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EXHIBIT 10.13
ASSET SALE AGREEMENT
THIS ASSET SALE AGREEMENT, dated as of ________________, by and among
Bausch & Lomb Incorporated, a New York corporation (referred to herein as
"B&L"), Steri-Oss Inc., a California corporation (referred to herein as
"Seller"), and S-O Acquisition Corp., a Delaware corporation (referred to
herein as "Buyer").
WITNESSETH:
WHEREAS, Seller is engaged in the design, manufacture, marketing and
distribution of dental implants and related products and services for use by
dental professionals worldwide (the "Business"); and
WHEREAS, Buyer desires to buy substantially all of the assets, obtain
certain rights and assume certain specified liabilities of Seller related to
the Business, and Seller desires to sell and provide such assets and rights to
Buyer upon such assumption, all on the terms and conditions set forth herein.
NOW, THEREFORE, the parties agree as follows:
ARTICLE 1
PURCHASE AND SALE OF ASSETS
1.1 Transfer of Purchased Assets. Upon the terms and subject to
the conditions of this Agreement, and except as provided in Section 1.2 hereof,
on the Closing Date (defined in Section 1.7), in consideration of (i) payment
of the Consideration (defined in Section 1.5), (ii) assumption of the Assumed
Liabilities (defined in Section 1.3), Seller shall sell, assign, convey and
transfer to Buyer, and Buyer shall acquire from Seller, all of Seller's right,
title and interest in, to and under all properties, assets and rights of every
kind, type and description, tangible and intangible, real, personal and mixed,
as in existence on the Closing Date, in each case that are used in or are
related to the Business (collectively, the "Purchased Assets"), but excluding
the Excluded Assets as defined in Section 1.2. The Purchased Assets shall
include without limitation the following:
(a) Equipment, Supplies and Fixed Assets. All equipment,
machinery, furniture, fixtures, tools, dies, molds, supplies, parts, vehicles
and other fixed assets and tangible personal property owned by Seller on the
Closing Date and used in or related to the Business including, without
limitation, the property identified on Schedule 1.1(a) hereto (collectively,
the "Equipment, Supplies and Fixed Assets");
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(b) Inventory. All inventory including, without
limitation, raw materials, work in process, finished goods, spare parts and
replacement and component parts owned by Seller on the Closing Date and used in
or related to the Business (collectively, the "Inventory");
(c) Prepaid Expenses, etc. All credits, prepaid
expenses, advance payments, deposits, deferred charges, and other current and
non-current assets owned by Seller on the Closing Date and used in or related
to the Business ("Other Current Assets");
(d) Accounts Receivable, etc. All accounts, notes and
other receivables, and rights to receive payments from any Person, owned by
Seller on the Closing Date that relate to, or arise out of, the Business
("Accounts Receivable");
(e) Intangible Property. All of the intellectual
property owned by or licensed to Seller on the Closing Date and used in or
related to the Business including, without limitation, (i) the patent and
trademark rights described on Schedule 1.1(e) hereto, together with all of
Seller's right, title and interest in and to the name "Steri-Oss", and any and
all derivations thereof; (ii) all trade names, trade name licenses and
applications, copyrights, copyright licenses and applications, service marks,
service names, in each case whether registered or unregistered, and know-how,
trade secrets, formulae, reports, utility models, computer programs, computer
software (including documentation and object and source code listings, but
excluding any software or programs owned or used primarily by B&L), flow
charts, proprietary data, research and development data, processes, technology,
innovations, inventions, manufacturing drawings, engineering drawings, product
designs, product patterns and all other similar types of proprietary
intellectual property (including any registrations or applications for
registration of any of the foregoing and whether or not capable of protection
by patent or by registration) used to carry on the Business; (iii) all
licenses, permits and other governmental authorizations necessary to carry on
the Business (to the extent such licenses, permits and authorizations are
assignable); and (iv) other intangible property rights owned by Seller on the
Closing Date, used in or related to the Business (collectively, the "Intangible
Property");
(f) Contracts. All of Seller's right, title and interest
on the Closing Date in and to all contracts, arrangements and agreements,
including license agreements and personal property leases, and all commitments
and orders for the purchase and sale of goods and services (including
advertising, maintenance and incidental services) (collectively, the "General
Contracts");
(g) Real Property Leases. All of Seller's right, title
and interest on the Closing Date in the real property leases identified on
Schedule 1.1(g) hereto, including without limitation any prepaid rents,
security deposits and options to renew
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or purchase under such leases (the "Leases" and, collectively with the General
Contracts the "Assigned Contracts");
(h) Customer Lists, Books and Records, etc. Subject to
Section 4.17 regarding limited use of B&L trademarks, all accounting, financial
reporting, business, files, marketing, documents, instruments, papers, books
and records of the Seller, including without limitation financial statements,
budgets, projections, ledgers, journals, deeds, titles, policies, manuals,
books, contracts, permits, agency lists, reports, computer files, retrieval
programs, operating data or plans, environmental studies or plans and tax
records relating solely to Seller's business or sales, but excluding tax
records relating to the consolidated tax returns or tax information of B&L or
any of its affiliates (excluding Seller), product catalogs, product literature,
manuals, advertising materials, promotional materials, customer lists, supplier
lists, personnel records as to those employees of Seller who are employed after
the Closing Date by Buyer, sales records and other books and records (except
Seller's corporate records) owned by Seller on the Closing Date and used in or
related to the Business, except to the extent Seller or B&L are, in their
discretion, required by law to retain the same (collectively, the "Books and
Records"); and
(i) Goodwill. All of the goodwill and going concern
value owned by Seller on the Closing Date which is exclusively related to the
Business, except to the extent goodwill and going concern value arises out of
Excluded Assets (defined in Section 1.2). For purposes of this paragraph,
"goodwill" does not include goodwill on Seller's or B&L's balance sheets for
accounting purposes.
1.2 Excluded Assets. The Purchased Assets transferred pursuant to
this Agreement shall not include the following (collectively, the "Excluded
Assets"):
(a) Cash and Marketable Securities. Any cash, cash
equivalents and marketable securities owned by Seller on the Closing Date;
(b) Intercompany Receivables. Any amounts owed to Seller
by B&L or any direct or indirect subsidiary of B&L on the Closing Date;
(c) Pension Plans and Benefit Plans. All Pension Plans
and Employee Benefit Plans (each as defined in Section 2.10) and related trusts
in which the employees of Seller participate and any assets thereof and any
insurance or other contracts related to such plans;
(d) Excluded Contract Rights. The rights of Seller under
any of the contracts, agreements or understandings described on Schedule 1.2(d)
hereto (collectively, the "Excluded Contract Rights"); and
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(e) Other Excluded Assets. The rights of Seller with
respect to all assets other than those identified in Section 1.1 of this
Agreement, including assets owned by or shared with B&L or any of its
affiliates excluding Seller. If Buyer requests, any assets owned by B&L or
shared with B&L or any of its affiliates so excluded shall be made available to
Buyer for use in its operation of the Business for six months after Closing to
provide a transition.
1.3 Assumption of Liabilities. Upon the terms and subject to the
conditions of this Agreement and in further consideration of the purchase and
sale described in Section 1.1, on the Closing Date, Buyer shall assume and
agree to pay and perform the following obligations and liabilities of Seller
existing as of the Closing Date that primarily relate to or arise out of the
Business, of whatever nature, primary or secondary, direct or indirect,
absolute or contingent, known or unknown, but excluding the Retained
Liabilities, and only to the extent specifically set forth below (collectively,
the "Assumed Liabilities"):
(a) the Accounts Payable (defined in Article 9);
(b) the Accrued Liabilities (defined in Article 9);
(c) all liabilities incident to the performance after the
Closing Date of all Assigned Contracts; and
(d) any liability, commitment or obligation of Seller in
respect of (i) products sold, manufactured or designed after the Closing Date,
(ii) warranties for repair, replacement or credit related to products
manufactured, sold and shipped by Seller prior to the Closing Date, and (iii)
customer rights of return of products created in the ordinary course of
business consistent with past practice.
The parties agree that Buyer shall not be the successor to Seller and that
Buyer does not hereby agree to assume or become liable to pay, perform, satisfy
or discharge any of the Retained Liabilities or any other obligation or
liability of Seller whatsoever except the Assumed Liabilities.
1.4 Retained Liabilities. Except to the extent otherwise provided
specifically herein, Buyer shall not be responsible for, nor is it assuming,
and Seller shall retain, pay, perform, and discharge, any and all liabilities
and obligations (i) relating to or arising from the Excluded Assets (including
Pension Plans and Employee Benefit Plans), (ii) relating to or arising from the
employment or termination of employment of any person by Seller before, on or
after the Closing Date, (iii) relating to or arising from the operation of
Seller and the Business on or prior to the Closing Date, (iv) representing
intercompany payables with respect to B&L or its subsidiaries, (v) for Taxes
(defined in Article 9) relating to or arising from conduct of the Business or
the ownership or use of the Purchased Assets on or prior to the Closing Date,
and (vi) any
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other obligation or liability of Seller whatsoever except the Assumed
Liabilities (collectively, the "Retained Liabilities").
1.5 Consideration. In consideration of the performance of B&L and
Seller under this Agreement and the transfer and delivery of the Purchased
Assets to Buyer, at Closing Buyer shall (a) pay to Seller FIFTY-SEVEN MILLION
DOLLARS (U.S. $57,000,000.00), subject to adjustments as may be made pursuant
to Section 1.8 hereof (the "Cash Amount"), (b) deliver to Seller the Preferred
Stock of Buyer with a stated value of $10 million (the "Preferred Stock"),
based upon terms consistent with the restated certificate of incorporation
attached as Exhibit 1.5A hereto (the Cash Amount and Preferred Stock, together
being called the "Consideration"), and (c) deliver to Seller an Instrument of
Assumption in the form of Exhibit 1.5B pursuant to which Buyer assumes the
Assumed Liabilities (the "Instrument of Assumption").
To facilitate Buyer's acquisition of the Purchased Assets, B&L agrees to fully
and unconditionally guarantee Buyer's payment obligations under a credit
facility obtained by Buyer, at or within six months after the Closing, with a
commercial bank reasonably acceptable to B&L, in the principal amount of
$3,000,000. Such credit facility will be used to fund Buyer's capital
expenditures. B&L's obligation shall be pursuant to a guaranty agreement (the
"Guaranty") with a duration of three years from the date of Closing or, if
earlier, until the date of the first occurrence of an event that results in a
mandatory redemption of the Preferred Stock pursuant to Section 4(g)(1) of the
Restated Certificate of Incorporation of the Buyer (in the form attached hereto
as Exhibit 1.5A). The terms of the credit facility shall be such commercially
reasonable terms as Buyer and the bank may negotiate. Amortization shall begin
immediately after maturity of Buyer's senior secured bank debt unless the
providers thereof otherwise agree. The Guaranty shall be in such form as the
financing bank shall reasonably request, it being understood that B&L shall not
be obliged to provide security or give any covenants or agree to other terms
that it would not ordinarily accept if it were itself obtaining unsecured
credit. Buyer shall grant B&L a security interest in the capital equipment and
other capital assets obtained through the credit facility to secure Buyer's
reimbursement.
1.6 Allocation of Consideration. The Consideration shall be
allocated among the Purchased Assets as set forth on Schedule 1.6 hereto. Such
allocation shall be in accordance with Section 1060 of the Code and the
regulations issued thereunder. The parties agree to reflect this allocation on
their forms filed under Section 1060 of the Code and shall file all tax returns
and reports in a manner consistent with such allocation (except to the extent
that the allocation is the subject of a final settlement with the Internal
Revenue Service ("IRS") or a final court decision). Neither Buyer nor Seller
nor any of their respective affiliates shall take any positions for purposes of
Federal, state or local income tax respecting the allocation of the
Consideration which is inconsistent with the allocation so agreed by the
parties (except to the extent that the allocation is the subject of a final
settlement with the IRS or a final court decision).
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1.7 The Closing. (a) The closing of the transactions provided for
in this Agreement (the "Closing") shall take place at B&L's offices at One
Bausch & Lomb Place in Rochester, New York at 10:00 a.m., local time, on or
before October 15, 1996 or at such other time and place and on such other date
as Buyer and Seller may mutually agree. The date on which the Closing actually
occurs is herein referred to as the "Closing Date".
(b) At the Closing, Buyer shall deliver to Seller (i) the
Estimated Cash Amount (defined in Article 9 and adjusted in accordance with
Section 1.8) by wire transfer in immediately available funds to the bank
account of Seller described in Schedule 1.7(b)(i), (ii) the Preferred Stock,
(iii) the Instrument of Assumption duly executed by Buyer, and (iv) such other
instruments as shall be reasonably required of Buyer pursuant to this
Agreement.
(c) At the Closing, Seller shall deliver to Buyer (i) a
Xxxx of Sale and Assignment in the form of Exhibit 1.7C duly executed by Seller
(the "Xxxx of Sale"), (ii) such other appropriate instruments of transfer and
assignment as Buyer shall reasonably request prior to the Closing Date, in
order to vest in Buyer, as of the Closing Date, all Seller's right, title and
interest in, to and under the Purchased Assets free and clear of any Liens
(defined in Article 9), except Permitted Liens (defined in Section 2.7(a)), and
(iii) the Guaranty, if the credit facility referred to in Section 1.5 has been
obtained.
