ASSET PURCHASE AGREEMENT BY AND BETWEEN MERIT MEDICAL SYSTEMS, INC. AND ENDOGASTRIC SOLUTIONS, INC.
EXHIBIT 2.1
BY AND BETWEEN
MERIT MEDICAL SYSTEMS, INC.
AND
ENDOGASTRIC SOLUTIONS, INC.
Dated as of July 1, 2024
Article 9
MISCELLANEOUS PROVISIONS
EXHIBITS
Exhibit ACertain Definitions
Exhibit BProducts
Exhibit CGeneral Assignment and Bill of Sale
Exhibit DPatent Assignment
Exhibit ETrademark Assignment
Exhibit FTransition Services Agreement
Exhibit GContract Manufacturing Agreement
Exhibit HTransition Distribution Agreement
iii
THIS ASSET PURCHASE AGREEMENT (this “Agreement”) is dated as of July 1, 2024, by and between MERIT MEDICAL SYSTEMS, INC., a Utah corporation (“Purchaser”), and ENDOGASTRIC SOLUTIONS, INC., a Delaware corporation (“Seller”). The capitalized terms used in this Agreement are defined in Exhibit A hereto, unless otherwise defined herein.
RECITALS
WHEREAS, Seller is engaged in the business of developing, manufacturing and commercializing products associated with the transoral incisionless fundoplication procedure (the “Business”), as identified on Exhibit B hereto (together, the “Products”); and
WHEREAS, Seller desires to sell to Purchaser, and Purchaser desires to purchase from Seller, substantially all of Seller’s assets, including, but not limited to, all assets related to the Products, on the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the foregoing recitals and the mutual representations, warranties, covenants and promises contained herein, the adequacy and legal sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
37
37
37
37
37
37
37
Except as set forth in the disclosure schedule delivered by Seller to Purchaser on the date hereof (the “Disclosure Schedule”), Seller hereby represents and warrants to Purchaser as follows as of the date hereof and as of the Closing (except for those representations and warranties made as of a particular date, in which case Seller represents to Purchaser as follows as of such date):
37
37
37
37
Section 168 of the Code, (iii) secures any debt the interest of which is tax-exempt under Section 103(a) of the Code, or (iv) is subject to a 467 rental agreement as defined in Section 467 of the Code.
37
37
37
37
liability on the part of Seller. All such Insurance Policies (a) are valid and binding in accordance with their terms; (b) are provided by carriers who are financially solvent; and (c) have not been subject to any lapse in coverage. There are no claims pending under any such Insurance Policies as to which coverage has been questioned, denied or disputed or in respect of which there is an outstanding reservation of rights. Seller is not in default under, or has otherwise failed to comply with, in any material respect, any provision contained in any such Insurance Policy. The Insurance Policies are of the type and in the amounts customarily carried by Persons conducting a business similar to Seller and are sufficient for compliance with all applicable Laws and Contracts to which Seller is a party or by which it is bound.
37
37
37
37
37
37
37
Purchaser hereby represents and warrants to Seller as follows:
37
37
transfer all Governmental Approvals (to the extent transferable) to Purchaser, and (iii) cooperate with reasonable requests from Purchaser to ensure an orderly transfer of customer relationships involving the Products to Purchaser. For a period of nine months following the Closing, Seller shall promptly deliver to Purchaser (w) any mail, packages, orders, inquiries and other communications addressed to Seller and relating to the Products and (x) any property that Seller receives and that properly belongs to Purchaser or any of its Affiliates. For a period of nine months following the Closing, Purchaser shall promptly deliver to Seller (y) any mail, packages, orders, inquiries and other communications addressed to a Seller or any of its Affiliates and relating to a business of Seller or its Affiliates other than the Products and (z) any property that Purchaser receives and that properly belongs to Seller or any of its Affiliates. The provisions of this Section 6.1 are not intended to, and shall not be deemed to, constitute an authorization by a party to permit another party to accept service of process on its behalf, and no party is or shall be deemed to be the agent of another party for service of process purposes. Promptly upon the Closing, Seller shall update its FDA registration and medical device listing to de-list the Seller as the manufacturer or distributor of any of the Products, and shall cooperate with Purchaser to facilitate Purchaser updating its FDA registration and listing to list Purchaser as the manufacturer or distributor of each of the Products.
