STOCK AND NOTE PURCHASE AGREEMENT among COMPASS GROUP DIVERSIFIED HOLDINGS LLC, as Buyer, COMPASS GROUP INVESTMENTS, INC. and COMPASS MEDICAL MATTRESSES PARTNERS, LP as Seller Dated as of July 31, 2006
Exhibit 2.1
among
COMPASS GROUP DIVERSIFIED HOLDINGS LLC,
as Buyer,
as Buyer,
COMPASS GROUP INVESTMENTS, INC.
and
COMPASS MEDICAL MATTRESSES PARTNERS, LP
as Seller
as Seller
Dated as of July 31, 2006
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TABLE OF CONTENTS
| Page | ||||||||
| 1. | DEFINITIONS | 1 | ||||||
| 2. | SALE AND TRANSFER OF SHARES; CLOSING | 7 | ||||||
| 2.1 | Purchase and Sale | 7 | ||||||
| 2.2 | Purchase Price | 7 | ||||||
| 2.3 | Closing | 7 | ||||||
| 2.4 | Closing Obligations | 7 | ||||||
| 3. | REPRESENTATIONS AND WARRANTIES OF CGI AND SELLER IN RESPECT OF ANODYNE | 9 | ||||||
| 3.1 | Organization and Good Standing | 9 | ||||||
| 3.2 | Authority; No Conflict | 9 | ||||||
| 3.3 | Capitalization; Title to Shares and Note | 10 | ||||||
| 3.4 | Compliance with Legal Requirements | 11 | ||||||
| 3.5 | Legal Proceedings | 11 | ||||||
| 3.6 | Business of Anodyne | 11 | ||||||
| 3.7 | Acquisition of SenTech and AMF | 11 | ||||||
| 4. | REPRESENTATIONS AND WARRANTIES OF BUYER | 11 | ||||||
| 4.1 | Organization and Good Standing | 11 | ||||||
| 4.2 | Authority; No Conflict | 11 | ||||||
| 4.3 | Investment Intent | 12 | ||||||
| 4.4 | Certain Proceedings | 12 | ||||||
| 4.5 | Title to CODI Shares | 12 | ||||||
| 5. | COVENANTS | 12 | ||||||
| 5.1 | Rights to Indemnification Under Historical Purchase Agreement | 12 | ||||||
| 6. | CONDITIONS PRECEDENT TO BUYER’S OBLIGATION TO CLOSE | 13 | ||||||
| 6.1 | Accuracy of Representations | 13 | ||||||
| 6.2 | Seller’s Performance | 13 | ||||||
| 6.3 | Consents | 13 | ||||||
| 6.4 | Note Purchase Agreement | 14 | ||||||
| 6.5 | Additional Documents | 14 | ||||||
| 6.6 | No Proceedings; No Orders | 14 | ||||||
| 6.7 | No Claim Regarding Stock Ownership or Sale Proceeds | 14 | ||||||
| 6.8 | No Prohibition | 14 | ||||||
| 7. | CONDITIONS PRECEDENT TO CGI’S AND THE SELLER’S OBLIGATION TO CLOSE | 14 | ||||||
| 7.1 | Accuracy of Representations | 14 | ||||||
| 7.2 | Buyer’s Performance | 15 | ||||||
| 7.3 | Consents | 15 | ||||||
| 7.4 | Additional Documents | 15 | ||||||
| 7.5 | No Injunction | 15 | ||||||
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TABLE OF CONTENTS
(continued)
(continued)
| Page | ||||||||
| 8. | INDEMNIFICATION; REMEDIES | 15 | ||||||
| 8.1 | Survival; Right to Indemnification not Affected by Knowledge | 15 | ||||||
| 8.2 | Indemnification and Payment of Damages by CGI and SELLER | 16 | ||||||
| 8.3 | Indemnification and Payment of Damages by Buyer | 16 | ||||||
| 8.4 | Procedure for Indemnification—Third Party Claims | 17 | ||||||
| 8.5 | Procedure for Indemnification—Other Claims | 18 | ||||||
| 9. | GENERAL PROVISIONS | 18 | ||||||
| 9.1 | Expenses | 18 | ||||||
| 9.2 | Notices | 18 | ||||||
| 9.3 | Further Assurances | 19 | ||||||
| 9.4 | Waiver | 19 | ||||||
| 9.5 | Entire Agreement and Modification; Disclaimer of Representations | 19 | ||||||
| 9.6 | Assignments, Successors, and no Third-Party Rights | 20 | ||||||
| 9.7 | Severability | 20 | ||||||
| 9.8 | Section Headings; Construction | 20 | ||||||
| 9.9 | Time of Essence | 20 | ||||||
| 9.10 | Governing Law | 20 | ||||||
| 9.11 | Counterparts | 20 | ||||||
-ii-
This Stock and Note Purchase Agreement (“Agreement”) is made as of July 31, 2006, by
and among Compass Group Diversified Holdings LLC, a Delaware limited liability company
(“Buyer”), Compass Group Investments, Inc., a Bahamian International Business Company
(“CGI”), and Compass Medical Mattresses Partners, LP, a Bahamian limited partnership
(“Seller”).
RECITALS
A. The Buyer is wholly-owned by Compass Diversified Trust, a statutory business trust
formed under the laws of the State of Delaware (the “Trust”).
B. CGI wholly-owns, indirectly, the Seller.
C. Seller is the controlling stockholder of Anodyne Medical Device, Inc., a Delaware
corporation (“Anodyne”), and owns, and holds of record, 70,640 shares of Series A common
stock, $0.01 par value of Anodyne (the “Common Stock”) and 109,136 shares of Series A
convertible preferred stock, $0.01 par value of Anodyne (the “Convertible Preferred Stock”
and, together with the Common Stock, the “Shares”).
D. Seller is, pursuant to that certain Credit Agreement, dated as February 15, 2006 (the
“Credit Agreement”), by and among Seller, and AMF Support Surfaces, Inc., a California
corporation (“AMF”), and SenTech Medical Systems, Inc., a Florida corporation formerly
known as SenTech Acquisition Corp. (“SenTech” and, together with AMF, each a
“Borrower” and collectively the “Borrowers”), lender to the Borrowers and the
holder of the Note (as defined in the Credit Agreement), which Note evidences the Loans (as defined
in the Credit Agreement).
E. CGI and the Seller desire that the Seller sell, and Buyer desires to purchase, all of the
Shares and the Note for the consideration and on the terms set forth in this Agreement.
AGREEMENT
The parties, intending to be legally bound, agree as follows:
1. DEFINITIONS
For purposes of this Agreement, the following terms have the meanings specified or referred to
in this Section 1:
“AMF” — as defined in the Recitals of this Agreement.
“AMF Acquisition Agreement” — that certain Agreement and Plan of Merger, dated as of February
15, 2006, among Anodyne, AMF Acquisition Corp., AMF and Xxxxxxx X. Xxxxx, pursuant to which AMF
Acquisition Corp. was merged with and into AMF.
“Anatomic” — Anatomic Concepts Acquisition Corp., a Delaware corporation that is wholly owned
by Anodyne and which has conducted no business to date, being formed for the sole purpose of
effectuating the potential acquisition of the business of Anatomic Concepts, Inc., a third party
unrelated to any of the parties hereto.
“Anodyne” — as defined in the Recitals of this Agreement.