1.8 Adjustments to Cash Amount. (a) The Cash Amount shall be
adjusted as follows:
(i) The Cash Amount shall be adjusted upward, on
a dollar-for-dollar basis, to the extent that (A) the amount of Net Operating
Assets (defined in Article 9) reflected on the Closing Date Balance Sheet (the
"Closing Date Net Operating Assets") is more than (B) Eight Million Two Hundred
Fifty-Four Thousand DOLLARS ($8,254,000.00) (being the amount of Net Operating
Assets reflected on the Balance Sheet and herein called the "Balance Sheet Date
Net Operating Assets"). Notwithstanding the foregoing, if Net Operating Assets
on the Estimated Closing Date Balance Sheet exceed one hundred five percent
(105%) of the projected Net Operating Assets ("Projected NOA") for the
month-end prior to the month in which the Closing occurs, as set forth in
Schedule 1.7 hereto, Buyer shall have the option to terminate this Agreement
upon written notice to Seller and B&L delivered within five (5) days after
Buyer is notified of the Estimated Cash Amount; provided, however, such
termination notice shall be ineffective, and this Agreement shall not
terminate, if after the receipt of such notice B&L elects to accept an
Estimated Cash Amount and Cash Amount with an upward adjustment based upon Net
Operating Assets on the Estimated Closing Date and Closing Date Balance Sheets
(in accordance with the Agreed Procedure) equal to but not greater than 105% of
Projected NOA for the month-end prior to the month in
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which Closing occurs ("Maximum Cash Amount"). If Seller so notifies Buyer, the
Estimated Cash Amount shall be the Maximum Cash Amount and the Cash Amount
shall be the lesser of (x) the Maximum Cash Amount and (y) the Cash Amount
computed pursuant to this Section 1.8(a) but for the provisions of the
preceding two sentences. If the Estimated Closing Date Balance Sheet is not
yet available on the Closing Date, Buyer, Seller and B&L agree to delay the
Closing for a reasonable time until the Estimated Closing Date Balance Sheet is
available and any agreed delay shall delay Buyer's obligations pursuant to
Section 4.16(b) by an equal number of days.
(ii) The Cash Amount shall be adjusted downward,
on a dollar-for-dollar basis, to the extent that the Closing Date Net Operating
Assets are less than the Balance Sheet Net Operating Assets.
(b) (i) Seller shall, at its own cost and expense,
prepare and deliver to Buyer within 60 days after the Closing Date, a balance
sheet for Seller as of the Closing Date (the "Closing Date Balance Sheet")
which shall include, in addition to the other information set forth therein,
the Closing Date Net Operating Assets. The Closing Date Balance Sheet, and the
assets and liabilities reflected thereon, shall be prepared and determined in
accordance and consistently with the Agreed Procedure (defined in Article 9),
and shall be accompanied by an audit opinion thereon of Price Waterhouse, LLP
("PW") to the effect that the Closing Date Balance Sheet, and the assets and
liabilities reflected thereon, were prepared and determined in accordance with
the Agreed Procedure. The Closing Date Balance Sheet shall be accompanied by a
supplementary schedule setting forth the calculation of the adjustment to the
Cash Amount contemplated by Section 1.8(a). Seller and PW shall make available
to Buyer all work papers, books and records used in the preparation and audit
of the Closing Date Balance Sheet, and shall provide copies of the same at
Buyer's cost and expense. Buyer and such accountants or inventory
professionals of its choice shall be entitled to jointly conduct with Seller
and PW, or otherwise participate in or monitor, a physical count of the
Inventories as of the Closing Date (or such other date as Buyer and Seller
shall mutually agree).
(ii) Buyer shall have twenty (20) business days
after its receipt of the Closing Date Balance Sheet and related supplementary
schedules to review them (the "Review Period"). On or prior to the expiration
of the Review Period, Buyer shall notify Seller in writing if it does not agree
with Seller's calculation of any adjustment to the Cash Amount (the
"Disagreement Notice"), which notice shall include a brief description of the
basis of its disagreement, including its calculation of any adjustment to the
Cash Amount. If Seller does not receive the Disagreement Notice on or prior to
the expiration of the Review Period, Buyer shall be deemed to have approved the
Closing Date Balance Sheet and Seller's calculation of any adjustment to the
Cash Amount applicable thereto.
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(iii) If Seller receives the Disagreement Notice,
Seller and Buyer shall, in good faith, attempt to resolve the disagreement
within twenty (20) business days after Buyer's receipt of the Disagreement
Notice. If they cannot resolve the disagreement within such time period, then
(I) Buyer shall promptly pay any net amount owed to Seller that is not in
disagreement (i.e., net of any offsetting liability), and (II) the parties
promptly shall refer such disagreement for resolution to Xxxxxx Xxxxxxxx &
Company ("AA"), or if AA is unable to serve or declines to act, or if at the
time of such referral AA is not independent of each of Buyer and Seller, such
other firm of independent accountants of recognized national standing as
mutually selected by Buyer and Seller (AA or such other firm being referred to
herein as the "Deciding Accountant"). The determination of the Deciding
Accountant as to the calculation and amount of any adjustment to the Cash
Amount shall be rendered within thirty (30) calendar days after such
disagreement is referred to the Deciding Accountant, and shall be binding upon
the parties hereto.
(iv) Each of Buyer and the Seller shall furnish to
the Deciding Accountant, at its own cost and expense, such documents and
information as the Deciding Accountant may request, and each party may also
furnish to the Deciding Accountant such other information and documents as it
deems relevant, in all cases with copies (where it would not be unreasonably
costly or burdensome to provide copies) or notification (with reasonable rights
of access) being given to the other party. The fees and expenses payable to
the Deciding Accountant shall be borne one-half by Seller and one-half by
Buyer.
(v) The Closing Date Balance Sheet as agreed to
by the parties or as determined by the Deciding Accountant, and the Closing
Date Net Operating Assets reflected thereon, shall thereafter be the "Closing
Date Balance Sheet" and the "Closing Date Net Operating Assets", respectively,
for all purposes of this Agreement. The later of the date on which the parties
agree upon the Closing Date Balance Sheet and the calculation of any adjustment
to the Cash Amount or the date on which the Deciding Accountant renders its
decision with respect thereto shall be called the "Final Settlement Date".
(vi) Within five (5) business days after the Final
Settlement Date, (A) if the Cash Amount exceeds the Estimated Cash Amount paid
at Closing, Buyer shall pay to Seller the amount of such excess via wire
transfer to an account of Seller identified in writing by Seller, and (B) if
the Estimated Cash Amount exceeds the Cash Amount paid at Closing, Seller shall
pay to Buyer the amount of such excess via wire transfer to an account of Buyer
identified in writing by Buyer. Amounts paid by either party shall bear
interest at the Interest Rate from the Closing Date until the date of payment.
(vii) Any adjustments to the Cash Amount required
by application of this Section 1.8 shall be allocated among the Net Operating
Assets in the
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same manner as the allocation of Consideration required by Section 1.6 hereto,
unless agreed to otherwise in writing by the parties.
1.9 B&L Guarantee of Obligations of Seller. B&L hereby
unconditionally guarantees the due and punctual performance of any and all
obligations or liabilities of Seller to Buyer in connection with, relating to
or arising under this Agreement or any transaction contemplated in or by this
Agreement. Upon the failure by Seller to duly and punctually perform any such
obligations or liabilities, B&L shall immediately, upon demand, perform or
cause to be performed such obligations and liabilities in accordance with the
terms of this Agreement. B&L understands, agrees and confirms that Buyer may
enforce the obligations of B&L under this Section 1.9 without proceeding
against Seller or any other obligor.
The obligations of B&L under this Section 1.9 shall be unconditional and
absolute and, without limiting the generality of the foregoing, shall not be
released, discharged or otherwise affected by (a) any extension, renewal,
settlement, compromise, waiver or release in respect of any obligation of
Seller by operation of law or otherwise, (b) any modification or amendment of
or supplement to this Agreement or any document in respect thereof, (c) any
invalidity or unenforceability relating to or against Seller for any reason of
any obligation under this Agreement or any document in respect thereof, or any
provision of applicable law or regulation purporting to prohibit the payment by
Seller of any obligation under this Agreement, (d) bankruptcy or insolvency of
Seller, or (e) any other act or omission to act or delay of any kind by Seller,
Buyer or any Person or any other circumstance whatsoever which might, but for
the provisions of this Section 1.9, constitute a legal or equitable discharge
of obligations of B&L hereunder.
ARTICLE 2
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to Buyer as follows:
2.1 Organization; Qualification. Seller is a corporation duly
organized, validly existing and in good standing under the laws of California,
and has all requisite corporate power and authority to own, lease and operate
its properties and to carry on its business as now being conducted. Seller is
duly qualified or licensed to do business as a foreign corporation and in good
standing in each jurisdiction in which the property owned, leased or operated
by it makes such qualification or license necessary, except in each case in
those jurisdictions where the failure to be so duly qualified or licensed and
in good standing would not have a material adverse effect on the Business.
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2.2 Authority Relative to this Agreement. Seller has full power
and authority to execute, deliver and perform this Agreement and to consummate
the transactions contemplated hereby. All actions necessary to be taken by or
on the part of Seller to execute, deliver and perform this Agreement and
consummate the transactions contemplated hereby have been duly and validly
taken. This Agreement has been duly and validly executed and delivered by
Seller and, assuming due execution and delivery by Buyer, constitutes a valid
and binding agreement of Seller enforceable against Seller in accordance with
its terms, except to the extent that enforceability may be limited by
applicable bankruptcy, reorganization, insolvency, moratorium or similar laws
affecting the enforcement of creditors' rights generally as at the time in
effect and by general principles of equity, regardless of whether such
enforceability is considered in a proceeding in equity or at law.
2.3 Consents and Approvals; No Violation. Neither the execution,
delivery and performance of this Agreement by Seller nor the consummation of
the transactions contemplated hereby (i) conflict with or will result in any
breach of any provision of the respective Certificate of Incorporation or
By-laws of Seller; (ii) except as set forth on Schedule 2.3(a) and except for
filings and approvals required under the HSR Act (defined in Section 4.5),
require any consent, approval, authorization or permit of, or filing with or
notification to, any governmental or regulatory authority, except where the
failure to obtain such consent, approval, authorization or permit, or to make
such filing or notification would not have a material adverse effect on the
Purchased Assets, condition (financial or otherwise), results of operations or
prospects of the Business, and except for any requirements which become
applicable to the Business as a result of the specific regulatory status of
Buyer; (iii) except as set forth on Schedule 2.3(b), constitute a breach or
will result in a default under any of the terms, conditions or provisions of
any note, bond, mortgage, indenture, license, contract, agreement or other
instrument or obligation of any kind to which Seller or B&L is a party or by
which either of them may be bound, including, without limitation, the Assigned
Contracts, except for any such breach or default as to which requisite waivers
or consents have been obtained, or which will not result in the termination of,
or cause the acceleration of the maturity of any debt or obligation pursuant
to, any Lease, License Agreement or Material Contract, or result in the
creation or imposition of any Lien upon any of the Purchased Assets, and which
would not otherwise have a material adverse effect on the Purchased Assets,
condition (financial or otherwise), results of operations or prospects of the
Business; or (iv) violate any order, writ, injunction, judgment, decree, law,
statute, rule, regulation or governmental permit or license applicable to
Seller, B&L or the Business, which violation would have or is likely to have a
material adverse effect on the Business, the Purchased Assets, condition
(financial or otherwise), results of operation or prospects of the Business.
2.4 Financial Statements. The unaudited balance sheets of Seller
for the years ended December 1993 (11 fiscal months), 1994 and 1995, and the
related unaudited statements of income for each of the years then ended, the
unaudited balance
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sheet of Seller as of December 30, 1995 ("Balance Sheet") and the related
unaudited statement of income for the twelve (12) month period then ended
(collectively, the "Financial Statements"), copies of which have been furnished
to Buyer, fairly present the financial position of Seller as of the dates
thereof and the results of operations for the periods covered thereby in
accordance with GAAP, except as set forth on Schedule 2.4. The date December
30, 1995 is herein referred to as the "Balance Sheet Date". The unaudited
balance sheets of Seller as of June 30, 1995 and 1996, and the related
unaudited income statements for the respective six month periods then ended,
copies of which have been delivered to Buyer, fairly present, in conformity
with GAAP applied on a basis consistent with the Financial Statements (except
as otherwise expressly stated therein), the financial position of Seller as of
such dates and the results of operations for each such period (subject to
normal year-end adjustments).
2.5 Undisclosed Liabilities. Except as set forth on Schedule 2.5
or reflected on the Balance Sheet, as of the Balance Sheet Date, Seller had no
indebtedness or liability, fixed or unfixed, liquidated or unliquidated,
secured or unsecured, accrued, absolute, contingent or otherwise, other than
liabilities arising in the ordinary course of business which are not material
and are not of a kind required by GAAP to be set forth on or disclosed in a
financial statement of Seller. Since the Balance Sheet Date, Seller has
incurred no such indebtedness or liability, except in the ordinary course of
business and consistent with past practices.
2.6 Absence of Certain Changes or Events. Except as set forth on
Schedule 2.6 or as otherwise provided in this Agreement, since the Balance
Sheet Date, the Business has been operated only in the ordinary course and,
(a) there has not been, occurred or arisen any change,
event (including, without limitation, any damage, destruction or loss, whether
or not covered by insurance), condition or state of facts of any character that
individually or in the aggregate has or is likely to have a material adverse
effect on the Business, the Purchased Assets, the condition (financial and
otherwise), results of operations or prospects of the Business; and
(b) there has not been any transaction or event of the
type which would have been restricted or prohibited by Section 4.1 hereof, had
such transaction or event occurred subsequent to the date hereof.