37
contemplated hereby. The foregoing will not require any party to permit any inspection, or to disclose any information, that in its reasonable judgment, upon the advice of outside counsel, is commercially sensitive or reasonably likely to result in the waiver of any attorney-client privilege. If within nine months following the Closing, Seller becomes aware that it or any of its Affiliates has in its or their possession any business records, financial books and records, sales order files, purchase order files, engineering order files, warranty and repair files, supplier lists, customer lists, dealer, representative and distributor lists, studies, surveys, analyses, strategies, plans, forms, designs, diagrams, drawings, specifications, technical data, information relating to any Governmental Approvals, or production and quality control records and formulations, in each case that are Purchased Assets (collectively “Business Records”), Seller shall promptly forward such Business Records to Purchaser. If, within nine months following the Closing, Purchaser contacts Seller to inquire as to whether any specific Business Records are in the possession of Seller or any of its Affiliates, Seller will use its good faith efforts to determine whether such Business Records are in its possession or the possession of any of its Affiliates and, to the extent Seller locates any such Business Records, Seller will promptly forward such Business Records to Purchaser.
37
37
compliance (“Recalls”) of Products (whether Products were made before or after Closing), including Recalls required by any Governmental Authority and voluntary Recalls of Products. To the extent that one or more units of Product made by Seller or any of its Affiliates prior to the Closing Date are subject to a Recall, any Damages or other Liabilities arising with respect to or related to any Recall with respect to such units of Product made by Seller or its Affiliates prior to the Closing Date shall be Excluded Liabilities. Without limitation of, and subject to, Purchaser’s rights under the Contract Manufacturing Agreement, any Damages or other Liabilities arising with respect to or related to any Recall of any units of Product made on or after the Closing Date (including Products purchased under the Contract Manufacturing Agreement) shall be Assumed Liabilities. Upon the reasonable request of Purchaser, Seller shall cooperate and assist, and shall cause its Affiliates to cooperate and assist, Purchaser in implementing and effecting a Recall with respect to all such affected Products.
37
37
37
37
37
37
37
37
To Purchaser at:
Merit Medical Systems, Inc.
0000 Xxxx Xxxxx Xxxxxxx
Xxxxx Xxxxxx, XX 00000
Email: Xxxxx.Xxxxx@xxxxx.xxx
Attention: Xxxxx Xxxxx, Chief Legal Officer
With copies to: (which shall not constitute notice to Purchaser):
Xxxx Brown Gee & Xxxxxxxx
000 Xxxxx 000 Xxxx, Xxxxx 000
Salt Lake City, Utah 84111
Email: xxxxxxxx@xxxxxxxxx.xxx
Attention: Xxxxxxx X. Xxxxxxx
To Seller at:
EndoGastric Solutions, Inc.
00000 Xxxxxxxxx 00xx Xxxxxx
Suite 100
Redmond, WA 98052
Email: xxxxxxxx@xxxxxxxxxxxxxxxxxxxx.xxx
Attention: Xxxxx Xxxxxxx
With copies to: (which shall not constitute notice to Seller):
Xxxxxx LLP
0000 Xxxxxxx Xxxxxx, Xxxxx 0000
Seattle, WA 98101
Email: xxxxxxxxx@xxxxxx.xxx
Attention: Xxxxx Xxxxxxxx
37
[Signatures Follow On a Separate Page]
37
IN WITNESS WHEREOF, the Parties hereto have executed this Asset Purchase Agreement on as of the date first above written.
MERIT MEDICAL SYSTEMS, INC.
By: /s/ Xxxx X. Xxxxxxxxxxxx_______________
Name: Xxxx X. Xxxxxxxxxxxx
Title: Chairman and Chief Executive Officer
By: /s/ Xxxxx Xxxxxxx_____________________
Name: Xxxxx Xxxxxxx
Title: President and Chief Executive Officer
Solely for purposes of Section 6.5:
/s/ Xxxxx Hammers___________________
Xxxxx Xxxxxxx, an individual
/s/ Xxxxx Xxxxxxxx___________________
Xxxxx Xxxxxxxx, an individual
/s/ Xxxxxx Xxxx____________________
Xxxxxx Xxxx, an individual
[Signature Page to Asset Purchase Agreement]
EXHIBIT A
CERTAIN DEFINITIONS
“Accounting Mediator” shall mean the Salt Lake City office of Xxxxx Xxxxxxxx LLP.
“Accounting Principles” shall mean GAAP applied using the same accounting methods, practices, principles, policies and procedures, with consistent classifications, conventions, categorizations, definitions, elections, assumptions, inclusions, exclusions, judgments and valuation and estimation methodologies that were used in the preparation of the Financial Statements for the most recent fiscal year end.
“Accounts Receivable” shall mean all accounts or notes receivable held by Seller, and any security, claim, remedy or other right related to any of the foregoing.