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“Affiliate” — with respect to any Person, (a) any other Person which, directly or indirectly,
controls or is controlled by or is under common control with such Person, and (b) any officer or
director of such Person. A Person shall be deemed to be “controlled by” any other Person if such
Person possesses, directly or indirectly, power to vote 10% or more of the securities (on a fully
diluted basis) having ordinary voting power for the election of directors or managers or power to
direct or cause the direction of the management and policies of such Person whether by contract or
otherwise.
“Applicable Contract” — with respect to a particular Person, any Contract (a) under which such
Person or its Subsidiaries has or may acquire any rights, (b) under which such Person or its
Subsidiaries has or may become subject to any obligation or liability, or (c) by which such Person
or any of its Subsidiaries or any of the assets owned or used by any of them is or may become
bound.
“Average Closing Price” — as defined in Section 2.2(c).
“Best Efforts” — the efforts that a prudent Person desirous of achieving a result would use in
similar circumstances to ensure that such result is achieved as expeditiously as possible;
provided, however, that an obligation to use Best Efforts under this Agreement does not require the
Person subject to that obligation to take actions that would result in a Materially Adverse Change
in the benefits to such Person of this Agreement and the Contemplated Transactions.
“Breach” — a “Breach” of a representation, warranty, covenant, obligation, or other provision
of this Agreement or of any instrument delivered pursuant to this Agreement will be deemed to have
occurred if there is or has been (a) any inaccuracy in or breach or violation of, or any failure to
perform or comply with, such representation, warranty, covenant, obligation, or other provision, or
(b) any claim (by any Person) or other occurrence or circumstance that is or was inconsistent with
such representation, warranty, covenant, obligation, or other provision, and the term “Breach”
means any such inaccuracy, breach, violation, failure, claim, occurrence, or circumstance.
“Buyer” — as defined in the Preamble to this Agreement.
“Buyer’s Allocable Percentage” —47.3095%, representing Buyer’s equity ownership of Anodyne
immediately after Closing.
“Buyer Indemnification Cap” — as defined in Section 8.3(b).
“Buyer Indemnified Persons” — as defined in Section 8.2(a).
“Buyer Threshold Amount” — as defined in Section 8.3(b).
“Cash Consideration” — as defined in Section 2.2(c).
“CGI” — as defined in the Preamble to this Agreement.
“Closing” — as defined in Section 2.3.
“Closing Date” — the date on which the Closing actually takes place.
“CODI Shares” — shares of stock of the Trust, which stock trades on the Nasdaq National Market
under the symbol “CODI”.
“Common Stock” — as defined in the Recitals of this Agreement.
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“Consent” — any approval, consent, ratification, waiver or other authorization (including any
Governmental Authorization).
“Contemplated Transactions” — all of the transactions contemplated by this Agreement,
including:
(a) the sale of the Shares and the Note by Seller to Buyer;
(b) the performance by Buyer and the Seller of their respective covenants and
obligations under this Agreement;
(c) Buyer’s acquisition and ownership of the Shares and exercise of control over
Anodyne; and
(d) Buyer’s acquisition and ownership of the Note (as defined in the Credit Agreement)
and exercise of its rights as lender under the Credit Agreement.
“Contract” — any agreement, contract, obligation, promise, or undertaking (whether written or
oral and whether express or implied) that is legally binding.
“Convertible Preferred Stock” — as defined in the Recitals of this Agreement.
“Credit Agreement” — as defined in the Recitals of this Agreement.
“Damages” — the amount of any loss, liability, claim, damage (excluding incidental and
consequential damages) or expense (including costs of investigation and defense and reasonable
attorneys’ fees, but excluding any actual or claimed diminution of value), whether or not involving
a third-party claim, suffered or incurred by, for purposes of Sections 8.2, Buyer
Indemnified Persons and, for purposes of Section 8.3, CGI and Seller. For purposes of this
Agreement, Damages, when determined by reference to losses, liabilities, damages and/or expenses
of, or claims, will be deemed suffered or incurred by Buyer Indemnified Persons only to the extent
of Buyer’s Allocable Percentage thereof.
“Disclosure Letter” — the disclosure letter delivered by the Seller to Buyer concurrently with
the execution and delivery of this Agreement.
“Encumbrance” — any charge, claim, community property interest, condition, deed of trust,
easement, encumbrance, equitable interest, lien, lease, mortgage, option, pledge, security
interest, right of first refusal, proxy, servitude or similar restriction, including any
restriction on use, voting (including any such restriction imposed under any voting trust),
transfer, receipt of income, or exercise of any other attribute of ownership.
“Facilities” — with respect to any Person, any real property, leaseholds, or other interests
currently or formerly owned or operated by such Person or its Subsidiaries and any buildings,
plants, structures, or equipment (including motor vehicles, tank cars, and rolling stock) currently
or formerly owned or operated by such Person or its Subsidiaries.
“GAAP” — United States generally accepted accounting principles as of the date
hereof, consistently applied.
“Governmental Authorization” — any approval, consent, license, permit, waiver, or other
authorization issued, granted, given, or otherwise made available by or under the authority of any
Governmental Body or pursuant to any Legal Requirement.
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“Governmental Body” — any:
(a) nation, state, county, city, town, village, district, or other jurisdiction of any
nature;
(b) federal, state, local, municipal, foreign, or other government;
(c) governmental or quasi-governmental authority of any nature (including any
governmental agency, branch, department, official, or entity and any court or other
tribunal);
(d) multi-national organization or body; or
(e) body exercising, or entitled to exercise, any administrative, executive, judicial,
legislative, police, regulatory, or taxing authority or power of any nature.
“Historical Claim” — as defined in Section 5.1(a).
“Historical Claim Notice” — as defined in Section 5.1(a).
“Historical Purchase Agreement” — the Anodyne Medical Device, Inc. Stock Purchase Agreement
dated as of February 15, 2006 by and among Seller and the other purchasers party thereto and
Anodyne.
“Indemnification Cap” — as defined in Section 8.2(b).
“Knowledge” — with respect to any Person, the actual knowledge such Person or, if such Person
is a corporation, the actual knowledge of each individual who is serving, or who has at any time
served, as a director or chief executive officer of that corporation or, if such Person is a
limited partnership, the actual knowledge of each individual who is serving, or who has at any time
served, as a director, chief executive officer or manager of the general partner of that limited
partnership.
“Legal Requirement” — any federal, state, local, municipal, foreign, international,
multinational, or other administrative order, constitution, law, ordinance, principle of common
law, regulation, statute, or treaty.
“Material Adverse Effect” or “Material Adverse Change” — with respect to a particular Person
(the “Principal”), any effect or change that would be materially adverse to the business of the
Principal and its Subsidiaries, or to the ability of the Principal or its Subsidiaries to
consummate timely the transactions contemplated hereby; provided that none of the following shall
be deemed to constitute, and none of the following shall be taken into account in determining
whether there has been, a Material Adverse Effect or Material Adverse Change: (a) any adverse
change, event, development, or effect arising from or relating to (1) general business or economic
conditions, including such conditions related to the business of the Principal and its
Subsidiaries, (2) national or international political or social conditions, including the
engagement by the United States in hostilities, whether or not pursuant to the declaration of a
national emergency or war, or the occurrence of any military or terrorist attack upon the United
States, or any of its territories, possessions, or diplomatic or consular offices or upon any
military installation, equipment or personnel of the United States, (3) financial, banking, or
securities markets (including any disruption thereof and any decline in the price of any security
or any market index), (4) changes in United States generally accepted accounting principles, (5)
changes in laws, rules, regulations, orders, or other binding directives issued by any governmental
entity, or (6) the taking of any action contemplated by this Agreement and the other agreements
contemplated hereby, and (b) any existing event, occurrence, or circumstance with respect to which
Buyer has knowledge as of the date hereof.
