33
(b) The authorized, issued and outstanding capital stock
of Acquisition is as stated in such opinion; the outstanding shares
of capital stock of Acquisition are owned of record and
beneficially by Medical Action;
(c) Each of Medical Action and Acquisition has full
corporate power to carry out the transactions contemplated by this
Agreement; this Agreement and the Related Agreements have been duly
executed and delivered by each of Medical Action and Acquisition
and all necessary corporate action has been taken by each of
Medical Action and Acquisition, their Board of Directors and
shareholders in order to consummate the transactions contemplated
by this Agreement, to execute and deliver this Agreement and the
Related Agreements and to make this Agreement the valid and legally
binding obligations of each of Medical Action and Acquisition
enforceable against Medical Action and Acquisition in accordance
with its terms, except as may be limited by applicable bankruptcy,
insolvency, moratorium or other similar laws affecting creditors'
rights generally or by general principles of equity;
(d) The execution, delivery and performance of this
Agreement by Medical Action and Acquisition and the consummation of
the transactions contemplated by this Agreement will not constitute
a violation of any provision of the Certificate of Incorporation of
Medical Action or Acquisition or either of their By-Laws or, to the
best of such counsel's knowledge, under any agreement or other
document to or by which Medical Action or Acquisition is a party or
is bound or any judgment, decree, or
34
order of any court or other governmental authority which is binding on Medical
Action and Acquisition or any of their properties; and
(e) No consent or approval by any governmental authority
which has not been obtained is required in connection with the
consummation by Medical Action and Acquisition of the transactions
contemplated by this Agreement.
(vi) Corporate Proceedings. All corporate
proceedings of Acquisition and Medical Action in connection with
this Agreement and the Related Agreements and the transactions
contemplated hereby, and all documents and instruments incidental
thereto, shall be reasonably satisfactory in substance and form to
Xxxxxx Xxxxxx and its counsel, and Xxxxxx Xxxxxx and its counsel
shall have received all such documents and instruments, or copies
thereof (certified, if requested), as may be reasonably requested.
(vii) The execution and delivery of the
Promissory Note by Medical Action.
12. Reliance by Counsel. In rendering any opinion referred
to herein, counsel may rely, as to any factual matters involved in
their opinion, on certificates of public officials and of corporate
officers, opinions of corporate general counsel, and such other
evidence as such counsel may reasonably deem appropriate and, as to
matters governed by the Delaware General Corporation Law ("DGCL")
or the laws of jurisdictions other than the United States or the
State of New York an opinion of local counsel in such
jurisdictions, which counsel shall be satisfactory to the other
parties in the exercise of their reasonable judgment.
35
12.1 Notices. Any notice to a party hereto pursuant to this
Agreement shall be in writing, shall be deemed given when received,
and shall be delivered personally or sent by certified or
registered mail or by telecopier addressed as follows:
To Acquisition:
Medial Action Industries Inc.
000 Xxxxx Xxxxxxx
Xxxxxxxxx, Xxx Xxxx 00000
Attn: Xxxx X. Xxxxxxxxx, President
Telecopier No.: 000-000-0000
with a copy to:
Xxxxxxx X. Satin, Esq.
000 Xxxxx Xxxxxxx
Xxxxxxxxx, Xxx Xxxx 00000
Telecopier No.: 000-000-0000
To Xxxxxx Xxxxxx:
x/x Xxxxxxxxx-Xxxxx Xxxxxxx Inc.
00-00 Xxxxx 000
Xxxxxxxx, Xxx Xxxxxx 00000
Attn: Xxxx X. Xxxxxxxx, Treasurer
Telecopier No.: 000-000-0000
36
To LM Whitehaven:
Xxxxxx Xxxxxx Medical Packaging
Xxxxxxx Xxxx
Xxxxxxxxxx
Xxxxxxx
XX0000X U.K.
Attn: Xxxxxx Xxxxxx
Telephone No.: 00000 00000
Telecopier No: 01946 66445
with a copy to:
Xxxxxx Xxxxxx Packaging Ltd.
Xxxxxxxx, Xxxxxxx Xxxx
Xxxxxxx X00 0XX - X.X.
Telecopier No: (0000)000 0000
Attn: Xxxx Xxxxxxx Xxxxxxxxx, Legal Advisor
12.2 Entire Agreement; Law Governing. This Agreement together
with all other agreements contemplated hereby (a) constitute the
entire agreement and supersede all prior agreements and
understandings, both written and oral, among the parties with
respect to the subject matter hereof, (b) may be executed in
several counterparts, each of which will be deemed an original and
all of which shall constitute one and the same instrument, and (c)
except as otherwise stated in any other agreement, shall be
governed in all respects, including validity, interpretation and
effect, by the internal substantive laws of the State of Delaware.
12.3 Publicity and Disclosures. No press releases or public
disclosures of the transactions contemplated by this Agreement,
either oral or written, shall be made without the prior written
consent of all the parties hereto, provided, however, that no such
consent shall be unreasonably withheld or delayed and provided
further that no such consent shall be required if (a) in the
opinion of counsel for the party proposing to make such press
release or public disclosure, such press release and/or public
37
disclosure is required by applicable law, rules or regulations or
by stock exchange requirement, and (b) time does not permit the
obtaining of approval by the other parties.