“Actual Closing Working Capital” shall have the meaning specified in Section 2.2(a).
“Adjusted Purchase Price” shall have the meaning specified in Section 2.2(f).
“Affiliate” of any Person shall mean any Person directly or indirectly controlling, controlled by, or under common control with, such Person; provided, however, that, for the purposes of this definition, “control” (including, with correlative meanings, the terms “controlled by” and “under common control with”), as used with respect to any Person, shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities, by Contract, or otherwise.
“Agreement” shall have the meaning specified in the Preamble.
“Anti-Corruption Laws” shall mean all applicable federal, state and foreign Laws relating to the prevention or prohibition of corruption, bribery, kickbacks, conflicts of interest and off-label, false or misleading promotion, advertising or marketing of medical devices, including the United States Foreign Corrupt Practices Act of 1977, the UK Bribery Act of 2010, the United States Anti-Kickback Statute, the United States Xxxxx Law, the United States Physician Payments Sunshine Act, and implementing regulations of these acts, statutes and similar laws.
“Assigned Contracts” shall have the meaning specified in Section 1.1(c).
“Assignment Consent” shall have the meaning specified in Section 1.5(a).
“Assumed Liabilities” shall mean only the (i) Liabilities of Seller or its Affiliates, as applicable, under the Assigned Contracts arising after the Closing; (ii) Liabilities related to Product warranty claims with respect to Purchased Inventory or Products arising after the Closing (regardless of whether the applicable warranty is express or implied); (iii) obligations of Purchaser under this Agreement or any other Transaction Agreement; (iv) Liabilities for any returns with respect to Products; (v) Liabilities for Taxes related to the Purchased Assets or the Assumed Liabilities that are attributable to a Post-Closing Tax Period; (vi) Purchaser’s share of Transfer Taxes pursuant to Section 7.2, and Taxes allocated to Purchaser pursuant to Section 7.3; (vii) Damages and other Liabilities arising with respect to or related to any Recall of any units of Product manufactured on or after the Closing, without limitation of and subject to Purchaser’s rights under the Contract Manufacturing Agreement; (viii) the Liabilities set forth on Schedule 1.3; and (viii) all other Liabilities arising from or relating to the Purchased Assets or the Products after the Closing; provided
B-1
that Assumed Liabilities shall not include any Liabilities of Seller for Taxes (other than Transfer Taxes and Property Taxes, the allocation of which is addressed by Section 7.2 and 7.3, respectively).
“Benefit Plan” shall mean any “employee benefit plan” (as defined in section 3(3) of ERISA, regardless of whether subject to ERISA or tax qualified), and each other material agreement, plan, program, fund, policy, contract or arrangement (whether written or unwritten) providing employment, consulting, compensation, benefits, pension, retirement, profit sharing, stock bonus, stock option, stock ownership, stock appreciation right, stock purchase, phantom or stock equivalent or other equity or equity-based compensation, performance, bonus, retention, incentive, change in control, transition, “stay,” tax gross-up, deferred compensation, paid time off, vacation, life insurance, medical, vision, dental, disability, Code Section 125 cafeteria, death benefit, sick pay, thrift, perquisite, educational, employee assistance, savings, employee loan, disability, severance, termination indemnity, seniority pay, holiday pay, fringe benefit or similar employee benefits maintained, sponsored or contributed to or required to be maintained or contributed to by Seller or any ERISA Affiliate of Seller covering any employee, former employee, or other service provider or former service provider of Seller or any ERISA Affiliate of Seller, or the beneficiaries and dependents of any employee or former employee or other service provider or former service provider of Seller any ERISA Affiliate of Seller.
“Books and Records” shall have the meaning specified in Section 1.1(f).
“Business Day” shall mean any day other than (i) a Saturday or a Sunday or (ii) a day on which banking institutions are generally closed in Salt Lake City, Utah.
“Business Records” shall have the meaning specified in Section 6.3.
“CARES Act” shall have the meaning specified in Section 4.28.
“CARES Act Matters” shall have the meaning specified in Section 4.28.