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“Order” —
any award, decision, injunction, judgment, order, ruling, subpoena, or verdict
entered, issued, made, or rendered by any court, administrative agency, or other Governmental Body
or by any arbitrator.
“Ordinary Course of Business” — an action taken by a Person will be deemed to have been taken
in the “Ordinary Course of Business” only if-
(a) such action is consistent with the past practices of such Person and is taken in
the ordinary course of the normal day-today operations of such Person; and
(b) such action does not require authorization by the board of directors of such Person
(or by any Person or group of Persons exercising similar authority).
“Organizational Documents” — (a) the articles or certificate of incorporation and the bylaws
of a corporation; (b) the partnership agreement and any statement of partnership of a general
partnership; (c) the limited partnership agreement and the certificate of limited partnership of a
limited partnership; (d) any charter or similar document adopted or filed in connection with the
creation, formation, or organization of a Person; and (e) any amendment to any of the foregoing.
“Person” — any individual, corporation (including any non-profit corporation), general or
limited partnership, limited liability company, joint venture, estate, trust, association,
organization, labor union, or other entity or Governmental Body.
“Proceeding” — any action, arbitration, audit, hearing, investigation, litigation, or suit
(whether civil, criminal, administrative, investigative, or informal) commenced, brought,
conducted, or heard by or before, or otherwise involving, any Governmental Body or arbitrator.
“Purchase Price” — as defined in Section 2.2(b).
“Related Person” — with respect to a particular individual:
(a) each other member of such individual’s Family;
(b) any Person that is directly or indirectly controlled by such individual or one or
more members of such individual’s Family;
(c) any Person in which such individual or members of such individual’s Family hold
(individually or in the aggregate) a Material Interest; and
(d) any Person with respect to which such individual or one or more members of such
individual’s Family serves as a director, officer, partner, executor, or trustee (or in a
similar capacity).
With respect to a specified Person other than an individual:
(a) any Person that directly or indirectly controls, is directly or indirectly
controlled by, or is directly or indirectly under common control with such specified Person;
(b) any Person that holds a Material Interest in such specified Person;
(c) each Person that serves as a director, officer, partner, executor, or trustee of
such specified Person (or in a similar capacity);
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(d) any Person in which such specified Person holds a Material Interest;
(e) any Person with respect to which such specified Person serves as a general partner
or a trustee (or in a similar capacity); and
(f) any Related Person of any individual described in clause (b) or (c).
For purposes of this definition, (a) the “Family” of an individual includes (i) the
individual, (ii) the individual’s spouse, (iii) any other natural person who is related to the
individual or the individual’s spouse within the second degree, and (iv) any other natural person
who resides with such individual, and (b) “Material Interest” means direct or indirect beneficial
ownership (as defined in Rule 13d-3 under the Securities Exchange Act of 1934) of voting securities
or other voting interests representing at least 51% of the outstanding voting power of a Person or
equity securities or other equity interests representing at least 51% of the outstanding equity
securities or equity interests in a Person.
“Representative” — with respect to a particular Person, any director, officer, employee,
agent, consultant, advisor, or other representative of such Person, including legal counsel,
accountants, and financial advisors.
“Securities Act” — the Securities Act of 1933 or any successor law, and regulations and rules
issued pursuant to that Act or any successor law.
“Seller” — as defined in the Preamble to this Agreement.
“SenTech” — as defined in the Recitals of this Agreement.
“SenTech Acquisition Agreement” — that certain Asset Purchase Agreement, dated as of February
15, 2006, among SenTech, SenTech Medical Systems, Inc. and those individual shareholders a party
thereto, pursuant to which SenTech acquired substantially all of the assets of SenTech Medical
Systems, Inc.
“Share Purchase Price” — as defined in Section 2.2(a).
“Shares” — as defined in the Recitals of this Agreement.
“Subsidiary” — with respect to any Person (the “Owner”), each other Person that is a
corporation, joint venture, trust, partnership, limited liability company or any other entity (i)
of which the securities or other interests having the power to elect a majority of that other
Person’s board of directors or similar governing body are held by the Owner or one or more of its
Subsidiaries (other than securities or other interests having such power only upon the happening of
a contingency that has not occurred), or (ii) over which the Owner has, directly or indirectly, the
power to direct its business and policies.
“Threatened” — a claim, Proceeding, dispute, action, or other matter will be deemed to have
been “Threatened” if any demand or statement has been made (orally or in writing) or any notice has
been given (orally or in writing), or if any other event has occurred or any other circumstances
exist, that would lead a prudent Person to conclude that such a claim, Proceeding, dispute, action,
or other matter is likely to be asserted, commenced, taken, or otherwise pursued in the future.
“Threshold Amount” — as defined in Section 8.2(b).
“Trust” — as defined in the Preamble to this Agreement.
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2. SALE AND TRANSFER OF SHARES; CLOSING
2.1 Purchase and Sale
Subject to the terms and conditions of this Agreement, at the Closing, the Seller will sell
and transfer to Buyer, and Buyer will purchase from the Seller, the Shares and the Note.
2.2 Purchase Price
(a) The purchase price for the Shares will be $14,314,750.40 (the “Share Purchase
Price”) (consisting of $1,076,553.60 for the Common Stock and $13,238,196.80 for the
Convertible Preferred Stock).
(b) The purchase price for the Note will be $10,750,000 (the “Note Purchase Price”
and, together with the Share Purchase Price, the “Purchase Price”).
(c) The aggregate consideration that will comprise the Purchase Price shall be the Cash
Consideration plus 950,000 of the CODI Shares. The term “Cash Consideration” means that
amount equal to (i) the Purchase Price minus (ii) the Average Closing Price multiplied by 950,000.
The term “Average Closing Price” means the average closing price of the CODI Shares for the
ten (10) consecutive trading days on which such shares were actually traded on the Nasdaq National
Market (as reported in The Wall Street Journal, or if not reported thereby, any other authoritative
source selected by Buyer) ending at the close of trading on the second trading day prior to the
date of this Agreement.
2.3 Closing
The purchase and sale of the Shares and the Note (the “Closing”) will take place at
the offices of Buyer at 00 Xxxxxx Xxxx, Xxxxxx Xxxxx, Xxxxxxxx, Xxxxxxxxxxxx, at 10:00 a.m. (local
time) on the Closing Date, or at such other time and place as the parties may agree.