12.4 (a) Indemnification by Xxxxxx Xxxxxx and LM Whitehaven.
Xxxxxx Xxxxxx and LM Whitehaven covenant and agree to defend,
indemnify and hold harmless Medical Action and Acquisition from and
against, and pay or reimburse them for, any and all claims,
liabilities, obligations, losses, fines, costs, royalties,
proceedings, deficiencies or damages (whether or not resulting from
third party claims), including out-of-pocket
expenses and reasonable attorneys' fees incurred in the
investigation or defense of any of the same or in asserting any of
their respective rights hereunder (collectively, the "Losses")
resulting from or arising out of:
(i) Any inaccuracy of any representation or
warranty made by Xxxxxx Xxxxxx or LM
Whitehaven herein;
(ii) Any Excluded Liabilities as set forth in
Section 1(b) herein;
(iii) Any and all Taxes relating to or arising
out of the business of Xxxxxx Xxxxxx;
(iv) Any and all Benefit Liabilities;
(v) All Environmental Liabilities and costs
arising out of the business of Xxxxxx Xxxxxx
prior to the Closing Date;
38
(vi) Any product liability claim with respect to
the Products manufactured or sold prior to the
Closing Date; and
(vii) Any failure of Xxxxxx Xxxxxx to timely
pay all applicable Transfer Taxes.
Any claim for indemnification pursuant to clause (i) of
this Section 12.4(a), however, shall be limited to $500,000.00.
(b) Indemnification by Medical Action and Acquisition.
Medical Action and Acquisition covenant and agree to defend,
indemnify and hold harmless Xxxxxx Xxxxxx and LM Whitehaven from
and against any and all losses resulting from or arising out of:
(i) The Assumed Liabilities; and
(ii) The operation of the business by Medical Action
or Acquisition and operation or use of the Assets
following the Closing Date, except to the extent such
Losses result from or arise out of the Excluded
Liabilities (as set forth in Section 1(b) herein) or
constitute Losses for which Xxxxxx Xxxxxx and LM
Whitehaven are required to indemnify Medical Action and
Acquisition under Section 12.4(a) above.
(c) Survival of Representations and Warranties. The
representations, warranties and covenants of Xxxxxx Xxxxxx, XX
Whitehaven, Acquisition and Medical Action contained in this
Agreement, or in any instrument delivered by each of them
hereunder, shall survive for a period of eighteen months from the
date of Closing. No claim for indemnification may be brought later
than eighteen (18) months after the date of Closing.
39
12.5 Headings. The headings and captions of the sections and
subsections of this Agreement are included for the convenience of
reference only and shall have no effect on the construction or
meaning of this Agreement.
12.6 Right to Notice of Sale.
(a) LM Whitehaven shall not, at any time prior to
January 31, 2001, sell or convey substantially all of its assets or
merge or consolidate with or into any other corporation without
first giving written notice thereof to Medical Action, which notice
is hereinafter referred to as the "Notice of Sale".
(b) The Notice of Sale shall include the complete terms
of the proposed transaction and the name of the prospective
purchaser.
(c) For a period of ten (10) days after receipt by
Medical Action of the Notice of Sale, Medical Action shall have the
right to give written notice to LM Whitehaven of Medical Action's
interest in negotiating and executing, within a period of ninety
(90) days, a definitive agreement under which Medical Action would
purchase the business operations of LM Whitehaven upon the terms of
the proposed transaction included in the Notice of Sale. In the
event that LM Whitehaven does not receive written notice of Medical
Action's exercise of the right herein granted within said 10 day
period, there shall be a conclusive presumption that Medical Action
has elected not to exercise its right hereunder, and LM Whitehaven
may sell its business operations to others at substantially the
same terms set forth in the Notice of Sale.
40
12.7 Name Change. Within forty-five (45) days of Closing,
Acquisition agrees to amend its Certificate of Incorporation
changing its name to not include the words "SBW".
IN WITNESS WHEREOF, the parties hereto have caused this
Agremeent to be duly executed as of the date first above written.
XXXXXX XXXXXX MEDICAL PRODUCTS, INC.
By: /s/ Xxxxxxx X. Xxxxxx
-------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: President
XXXXXX XXXXXX MEDICAL PRODUCTS, a
trading division of XXXXXX XXXXXX
PACKAGING UK LTD.
By: /s/ Xxxxxxxx Xxxxxx
--------------------------------
Name: Xxxxxxxx Xxxxxx
Title: Director
MEDICAL ACTION INDUSTRIES INC.
By: /s/ Xxxx X. Xxxxxxxxx
--------------------------------
Name: Xxxx X. Xxxxxxxxx
Title: President
SBW ACQUISITION CORP.
By: /s/ Xxxx X. Xxxxxxxxx
--------------------------------
Name: Xxxx X. Xxxxxxxxx
Title: President
41