2.7 Title, etc. (a) Except as to intellectual property, which
subject is covered in Section 2.8, Seller has good and valid title to all of
the Purchased Assets owned or purported to be owned by it, and holds all real
property leased or purported to be leased by it and all intellectual property
licensed or purported to be licensed by it under valid and subsisting leases or
licenses, as the case may be, with such exceptions as are not material and do
not, in the case of intellectual property, involve any of the patent or
trademark rights described or referred to on Schedule 1.1(e), except for
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(i) any Liens reflected on the Balance Sheet; (ii) any Liens incurred or
created since the Balance Sheet Date in the ordinary and usual course of
business and which do not constitute a default under any agreement to which
Seller is a party or by which it is bound, or which result from a violation of
law, or the creation or incurrence of which would not have been restricted or
prohibited by Section 4.1 hereof had such Lien been created or incurred
subsequent to the date hereof; (iii) any Liens for current taxes and
assessments not yet past due; (iv) any inchoate mechanic's and materialmen's
liens and encumbrances for construction in process; (v) any workmen's,
repairmen's, warehousemen's and carriers' liens and similar encumbrances
arising in the ordinary course of business; and (vi) any Liens which are
matters of record, arising in the ordinary course and which do not secure
indebtedness for borrowed money, unsatisfied judgments or other payment
obligations, including but not limited to, easements, quasi-easements, rights
of way, restrictive covenants, land use ordinances and zoning plans
(collectively, "Permitted Liens").
(b) Except as set forth on Schedule 2.7(b), (i) the
Leases, License Agreements and Material Contracts are, in all material
respects, valid, binding and enforceable in accordance with their terms; (ii)
Seller has not received notice of any default thereunder; and (iii) there are
no existing uncured or unwaived defaults by Seller thereunder which are likely
to have a material adverse effect on the Business or which would cause or
permit, or is reasonably likely to result in, any of the Leases, License
Agreements or Material Contracts being terminated or rendered unenforceable or
result in any Lien upon any of the Purchased Assets.
(c) With the exception of cash resources and software not
included in the Purchased Assets, the Purchased Assets (i) comprise all of the
assets required or necessary to the conduct of the Business as currently
conducted in the ordinary course consistent with past practices, and (ii) are
in sufficient operating condition and repair for the conduct of the Business in
the ordinary course and consistent with past practices (except for ordinary
wear and tear, which may include temporary malfunction or disrepair).
2.8 Patents, Trademarks, etc. (a) Except for B&L trademarks
referenced in Section 4.17, Schedule 1.1(e) is a complete and accurate listing
of (i) all patents, all registered and unregistered trademarks and all
registered copyrights, and (ii) to the knowledge of Seller, all service marks,
logos and trade names, together in each case with all applications, reissues,
renewals, continuations and extensions pertaining to any of the foregoing
(collectively, the "intellectual property") that are owned by or licensed to
Seller and which are used in the business of Seller. Except as set forth on
Schedule 2.8(a), during the past two years no notice has been given by Seller
to any Person that such person has violated or infringed any of such
intellectual property. Except as set forth on Schedule 2.8(a), no written
claims or notices have been received by Seller during the past two years
challenging the use by Seller of any of such intellectual property, or
challenging or questioning the validity, enforceability or
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effectiveness of or the title to any of such intellectual property or of any
license or agreement relating thereto and, to Seller's knowledge, Seller is not
in violation of, or in default under, any material term or provision of any
license or agreement relating thereto. To Seller's knowledge, the use by
Seller of such intellectual property in the conduct of the Business as
currently conducted does not infringe the intellectual property of any third
person, and, to Seller's knowledge, such use will not infringe the intellectual
property of any third person when used by Buyer in the conduct of the Business
after the Closing; provided such use is consistent with the current use of such
intellectual property by Seller. Except as set forth in this Section 2.8,
Seller makes no representation as to the validity or enforceability of any
unregistered trademark. Subject to the foregoing, Seller owns or holds
adequate licenses or other rights to use the intellectual property necessary to
conduct the Business.
(b) Schedule 2.8(b) sets forth a complete list of all
license agreements which grant Seller the right to use intellectual property of
third parties in the Business.
(c) Schedule 2.8(c) identifies all licenses by Seller to
third parties of intellectual property identified on Schedule 1.1(e) (the
license agreements and licenses identified on Schedules 2.8(b) and 2.8(c) are
herein called the "License Agreements"). To Seller's knowledge, no third party
is in material violation of, or in material default under, any term or
provision of any license by Seller to any third party or any agreement relating
thereto.
2.9 Insurance. All material property, workers' compensation and
casualty insurance policies which currently insure Seller with respect to the
Purchased Assets or the Business are identified on Schedule 2.9. Buyer
acknowledges that, with the exception of workers' compensation, the policies
and insurance coverage described in this paragraph are part of the corporate
insurance program obtained by B&L, and such coverage will not be available or
transferable to Buyer.
2.10 Employee Benefit Plans: Labor Matters.
(a) Except as set forth on Schedule 2.10(a) ("Pension
Plans"), there are no pension plans (as defined in Section 3(2) of ERISA) which
Seller, or any organization of employees of Seller, maintains or to which
Seller is, directly or indirectly, required to contribute.
(b) Except as set forth on Schedule 2.10(b) ("Employee
Benefit Plans") and except for the Pension Plans, there are no oral or written
employee insurance, health, welfare, bonus, incentive compensation, severance,
change of control, stay agreements, leave of absence, disability, vacation,
service award, employee discount or other employee benefit plans of Seller in
which employees of Seller participate.
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(c) Except as set forth on Schedule 2.10(c) ("Employee
Agreements"), Seller is not obligated by or subject to any collective
bargaining agreement, no employees of Seller are represented by a labor
organization or covered by a collective bargaining agreement, nor, to Seller's
knowledge, have any Seller employees made a pending demand for recognition or
filed a petition seeking a representation proceeding presently pending with the
National Labor Relations Board. To Seller's knowledge, no such petitions have
been so pending at any time within the past three years and there has not been
any general solicitation of representation cards or other organizing activity
by any union seeking to represent Seller employees as their exclusive
bargaining agent at any time within the past three years. To Seller's
knowledge, all employees of Seller are citizens of, or authorized to be
employed in, the United States.
(d) Except as set forth on Schedule 2.10(d), there are no
pending, or, to Seller's knowledge, threatened strikes, slowdowns or other
stoppages with respect to Seller's employees and there are no pending or, to
Seller's knowledge, threatened employment- related claims, complaints or
charges with any federal, state, local or foreign governmental agency or court
with respect to any Seller's employees.
(e) Since December 31, 1995, Seller has not involuntarily
terminated any employee of the Business other than those set forth on Schedule
2.10(e). Schedule 2.10(e) also sets forth the name of each employee of the
Business who was not actively employed on the date hereof, together with the
reasons for their absence.
2.11 Legal Proceedings, Etc. Except as set forth on Schedule 2.11
and Schedule 2.10(d), there is no claim, action, proceeding or investigation
pending or, to the knowledge of Seller, threatened against, affecting or
relating to Seller before any court, arbitrator or governmental body, agency,
official or authority or which is likely to result in an adverse decision which
could have a material adverse effect on the Business, the Purchased Assets, the
condition (financial and otherwise), results of operations or prospects of the
Business or against or involving Seller which questions or challenges the
validity of this Agreement or any action taken or to be taken by Seller
pursuant to this Agreement or in connection with the transactions contemplated
hereby. Except for laws of general application and as set forth on Schedule
2.11, Seller is not subject to any outstanding order, writ, judgment,
injunction or decree of any court or governmental or regulatory authority or
body or subject to any compliance agreement, conciliatory or settlement
agreement relating to the Business or the Purchased Assets or limiting, in any
material respect, its ability to conduct the Business as presently conducted.
2.12 Material Agreements. (a) Except as set forth on Schedule 2.12
and except for (i) agreements made in connection with this Agreement and the
transactions contemplated hereby, (ii) the Leases, and (iii) the License
Agreements, Seller is not as
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of the date hereof a party to, or bound by, any Material Contract (defined
below) of any kind.
For purposes hereof, the term "Material Contract" shall mean any
contract or arrangement that is (i) an employment, severance or golden
parachute agreement or arrangement; (ii) any agreement or arrangement which
has, as a principal purpose, the provision of indemnification to any Person;
(iii) any agreement or arrangement involving the commitment to pay, or to
acquire or to provide goods or services with a fair market value, in excess of
$25,000, other than agreements for the purchase and sale of Inventory,
packaging, and advertising and promotional materials, in each case in the
ordinary course of the Business consistent with past practice; (iv) any
partnership or joint venture agreement or arrangement; (v) any agreement or
arrangement for the acquisition, sale or lease of any assets outside the
ordinary course of business; (vi) any mortgage, pledge, conditional sales
contract, security agreement, factoring agreement or other similar agreement or
arrangement with respect to tangible or intangible personal property (except
for sales of Inventory); (vii) any loan agreement, credit agreement, promissory
note, guarantee, subordination agreement, letter of credit or any other similar
type of agreement or arrangement, whether as borrower or lender; (viii) any
exclusive retainer agreement or arrangement with attorneys, accountants,
actuaries, appraisers, investment bankers or other professional advisers; (ix)
any agreement or arrangement that limits the freedom of Seller to compete in
any line of business or with any Person or in any area or which would so limit
the freedom of Seller or any of their Affiliates; or (x) otherwise material to
the Business.
(b) Except as disclosed on Schedule 2.12, there exists no
default under any Lease, License Agreement or Material Contract either by the
Seller, or to Seller's knowledge, by any other party thereto, and no event has
occurred which with notice or the passage of time would constitute such a
default or which would have a material adverse effect on the Business, whether
as a result of the consummation of the transactions contemplated hereby or
otherwise or under any obligation to be performed by any party to any such
Lease, License Agreement or Material Contract.
2.13 Environmental Matters. Except as set forth on Schedule 2.13,
(a) The Business is in substantial compliance with all
applicable Federal, state, regional, foreign and local laws, statutes,
ordinances, judgments, rulings and regulations relating to any matters of
pollution or of environmental regulation or control or protection of the
environment.
(b) To the knowledge of Seller and B&L, the Leased
Property and all improvements, structures, equipment, fixtures or activities
thereon are in compliance with all applicable Environmental Laws.
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(c) The Business and, to the knowledge of Seller and B&L,
the Leased Property, have obtained all Permits necessary for their operations
as currently conducted and comply with the terms and conditions thereof and all
such Permits are in good standing.
(d) There is no pending or, to the knowledge of Seller
and B&L, threatened civil or criminal litigation, written notice of violation
or formal administrative proceeding relating to the Environmental Laws
involving the Business.
(e) Seller has not (i) placed, held, located, released,
transported or disposed of any Hazardous Wastes (defined in Section 9) on or
under any property on which Seller has conducted the Business, other than in
compliance with Environmental Laws, or (ii) received any written notice (A) of
any violation of any Environmental Law or any other law, statute, rule or
regulation regarding Hazardous Wastes on or under any of such properties, (B)
of the institution or pendency of any suit, action, claim, proceeding or
investigation by any governmental entity of any such violation or (C) requiring
the removal of Hazardous Waste from any of such properties.
2.14 Compliance with Law. Except as set forth on Schedule 2.14,
the Business is not being conducted in violation of any law, ordinance, order
or regulation of any governmental entity or court, and the products of Seller
are manufactured, sold and marketed in compliance with all applicable Federal
and state laws, orders, ordinances or regulations, except for possible
violations which either individually or in the aggregate do not and are not
likely to have a material adverse effect on the Business or the Purchased
Assets, the condition, results of operation or prospects of the Business and
Seller has not received any notice of such violation or alleged violation. All
governmental approvals, permits and licenses required for Seller to conduct the
Business as presently conducted ("Authorizations") have been obtained and are
in full force and effect and are being complied with in all material respects,
except for Authorizations as to which the failure to so obtain, the lapse of
such effectiveness or the failure to so comply, either individually or in the
aggregate, will not have a material adverse effect on the Business the
Purchased Assets, the condition, results of operation or prospects of the
Business.
2.15 Inventory; Accounts Receivable; Accounts Payable. (a) Except
as set forth on Schedule 2.15(a), other than inventory that has been fully
reserved against, all items of inventory reflected on the Balance Sheet are
usable and salable in the ordinary course of business and the Balance Sheet
does not include, as inventory, products not currently being produced, sold or
marketed. The values at which net inventories are carried on the Balance Sheet
reflect the historical inventory valuation policy of Seller stating such
inventories at the lower of cost or market value. Except as set forth on
Schedule 2.15(a), Seller is not under any obligation or liability with respect
to accepting returns of items of merchandise in the possession of their
customers other than in the ordinary course of business.
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(b) Except as set forth on Schedule 2.15(b), since the
Balance Sheet Date, no Accounts Receivable have been sold, transferred or
otherwise disposed of by Seller, except in the ordinary course of business.
All of the Accounts Receivable included in the Purchased Assets have arisen in
connection with bona fide sales and deliveries of goods, performance of
services, licensing of intellectual property or other bona fide business
transactions in the ordinary course of business, consistent with past
practices. All reserves reflected in the Financial Statements against doubtful
accounts of, valid counterclaims or setoffs by, rebates, discounts and
allowances to, and returns from, customers were established in a manner
consistent with the collection experience of the Business in prior years. To
the knowledge of Seller, each of such Accounts Receivable constitutes a legal,
valid and binding account or other receivable, and none of such Accounts
Receivable is subject to any known defenses, assignments, restrictions,
counterclaims or setoffs by, any rebates, discounts or allowances to, or any
returns from, or any warranty claims of any customer. All of the Accounts
Receivable included in the Purchased Assets, net of reserves, are collectible
and will be collected in the ordinary course of the Business, consistent with
past practices, without recourse to legal proceedings before the one-year
anniversary date after the Closing Date. Since the Balance Sheet Date, Seller
has not provided any products or services at discounted rates or free of charge
to any customer as a rebate, discount or advance to any customer to collect or
to accelerate the collection of any such Accounts Receivable. Except as set
forth in Schedule 2.15(b), there are no account debtors owing on any of the
Accounts Receivable that are included in the Purchased Assets that are (i)
delinquent in payment by more than 30 days or (ii) who have refused or, to the
best knowledge of Seller, threatened to refuse to pay any such Accounts
Receivable.