2.4 Closing Obligations
At the Closing:
(a) CGI and Seller will deliver, or cause to be delivered, to Buyer:
(i) certificates representing the Shares, duly endorsed (or accompanied by duly
executed stock powers), for transfer to Buyer;
(ii) the Note, duly endorsed, for transfer to Buyer;
(iii) a certificate, dated as of the Closing Date, executed on behalf of CGI and Seller
by authorized officers of each, representing and warranting to Buyer that the conditions
specified in Section 6.1 and Section 6.2 (as such conditions relate to the
representations and warranties in Section 3 and the covenants and obligations in
respect of Anodyne and the Shares and the Note) have been fulfilled;
(iv) all books and records of Anodyne and its Subsidiaries within the possession or
control of CGI or Seller;
(v) a certificate of good standing for Anodyne, dated of recent date, from the
Secretary of State of the State of Delaware, and a certificate of good standing or its
equivalent for
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each Subsidiary of Anodyne, each dated of recent date, from the Secretary of State of
the state of its organization or formation;
(vi) copies of Seller’s Organizational Documents and the resolutions adopted by its
applicable governing body authorizing the execution, delivery and performance by it of this
Agreement and the sale of the Shares and the Note to Buyer, accompanied by the certificate
of an authorized representative of Seller certifying that its Organizational Documents and
authorizing resolutions remain in full force and effect and that the representatives named
in the certificate are authorized to execute and deliver this Agreement on its behalf;
(vii) copies of the Organizational Documents of Anodyne, accompanied by a certificate
of an authorized representative of Anodyne or Seller certifying that such Organizational
Documents remain in full force and effect;
(viii) an assignment agreement, duly executed and fully completed by Seller as lender
to Anodyne, and such other agreements, certificates and instruments as Buyer may require,
each in form and substance acceptable to Buyer, pursuant to which all of Seller’s rights and
interests in and obligations under the Credit Agreement and the other Loan Documents (as
such term is the Credit Agreement) are assigned to and accepted by Buyer; and
(ix) that certain Note Purchase and Sale Agreement, between Seller and Buyer, duly
executed by Seller, pursuant to which Seller transfers and assigns all of its rights and
interests in and obligations under that certain Promissory Note, dated February 15, 2006 and
in the original principal amount of $4,980,000, of Hollywood Support Partners, LLC to Buyer,
together with evidence satisfactory to Buyer that all of the conditions to closing as
specified therein have been satisfied.
(b) Buyer will deliver, or cause to be delivered, to or as directed in writing by CGI:
(i) (A) the Cash Consideration in cash by wire transfer of immediately available funds
to such bank account or accounts as CGI may specify and (B) 950,000 of the CODI Shares, the
aggregate fair value of which is hereby agreed by the parties hereto to be equal to the
Purchase Price;
(ii) a certificate executed by Buyer to the effect that, except as otherwise stated in
such certificate, each of Buyer’s representations and warranties in this Agreement was
accurate in all material respects as of the date of this Agreement and is accurate in all
material respects as of the Closing Date;
(iii) a certificate of good standing for Purchaser, dated of recent date, from the
Secretary of State of the State of Delaware;
(iv) a copy of Buyer’s Organizational Documents and the resolutions adopted by its
Board of Directors authorizing the execution, delivery and performance by it of this
Agreement and the purchase by it of the Shares, accompanied by the certificate of the
Secretary of Buyer certifying that its Organizational Documents and authorizing resolutions
remain in full force and effect and that the representatives named in the certificate are
authorized to execute and deliver this Agreement on its behalf; and
(v) such other documents and instruments as may be reasonably required by CGI or the
Seller to consummate the purchase of the Shares and the Note;
(c) CGI will deliver, or cause to be delivered, to or as directed in writhing by Buyer:
8
(i) a copy of CGI’s Memorandum and Articles of Association and the resolutions adopted
by its applicable governing body authorizing the execution, delivery and performance by it
of this Agreement, accompanied by the certificate of the Secretary or other authorized
officer of CGI certifying that such certificate of incorporation and authorizing resolutions
remain in full force and effect and that the representatives named in the certificate are
authorized to execute and deliver this Agreement on its behalf;
(ii) a certificate of good standing (or its equivalent) for CGI, dated of recent date,
from the Registrar’s Office of the Commonwealth of the Bahamas; and
(iii) such other documents and instruments as may be reasonably required by Buyer to
consummate, or evidence the consummation of, the Contemplated Transactions.
| 3. | REPRESENTATIONS AND WARRANTIES OF CGI AND SELLER IN RESPECT OF ANODYNE |
Except as otherwise set forth in the Disclosure Letter to this Agreement, CGI and Seller,
jointly and severally, hereby represent and warrant to Buyer as follows:
3.1 Organization and Good Standing
(a) Part 3.1 of the Disclosure Letter contains a complete and accurate list for
each of Anodyne and its Subsidiaries of its name and its jurisdiction of incorporation or
organization. Each of Anodyne and its Subsidiaries is duly organized, validly existing, and in
good standing under the laws of its jurisdiction of incorporation or organization, with full
corporate power and authority to conduct its business as it is now being conducted, to own or
use the properties and assets that it purports to own or use, and to perform all its material
obligations under Applicable Contracts.
(b) Each of Anodyne and its Subsidiaries is duly qualified to do business as a foreign
entity and is in good standing under the laws of each state or other jurisdiction in which
either the ownership or use of the properties owned or used by it, or the nature of the
activities conducted by it, requires such qualification, except where the failure to be so
qualified or in good standing would not reasonably be expected to have a Material Adverse Effect
on Anodyne and its Subsidiaries taken as a whole.
(c) Except as disclosed in Part 3.1 of the Disclosure Letter, Anodyne has no
Subsidiaries and no ownership interest in any corporation, joint venture, trust, partnership,
limited liability company or any other entity.
(d) CGI and Seller have delivered or made available to Buyer copies of the Organizational
Documents of each of Anodyne and its Subsidiaries, as currently in effect.
3.2 Authority; No Conflict
(a) This Agreement constitutes the legal, valid, and binding obligation of CGI and Seller,
enforceable against each of them in accordance with its terms, subject to applicable bankruptcy,
insolvency, reorganization, moratorium and other laws affecting creditors’ rights generally and
general principles of equity. Each of CGI and Seller has the absolute and unrestricted right,
power, authority, and capacity to execute and deliver this Agreement and to perform its
obligations under this Agreement. The execution and delivery by each of CGI and Seller of this
Agreement and any related agreements to which they are parties and the consummation by each of
them of the Contemplated Transactions and any transactions contemplated by such related
agreements (to the extent applicable to them) have been duly authorized and approved and no
other
9
action with respect to CGI and Seller is necessary to authorize this Agreement, such
related agreements or such transactions contemplated hereby or thereby.
(b) Except as set forth in Part 3.2 of the Disclosure Letter, neither the execution
and delivery of this Agreement nor the consummation or performance of any of the Contemplated
Transactions will, directly or indirectly (with or without notice or lapse of time):
(i) contravene, conflict with, or result in a violation of (A) any provision of the
Organizational Documents of CGI or Seller, or (B) any resolution adopted by the board of
directors or the stockholders or other equity holders of CGI or Seller;
(ii) contravene, conflict with, or result in a violation in any material respect of, or
give any Governmental Body or other Person the right to challenge any of the Contemplated
Transactions or to exercise any remedy or obtain any relief under, any Legal Requirement or
any Order to which any of Anodyne and its Subsidiaries or CGI and Seller, or any of the
assets owned or used by any of Anodyne and its Subsidiaries, may be subject;
(iii) contravene, conflict with, or result in a violation of any of the terms or
requirements of, or give any Governmental Body the right to revoke, withdraw, suspend,
cancel, terminate, or modify, any material Governmental Authorization that is held by any of
Anodyne and its Subsidiaries or that otherwise relates to the business of, or any of the
assets owned or used by, any of Anodyne and its Subsidiaries;
(iv) contravene, conflict with, or result in a material violation or breach of any
provision of, or give any Person the right to declare a default or exercise any remedy
under, or to accelerate the maturity or performance of, or to cancel, terminate, or modify,
any material Applicable Contract of Anodyne or its Subsidiaries or CGI and Seller; or
(v) result in the imposition or creation of any Encumbrance upon or with respect to any
of the Shares or the Note or to any of the assets owned or used by any of Anodyne and its
Subsidiaries.
Except as set forth in Part 3.2 of the Disclosure Letter, none of CGI and Seller,
Anodyne or any of its Subsidiaries is or will be required (x) to give any notice to or (y) obtain
any Governmental Authorization or other material Consent from any Person in connection with the
execution and delivery of this Agreement or the consummation or performance of any of the
Contemplated Transactions.