“Cash” shall mean, calculated on a consolidated basis, as of the Reference Time, the amount of all cash, xxxxx cash, cash equivalents, marketable securities, marketing deposits, certificates of deposit, security deposits, deposits with banks and financial institutions, liquid instruments, and including any (i) cash deposited with third parties to secure surety bonds, performance bonds, letters of credit and property leases or other utility deposits, (ii) short-term investments, (iii) cash in transit (including any credit card receivables and ACH deposits), and (iv) any of the items in subsections (i) through (iii) held by any Subsidiaries of the Company. Cash shall be increased by any deposited checks, wires or drafts, checks on hand and available for deposits, or other payments received, but which have not yet cleared as of the Reference Time but which do clear prior to preparation of the Closing Working Capital Statement, and shall be reduced by any overdrafts, uncleared outbound checks, wires or drafts. Cash (and all components thereof) shall be calculated in accordance with the Accounting Principles.
“Closing” shall have the meaning specified in Section 3.1.
“Closing Consideration” shall have the meaning specified in Section 2.1.
“Closing Date” shall have the meaning specified in Section 3.1.
“Closing Statement” shall mean a certificate executed by the chief executive officer of Seller certifying on behalf of Seller, an itemized list of outstanding Discharged Indebtedness as of the Reference Time, the Person to whom such outstanding Discharged Indebtedness is owed, and payment instructions for each such creditor’s account.
B-2
“Closing Working Capital Statement” shall have the meaning specified in Section 2.2(a).
“COBRA” shall mean the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended, and the rules and regulations promulgated thereunder.
“Code” shall mean the United States Internal Revenue Code of 1986, as amended.
“Collar Threshold” shall mean an amount equal to (a) Target Working Capital, multiplied by (b) 5%.
“Collected Information” shall have the meaning specified in Section 4.20(b).
“Confidential Information” shall mean all Trade Secrets and other confidential and/or proprietary information of a Person, including information derived from reports, investigations, research, work in progress, codes, marketing and sales programs, financial projections, cost summaries, pricing formulae, contract analyses, financial information, projections, confidential filings with any state or federal agency, and all other confidential concepts, methods of doing business, ideas, materials or information prepared or performed for, by or on behalf of such Person by its employees, officers, directors, agents, representatives, or consultants.
“Confidentiality Agreement” shall mean that certain confidentiality agreement between Purchaser and Seller, dated March 20, 2024.
“Consent” shall mean any approval, consent, ratification, permission, waiver or authorization (including any Governmental Approval).
“Contract” shall mean any agreement, contract, obligation, promise, understanding, arrangement, commitment, lease, license or undertaking of any nature, whether in written, oral, electronic or other form.
“Contract Manufacturing Agreement” shall have the meaning specified in Section 3.2(e).
“Copyrights” shall mean all rights in works of authorship, including all copyrights, mask works, and all registrations and applications for the foregoing and all statutory and common law rights related thereto, in any jurisdiction, including any prosecution and litigation files, extension, modification, or renewal of any such registration or application.
B-3
“Damages” shall mean and include any Liability, loss, damage, injury, settlement, judgment, award, fine, penalty, Tax, Proceeding, cost, fee or expense of any nature, including the cost of enforcing any right to indemnification hereunder (including reasonable fees and expenses of counsel, consultants, experts and other professional fees), irrespective of whether arising directly or indirectly from third-party claims and the cost of pursuing insurance providers.
“Data Room” shall mean the electronic data room hosted by Datasite LLC for “Project Escalus” (available through the Closing Date at xxxxx://xxxxx.xxxxxx.xxxxxxxx.xxx/).
“Discharged Indebtedness” shall mean indebtedness for borrowed money pursuant to that certain Term Loan Agreement among the Company, the Administrative Agent (as defined therein) and the Lenders (as defined therein), dated November 25, 2015 (as amended to date).
“Disclosure Schedule” shall have the meaning specified in Article 4.
“Downward Adjustment Amount” shall have the meaning specified in Section 2.2(f)(B).
“Encumbrance” shall mean any lien, pledge, hypothecation, charge, mortgage, security interest, deed of trust, covenant, option, right of first refusal or other encumbrance of any kind.
“Entity” shall mean any corporation (including any non-profit corporation), general partnership, limited partnership, limited liability partnership, joint venture, estate, trust or company (including any limited liability company or joint stock company) or other similar entity.
“Environmental Law” shall mean any Law relating to the environment, natural resources, pollutants, contaminants, wastes, chemicals or public health and safety, including any Law pertaining to (a) treatment, storage, disposal, generation and transportation of toxic or hazardous substances or solid or hazardous waste, (b) air, water and noise pollution, (c) groundwater or soil contamination, (d) the release or threatened release into the environment of toxic or hazardous substances or solid or hazardous waste, including emissions, discharges, injections, spills, escapes or dumping of pollutants, contaminants or chemicals, (e) manufacture, processing, use, distribution, treatment, storage, disposal, transportation or handling of pollutants, contaminants, chemicals or industrial, toxic or hazardous substances or oil or petroleum products or solid or hazardous waste, (f) underground and other storage tanks or vessels, abandoned, disposed or discarded barrels, containers and other closed receptacles, (g) public health and safety or (h) the protection of wildlife, marine sanctuaries and wetlands, including all endangered and threatened species.