(c) The Accounts Payable included in the Assumed
Liabilities arose from bona fide transactions in the ordinary course of
business, and all such Accounts Payable have either been paid, are not yet due
and payable under procedures for payment of accounts payable by Seller, or are
being contested by Seller in good faith, in each case with such exceptions as
do not have a material adverse effect on the Business or the Purchased Assets.
2.16 Brokers. There is no broker or finder or other person who
would have any valid claim against Buyer for a fee, commission or brokerage in
connection with this Agreement or the transactions contemplated hereby as a
result of any agreement, understanding or action by Seller. Seller shall be
solely responsible for all fees and expenses of any broker, finder or other
person engaged by or on behalf of it or otherwise claiming through it in
connection with the transactions contemplated by this Agreement.
2.17 Ownership of Seller. Seller is a directly wholly-owned
corporate subsidiary of B&L.
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2.18 Books and Records. Seller maintains the Books and Records
with respect to the Business which, in reasonable detail, accurately and fairly
reflect its transactions and acquisition and dispositions of its assets in
accordance with GAAP, to the extent applicable. Seller has not used any
improper practices for the purpose of deceptively reflecting or not reflecting
any of the properties, assets, liabilities, revenues or expenses in any of its
Books and Records.
2.19 Distributors. Since the Balance Sheet Date, there has been no
material termination, cancellation or change in the business relationship of
Seller with any of its distributors (and Seller has not received notice that it
has lost or will lose, and no such distributor has notified Seller that the
Business would lose in the event of the consummation of the transactions
contemplated hereby, any such distributor). Seller is not engaged in any
material disputes with any of its distributors or, to the best knowledge of
Seller, are there any circumstances which may result in any such material
dispute or in any distributor ceasing to utilize or substantially reduce the
use of any product or service provided by Seller in connection with the
Business. For purposes of this paragraph, "distributor" refers to those third
parties which purchase from Seller pursuant to an Exclusive Distributor
Agreement, as reflected on Schedule 2.12.
2.20 Software. On the Closing Date, Buyer shall acquire from
Seller all Seller's right, title and interest in and to all items of Software
(as defined below), which are used or held for use by Seller in connection with
the Business, except for any license to non-owned Software which, by its terms,
may not be assigned or otherwise transferred by Seller to Buyer and which is
specified in Schedule 2.20 or which is not material to the functioning of
Seller's accounting or information systems or production. The term "Software"
means the expression of an organized set of instructions in a natural or coded
language which is contained on a physical media of any nature and which may be
used with a computer to make such computer operate in a particular manner and
for a certain purpose, including, without limitation, all computer programs or
applications together with all user documentation relating to such computer
programs or applications.
2.21 No Interest in Properties. No director, officer or employee
of Seller directly or indirectly owns any interest in any of the Purchased
Assets and no director, officer or employee of Seller (or member of such
Person's immediate family) owns any interest in, controls or is an employee,
officer, director or agent of, or consultant to, any other entity which is a
competitor, supplier, customer, lessor or lessee of Seller.
2.22 No Other Representations or Warranties. Except for the
representations and warranties contained in this Article 2, neither Seller nor
B&L, nor their shareholders or affiliates, nor any other person makes any
representation or warranty to Buyer, express or implied, and Seller and B&L
hereby disclaim any such representation or warranty, whether by Seller or any
of its agents or representatives or any other person, notwithstanding the
delivery or disclosure to Buyer or any of its officers,
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directors, employees, agents or representatives or any other person of any
document or other information or any of their agents or representatives or any
other person. EXCEPT AS SPECIFICALLY PROVIDED HEREIN, SELLER AND B&L MAKE NO
REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED, WITH RESPECT TO THE
PURCHASED ASSETS, INCLUDING, WITHOUT LIMITATION, THEIR DESIGN, CAPACITY,
CONDITION, MERCHANTABILITY OR THEIR FITNESS FOR USE OR FOR ANY PARTICULAR
PURPOSE, AND SELLER AND B&L HEREBY DISCLAIM ALL SUCH REPRESENTATIONS AND
WARRANTIES. EXCEPT AS SPECIFICALLY PROVIDED HEREIN, THE SALE OF THE PURCHASED
ASSETS IS MADE ON AN "AS IS" BASIS AND "WITH ALL FAULTS".
2.23 Purchase for Investment. Seller acknowledges that the
Preferred Stock will not be registered under the Securities Act of 1933, as
amended (the "1933 Act") or any State Blue Sky or securities laws. Seller is
acquiring the Preferred Stock for its own account for investment and not with a
view to any distribution thereof and will not sell or otherwise transfer the
Preferred Stock unless, if Buyer so requests, it delivers to Buyer an opinion
of counsel, in form and substance satisfactory to Buyer, to the effect that
such transfer is exempt from the registration requirements of the 1933 Act and
applicable State Blue Sky or securities laws. Seller acknowledges that a
legend to such effect may be placed on the Preferred Stock.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Seller and B&L as follows:
3.1 Organization. Buyer is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation and has all requisite corporate power and authority to carry on
its business as now being conducted.
3.2 Authority Relative to this Agreement. Buyer has full
corporate power and authority to execute, deliver and perform this Agreement
and to consummate the transactions contemplated hereby. All actions necessary
to be taken by or on the part of Buyer to execute, deliver and perform this
Agreement and consummate the transactions contemplated hereby have be duly and
validly taken. This Agreement has been duly and validly executed and delivered
by Buyer and, assuming due execution and delivery by Seller, constitutes a
valid and binding agreement of Buyer enforceable against them in accordance
with its terms, except to the extent that enforceability may be limited by
applicable bankruptcy, reorganization, insolvency, moratorium or similar laws
affecting the enforcement of creditors' rights generally as at the time in
effect and
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by general principles of equity, regardless of whether such enforceability is
considered in a proceeding in equity or at law.
3.3 Consents and Approvals: No Violation. Neither the execution,
delivery and performance of this Agreement by Buyer nor the consummation of the
transactions contemplated hereby (i) conflict with or will result in any breach
of any provision of its Certificates of Incorporation or By-Laws of Buyer (or
other similar governing documents), (ii) except for filings and approvals
required under the HSR Act, require any consent, approval, authorization or
permit of, or filing with or notification to, any governmental or regulatory
authority, (iii) constitute a breach or will result in a default under any of
the terms, conditions or provisions of any note, bond, mortgage, indenture,
agreement, lease or other instrument or obligation to which Buyer is a party or
by which Buyer may be bound, or (iv) violate any order, writ, injunction,
decree, statute, rule or regulation applicable to Buyer.
3.4 Brokers. There is no broker or finder or other person who
would have any valid claim against Seller for a fee, commission or brokerage in
connection with this Agreement or the transactions contemplated hereby as a
result of any agreement, understanding or action by Buyer. Buyer shall be
solely responsible for all fees and expenses of any broker, finder or other
person engaged by or on behalf of it or otherwise claiming through it in
connection with the transactions contemplated by this Agreement.
ARTICLE 4
COVENANTS OF THE PARTIES
4.1 Conduct of Business of Seller. Except as contemplated by this
Agreement or as described on Schedule 4.1, during the period from the date of
this Agreement to the Closing Date, Seller will conduct the Business and its
operations according to its ordinary and usual course of business consistent
with past practice. Without limiting the generality of the foregoing, and,
except as contemplated in this Agreement or as described on Schedule 4.1,
Seller will not, with respect to the Business or Purchased Assets, prior to the
Closing date without the consent of Buyer:
(a) Sell or otherwise dispose of or abandon any assets,
including without limitation the Purchased Assets, except for collection of
Accounts Receivable and sales of Inventory in the ordinary course of business
and consistent with past practice and except for sales or dispositions of
Equipment, Supplies and Fixed Assets having a fair market value not in excess
of $25,000 individually or $100,000 in the aggregate.
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(b) (i) Amend or terminate any lease, License Agreement
or Material Contract, or (ii) breach in any material respect any Lease, License
Agreement or Material Contract, or (iii) breach any material provision of any
Lease, License Agreement or Material Contract such as would permit the
termination thereof or the loss of benefits to the Business thereunder.
(c) Amend or terminate any Assigned Contract (excluding
those referred to in Section 4.1(b) above), except in the ordinary course of
business and consistent with past practice.
(d) (i) Increase the rate or terms of compensation
payable or to become payable by Seller to any of its employees (including
officers), agents or consultants, except increases occurring in the ordinary
course of business in accordance with it customary practices (which shall
include normal periodic performance reviews and related compensation and
benefit increases); or (ii) increase the rate or term of any bonus, insurance,
pension or other employee benefit plan, payment or arrangement made to, for or
with any employees (including officers); provided that, no increase referred to
in this Section 4.1(d) shall be made with respect to any of the persons named
in Section 10.11 of this Agreement without the prior consent of Buyer; and
provided further that any increase referred to in clause (ii) of this Section
4.1(d) shall be made with respect to all eligible employees (including
officers) of Seller generally.
(e) Enter into any agreement, commitment or transaction
that would, had such agreement, commitment or transaction been in effect on the
date hereof, be a Lease, License Agreement or Material Contract; make or commit
to make any capital expenditure in excess of $25,000 individually or $100,000
in the aggregate; or enter into any other agreement, commitment or transaction
material to the business, operations or financial condition of Seller except
agreements, commitments or transactions in the ordinary course of business
consistent with past practices.
(f) Mortgage, pledge or grant any security interest on
any of the Purchased Assets in connection with the borrowing of money or for
the deferred purchase of any property; or otherwise permit the imposition of
any Lien on any of the Purchased Assets other than Permitted Liens.
(g) Lend any money or make any commitment to lend any
money except trade credit in the ordinary course of business consistent with
past practice.
(h) Make any written change to the terms upon which the
Business extends credit to customers, discounts prices or offers other terms or
sales incentives other than changes occurring in the ordinary course of the
Business consistent with past practice.
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(i) Agree, whether in writing or otherwise, to do any of
the foregoing.
(j) Cancel or compromise of any material claim under,
waive or release any rights of material value arising out of, or modify or
change in any material respect or terminate, any Purchased Assets or the
Business.
(k) Take any action that would cause any representation
or warranty to be untrue or incorrect or that would result in any of the
conditions to closing not being satisfied.
Without limiting the generality of the foregoing, Seller hereby covenants and
agrees that, from the date hereof until the Closing Date, Seller shall use
Commercial Efforts to: (a) maintain the present relationships and good will
with its suppliers, distributors, customers, lessors, licensors and licensees;
(b) maintain the Purchased Assets in good operating condition and repair; and
(c) maintain all Permits and Intangible Property.
4.2 Access to Information.
(a) Between the date of this Agreement and the Closing
Date, Seller will, during ordinary business hours and upon reasonable advance
notice, give Buyer and its authorized representatives reasonable access to the
books, records, plants, offices and other facilities and properties of Seller
in order that Buyer may have full opportunity to make such reasonable
investigations, as it shall reasonably need to make concerning the affairs of
the Business and Seller will use Commercial Efforts to cause its officers and
accountants to furnish such additional financial and operating data and other
information, in each case relating to the Business and the Purchased Assets, as
Buyer shall from time to time reasonably request; provided, however, that (A)
any such investigation shall be conducted in such a manner as not to interfere
unreasonably with the operation of the business of Seller; (B) Seller shall not
be required to take any action which would constitute a waiver of the
attorney-client privilege, and (C) Seller need not supply Buyer with any
information which Seller is under a legal obligation not to supply. In case
Seller determines not to provide Buyer with information on the basis of clause
(B) or (C) above, Seller shall advise Buyer of the basis for such exclusion.
In the case of information excluded under clause (C), Seller shall use
Commercial Efforts to obtain any required waiver if Buyer so requests.
(b) Any information provided pursuant to this Agreement
shall be held by Buyer until the Closing, in accordance with and shall be
subject to the terms of the Confidentiality Agreement, dated February 8, 1996
between The Finisterre Fund and B&L (the "Confidentiality Agreement"), the
terms of which are incorporated herein by reference; provided, however, that
Buyer shall be entitled to make the disclosures contemplated by the draft
Offering Memorandum in respect of Buyer's securities
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prepared by Larkspur Capital Corporation (draft of July 1996), or otherwise
required by providers of Financing.
4.3 Expenses. All costs and expenses incurred in connection with
this Agreement and the transactions contemplated hereby will be paid by the
party incurring such costs and expenses, whether or not the transactions
contemplated hereby are consummated, except as otherwise expressly provided
herein.
4.4 Further Assurances. Subject to the terms and conditions of
this Agreement, each of the parties hereto will use its Commercial Efforts to
take, or cause to be taken, all action, and to do, or cause to be done, all
things necessary under applicable laws and regulations to consummate the
transactions contemplated by this Agreement. On and from time to time after
the Closing Date, without further consideration, Seller will, at its own
expense, execute and deliver such documents to Buyer as Buyer may reasonably
request in order to consummate the transactions contemplated by the Agreement.