3.3 Capitalization; Title to Shares and Note
(a) The authorized equity securities of Anodyne consist of: (i) 250,000 shares of Series A
common stock, par value $0.01 per share, of which 200,000 shares are issued and outstanding; (ii)
500,000 shares of Series B Common Stock, of which 129,360 shares are issued and outstanding; (iii)
250,000 shares of Series A Convertible Preferred Stock, of which 180,000 shares are issued and
outstanding; and (iv) 500,000 shares of 13% Series B cumulative redeemable preferred stock, par
value $100.00 per share, of which no shares are issued and outstanding. Seller is and will be on
the Closing Date the record and beneficial owner, and holder of the Shares, free and clear of all
Encumbrances. All of the Shares were duly authorized and validly issued and are fully paid and
nonassessable. None of the Shares was issued in violation of the Securities Act or any other Legal
Requirement.
(b) Except as set forth in Part 3.3 of the Disclosure Letter, all the outstanding
equity securities of each Subsidiary of Anodyne are owned, directly or indirectly, of record and
beneficially by Anodyne, free and clear of all Encumbrances..
10
(c) The Note (i) was duly and validly issued, (ii) is free of restrictions on transfer other
than restrictions on transfer under this Agreement and applicable federal and state securities
laws, and (iii) was issued in compliance with the registration requirements of all applicable
federal and state securities laws.
3.4 Compliance with Legal Requirements
To the Knowledge of CGI and Seller, each of Anodyne and its Subsidiaries is in compliance with
all applicable Legal Requirements of any Governmental Body (and all agencies thereof), except where
the failure to be in compliance would not reasonably be expected to have a Material Adverse Effect
on Anodyne and its Subsidiaries taken as a whole.
3.5 Legal Proceedings
Except as disclosed in Part 3.5 of the Disclosure Letter, there is no Proceeding that
is pending against Anodyne or its Subsidiaries or that challenges any of the Contemplated
Transactions. To the Knowledge of CGI and Seller, (i) no such Proceeding has been Threatened, and
(i) no event has occurred or circumstance exists that may give rise to or serve as a basis for the
commencement of any such Proceeding.
3.6 Business of Anodyne
Anodyne is engaged in no other business except those conducted by SenTech, AMF and Anatomic
and the ownership of the capital stock of these Subsidiaries.
3.7 Acquisition of SenTech and AMF
(a) Except as disclosed in Part 3.7(a) of the Disclosure Letter, all purchase price
adjustments under the SenTech Acquisition Agreement and the AMF Acquisition Agreement, whether
for working capital or contingent consideration, have been concluded and no further liability
remains for the payment of purchase price thereunder.
(b) Except as disclosed in Part 3.7(b) of the Disclosure Letter, (i) no indemnity
claims have been made by AMF or SenTech against, or asserted against AMF or SenTech by, the
applicable party under the SenTech Acquisition Agreement or the AMF Acquisition Agreement, and
(ii) to the Knowledge of CGI and Seller, no event has occurred or circumstance exists that may
reasonably be expected to give rise to or serve as a basis for an indemnification claim under
the SenTech Acquisition Agreement or the AMF Acquisition Agreement, whether such claim is made
by or asserted against SenTech or AMF.
| 4. | REPRESENTATIONS AND WARRANTIES OF BUYER |
Buyer represents and warrants to CGI and the Seller as follows:
4.1 Organization and Good Standing
Buyer is a limited liability company duly organized, validly existing, and in good standing
under the laws of the State of Delaware.
4.2 Authority; No Conflict
(a) This Agreement constitutes the legal, valid, and binding obligation of Buyer,
enforceable against Buyer in accordance with its terms. Buyer has the absolute and unrestricted
right,
11
power, and authority to execute and deliver this Agreement and to perform its obligations
under this Agreement. The execution and delivery by Buyer of this Agreement and any related
agreements to which it is a party and the consummation by it of the Contemplated Transactions
and any transactions contemplated by such related agreements have been duly authorized and
approved and no other action with respect to Buyer is necessary to authorize this Agreement,
such related agreements or such transactions contemplated hereby or thereby.
(b) Neither the execution and delivery of this Agreement by Buyer nor the consummation or
performance of any of the Contemplated Transactions by Buyer will give any Person the right to
prevent, delay, or otherwise interfere with any of the Contemplated Transactions pursuant to:
(i) any provision of Buyer’s Organizational Documents;
(ii) any resolution adopted by the board of directors or the stockholders of Buyer;
(iii) any Legal Requirement or Order to which Buyer may be subject; or
(iv) any material Contract to which Buyer is a party or by which Buyer may be bound.
(c) Except as set forth in Schedule 4.2 hereto, Buyer is not and will not be
required to obtain any Consent from any Person in connection with the execution and delivery of
this Agreement or the consummation or performance of any of the Contemplated Transactions.
(d) Buyer, as sponsor of the Trust, is authorized in such capacity to cause the Trust to
issue the CODI Shares and to accept the Shares and the Note as payment therefor. .
4.3 Investment Intent
Buyer is acquiring the Shares and the Note for its own account and not with a view to their
distribution within the meaning of Section 2(11) of the Securities Act.
4.4 Certain Proceedings
There is no pending Proceeding that has been commenced against Buyer and that challenges, or
may have the effect of preventing, delaying, making illegal, or otherwise interfering with, any of
the Contemplated Transactions. To Buyer’s Knowledge, no such Proceeding has been Threatened.
4.5 Title to CODI Shares
Immediately prior to the consummation of the Contemplated Transactions, Buyer will own and
will have good and valid title to the CODI Shares, free and clear of all Encumbrances; and upon
delivery of the CODI Shares to Seller in exchange for the Shares and the Note, Seller will receive
good and valid title to the CODI Shares, free and clear of all Encumbrances. All of the CODI
Shares were duly authorized and validly issued and are fully paid and nonassessable. None of the
CODI Shares was issued in violation of the Securities Act or any other Legal Requirement.
12
| 5. | COVENANTS |
5.1 Rights to Indemnification Under Historical Purchase Agreement
(a) Subject to paragraphs (b) and (c) of this Section 5.1, if (i) Buyer shall
suffer Damages as a result of any inaccuracy in or breach of, or any failure to perform or
comply with, any representation or warranty, or any claim (by any Person) or other occurrence or
circumstance that is or was inconsistent with such representation or warranty, under the
Historical Purchase Agreement by the seller party thereunder, (ii) Buyer notifies CGI in writing
(each such notice an “Historical Claim Notice”) of such breach, failure, occurrence or
circumstance (each an “Historical Claim”), each of which Historical Claim Notices shall
specify in particularity the basis for such Historical Claim and the amount of such claimed
Damages, and (iii) at the time of receipt of an Historical Claim Notice, CGI has sufficient
information to prosecute such Historical Claim, then CGI shall in good faith cooperate with
Buyer in fully prosecuting such Historical Claim.
(b) CGI’s obligations under paragraph (a) of this Section 5.1 with respect to each
Historical Claim shall be conditioned upon Buyer’s agreement to (i) pay, or reimburse CGI for,
all costs and expenses (including reasonable attorneys’ fees and costs) incurred in connection
with the prosecution of such Historical Claim, (ii) indemnify and hold CGI and Seller and their
respective Affiliates harmless against any and all claims, counterclaims, Damages, fees and
expenses incurred as a result of or arising from the prosecution of such Historical Claim, and
(iii) if and to the extent requested by CGI, assume (with the assistance of legal counsel
reasonably acceptable to CGI) responsibility for the prosecution of such Historical Claim.