“ERISA” shall mean the Employee Retirement Income Security Act of 1974.
“ERISA Affiliate” shall mean any other Person that, together with Seller, would be treated as a single employer under section 414 of the Code.
“Excluded Assets” shall have the meaning specified in Section 1.2.
“Excluded Liability” shall have the meaning specified in Section 1.4.
B-4
“Export-Import Laws” shall mean all applicable United States and foreign Laws relating to export, reexport, transfer, and import controls, including the Export Administration Regulations and the EU Dual Use Regulation.
“FDA” shall mean the United States Food and Drug Administration or any successor agency.
“Financial Statements” shall have the meaning specified in Section 4.4(a).
“GAAP” shall mean United States generally accepted accounting principles consistently applied.
“General Assignment and Bill of Sale” shall have the meaning specified in Section 3.2(a).
“Governmental Approval” shall mean any: (a) permit, license, certificate, concession, approval, consent, ratification, permission, clearance, confirmation, exemption, waiver, franchise, certification, designation, rating, registration, notice, filing, variance, qualification, accreditation or authorization issued, granted, given or otherwise made available by or under the authority of any Governmental Authority or pursuant to any Law; or (b) right under any Contract with any Governmental Authority.
“Governmental Authority” shall mean any: (a) nation, principality, state, commonwealth, province, territory, county, municipality, 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 division, subdivision, department, agency, bureau, branch, office, commission, council, board, instrumentality, officer, official, representative, organization, unit, body or Entity and any court or other tribunal); (d) multinational organization or body; or (e) United States or non-United States, individual, Entity or body exercising, or entitled to exercise, any executive, legislative, judicial, administrative, arbitral, regulatory, police, military or taxing authority or power.
“Indemnitee” shall have the meaning specified in Section 8.4(a).
“Indemnitor” shall have the meaning specified in Section 8.4(a).
“Intellectual Property Rights” shall mean any or all rights in and to intellectual property anywhere in and throughout the world, including (i) Patent Rights, Trade Secrets, Copyrights, and Trademarks, (ii) any rights similar, corresponding or equivalent to any of the foregoing anywhere in the world, (iii) any rights in computer software, data, and databases, (iv) all other proprietary rights, and (v) any claims or causes of action, including the right to sue, for past, present and future infringement, misappropriation, dilution, or any other violation of any of the foregoing.
“Law” shall mean any law, statute, legislation, constitution, principle of common law, resolution, ordinance, code, edict, decree, proclamation, treaty, convention, rule, regulation, permit, ruling, directive, pronouncement, requirement (licensing or otherwise), specification, determination, decision, opinion Order, regulatory guidance or interpretation issued, enacted, adopted, passed, approved, promulgated, made,
B-5
implemented or otherwise put into effect by or under the authority of any Governmental Authority including any (a) technical or scientific standard to which adherence is required by any Governmental Authority and (b) any rules or policies of non-governmental accreditation or oversight bodies applicable to medical devices and related accessories, including the Products.
“Leased Real Property” shall mean the real property leased or subleased by Seller, together with all buildings, structures and facilities located thereon that constitutes a Purchased Asset.
“Liabilities” shall mean any and all liabilities and obligations, whether accrued, fixed or contingent, mature or inchoate, known or unknown, reflected on a balance sheet or otherwise, including those arising under any Proceeding or Law, and those arising under any Contract.
“Licenses” shall have the meaning specified in Section 4.8(c).
“Material Adverse Effect” shall mean, any event, change or effect that, when taken individually or together with all other adverse events, changes and effects, (a) is or could reasonably be expected to be materially adverse to the Purchased Assets, Assumed Liabilities, Products or the financial or other condition, assets, business, operations or prospects of the Business, (b) could or could reasonably be expected to prevent or materially delay or impair consummation of the Transactions or (c) could or could reasonably be expected to have a materially adverse effect on Purchaser’s ability to operate the Business immediately after Closing in substantially the same manner as operated by Seller during the twelve (12) month period before Closing; provided, however, that any events, changes or effects will not be deemed to constitute a Material Adverse Effect to the extent resulting from (i) general changes or conditions in general economic, political or market conditions or in the industries (or therapeutic areas) in which the Business operates, except to the extent that such changes or conditions in the industries (or therapeutic areas) in which the Business operates have a disproportionate effect on the Business compared with other companies or businesses operating in such industries (or therapeutic areas); (ii) any failure by Seller, the Business, or the Products to meet internal projections or forecasts for any period (provided that the underlying causes of such failure may be taken into account in determining whether there has been a Material Adverse Effect); (iii) acts of war or terrorism (or the escalation of the foregoing); and (iv) changes in any Laws applicable to the Business or applicable accounting regulations or principles, except to the extent that such changes in the industries (or therapeutic areas) in which the Business operates have a disproportionate effect on the Business compared with other companies or businesses operating in such industries (or therapeutic areas).