On and from time to time after the Closing Date, without further consideration,
Buyer will, at its own expense, execute and deliver such documents to Seller as
Seller may reasonably request in order to consummate the transactions
contemplated by this Agreement.
4.5 Filing. (a) Buyer and Seller will file, or cause to be filed,
as promptly as possible, and in no event later than five (5) days after the
date hereof, with the United States Federal Trade Commission ("FTC") and the
Antitrust Division of the United States Department of Justice ("DOJ") pursuant
to the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended (the
"HSR Act"), the notification required by the HSR Act. Each party shall keep
the other apprised of the status of any inquiries or requests for additional
information made by any governmental authority (including FTC or DOJ) in
connection with such filing. Buyer shall pay the filing fee under the HSR Act.
(b) Buyer promptly will make, or cause to be made, all
such other filings and submissions under laws and regulations applicable to
Buyer, if any, as may be required of Buyer for the consummation of the
transactions contemplated hereby. Seller promptly will make or cause to be
made all such other filings and submissions under laws and regulations
applicable to Seller, as may be required of Seller, for consummation of the
transactions contemplated hereby. The parties hereto will coordinate and
cooperate with one another in exchanging such information and reasonable
assistance as may be requested in connection with all of the foregoing.
(c) To the extent that the approval, consent or
permission of any Governmental Entity or other Person is necessary or desirable
for Buyer to obtain in connection with the conduct of the Business after the
Closing, including the issuance of such new permits as may be required for
Buyer to conduct the Business, Seller shall, at
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Buyer's request and expense, reasonably cooperate with Buyer in obtaining all
such approvals, consents or permissions.
4.6 Transfer Taxes. Seller, on the one hand, and Buyer, on the
other hand, shall each be responsible for one-half of the aggregate of all
transfer, excise, stamp, sales, use, recording or similar taxes or fees,
arising out of the sale, transfer, conveyance or assignment of any of the
Purchased Assets by Seller and the transactions contemplated hereby. Buyer
shall be responsible for obtaining re-sale tax exemption certificates in
respect of inventory; and if Buyer shall fail to obtain such exemption
certificates Buyer shall be responsible for all such taxes resulting therefrom.
The party responsible for making any required filing under applicable law shall
make such filing and Seller or Buyer, as the case may be, shall cooperate with
the other in providing any documents or affidavits necessary for any filings.
4.7 Public Announcements. Neither Seller nor Buyer shall issue
any press release or make any other public disclosure or announcement
concerning the transactions contemplated by this Agreement, without the prior
consent of the other parties hereto as to both the timing and content of such
press release or public disclosure, which consent shall not be unreasonably
withheld.
4.8 Employees and Employee Benefit Plans.
(a) On the Closing Date, Buyer shall (i) offer employment
on an "at will" basis, at the same hourly rates, to all of the hourly employees
of Seller actively employed as of the Closing Date; and (ii) offer employment
on an "at will" basis, at the same salary to all of the salaried employees of
Seller actively employed as of the Closing Date. Buyer shall also offer
employment under the terms of Buyer's employment policies to each of Seller's
employees who is temporarily absent on the Closing Date from active employment
and who has rights of re-employment upon termination of such temporary absence
in accordance with existing policies. An employee on temporary absence from
active employment shall be deemed to be a "Transferred Employee" from and after
such employee's commencement of employment with Buyer immediately following the
termination of such absence. All employees who become employees of Buyer
pursuant to such offers of employment shall be sometimes referred to as
"Transferred Employees" as of the date of such employment. Schedule 4.8 is a
list of all Seller's employees as of June 26, 1996, including date of hire and
position. Through the first anniversary of the Closing Date, Buyer shall, with
respect to all Transferred Employees from time to time employed, provide
employee benefit plans, programs and arrangements having benefits to such
Transferred Employees that in the reasonable judgment of Buyer are, in the
aggregate, commercially reasonable alternative benefits to those Employee
Benefit Plans referred to in Schedule 4.8 covering such Transferred Employees
as in effect immediately prior to the Closing Date provided that (i) Buyer's
obligation to provide commercially reasonable alternative benefits in the
aggregate shall be deemed satisfied if Buyer's actual annual cost of
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providing all benefits to Transferred Employees through such first anniversary
date, pro rated for periods less than a full year (including, without
limitation, administrative charges paid to third Persons but excluding any
allocation of overhead or other internal costs of Buyer) shall be at least
equal to Seller's costs of providing such benefits, projected for the year
1996, to an equal number of employees which costs are set forth in Schedule 4.8
("1996 Benefit Costs"), and (ii) nothing in this Agreement shall require Buyer
to provide or maintain any specific Benefit Plan or type of plan or program,
including, without limitation, any defined benefit plan or retiree medical
plan. In the case of any new plan, program or arrangement, Buyer shall provide
that periods of service with Seller and each Affiliate or predecessor of Seller
prior to the Closing Date shall be credited for eligibility, vesting and
benefits purposes (if applicable and without duplication). To the extent set
forth on the Closing Date Balance Sheet, Buyer shall assume the amount of
accrued and unpaid vacation pay, employee service days, sick days, bonuses,
salaries and commissions, and the foregoing shall not be Retained Liabilities
to the extent of such accruals. Seller has delivered to Buyer a complete and
correct copy of each Employee Benefit Plan referred to on Schedule 4.8 and of
Seller's vacation pay, employee service days, sick days, bonus or other
incentive compensation plan or policy, together with the most recent summary
plan description, if any. Seller shall deliver to Buyer a list of the name of
each employee who was not actively employed on the Closing Date, together with
the reasons for the absence.
(b) Effective as of the Closing Date, Seller shall
provide that all benefit accrual of vested participants in the Pension Plans
shall cease on the Closing Date. Buyer shall include the Transferred Employees
and their beneficiaries in Buyer's medical, dental or health plans upon their
commencement of employment with Buyer, and Buyer shall use Commercial efforts
to establish plans that waive any preexisting condition limitations for such
conditions covered under Seller's medical, dental or health plans and shall
credit any deductible and out-of-pocket expenses incurred by such Transferred
Employees and their beneficiaries under Seller's medical, dental or health
plans during the portion of the calendar year preceding their commencement of
employment with Buyer.
(c) After the Closing, Buyer shall be required to give
any notice to employees of Seller which it employs which is required under the
Worker Adjustment and Restraining Notification ("WARN") Act.
4.9 Insurance. B&L and Seller shall, until the Closing Date,
maintain in effect the insurance on the Purchased Assets or the Business as set
forth in Schedule 2.9.
4.10 Severance Obligations. (a) Effective as of the Closing Date,
Seller shall terminate or cause to be terminated the employment of all persons
employed by Seller as of the Closing Date.
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(b) As to each employee terminated by Seller under this
Section effective at or after the Closing, Buyer shall offer employment as
contemplated by Section 4.8(a).
(c) With respect to each such employee who does not
accept Buyer's offer of employment described in clause (b) of this Section,
Seller shall be liable for and pay all valid claims of any such employee
relating to such termination of employment, including, without limitation, all
severance obligations of B&L arising by virtue of an employee's employment by
Seller and shall indemnify and hold harmless Buyer for any failure to pay such
severance obligations.
(d) With respect to each such employee who does accept
Buyer's offer of employment, Buyer shall indemnify and hold harmless Seller and
B&L against any and all valid claims against Seller or B&L by any employee
terminated by Buyer for any severance or other claims relating to such
employee's employment by Buyer, or termination thereof; provided, however, that
Buyer shall not indemnify Seller and B&L to the extent of any valid severance
obligations of Seller and B&L.
4.11 Covenants to Satisfy Conditions. Upon the terms and subject
to the conditions set forth herein, Seller shall use its Commercial Efforts to
ensure that the conditions set forth in Article 5 hereof are satisfied, insofar
as such matters are within the control of Seller, and Buyer shall use its
Commercial Efforts to ensure that the conditions set forth in Article 5 hereof
are satisfied, insofar as such matters are within the control of Buyer.
4.12 Books and Records. Buyer and Seller agree that Buyer shall
retain after the Closing Date, for a period of three (3) years, any and all
Books and Records (including hard copies, electronic or otherwise) in its
possession related to the Purchased Assets, the Assumed Liabilities, the
Retained Liabilities or the Business for all periods through the Closing Date
or related to the transactions contemplated hereby; provided, however, that
within three months prior to the expiration of such period, Buyer shall give
written notice to Seller and an opportunity to ship such books and records at
Seller's expense and risk to a location chosen by Seller. Buyer shall at all
times within business hours provide Seller access to such Books and Records
during such three year period.
4.13 Allocations. With respect to those charges (including,
without limitation, real estate taxes, water and sewer rents, if any, utility
charges and similar items) which are not included in the calculation of the
Closing Date Net Operating Assets and which relate to a period beginning prior
and ending subsequent to the Closing Date and which cannot be measured
otherwise, any invoices or statements received by either party which cover such
period shall be prorated between Buyer and Seller according to the number of
days in the period covered by such invoice or statement during which Buyer and
Seller, respectively, operated the Business, and each
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shall pay its allocable share thereof, either directly or by way of
reimbursement if the other party shall have paid the same, upon receipt of an
invoice therefor or evidence of such payments, as applicable.
4.14 Financing. Buyer shall use Commercial Efforts to obtain debt
financing consisting of approximately $20.0 million Senior Notes with an
average life of approximately six and a half years from closing and $12.0
million Senior Subordinated Notes with an approximate seven year maturity, as
well as $25.0 million of investor preferred equity and $4.0 million of common
equity, plus any additional amount necessary to make up an adjustment to the
Cash Amount pursuant to Section 1.8, or a commercially reasonable alternative
financing structure entirely satisfactory to Buyer in its reasonable and good
faith judgment (the "Financing").
4.15 Waiver of Compliance with Bulk Transfer Laws. Buyer hereby
waives compliance by Seller with the provisions of any bulk transfer laws
applicable to the transactions contemplated by this Agreement. Seller agrees
to promptly and diligently pay and discharge when due or to contest or litigate
any claims of creditors which are asserted against Buyer by reason of any
noncompliance with such laws, and to indemnify Buyer in accordance with Section
8.2 against any Claim or Loss arising from such noncompliance.
4.16 Deposit; Failure to Close on Certain Dates. (a)
Contemporaneously with execution hereof, Buyer will pay to B&L, on behalf of
Seller, a cash deposit in the amount of TWO HUNDRED FIFTY THOUSAND DOLLARS
($250,000.00) (the "Deposit"). If the Closing shall not have occurred on or
before 11:59 P.M. New York time on October 15, 1996 (such time and date being
herein called the "Desired Closing Date"), Seller shall be entitled to retain
the Deposit, which shall thereafter be non-refundable and become the property
of Seller to the extent provided in Section 4.16(c).
(b) If the Closing shall not have occurred on or before
the Desired Closing Date, Buyer may, at its option, extend the closing until
November 15, 1996 (the "Extended Closing Date") upon payment to Seller, in
cash, of an additional TWO HUNDRED FIFTY THOUSAND DOLLARS ($250,000) (the
"Additional Deposit"). To effectively extend the Closing Date to the Extended
Closing Date, the Additional Deposit must be received by Seller on or before
the Desired Closing Date. Thereafter, if the Closing shall not have occurred
on or before the Extended Closing Date the Additional Deposit shall be
non-refundable and become the property of Seller to the extent provided in
Section 4.16(c).
(c) The Deposit and any Additional Deposit shall be
retained by Seller until the earlier of:
(i) the date upon which the Closing occurs
(provided such date is prior to the Extended Closing Date), at which time the
Deposit and any
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Additional Deposit shall be applied by Seller to the Estimated Cash Amount due
by Buyer at the Closing;
(ii) the date upon which this Agreement is
terminated pursuant to Section 7.1(a), or by Buyer or Seller pursuant to
Section 7.1(b) (unless Section 7.2(b) applies) or by Buyer pursuant to Section
7.1(c) hereof, at which time the Deposit shall be refunded by Seller to Buyer;
and
(iii) the date upon which this Agreement is
terminated by Buyer, Seller or B&L (on behalf of Seller) pursuant to Section
7.1(b) (if Section 7.2(b) applies), or by Seller pursuant to Section 7.1(d), at
which time the Deposit and Additional Deposit shall be retained by Seller and
applied against Seller's damages for Buyer's breach.
(d) If the Closing shall not have occurred on or before
the Extended Closing Date due to the failure to satisfy the condition set forth
in Section 5.3(e) but the Agreement is not terminated and Closing subsequently
occurs, the Deposit and Additional Deposit shall not be applied to the
Estimated Cash Amount due from Buyer at Closing.
4.17 Right to Name. Seller and B&L agree to cause Seller within
ten (10) days after the Closing, to change the name of Seller to a name which
does not include "Steri-Oss", a similar name or any other name reasonably
objected to by Buyer. Seller shall provide to Buyer copies of all documents
evidencing the change of name of Seller within two (2) business days after same
are effective. Buyer agrees that it shall obtain no rights in the name "Bausch
and Lomb" by virtue of this Agreement, except that, as a temporary
accommodation to Buyer, B&L agrees that Buyer may exhaust existing inventories
of sales and marketing literature reflecting the name "Bausch & Lomb" for a
period not to exceed one (1) year from Closing. Buyer shall destroy all
inventories of materials bearing the name "Bausch and Lomb" one year from the
date of Closing. Buyer shall use best efforts to discontinue use of the name
"Bausch and Lomb" on all signs, telephone recordings and other uses other than
products and sales literature within thirty (30) days after Closing, and in all
events such use shall be discontinued within sixty (60) days after Closing.