(c) Any amounts recovered by CGI or Buyer as a result of the prosecution of any Historical
Claim shall be for the benefit of Buyer.
| 6. | CONDITIONS PRECEDENT TO BUYER’S OBLIGATION TO CLOSE |
Buyer’s obligation to purchase the Shares and the Note and to take the other actions required
to be taken by Buyer at the Closing is subject to the satisfaction, at or prior to the Closing, of
each of the following conditions (any of which may be waived by Buyer, in whole or in part):
6.1 Accuracy of Representations
Except as contemplated or permitted by this Agreement, all of CGI’s and the Seller’s
representations and warranties in this Agreement must be accurate in all material respects as of
the Closing Date. Notwithstanding the foregoing, those representations and warranties (a)
expressly made as of a particular date must be accurate in all material respects as of that
particular date and (b) qualified by the term “material” or containing terms such as “Material
Adverse Effect” or “Material Adverse Change” shall be true and correct in all respects as of the
Closing Date. Notwithstanding the foregoing, the representations and warranties of CGI and the
Seller set forth in Section 3.3 shall be true and correct in all respects at the Closing.
6.2 Seller’s Performance
(a) All of the covenants and obligations that CGI and the Seller, or either of them, are
required to perform or to comply with pursuant to this Agreement at or prior to the Closing
(considered collectively), and each of these covenants and obligations (considered
individually), must have been duly performed and complied with in all material respects.
(b) Each document and other item required to be delivered by CGI and/or Seller pursuant to
Sections 2.4(a) and (c) must have been delivered.
13
6.3 Consents
Each of the Consents identified in Part 3.2 of the Disclosure Letter must have been
obtained and must be in full force and effect.
6.4 Note Purchase Agreement
The transactions contemplated by the Note Purchase Agreement shall have closed.
6.5 Additional Documents
CGI and the Seller must have delivered to Buyer such other documents as Buyer may reasonably
request for the purpose of (i) evidencing the accuracy of any of CGI’s and the Seller’s
representations and warranties, (ii) evidencing the performance by CGI and the Seller of, or the
compliance by CGI and the Seller with, any covenant or obligation required to be performed or
complied with by CGI or Seller, (iii) evidencing the satisfaction of any condition referred to in
this Section 6, or (iv) otherwise facilitating the consummation or performance of any of
the Contemplated Transactions.
6.6 No Proceedings; No Orders
There must not have been commenced or Threatened against Buyer, or against any Person
affiliated with Buyer, any Proceeding (a) involving any challenge to, or seeking damages or other
relief in connection with, any of the Contemplated Transactions, or (b) that may have the effect of
preventing, delaying, making illegal, or otherwise interfering with any of the Contemplated
Transactions. No Order (whether temporary, preliminary or permanent) shall be issued or entered
that restrains, enjoins or otherwise prohibits consummation of the Contemplated Transactions.
6.7 No Claim Regarding Stock Ownership or Sale Proceeds
There must not have been made or Threatened by any Person any claim asserting that such Person
(a) is the holder or the beneficial owner of, or has the right to acquire or to obtain beneficial
ownership of, the Shares or the Note, or (b) is entitled to all or any portion of the Purchase
Price.
6.8 No Prohibition
Neither the consummation nor the performance of any of the Contemplated Transactions will,
directly or indirectly (with or without notice or lapse of time), materially contravene, or
conflict with, or result in a material violation of, or cause Buyer or any Person affiliated with
Buyer to suffer any material adverse consequence under, (a) any applicable Legal Requirement or
Order, or (b) any Legal Requirement or Order that has been published, introduced, or otherwise
proposed by or before any Governmental Body.
6.9 Issuance of CODI Shares
The CODI Shares shall have been issued.
| 7. | CONDITIONS PRECEDENT TO CGI’S AND THE SELLER’S OBLIGATION TO CLOSE |
CGI and the Seller’s obligation to sell the Shares and to take the other actions required to
be taken by CGI and the Seller, or either of them, at the Closing is subject to the satisfaction,
at or prior to the Closing, of each of the following conditions (any of which may be waived by CGI
and the Seller, in whole or in part):
14
7.1 Accuracy of Representations
All of Buyer’s representations and warranties in this Agreement (considered collectively), and
each of these representations and warranties (considered individually), must have been accurate in
all material respects as of the date of this Agreement and must be accurate in all material
respects as of the Closing Date.
7.2 Buyer’s Performance
(a) All of the covenants and obligations that Buyer is required to perform or to comply
with pursuant to this Agreement at or prior to the Closing (considered collectively), and each
of these covenants and obligations (considered individually), must have been performed and
complied with in all material respects.
(b) Buyer must have delivered each of the documents and other items, including the CODI
Shares, required to be delivered by Buyer pursuant to Section 2.4(b).
7.3 Consents
Each of the Consents identified in Part 3.2 of the Disclosure Letter must have been
obtained and must be in full force and effect.
7.4 Additional Documents
Buyer must have delivered to CGI and the Seller such other documents as CGI and the Seller may
reasonably request for the purpose of (i) evidencing the accuracy of any representation or warranty
of Buyer, (ii) evidencing the performance by Buyer of, or the compliance by Buyer with, any
covenant or obligation required to be performed or complied with by Buyer, (iii) evidencing the
satisfaction of any condition referred to in this Section 7, or (iv) otherwise facilitating
the consummation of any of the Contemplated Transactions.
7.5 No Injunction
There must not be in effect any Legal Requirement or any injunction or other Order that (a)
prohibits the sale of the Shares or the Note by the Seller to Buyer, and (b) has been adopted or
issued, or has otherwise become effective, since the date of this Agreement.
| 8. | INDEMNIFICATION; REMEDIES |
8.1 Survival; Right to Indemnification not Affected by Knowledge
(a) The representations, warranties and covenants of the parties shall survive the Closing
until the fifteenth (15th) month anniversary of the Closing Date; except for (i) the
representations and warranties set forth in Sections 3.1(a) (Organization and Good
Standing), 3.2(a) (Authority and Enforceability), 3.3 (Capitalization; Title to
Shares), which representations and warranties shall survive the Closing until the expiration of
the applicable statute of limitations, and (ii) the covenants set forth in Section 5.1
(Rights to Indemnification Under Historical Purchase Agreement), which covenants shall survive
the Closing until the expiration of the applicable survival periods under the Historical
Purchase Agreement (as applicable, the “Survival Period”). Nothing contained in the
foregoing sentence shall prevent recovery under this Section 8 after the expiration of
the Survival Period so long as the party making a claim or seeking recovery complies with the
provisions of clause (x) and (y) of the following sentence. No party shall have any claim or
right of recovery for any breach of a representation, warranty, covenant or agreement unless (x)
written notice
15
is given in good faith by that party to the other party of the representation, warranty,
covenant or agreement pursuant to which the claim is made or right of recovery is sought setting
forth in reasonable detail the basis for the purported breach of the representation, warranty,
covenant or agreement, the amount or nature of the claim being made, if then ascertainable, and
the general basis therefor and (y) such notice is given prior to the expiration of the Survival
Period.