“Material Contracts” shall have the meaning specified in Section 4.9(a).
“Most Recent Balance Sheet” shall have the meaning specified in Section 4.4(a)
“Non-Assignable Asset” shall have the meaning specified in Section 1.5(a).
“Offered Employees” shall have the meaning specified in Section 6.11(a).
“Open Source” shall have the meaning specified in Section 4.8(j).
“Order” shall mean any: (a) temporary, preliminary or permanent order, judgment, injunction, edict, decree, ruling, pronouncement, determination, decision, opinion, verdict, sentence, stipulation, subpoena, writ or award that is or has been issued, made, entered, rendered or otherwise put into effect by or under the authority of any court, administrative agency or other Governmental Authority or any arbitrator or arbitration panel; or (b) Contract with any Governmental Authority that is or has been entered into in connection with any Proceeding.
B-6
“Patent Assignment” shall have the meaning specified in Section 3.2(c).
“Patent Rights” shall mean all patents, utility models, and industrial designs, and applications therefor, and all reissues, divisions, re-examinations, revisions, renewals, extensions, adjustments, reissues, provisionals, continuations, continuations-in-part thereof, and counterparts, invention disclosures, and all rights of priority related to any of the foregoing in any jurisdiction, including any prosecution and litigation files for any of the foregoing.
“Permitted Encumbrance” shall mean (a) statutory Encumbrances for Taxes or other governmental charges not yet due and payable or the amount or validity of which is being contested in good faith by appropriate proceedings; (b) mechanics’, materialmen’s, architects’, warehousemen’s, landlords’ and other like statutory Encumbrances arising or incurred in the ordinary course of business, either securing payments not yet due or that are being contested in good faith by appropriate proceedings and for which appropriate reserves have been set aside; (c) zoning, building codes and other land use laws that do not materially impair the value, merchantability or continued use of the Purchased Assets, and (d) Encumbrances that will be discharged upon payment of the Discharged Indebtedness in full. For the avoidance of doubt, any Encumbrance arising under the Code or ERISA in connection with any Benefit Plan is not a Permitted Encumbrance.
“Person” shall mean any individual, Entity or Governmental Authority.
“Policy Excluded Loss” shall mean Damages that arise or result from or are based on (a) the breach of a representation or warranty that is excluded from coverage under the R&W Insurance Policy, or (b) with respect to which the R&W Insurance Company otherwise denies coverage under the R&W Insurance Policy.
“Post-Closing Tax Period” shall mean any Tax period beginning after the close of business on the Closing Date or, in the case of any Tax period that includes, but does not begin, after the close of business on the Closing Date, the portion of such period beginning after the close of business on the Closing Date.
“PPP Loan” shall mean that certain loan received by the Company on April 30, 2020 from Bank of America, N.A. under the Paycheck Protection Program established by the CARES Act in the original principal amount of $2,095,497 and bearing interest of 1% per annum.
“Pre-Closing Tax Period” shall mean any Tax period ending on or before the close of business on the Closing Date or, in the case of any Tax period that includes, but does not end on, the Closing Date, the portion of such period ending on the Closing Date.
“Proceeding” shall mean any action, claim, charge, complaint, demand, suit, litigation, arbitration, proceeding (including any civil, criminal, administrative, investigative or appellate proceeding), prosecution, contest, hearing, inquiry, inquest, audit, examination or investigation that is, has been or may in the future be commenced, brought, conducted or heard at law or in equity or before any Governmental Authority.
“Products” shall have the meaning specified in the Recitals.
“Purchase Price” shall have the meaning specified in Section 2.1.
“Purchase Price Allocation” shall have the meaning specified in Section 7.1.
“Purchased Assets” shall have the meaning specified in Section 1.1.