4.18 Non-Competition. The Seller and B&L hereby acknowledge and
recognize such parties' possession of confidential or proprietary information
and the highly competitive nature of the Business and accordingly agree that,
in consideration of the premises contained herein, each of such parties will
not, from and after the date of this Agreement for a period of three (3) years
after the date of this Agreement, for any reason whatsoever, (i) directly or
indirectly engage anywhere in the world in the production, manufacture, design,
marketing, sale, distribution
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or development of dental implants and related abutments and surgical tools,
(ii) assist others anywhere in the world in engaging in the production,
manufacture, design, marketing, sale, distribution or development of dental
implants and related abutments and surgical tools, (iii) solicit or attempt to
solicit any current or potential customers of the Business in connection with
the actions described in the foregoing clauses (i) and (ii), or (iv) induce
employees of the Business to terminate their employment with Buyer; provided,
however, that in the event that during the three (3) year period after the date
of this Agreement, Seller, B&L or any Affiliate effects an acquisition or
business combination and incidental hereto acquires any Person, or
substantially all of the assets of a Person, which directly or indirectly
engages anywhere in the world in the production, manufacture, design,
marketing, sale, distribution or development of dental implants and related
abutments and surgical tools, Seller, B&L or such Affiliate, as the case may
be, may continue to perform or otherwise conduct such acquired business
operations for a period of twelve (12) months after the date of such
acquisition or business combination without violating the provisions of this
Section after which time the provisions of this Section shall act to prohibit
any such activity by Seller, B&L or such Affiliate, as the case may be. If, at
any time after such acquisition or business combination, Seller, B&L or such
Affiliate propose to sell, assign, transfer or otherwise convey the portion of
the acquired business that would otherwise cause Seller or B&L to violate the
provisions of this Section prior to the consummation of any agreement of sale,
assignment, transfer or other conveyance, Seller, B&L or such Affiliate must
first offer the portion of such acquired business to Buyer on terms to be
negotiated by the parties.
4.19 No Shopping. From the date hereof until the earlier of (i)
the Closing Date and (ii) the date this Agreement is terminated in accordance
with Article 7, neither Seller nor any partner, director, officer or
shareholder of Seller will, directly or indirectly, solicit or initiate
discussions concerning, or exchange information (including by way of furnishing
information) concerning the Business or enter into any negotiations concerning,
or solicit, entertain or agree to any proposals for, the acquisition of all or
a substantial part of the assets of Seller (including the Purchased Assets), or
the transfer of all or a substantial part of the capital stock of Seller to any
person other than Buyer, or a merger involving the capital stock of Seller. In
addition, during such time period, Seller and B&L shall not authorize, direct
or knowingly permit any employee or agent to do any of the foregoing. At
Closing, B&L shall notify Buyer of the identity of any person who has expressed
an interest in acquiring the Business within the six-month period prior to
Closing.
4.20 Release of Liens. At or prior to Closing, Seller will deliver
to Buyer, and cause to be filed or recorded, such releases, termination
statements and other documents and instruments as are sufficient to eliminate
and extinguish all Liens on any of the Purchased Assets so that, at Closing,
Buyer will receive title to such Purchased Assets free and clear of any such
Liens, except the Permitted Liens. Notwithstanding anything in this Agreement
to the contrary, if, at the Closing, any of the Purchased Assets is not so
delivered free and clear of all Liens, Buyer shall have the option in its sole
discretion to pay an amount sufficient to extinguish any or all of such Liens
directly to the holder or holders of such Liens, and to consummate the
transaction
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contemplated hereby. The full amounts, including any accrued interest and
penalties on any indebtedness or obligations secured by such Liens, that are
paid by Buyer to the holder or holders of such Liens shall be deducted from the
Consideration.
4.21 Accounts Receivable. Seller hereby agrees that, following the
Closing Date and upon the request from time to time of Buyer, Seller will sign
a form of notification for delivery by Buyer to all obligors in respect of the
then-outstanding Accounts Receivable which are included in the Purchased Assets
notifying them of the assignment pursuant to this Agreement of such Accounts
Receivable and that payment in respect of such Accounts Receivable should be
made directly to Buyer. Seller and B&L shall pay to Buyer an amount equal to
all moneys received by Seller o B&L from and after the Closing Date that are
attributable to Accounts Receivable transferred pursuant to this Agreement or
that relate to the Purchased Assets.
4.22 Subleases. With respect to each Lease for which Seller has
not obtained (a) all consents from all Persons and tribunals necessary to
assign and transfer such Lease to Buyer at the Closing and to permit continued
possession of the premises subject to the Lease in substantially the same
manner as such possession was enjoyed as of the Closing Date, and (b) estoppel
letters in the form previously agreed to by the parties, then, if Buyer elects
to waive the condition specified in Section 5.3(g) applicable thereto, Seller
shall enter into a sublease, shared access or similar agreement providing for
the same lease payments and term as the Lease so listed and such other terms
and conditions as the parties shall mutually agree, all to the extent that
Buyer is provided quiet enjoyment of the premises subject to such Lease. With
respect to any such sublease, if all such consents and estoppel letters are
obtained within the six-month period following the Closing Date, then (i)
Seller shall assign the related Lease to Buyer, (ii) Buyer shall assume the
obligations to pay, perform, satisfy and discharge the executory obligations of
Seller under such Lease arising from and after the date of such assignment, and
(iii) such parties shall terminate the sublease.
4.23 Notification of Certain Matters. From the date hereof through
the Closing Date, Seller and Buyer each shall give prompt written notice to the
other after either of them has obtained knowledge of the occurrence, or failure
of occurrence, of any event, which occurrence or failure to occur would cause
or be reasonably likely to cause a breach of their respective representations,
warranties, covenants and agreements contained in this Agreement.
4.24 Negotiation of Employment Contracts. Buyer agrees that
promptly after the signing of this Agreement by both parties, Buyer will seek
to commence negotiations with Xxx Xxxxxxxx regarding the terms of his proposed
employment contract with Buyer that is a condition to Closing pursuant to
Section 5.3(f). Buyer shall use Commercial Efforts to reach agreement on
reasonable and fundamental terms of such contract with such individual within
thirty (30) days after the execution of this Agreement, it being understood
that a final agreement on terms may be influenced by
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third parties proposing to provide financing for the acquisition of the
Purchased Assets and other factors.
4.25 Delivery of Audited Financial Statements. If Buyer requests
prior to September 1, 1996, Seller shall prepare and deliver to Buyer the
financial statements of the Business as of a fiscal month end between December
1995 and August 1996 and for the twelve-month fiscal period then ended prepared
in accordance with generally accepted accounting principles, together with the
opinion thereon of PW, on or before the Desired Closing Date, at Buyer's
Expense. Buyer hereby authorizes Seller to commence preliminary audit work at
Buyer's expense, not to exceed $5,000 until Buyer's authorization for
completion of the audit.
4.26 Canadian Business. Seller and B&L will cause the lease, dated
January 3, 1995, by and between the Dundas/Xxxxxx Centre Inc. and Bausch &
Lomb Canada Inc. ("B&L Canada") for a premises known as 000 Xxxxxx Xxxxxx,
Xxxxxxx, Xxxxxxx to be assigned by B&L Canada to Buyer at the Closing. Each
party to this Agreement agrees that the employees of B&L Canada shall, for
purposes of this Agreement and the transactions contemplated herein, be treated
and receive similar treatment as employees of Seller. With the exception of
the assets listed on Schedule 4.26, all assets owned or leased by B&L Canada
but used primarily in the Business of Seller in Canada (and would otherwise be
included as Purchased Assets) shall be deemed assets of Seller and caused to be
transferred, assigned or otherwise conveyed to Buyer.
4.27 Core-Vent Covenant Not to Xxx. Seller and B&L agree to (a)
enforce the terms of a certain Covenant Not to Xxx, dated April 24, 1991, by
and between Core-Vent Corporation and Seller (the "Covenant Not to Xxx") and
defend any claim, suit, action, charge or allegation made or asserted against
Buyer for infringement of United States Patent No. 4,960,381 (the "Core-Vent
Patent") by reason of the manufacture, sale or any other use of dental implant
devices substantially as depicted in Exhibit IV to the Covenant Not to Xxx,
provided Buyer's use of such intellectual property is consistent with Seller's
use thereof prior to Closing, (b) indemnify and hold harmless Buyer from and
against any and all Claims and Losses suffered by reason of, arising out of or
resulting from any actual or alleged infringement of the Core-Vent Patent on
account thereof, provided Buyer's use of such intellectual property is
consistent with Seller's use thereof prior to Closing.
ARTICLE 5
CLOSING CONDITIONS
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5.1 Conditions to Each Party's Obligations. The respective
obligations of Seller and Buyer to consummate the transactions contemplated by
this Agreement shall be subject to each of the following conditions:
(a) Neither Seller nor Buyer shall be subject to any
order, judgment, decree or injunction of a court of competent jurisdiction or
governmental body, agency or official nor any applicable law or regulation or
executive order which prevents consummation of the transactions contemplated
hereby, and
(b) All filings required by the HSR Act shall have been
made and all waiting periods thereunder with respect to the transactions
contemplated by this Agreement shall have expired or been terminated.
5.2 Conditions to the Obligations of Seller. The obligation of
Seller to consummate the transaction contemplated hereby shall be further
subject to the fulfillment on or prior to the Closing Date of each of the
following conditions:
(a) Buyer shall have performed and complied in all
material respects with the agreements contained in this Agreement required to
be performed and complied with by it at or prior to the Closing Date.
(b) The representations and warranties of Buyer set forth
in this Agreement shall be true and correct in all material respects as of the
date made and as of the Closing Date as though made at and as of the Closing
Date (except as otherwise contemplated by this Agreement).
(c) Seller shall have received a certificate, dated the
Closing Date, certifying to the fulfillment of the conditions set forth in
paragraphs (a) and (b) of this Section 5.2 and signed on behalf of Buyer by an
authorized officer of Buyer.
(d) Seller shall have been released from Leases, and
shall have received evidence of same which is reasonably acceptable to Seller
and its counsel, or Buyer shall have indemnified Seller with respect thereto,
in respect of matters arising after the Closing.
(e) Seller and B&L shall have received the opinion in
form of Exhibit 5.2E reasonably acceptable to Seller, dated the Closing Date,
of Xxxxxx, Xxxxx & Xxxxx, counsel to Buyer.
(f) The transactions contemplated hereby shall have
received approval from the B&L Board of Directors. The condition set forth in
this Section 5.2(f) shall expire at 5:00 p.m. E.S.T. seven (7) days after the
date of this Agreement. On or prior to the expiration date, B&L may elect to
terminate this Agreement in the event this condition is not satisfied. If B&L
does not terminate this
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Agreement pursuant to this Section 5.2(f) on or prior to the expiration date,
this condition shall be null and void.
(g) Seller shall have received complete and correct
copies of Buyer's Certificate of Incorporation and By-Laws, and all
restatements or amendments thereof.
5.3 Conditions to the Obligations of the Buyer. The obligation of
Buyer to consummate the transactions contemplated hereby shall be further
subject to the fulfillment on or prior to the Closing Date of each of the
following conditions:
(a) Seller shall have performed and complied in all
material respects with the agreements contained in this Agreement required to
be performed and complied with by it at or prior to the Closing Date.
(b) The representations and warranties of Seller and B&L
set forth in this Agreement shall be true and correct in all material respects
as of the date made and as of the Closing Date as though made at and as of the
Closing Date.
(c) Buyer shall have received a certificate, dated the
Closing Date, signed by an authorized officer of Seller certifying to the
fulfillment of the conditions set forth in paragraphs (a) and (b) of this
Section 5.3.
(d) Buyer shall have received the opinion in form
reasonably acceptable to Buyer, dated the Closing Date, of B&L's General
Counsel in a form reasonably acceptable to Buyer consistent with Exhibit
5.3(d).
(e) Buyer shall have obtained the Financing on terms
entirely satisfactory to Buyer in its reasonable and good faith judgment.
Buyer acknowledges that such terms as are contained in the draft offering
circular prepared by Larkspur Capital Corporation (draft of July 1996) shall be
deemed satisfactory to Buyer, but it is understood that all other terms of such
financing, not specifically provided for in such offering circular, must be
satisfactory to Buyer in its reasonable and good faith judgment.
(f) Xxx Xxxxxxxx shall have executed and delivered to
Buyer a valid and legally binding employment agreement in form and substance
reasonably satisfactory to Buyer providing for his employment, for a period of
three years, as President of Buyer or its operating entity, at a base salary
and cash bonus compensation reasonably comparable to his existing base salary
and cash bonus compensation arrangement with Seller and providing for an equity
compensation incentive arrangement of the kind typically provided in leveraged
buyout transactions where existing senior management continues its positions.
The condition set forth in this Section 5.3(f) shall expire at 5:00 p.m. E.S.T.
thirty (30) days after the date of this Agreement. On or prior to the
expiration date, Buyer may elect to terminate this
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Agreement in the event this condition is not satisfied. If Buyer does not
terminate this Agreement pursuant to this Section 5.3(e) on or prior to the
expiration date, the condition set forth herein shall be null and void.
(g) Seller shall have obtained the consent, in form and
substance satisfactory to Buyer in its good faith judgment, to the sale and
assignment to Buyer of (i) each of the leases referred to in Schedule 1.1(g),
and (ii) each of the licenses referred in Schedule 2.8(b) (except Core-Vent),
provided, however, if such consent has not been obtained, such other provision
has been made as will provide Buyer with the same financial benefits, and the
right to market, produce and manufacture, as if consent to the assignment of
each such license and contract had been obtained and be in form and substance
reasonably satisfactory to Buyer in its complete discretion.