(b) The right of any indemnified party to indemnification, payment of Damages or other
remedy based on representations, warranties, covenants, and obligations of any indemnifying
party will not be affected by any investigation conducted by such indemnified party with respect
to, or any Knowledge acquired (or capable of being acquired) by such indemnified party at any
time, whether before or after the execution and delivery of this Agreement or the Closing Date,
with respect to the accuracy or inaccuracy of or compliance with, any such representation,
warranty, covenant, or obligation of such indemnifying party. The waiver by such indemnified
party of any condition based on the accuracy of any representation or warranty of such
indemnifying party, or on the performance of or compliance with any covenant or obligation by
such indemnifying party, will not affect the right of such indemnified party to indemnification,
payment of Damages, or other remedy based on such representations, warranties, covenants, and
obligations.
(c) From and after the Closing, the right of the parties hereto to demand and receive
indemnification pursuant to this Section 8 shall be the sole and exclusive remedy
exercisable by a party with respect to any claim arising out of or relating to this Agreement or
the Contemplated Transactions, except for remedies based on fraud, willful misconduct or bad
faith.
8.2 Indemnification and Payment of Damages by CGI and SELLER
(a) Indemnification and Payment of Damages. Subject to Section 8.3(b), CGI
and Seller will indemnify and hold harmless Buyer and its Representatives, stockholders,
controlling persons, and Affiliates (collectively, the “Buyer Indemnified Persons”) for,
and will pay to the Buyer Indemnified Persons, any and all Damages arising, directly or
indirectly, from or in connection with:
(i) any Breach of any representation or warranty made by CGI and Seller in Section
3 of this Agreement (giving effect to the Disclosure Letter), the Disclosure Letter or
any other certificate or document delivered by CGI and Seller pursuant to this Agreement;
(ii) any Breach by CGI and Seller of any covenant or obligation of CGI (as relates to
Anodyne or the Shares) and Seller in this Agreement; or
(iii) any claim by any Person for brokerage or finder’s fees or commissions or similar
payments based upon any agreement or understanding alleged to have been made by any such
Person with either CGI and Seller or any of Anodyne and its Subsidiaries (or any Person
acting on their behalf) in connection with the sale of the Shares.
(b) Limitations. Notwithstanding anything to the contrary in Section
8.2(a), CGI and Seller will have no liability (for indemnification or otherwise) with
respect to the matters described in clause (i) or clause (ii) of Section 8.2(a) until
the total of all Damages with respect to such matters exceeds $143,14 (the “Threshold
Amount”), and the aggregate liability of CGI and Seller to Buyer Indemnified Persons in
respect of Section 8.2(a) shall not in any event exceed $2,147,212 (the
“Indemnification Cap”); provided, however, that neither the Threshold Amount nor the
Indemnification Cap shall apply to Damages to the extent arising from any Breach of any
representation or warranty set forth in Sections 3.1(a), Section 3.2(a) or
Section 3.3.
16
8.3 Indemnification and Payment of Damages by Buyer
(a) Indemnification and Payment of Damages. Buyer will indemnify and hold harmless
CGI and the Seller, and will pay to CGI and the Seller the amount of any Damages arising,
directly or indirectly, from or in connection with (a) any Breach of any representation or
warranty made by Buyer in this Agreement or in any certificate delivered by Buyer pursuant to
this Agreement, (b) any Breach by Buyer of any covenant or obligation of Buyer in this
Agreement, or (c) any claim by any Person for brokerage or finder’s fees or commissions or
similar payments based upon any agreement or understanding alleged to have been made by such
Person with Buyer (or any Person acting on its behalf) in connection with any of the
Contemplated Transactions.
(b) Limitations on Amount. Buyer will have no liability (for indemnification or
otherwise) with respect to the matters described in clause (a) of this Section until the
total of all Damages with respect to such matters exceeds $500,000 (the “Buyer Threshold
Amount”), and then only for the amount by which such Damages exceed the Buyer Threshold
Amount. Notwithstanding anything to the contrary in this Agreement, the Buyer’s aggregate
liability to Seller under this Agreement shall not in any event exceed $1,500,000 (the
“Buyer Indemnification Cap”); provided, however, that neither the Buyer Threshold Amount
nor the Buyer Indemnification Cap shall apply to Damages to the extent arising from any Breach
of any representation or warranty set forth in Section 4.2(a).
8.4 Procedure for Indemnification—Third Party Claims
(a) Promptly after receipt by an indemnified party under Sections 8.2 or
8.3 of notice of the commencement of any Proceeding against it, such indemnified party
will, if a claim is to be made against an indemnifying party under such Section, give notice to
the indemnifying party of the commencement of such claim, but the failure to notify the
indemnifying party will not relieve the indemnifying party of any liability that it may have to
any indemnified party, except to the extent that the indemnifying party demonstrates that the
defense of such action is prejudiced by the indemnified party’s failure to give such notice.
(b) If any Proceeding referred to in Section 8.4(a) is brought against an
indemnified party and it gives notice to the indemnifying party of the commencement of such
Proceeding, the indemnifying party be entitled to participate in such Proceeding and, to the
extent that it wishes (unless (i) the indemnifying party is also a party to such Proceeding and
the indemnified party determines in good faith that joint representation would be inappropriate,
or (ii) the indemnifying party fails to provide reasonable assurance to the indemnified party of
its financial capacity to defend such Proceeding and provide indemnification with respect to
such Proceeding), to assume the defense of such Proceeding with counsel satisfactory to the
indemnified party and, after notice from the indemnifying party to the indemnified party of its
election to assume the defense of such Proceeding, the indemnifying party will not, as long as
it diligently conducts such defense, be liable to the indemnified party under this Section
8 for any fees of other counsel or any other expenses with respect to the defense of such
Proceeding, in each case subsequently incurred by the indemnified party in connection with the
defense of such Proceeding, other than reasonable costs of investigation. Pending a final and
binding determination of any such Proceeding, upon giving notice thereof to the indemnifying
party, the indemnified party shall be entitled to set off any amount to which it may be entitled
under this Section 8 against amounts otherwise payable or distributable by the
indemnified party to the indemnifying party, including amounts distributable in respect of
equity securities directly or indirectly owned by such indemnified party (such as in respect of
trust shares of Compass Diversified Trust). If the indemnifying party assumes the defense of a
Proceeding, (i) it will be conclusively established for purposes of this Agreement that the
claims made in that Proceeding are within the scope of and subject to indemnification; (ii) no
compromise or settlement of such claims
17
may be effected by the indemnifying party without the indemnified party’s consent unless
(A) there is no finding or admission of any violation of Legal Requirements or any violation of
the rights of any Person and no effect on any other claims that may be made against the
indemnified party, and (B) the sole relief provided is monetary damages that are paid in full by
the indemnifying party; and (iii) the indemnified party will have no liability with respect to
any compromise or settlement of such claims effected without its consent. If notice is given to
an indemnifying party of the commencement of any Proceeding and the indemnifying party does not,
within ten days after the indemnified party’s notice is given, give notice to the indemnified
party of its election to assume the defense of such Proceeding, the indemnifying party will be
bound by any determination made in such Proceeding or any compromise or settlement effected by
the indemnified party.
(c) Notwithstanding the foregoing, if an indemnified party determines in good faith that
there is a reasonable probability that a Proceeding may adversely affect it or its Affiliates
other than as a result of monetary damages for which it would be entitled to indemnification
under this Agreement, the indemnified party may, by notice to the indemnifying party, assume the
exclusive right to defend, compromise, or settle such Proceeding, but the indemnifying party
will not be bound by any determination of a Proceeding so defended or any compromise or
settlement effected without its consent (which may not be unreasonably withheld).
(d) CGI and the Seller hereby consent to the non-exclusive jurisdiction of any court in
which a Proceeding is brought against any Indemnified Person for purposes of any claim that an
Indemnified Person may have under this Agreement with respect to such Proceeding or the matters
alleged therein, and agree that process may be served on Seller with respect to such a claim
anywhere in the world.