B-7
“Purchased Intellectual Property” shall mean (a) the Product Intellectual Property, (b) Tangible Embodiments and (c) to the extent owned by Seller and used in connection with any Product: (i) any Patent Right anywhere in any jurisdiction that is derived from or claiming priority to any Patent Right on Schedule 4.8(a) but not listed on Schedule 4.8(a), and (ii) all other Intellectual Property Rights, including all rights in any labels, product inserts and training manuals used by Seller in connection with or related to the Business, the Products, or any Purchased Assets.
“Purchased Inventory” shall have the meaning specified in Section 1.1(a).
“Purchaser” shall have the meaning specified in the Preamble.
“Purchaser Assignment and Assumption Agreements” shall have the meaning specified in Section 3.2(b).
“Purchaser Damages” shall have the meaning specified in Section 8.1.
“Purchaser Indemnified Persons” shall have the meaning specified in Section 8.1.
“Purchaser’s Fundamental Representations” shall mean the representations and warranties set forth in Article 5.
“Recalls” shall have the meaning specified in Section 6.6.
“Reference Time” shall mean as of immediately prior to the Closing.
“Registered Intellectual Property Rights” shall mean, in any jurisdiction, all: (i) Patent Rights; (ii) registered Trademarks and pending applications to register Trademarks; (iii) Copyright registrations, pending applications to register Copyrights, and Copyright renewals; (iv) domain name registrations; (v) branded accounts on any social medial networks; and (vi) any other Intellectual Property Rights that are the subject of a pending application, certificate, filing, registration or other document issued by, filed with, or recorded by, any Government Authority or other organization at any time.
“Regulatory Authority” shall mean any federal, national, state, foreign or multinational Governmental Authority (including the FDA) that has jurisdiction or oversight over (a) the research, development, approval, clearance, marketing, manufacture, labeling, sale, import, export and distribution of medical devices and technology, (b) federal healthcare programs under which such medical devices are purchased or reimbursed, or (c) the protection of personal healthcare information.
“Representatives” shall mean, as to any Person, its officers, directors, employees, counsel, accountants, financial advisers, consultants, financing sources and agents.
“Restricted Business” shall mean the business of developing and/or marketing an anti-reflux procedure or product for prevention, control, or treatment of gastroesophageal reflux disease.
“Restricted Parties” shall mean each of Xxxxx Xxxxxxx, Xxxxx Xxxxxxxx, and Xxxxxx Xxxx.
“Restricted Period” shall mean, (i) with respect to Xxxxx Xxxxxxx and Xxxxx Xxxxxxxx, a period of two (2) years commencing on the Closing Date, and (ii) with respect to Xxxxxx Xxxx, a period of one (1) year commencing on the Closing Date.
“Review Period” shall have the meaning specified in Section 2.2(b).
B-8
“R&W Insurance Company” shall mean the provider of R&W Insurance Policy selected by Purchaser, prior to Closing on the terms and subject to the conditions set forth herein.
“R&W Insurance Policy” shall mean the Purchaser-side representation and warranty insurance policy obtained by Purchaser; provided, however that each of Purchaser and Seller shall be responsible for fifty percent (50%) of the R&W Insurance Policy Premium.
“R&W Insurance Policy Premium” shall mean the premium and related fees and expenses payable to the underwriter and the broker with respect to the R&W Insurance Policy.
“R&W Policy Retention Amount” shall mean the aggregate amount of retention set forth in the R&W Insurance Policy.
“Sanctioned Country” shall mean any country or region that is the target of comprehensive United States economic sanctions, including currently Cuba, Iran, Sudan, Syria, North Korea, and the Crimea region of Ukraine.
“Sanctioned Person” shall mean any Person that is the subject or target of sanctions or restrictions under Sanctions Laws or Export-Import Laws, including: (a) any Person listed on any applicable United States or foreign sanctions- or export-related restricted party list, including OFAC’s Specially Designated Nationals and Blocked Persons List and the EU Consolidated List; (b) any entity that is, in the aggregate, fifty percent (50%) or greater owned, directly or indirectly, or otherwise Controlled by a Person or Persons described in clause (a); or (c) any national of a Sanctioned Country.
“Sanctions Laws” shall mean all United States and foreign Laws relating to economic sanctions, including those administered or enforced by the United States (including by OFAC or the United States Department of State), the United Nations Security Council, and the European Union.
“Seller” shall have the meaning specified in the Preamble.
“Seller Indemnified Persons” shall have the meaning specified in Section 8.2.
“Seller’s Fundamental Representations” shall mean the representations and warranties in Section 4.1, Section 4.2, Section 4.3, Section 4.8, Section 4.11, Section 4.14 and Section 4.15.