ARTICLE 6
CERTAIN TAX MATTERS
6.1 Representations. Seller represents and warrants to Buyer
that, except as set forth in Schedule 6.1:
(a) Seller has timely filed, caused to be timely filed,
will timely file or will cause to be timely filed, on behalf of Seller and with
respect to the Business, all tax returns required to be filed with respect to
all periods through the Closing Date. Such tax returns were or will be
prepared, as the case may be, in the manner required by applicable law and all
Taxes shown thereon to be payable by Seller in respect of the Business have
been paid or will be paid when due and there are or will be no Liens for Taxes
upon any of the Purchased Assets (except for Liens for Taxes not yet due or
Taxes being contested in good faith through appropriate proceedings, from and
against which Seller will indemnify and hold Buyer harmless). Schedule 6.1(a)
lists all jurisdictions where returns are filed for any period in the period
from January 1, 1995 through the Closing Date and describes briefly the return
filed and its status. No claim has ever been made by a taxing authority that
Seller is or may be subject to taxation that Seller disputes and is unresolved.
(b) Seller has materially complied, as to the Business,
with all applicable laws, rules and regulations relating to the payment and
withholding of Taxes and has timely withheld from Seller employees wages and
paid over (and through the date of the Closing will timely withhold and pay
over) to the proper governmental entities all amounts required to be so
withheld and paid over for all periods under all applicable laws.
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(c) None of the Purchased Assets is property that Seller
or Buyer is or will be required to treat as being owned by another person
pursuant to the provisions of Section 168(f)(8) of the Code.
(d) There is no contract, agreement, plan or arrangement
covering any person that, individually or collectively, could give rise to the
payment of any amount that would not be deductible by Buyer by reason of
Section 280G of the Code.
(e) Seller is not a "foreign person" as defined in
Section 1445(f)(3) of the Code.
6.2 Tax Returns.
(a) Except as otherwise expressly set forth herein,
Seller shall be responsible for and shall pay all Taxes, including without
limitation, all sales and use taxes, relating to or arising from the conduct of
the Business and the ownership or use of the Purchased Assets prior to Closing
and shall be entitled to any refunds for all taxable periods (or portions
thereof) ending on or before the Closing Date and shall be responsible for
filing the necessary tax returns with respect to the Business and the Purchased
Assets for all such periods.
(b) Except as otherwise expressly set forth herein, Buyer
shall be responsible for, and shall pay, all Taxes relating to or arising from
the conduct of the Business by Buyer and the ownership or use of the Purchased
Assets by Buyer and shall be entitled to any refunds for all taxable periods
(or portions thereof) on or after the Closing Date and Buyer shall be
responsible for filing the necessary tax returns with respect to the Business
and the Purchased Assets for all such periods.
(c) If after the Closing Date Buyer pays any Taxes for
which Seller is liable under this Agreement, or Seller pays any Taxes for which
Buyer is liable under this Agreement, appropriate reimbursement shall be made
promptly upon demand therefor. The portion of any refund, rebate or
reimbursement received by any Person to which another Person is entitled shall
be paid over promptly to the Person which is entitled thereto.
(d) Each party hereto shall provide the other party,
without cost and expense, with such assistance as reasonably may be requested
by such party in connection with the preparation of any tax return, any audit
or other examination by any taxing authority, or any judicial or administrative
proceedings relating to liability for Taxes with respect to the Business and
the Purchased Assets, and each party shall retain, for a reasonable period of
time (but not less than the applicable statute of limitations in the
jurisdiction in which such Taxes are paid, including all extensions), and
provide the other party with, any records or information which may be relevant
to any such tax return, audit or examination, proceedings or determination.
Any records
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retained pursuant to this Section 6.2(d) shall be subject to the provisions of
Section 4.16 (other than with respect to the retention period stated therein).
(e) Seller agrees to indemnify, defend and hold Buyer
harmless from and against all Losses arising out of (1) unpaid Taxes for which
Seller is responsible under the terms of this Article 6, and (2) any breach of
the representations, warranties and covenants contained in Section 6.1 hereof.
Buyer agrees to indemnify, defend and hold Seller harmless from and against all
Losses arising out of unpaid Taxes for which Buyer is responsible under the
terms of this Article 6.
(f) Any payments made to Seller or Buyer pursuant to this
Section 6.2 shall constitute an adjustment of the Consideration for tax
purposes.
6.3 Contests. Any audits of tax returns with respect to the
Business or the Purchased Assets and related administrative and judicial
proceedings shall be controlled by the party responsible for filing such tax
returns pursuant to this Article 6 (the "Filing Party"). The Filing Party
shall promptly notify the other party (the "Non-filing Party") of any proposed
adjustment which would result in liability of the Non-filing Party under this
Agreement. If the Non-filing Party so requests within thirty days of receipt
of such notice, the Filing Party shall:
(i) in good faith contest such proposed
adjustment by appropriate administrative or judicial proceedings;
(ii) permit the Non-filing Party to participate at
its own expense in such proceedings; and
(iii) not enter into any compromise or settlement
with respect to such proposed adjustment without the consent of the Non-filing
Party, which shall not be unreasonably withheld; provided, however, that the
Filing Party shall not be required to contest any proposed adjustments with
respect to any tax return unless (x) the aggregate amount of the Non-filing
Party's reasonable potential liability is at least $50,000; (y) the Non-filing
Party agrees to pay (or, in the case of item (C) below, advance to) the Filing
Party all costs and expenses which the Filing Party may incur in connection
with such contest, including, without limitation, (A) all reasonable legal,
accounting, and investigatory fees and disbursements, (B) any interest,
penalties or additions to Tax which may be incurred as a result of such
contests, and (C) if such contest is conducted in a forum which requires the
payment of, and claiming of a refund for, the amount of the proposed
adjustment, sufficient funds to make such payment; and (z) if so requested by
the Filing party, the Non-filing Party provides a written opinion, reasonably
acceptable in form and substance to the Filing Party, of independent counsel
that there is a reasonable basis for contesting the proposed adjustment.
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ARTICLE 7
TERMINATION
7.1 Termination. This Agreement may be terminated at any time on
or prior to the Closing Date:
(a) By mutual written consent of Seller and Buyer.
(b) By written notice by either party (including notice
by B&L on behalf of Seller) to the other party if the Closing shall not have
occurred on or before the Desired Closing Date (or the Extended Closing Date,
if applicable under Section 4.16(b)), unless such failure to occur is due to
the failure of the party seeking to terminate this Agreement to perform in all
material respects any of its obligations under this Agreement required to be
performed by it at or before the Closing Date; provided that, if such failure
to Close is due to the failure to satisfy the condition set forth in Section
5.3(e) (but all other conditions to Buyer's obligations set forth in Section
5.3 are satisfied), the provisions of Section 7.2(b) shall apply.
(c) By Buyer if there has been a material violation or
breach by Seller of an agreement, representation or warranty contained in this
Agreement which has rendered the satisfaction of any condition to the
obligations of Buyer specified in Section 5.3 impossible and such violation or
breach has not been waived by Buyer or cured by Seller within 15 days after
written notice to Seller of such violation or breach.
(d) By Seller if there has been a material violation or
breach by Buyer of any agreement, representation or warranty contained in this
Agreement which has rendered the satisfaction of any condition to the
obligations of Seller specified in Section 5.2 impossible and such violation or
breach has not been waived by Seller or cured by Buyer within 15 days after
written notice to Buyer of such violation or breach.
7.2 Procedure and Effect of Termination. (a) In the event of
termination of this Agreement pursuant to Section 7.1 (other than when Section
7.2(b) applies), this Agreement shall terminate, and in each case the
transactions contemplated hereby shall be abandoned, without further action by
any of the parties hereto, and there shall be no liability on the part of
Seller or Buyer for further performance hereunder, except as set forth in this
Section 7.2(a) and in Sections 4.2(b) and 4.3, which Sections shall survive the
termination of this Agreement and except that the foregoing shall not relieve
any party from liability for damages actually incurred as a result of breach by
it of any of its obligations under this Agreement.
(b) In the event of termination of this Agreement by
Buyer, Seller or B&L (on behalf of Seller) pursuant to Section 7.1(b) by reason
of the failure to satisfy
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the condition set forth in Section 5.3(e) (but all other conditions to Buyer's
obligations set forth in Section 5.3 are satisfied), this Agreement shall
terminate, and the transactions contemplated hereby shall be abandoned, without
further action by any of the parties hereto, and there shall be no liability or
obligation on the part of Seller or Buyer, except as set forth in Sections
4.2(b) and 4.3, which Sections shall survive the termination of this Agreement
and except that Buyer shall pay to Seller, as liquidated damages, the sum of
(i) Two Hundred Fifty Thousand Dollars ($250,000.00) if termination occurs on
or prior to the Desired Closing Date, which shall be satisfied by Seller
retaining the Deposit, or (ii) Five Hundred Thousand Dollars ($500,000.00) if
termination occurs after the Desired Closing Date, which shall be satisfied by
Seller retaining the Deposit and the Additional Deposit, if previously paid, or
if not previously paid, by payment to Seller of an additional Two Hundred Fifty
Thousand Dollars ($250,000.00).
(c) If this Agreement is terminated as provided in this
Section 7.2, all filings, applications and other submissions made pursuant to
Section 4.5 shall, to the extent practicable, be withdrawn from the agency or
other person to which they were made.
ARTICLE 8
SURVIVAL AND INDEMNIFICATION
8.1 Survival. The representations, warranties, covenants and
agreements of the parties hereto shall survive the execution and delivery
hereof and the delivery of all of the documents executed in connection herewith
and shall continue in full force and effect after the date hereof and after the
Closing Date for a period of two (2) years after the Closing Date (the
"Expiration Date"); provided that, the representations, warranties, covenants
and agreements provided in Section 6.1 shall continue in full force and effect
for a period of three (3) years after Closing, those in Section 4.27 shall
survive for four (4) years after Closing and those in Sections 2.1, 2.2, 2.3,
3.1, 3.2 and 3.3 shall survive for six (6) years after Closing.
8.2 Indemnification of Buyer. Seller and B&L shall indemnify
Buyer and hold Buyer harmless from and against any and all Claims and Losses
suffered by reason of, arising out of or resulting from (i) any
misrepresentation or breach of warranty made in this Agreement by Seller, or
(ii) any failure by Seller to fulfill any covenant or agreement under this
Agreement (other than a covenant set forth in Article 6 as to which the
provisions of Article 6 shall apply), or (iii) any and all Retained
Liabilities, or (iv) the successful enforcement by Buyer of its rights under
this Section 8.2 to the extent the same is determined by a court of competent
jurisdiction, or (v) any defects or errors in the design, manufacture or
production of any product sold by Seller prior to the Closing Date (other than
the Assumed Liabilities), or (vi) any final judgment
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obtained by any person that Buyer is liable for (as successor in interest or
otherwise) any liabilities of Seller, whether known or unknown, absolute or
contingent, arising before, on or after the Closing Date, other than Assumed
Liabilities; provided, however, that Seller and B&L shall have no liability for
indemnity hereunder to Buyer with respect to any matter referred to in clause
(i) of this Section 8.2 until the aggregate amount of all Losses arising
therefrom exceeds FIVE HUNDRED THOUSAND AND NO/100 DOLLARS ($500,000) (the
"Deductible"). In no event shall Seller or B&L be obligated to provide
indemnification for Claims or Losses (including without limitation the covenant
in Section 4.27) in excess of fifty percent (50%) of the Cash Amount portion of
the Consideration, except as to a breach of the representations, warranties and
agreements contained in Sections 2.1, 2.2 and 2.3, as to which such percentage
shall be one hundred percent (100%).
8.3 Indemnification of Seller. Buyer shall indemnify and hold
harmless Seller from and against any and all Claims and Losses suffered by
reason of, arising out of or resulting from (i) any misrepresentation or breach
of warranty made in or pursuant to this Agreement by Buyer, (ii) any failure by
Buyer to fulfill any covenant or agreement under this Agreement, (iii) any
claims of third parties arising out of any offering by Buyer, its agents,
consultants, bankers or Affiliates, including Larkspur Capital Corporation, of
securities representing, directly or indirectly, an interest in the Business,
or debt of Buyer, not based upon a misrepresentation or breach of warranty made
in this Agreement by Seller, (iv) the successful enforcement by Seller of its
rights under this Section 8.3 to the extent the same is determined by a court
of competent jurisdiction, or (v) any claim or loss resulting from operation of
the Business from and after the Closing Date.
8.4 Notice of Claim. If any party hereto has suffered or incurred
any Loss and Expense, or if a third party claim, whether pursuant to an
administrative proceeding, action at law, suit in equity, or otherwise ("Third
Party Claim") is instituted which, if decided adversely to a party, would
result in such party suffering or incurring any Loss and Expense, such party
shall give written notice within thirty (30) days of such Loss, Expense or
Third Party Claim to the party against which a claim for indemnification may be
made pursuant to this Agreement ("indemnifying party"), setting forth: (i) the
facts or events, in reasonable detail which indicate that such party has
suffered or incurred such Loss and Expense, (ii) the Section or Sections of
this Agreement (in addition to this Article 8) under which such party has
suffered or incurred such Loss and Expense, (iii) the amount of such Loss and
Expense (estimated, if necessary and reasonably practicable) or, in the case of
a Third Party Claim, such party's then good faith estimate (if reasonably
practicable) of the reasonably foreseeable estimated amount of its claim for
indemnification for such Loss and Expense, and (iv) the method of computation
of the amount of such Loss and Expense, any of which information shall be
promptly amended by such party when its knowledge of the facts or events and
any resulting liability so warrant in its good faith judgment. No party shall
be liable for indemnification pursuant to Sections 8.2 or 8.3 unless notice of
claim
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for such indemnification has been given in accordance with this Section 8.4 and
on or prior to the Expiration Date. Buyer shall deliver to Seller within
thirty (30) days after the end of any calendar month, a statement in reasonable
detail describing and showing the amount (to the extent the same can reasonably
be determined) of any Claim or Loss of which the senior executive officers of
Buyer (which shall include, without limitation, the current President and Vice
Presidents of Seller, and their successors) have actual knowledge and with
respect to which Buyer would be entitled to indemnification pursuant to clauses
(i) and (ii) of Section 8.2 hereof (and whether or not the Claim or Loss is
within the Deductible).