8.5 Procedure for Indemnification—Other Claims
A claim for indemnification for any matter not involving a third-party claim may be asserted
by notice to the party from whom indemnification is sought. Upon receipt of such notice, the
indemnifying party shall have 30 days to object to such claim for indemnification by delivery of a
written notice of such objection to the indemnified party specifying in reasonable detail the basis
for such objection. Failure to timely object shall constitute a final and binding acceptance of
the claim for indemnification by the indemnifying party and such claim shall be paid by the
indemnifying party. If an objection is timely made by the indemnifying party, then the
indemnifying party and the indemnified party shall negotiate in good faith to resolve any such
dispute.
| 9. | GENERAL PROVISIONS |
9.1 Expenses
Except as otherwise expressly provided in this Agreement, each party to this Agreement will
bear its respective expenses incurred in connection with the preparation, execution, and
performance of this Agreement and the Contemplated Transactions, including all fees and expenses of
agents, representatives, counsel, and accountants.
9.2 Notices
All notices, consents, waivers, and other communications under this Agreement must be in
writing and will be deemed to have been duly given when (a) delivered by hand (with written
confirmation of receipt), (b) sent by telecopier (with written confirmation of receipt), provided
that a copy is mailed by registered mail, return receipt requested, or (c) when received by the
addressee, if sent by a nationally recognized overnight delivery service (receipt requested), in
each case to the appropriate
18
addresses and telecopier numbers set forth below (or to such other addresses and telecopier
numbers as a party may designate by notice to the other parties):
If to CGI or the Seller:
|
Compass Group Investments, Inc. | |
| c/o Compass Group International LLC | ||
| Sixty Xxx Xxxxxx Xxxx, Xxxxxx Xxxxx | ||
| Xxxxxxxx, Xxxxxxxxxxx 00000 | ||
| Attention: I. Xxxxxx Xxxxxxx | ||
| Facsimile No.: (000) 000-0000 | ||
If to Buyer:
|
Compass Group Diversified Holdings LLC | |
| Sixty Xxx Xxxxxx Xxxx, Xxxxxx Xxxxx | ||
| Xxxxxxxx, Xxxxxxxxxxx 00000 | ||
| Attention: I. Xxxxxx Xxxxxxx | ||
| Facsimile No.: (000) 000-0000 | ||
with a copy to:
|
The Compass Group | |
| Sixty Xxx Xxxxxx Xxxx, Xxxxxx Xxxxx | ||
| Xxxxxxxx, Xxxxxxxxxxx 00000 | ||
| Attention: Xxxxxx X. Xxxx, Esq. | ||
| Facsimile No.: (000) 000-0000 |
9.3 Further Assurances
The parties agree (a) to furnish upon request to each other such further information, (b) to
execute and deliver to each other such other documents, and (c) to do such other acts and things,
all as the other party may reasonably request for the purpose of carrying out the intent of this
Agreement and the documents referred to in this Agreement.
9.4 Waiver
The rights and remedies of the parties to this Agreement are cumulative and not alternative.
Neither the failure nor any delay by any party in exercising any right, power, or privilege under
this Agreement or the documents referred to in this Agreement will operate as a waiver of such
right, power, or privilege, and no single or partial exercise of any such right, power, or
privilege will preclude any other or further exercise of such right, power, or privilege or the
exercise of any other right, power, or privilege. To the maximum extent permitted by applicable
law, (a) no claim or right arising out of this Agreement or the documents referred to in this
Agreement can be discharged by one party, in whole or in part, by a waiver or renunciation of the
claim or right unless in writing signed by the other party; (b) no waiver that may be given by a
party will be applicable except in the specific instance for which it is given; and (c) no notice
to or demand on one party will be deemed to be a waiver of any obligation of such party or of the
right of the party giving such notice or demand to take further action without notice or demand as
provided in this Agreement or the documents referred to in this Agreement.
9.5 Entire Agreement and Modification; Disclaimer of Representations
(a) This Agreement supersedes all prior agreements between the parties with respect to its
subject matter and constitutes (along with the documents referred to in this Agreement) a complete
and exclusive statement of the terms of the agreement between the parties with respect to its
subject matter. This Agreement may not be amended except by a written agreement executed by the
party to be charged with the amendment.
19
(b) Except as expressly set forth in this Agreement, neither CGI nor Seller makes any
representation or warranty, express or implied, at law or in equity, in respect of the Shares, the
Note or Anodyne or its Subsidiaries, or any of their respective assets, liabilities or operations,
including with respect to merchantability or fitness for any particular purpose, and any such other
representations or warranties are hereby expressly disclaimed.
9.6 Assignments, Successors, and no Third-Party Rights
No party may assign any of its rights under this Agreement without the prior consent of the
other parties, which will not be unreasonably withheld, except that Buyer may assign any of its
rights under this Agreement to any of its Affiliates. Subject to the preceding sentence, this
Agreement will apply to, be binding in all respects upon, and inure to the benefit of the
successors and permitted assigns of the parties. Nothing expressed or referred to in this
Agreement will be construed to give any Person other than the parties to this Agreement any legal
or equitable right, remedy, or claim under or with respect to this Agreement or any provision of
this Agreement. This Agreement and all of its provisions and conditions are for the sole and
exclusive benefit of the parties to this Agreement and their successors and assigns.
9.7 Severability
If any provision of this Agreement is held invalid or unenforceable by any court of competent
jurisdiction, the other provisions of this Agreement will remain in full force and effect. Any
provision of this Agreement held invalid or unenforceable only in part or degree will remain in
full force and effect to the extent not held invalid or unenforceable.
9.8 Section Headings; Construction
The headings of Sections in this Agreement are provided for convenience only and will not
affect its construction or interpretation. All references to “Section” or “Sections” refer to the
corresponding Section or Sections of this Agreement. All words used in this Agreement will be
construed to be of such gender or number as the circumstances require. Unless otherwise expressly
provided, the word “including” does not limit the preceding words or terms.
9.9 Time of Essence
With regard to all dates and time periods set forth or referred to in this Agreement, time is
of the essence.
9.10 Governing Law
This Agreement will be governed by the laws of the State of New York without regard to
conflicts of laws principles thereof.
9.11 Counterparts
This Agreement may be executed in one or more counterparts, each of which will be deemed to be
an original copy of this Agreement and all of which, when taken together, will be deemed to
constitute one and the same agreement.
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IN WITNESS WHEREOF, the parties have executed and delivered this Agreement as of the date
first written above.
| BUYER: | ||||
| COMPASS GROUP DIVERSIFIED HOLDINGS LLC | ||||
By:
|
/s/ Xxxxx X. Xxxxxxxxxxx
|
|||
| Name: Xxxxx X. Xxxxxxxxxxx | ||||
| Title: Chief Financial Officer | ||||
| CGI AND THE SELLER: | ||||
| COMPASS GROUP INVESTMENTS, INC. | ||||
By:
|
/s/ Xxxxxxx X. Xxxxxxx
|
|||
| Name: Xxxxxxx X. Xxxxxxx | ||||
| Title: Director | ||||
| COMPASS MEDICAL MATTRESSES PARTNERS, LP | ||||
By:
|
/s/ Xxxxxxx X. Xxxxxxx
|
|||
| Name: Xxxxxxx X. Xxxxxxx | ||||
| Title: Director, Navco Management, Inc., its General Partner | ||||
Signature Page to Stock and Note Purchase Agreement
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