“Seller’s knowledge”, “knowledge of Seller” or any other similar knowledge qualification, shall mean the actual or constructive knowledge of any manager, director, officer or person fulfilling similar roles of Seller, after due inquiry.
“Solvent” when used with respect to any Person, shall mean that, as of any date of determination, (a) the amount of the “fair saleable value” of the assets of such Person will, as of such date, exceed (i) the value of all “liabilities of such Person, including contingent and other liabilities,” as of such date, as such quoted terms are generally determined in accordance with applicable Laws governing determinations of the insolvency of debtors, and (ii) the amount that will be required to pay the probable liabilities of such Person on its existing debts (including contingent liabilities) as such debts become absolute and matured, (b) such Person will not have, as of such date, an unreasonably small amount of capital for the operation of the businesses in which it is engaged or proposed to be engaged following such date and (c) such Person will be able to pay its liabilities, including contingent and other liabilities, as they mature.
“Statement of Objections” shall have the meaning specified in Section 2.2(c).
B-9
“Straddle Period” shall mean any Tax period that begins on or before and ends after the Closing Date.
“Tangible Embodiments” shall mean all tangible embodiments of the material unregistered Copyrights, including all software source code and object code, and all website content in any form or media.
“Target Working Capital” shall mean an amount equal to $2,825,000.
“Tax” (and, with correlative meaning, “Taxes” and “Taxable”) shall mean all forms of taxation imposed by any Tax Authority, including all national, state or local taxation (including income, value added, goods and services, occupation, real and personal property, social security, gross receipts, sales, use, ad valorem, franchise, profits, license, withholding, payroll, employment, employer shared responsibility, excise, severance, occupation, premium or windfall profit taxes, stamp duty, customs and other import or export duties, estimated and other taxes), together with any interest, penalties, and additions to tax related thereto. For clarity, Taxes include any amounts described in the immediately preceding sentence imposed on or assessed against any Person for which Seller or its Affiliates have Liability by Contract, as successor or transferee, or otherwise under applicable Laws.
“Tax Authority” shall mean a Governmental Authority responsible for the imposition, assessment or collection of any Tax (domestic or foreign).
“Tax Claim” shall mean any action, suit, proceeding, investigation, audit or claim with respect to Taxes made or initiated by any Tax Authority.
“Tax Contest” shall have the meaning specified in Section 9.4.
“Tax Return” shall mean any report, return, statement, declaration, notice, certificate or other document filed or required to be filed with any Tax Authority in connection with the determination, assessment, collection or payment of any Tax.
“Territory” shall mean anywhere in the world.
“Third-Party Intellectual Property” shall have the meaning specified in Section 4.8(c).
“Trade Control Laws” shall have the meaning specified in Section 4.16.
“Trade Secrets” shall mean all trade secrets under applicable law and other rights in know-how and confidential or proprietary information, clinical study data, formulae, processes, manufacturing information, procedures, inventions, or marketing information, and all other non-public information with regard to the Products, and all claims and rights related thereto.
“Trademark Assignment” shall have the meaning specified in Section 3.2(c).
“Trademarks” shall mean any and all trademarks, service marks, trade dress, logos, slogans, trade names, and other source identifiers, all applications and registrations therefor, all common law rights therein and thereto, and all goodwill associated with any of the foregoing in any jurisdiction, including any prosecution and litigation files, extension, modification, or renewal of any such registration or application.
“Transaction Agreements” shall mean this Agreement and the General Assignment and Bill of Sale, the Purchaser Assignment and Assumption Agreements, the Parent Assignment, the Trademark
B-10
Assignment, the Transition Services Agreement, the Contract Manufacturing Agreement, the Transition Distribution Agreement and any other agreements or instruments executed pursuant hereto.
“Transaction Confidentiality Agreement” shall mean any right or interest of Seller or any Affiliate of Seller under any confidentiality agreement entered into by Seller or any Affiliate of Seller, solely to the extent relating to information of a proprietary or confidential nature concerning the Products.
“Transaction(s)” shall mean, collectively, the transactions contemplated by this Agreement.
“Transfer Taxes” shall mean all federal, state, local or foreign sales, use, transfer, real property transfer, mortgage recording, stamp duty, value-added or similar Taxes that may be imposed in connection with the transfer of Purchased Assets.
“Transferred Employees” shall have the meaning specified in Section 6.11(a).
“Transition Services Agreement” shall have the meaning specified in Section 3.2(d).
“Treasury Regulation” shall mean the regulations promulgated under the Code by the United States Treasury and Internal Revenue Service.
B-11