8.5 Defense of Third Party Claim. The indemnifying party shall
have the right to conduct and control, at its expense and through counsel of
its own choosing, the defense of any Third Party Claim, action or suit, but the
indemnified party may, at its election, participate in the defense of such
claim, action or suit at its sole cost and expense; provided that if (i) the
indemnifying party shall fail to defend any such claim, action or suit, (ii)
the indemnifying party and indemnified party mutually agree or (iii) the named
parties to such claim, action or suit (including any impeded parties) include
both the indemnifying party and the indemnified party and representation of
both parties by the same counsel would be inappropriate due to actual or
potential differing interests between them, then the indemnified party may
defend, through counsel of its own choosing, such claim, action or suit and
settle such claim, action or suit, and recover from the indemnifying party the
amount of any settlement to which the indemnifying party consents or of any
resulting judgment and the costs and expenses of such defense, provided that
the indemnified party shall not compromise or settle any third party claim,
action or suit without the prior written consent of the indemnifying party,
which consent will not be unreasonably withheld, continued or delayed.
8.6 Special Procedure for Certain Indemnified Claims.
Notwithstanding the provisions of Sections 8.4 and 8.5, in case of any claim
against Buyer of the kind for which indemnification may be sought pursuant to
any of clauses (v) or (vi) of Section 8.2 (a "Special Procedure Claim"), upon
notification from Buyer that a claim for indemnification may be sought
hereunder, Seller shall have thirty (30) days to investigate whether it agrees
that the Special Procedure Claim is one indemnified against by Seller hereunder
and shall, prior to the end of such thirty (30) day period notify Buyer whether
it acknowledges that Buyer is entitled to be indemnified in respect of such
Special Procedure Claim hereunder. Buyer shall then have ten (10) Business
Days (the "determination period") to determine whether it will make a claim for
indemnification and shall then notify Seller of its determination. If Buyer
notifies B&L that it has elected not to make a claim for indemnification, or
provides no notification to B&L in response to Seller's first notification and
within ten (10) days after a second notification by Seller and expiration of
the determination period, then Seller and B&L shall be relieved of their
indemnification obligations under this Agreement in respect of such Special
Procedure Claim. If Buyer notifies B&L that it has elected to make a claim for
indemnification, then B&L shall have the right, but not the obligation, to
control and direct the defense of such claim and, in its discretion, to settle
such claim.
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ARTICLE 9
CERTAIN DEFINITIONS
9.1 Certain Definitions. For all purposes of this Agreement,
except as otherwise expressly provided or unless the context otherwise
requires:
"Accounts Payable" shall mean (i) when used with reference to the
Balance Sheet, all accounts payable of Seller reflected as "Accounts Payable"
on the Balance Sheet, and (ii) when used with reference to the Closing Date
Balance Sheet, all accounts payable of Seller in existence as of the Closing
Date as reflected as "Accounts Payable" on the Closing Date Balance Sheet, in
each case which arise from the ordinary course of operation of the Business.
"Accounts Receivable - Net" shall mean (i) when used with reference to
the Balance Sheet, all accounts receivable of Seller reflected on the Balance
Sheet as "Accounts Receivable net" or "net Trade Receivables", and (ii) when
used with reference to the Closing Date Balance Sheet, all Accounts Receivable
of Seller in existence on the Closing Date, net of allowances for doubtful
accounts, credits for cooperative advertising and sales returns and other
allowances, as reflected on the Closing Date Balance Sheet.
"Accrued Liabilities" shall mean (i) when used with reference to the
Balance Sheet, all accrued liabilities of Seller reflected as "Accrued
Liabilities" and/or "Accrued Payroll and Related Expenses" on the Balance
Sheet, and (ii) when used with reference to the Closing Date Balance Sheet, all
liabilities of Seller in existence as of the Closing Date as reflected as
"Accrued Liabilities" (including customer advances) and/or "Accrued Payroll and
Related Expenses" on the Closing Date Balance Sheet and which arise from the
ordinary course of operation of the Business and including, without limitation,
liabilities of Seller with respect to warranties for repair and replacement
related to products of the Business manufactured, sold or shipped by Seller on
or prior to the Closing Date.
"Affiliate" shall have the meaning prescribed by Rule 12b-2 of the
regulations promulgated pursuant to the Securities Exchange Act of 1934, as
amended.
"Agreed Procedure" shall mean the procedure described in Schedule 9.1
hereto.
"Claim" shall mean any demand, claim, action or cause of action based
on any Loss.
"Code" shall mean the United States Internal Revenue Code of 1986, as
amended.
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"Commercial Efforts" shall mean such good faith efforts as shall not
require the performing party (i) to do any act that is unreasonable under the
circumstances, (ii) to make any capital contribution not expressly contemplated
hereunder, (iii) to amend or waive any rights under this Agreement, or (iv) to
incur or expend any funds other than reasonable out-of-pocket expenses incurred
in satisfying its obligation hereunder, including the fees, expenses and
disbursements of accountants, counsel and other professionals.
"Environmental Laws" shall mean (A) all laws governing, regulating or
pertaining to environmental matters as in effect on or prior to the Closing
Date, and the regulations promulgated thereunder, and any environmental
statutes or regulations of, and treaties or conventions entered into by,
non-Domestic jurisdictions that are applicable to the Business or any Prior
Property or Disposal Site, as these laws, regulations, statutes, treaties and
conventions have been amended or supplemented on or prior to the Closing Date;
(B) any permits, licenses, approvals, plans, rules, regulations or ordinances
adopted pursuant to the preceding laws, in each case to the extent applicable
to the Business and the Leased Property.
"Estimated Cash Amount" shall mean a dollar amount, for purposes of
Closing, determined in the same manner as the Cash Amount except that such
determination shall be made by Seller within five (5) business days prior to
Closing with reference to the Estimated Closing Date Balance Sheet rather than
with reference to the Closing Date Balance Sheet.
"Estimated Closing Date Balance Sheet" shall mean an unaudited balance
sheet of the Business prepared in accordance with the Agreed Procedure
described in Schedule 9.1 for the month end prior to the month in which Closing
occurs (unless Closing occurs in November 1996, in which event the unaudited
balance sheet for September 1996 shall be used), prepared by Seller, or such
other unaudited balance sheet of the Business as Buyer and Seller shall
mutually agree.
"GAAP" shall mean when used with reference to the Financial Statements
and the Estimated Closing Date Balance Sheet and the Closing Date Balance Sheet
(the "GAAP Financials"), the generally accepted accounting principles used in
the preparation of the GAAP Financials with respect to all periods presented
thereby, applied on a consistent basis for all such periods and in accordance
with past practice and using materiality standards that reflect all of B&L's
operations as a whole rather than the Business alone, except that the standard
of materiality applicable to the Closing Date Balance Sheet shall be that which
would be appropriate for Seller as an independent entity without regard to its
consolidation with B&L.
"Hazardous Wastes" shall mean any toxic or hazardous material or
substances, including asbestos, contaminants, chemicals, flammable explosives,
radioactive material and any substances defined as, or included in the
definition of, "hazardous
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substances", "hazardous wastes", "Hazardous Materials", "toxic substances" or
otherwise regulated under any Environmental Law.
"Interest Rate" shall mean a fluctuating rate per annum equal to two
percent (2%) above the prime rate of, or similar rate used by, Citibank, N.A.
New York, from time to time in effect.
"Inventories - Net" shall mean (i) when used with reference to the
Balance Sheet, inventories reflected as "Total Gross Inventories Minus
Inventory Reserves" on the Balance Sheet, and (ii) when used with reference to
the Closing Date Balance Sheet, Inventories owned by Seller on the Closing Date
net of reserves and valuation allowances recorded in a manner consistent with
past practices.
"Lien" shall mean any mortgage, pledge, security interest, lien,
charge, encumbrance, equity, claim, option, tenancy, right or restriction on
transfer of any nature whatsoever.
"Loss" shall mean any loss, damage, liability, cost, assessment and
expense including, without limitation, any interest, fine, court cost and
reasonable investigation cost, penalty and attorneys' and expert witnesses'
fees, disbursements and expenses, after taking into account (i) any insurance
proceeds actually received by or paid on behalf of any party incurring a Loss
which are not required to be remitted by such party to the other party pursuant
to the terms hereof and (ii) any reserves or accruals related to such Loss to
the extent reflected in the Closing Date Net Operating Assets.
"Net Operating Assets" shall mean, when used with reference to the
Balance Sheet and the Closing Date Balance Sheet (prepared in accordance with
the Agreed Procedure in the case of the Closing Date Balance Sheet), as the
case may be, the amount by which (A) exceeds (B), where (A) equals (1)
Accounts Receivable - Net (or Net Trade Receivables), plus (2) Inventories -
Net, plus (3) Other Current Assets, plus (4) Net Property, Plant and Equipment,
plus (5) Intangibles excluding good will and (6) Other Assets excluding
Capitalized Acquisition Costs, and (B) equals (1) Accounts Payable, plus (2)
Accrued Liabilities, in each case as reflected on the Balance sheet and the
Closing Date Balance Sheet, as applicable.
"Permit" shall mean any permit, approval, authorization, license,
variance or permission required by a governmental entity under any applicable
Environmental Law.
"Person" shall mean an individual, a partnership, a joint venture, a
corporation, a trust, an unincorporated organization, a governmental entity or
any other entity.
"Taxes" shall mean all taxes, levies or other like assessments,
charges or fees, including, without limitation, income, gross receipts, excise,
value added, real or personal property, withholding, asset, sales, use,
license, payroll, transaction, capital,
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business, corporation, employment, net worth and franchise taxes, or other
governmental taxes imposed by or payable to the United States of America or any
State, local or foreign governmental entity, whether computed on a separate,
consolidated, unitary, combined or any other basis; and in each instance such
term shall include any interest, penalties or additions to tax attributable to
any such Tax.
9.2 Plurals; Etc. As used herein, the plural form of any noun
shall include the singular and the singular shall include the plural, unless
the context otherwise requires. Each of the masculine, neuter and feminine
forms of any pronoun shall include all such forms unless the context otherwise
requires.
ARTICLE 10
MISCELLANEOUS PROVISIONS
10.1 Amendment and Modification. This Agreement may be amended,
modified or supplemented only by written agreement of B&L, Seller and Buyer.
10.2 Waiver of Compliance. Except as otherwise provided in this
Agreement, any failure of any of the parties to comply with any obligation,
covenant, agreement or condition herein may be waived by the party entitled to
the benefits thereof only by a written instrument signed by the party granting
such waiver, but such waiver or failure to insist upon strict compliance with
such obligation, covenant, agreement or condition shall not operate ag a waiver
of, or estoppel with respect to, any subsequent or other failure.
10.3 Notices. All notices and other communications hereunder shall
be in writing and shall be deemed given if delivered personally or by facsimile
or three days after mailed by registered or certified mail (return receipt
requested), postage prepaid, to the parties at the following addresses (or at
such other address for a party as shall be specified by like notice; provided,
however, that notices of a change of address shall be effective only upon
receipt thereof):
(a) if to B&L or Seller:
Bausch & Lomb Incorporated
Xxx Xxxxxx & Xxxx Xxxxx
Xxxxxxxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. XxXxxxxx, Senior Vice
President - Finance
with copies to:
Xxxxxxx X. Xxxxxxxx, Senior Vice President,
Secretary and General Counsel
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(b) if to Buyer:
S-O Acquisition Corp.
00 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxxx
with a copy to:
Xxxxxx, Xxxxx & Xxxxx
1330 Avenue of the Americas
New York, New York
Attention: Xxxxxxxx X. Xxxxx, III
10.4 Assignment. At any time at or after the Closing, Buyer may
assign its rights hereunder (i) as collateral security its rights pursuant
hereto to any Persons providing financing for the consummation hereof or (ii)
to any subsidiary; provided, that, no such assignment by Buyer shall release it
from any of its obligations or liabilities hereunder; and provided further,
that, such assignee shall acquire no greater rights than those held by Buyer.
Except as expressly provided above, neither this Agreement nor any of the
rights, interests or obligations hereunder shall be assigned by any party
hereto without the prior written consent of the other party. Any attempted
assignment in violation of the preceding sentence shall be void ab initio and
the assignee shall obtain no rights by reason thereof. This Agreement and all
of the provisions hereof shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and permitted assigns. This
Agreement does not and is not intended to confer upon any other Person except
the parties hereto and their respective successors and assigns any rights,
remedies, obligations or liabilities hereunder. Notwithstanding the foregoing
paragraph, In addition, at any time after the Closing, Seller may merge with or
into an Affiliate of Seller and the surviving or resulting entity shall succeed
to all of the rights and obligations of the Seller hereunder and under any
other agreement or instrument entered into in connection with the transactions
contemplated hereby.
10.5 Governing Law. This Agreement shall be governed by the laws
of the State of New York, without reference to principles of conflicts of law
which require that the substantive laws of another jurisdiction apply.
10.6 Actions and Proceedings. Buyer and Seller hereby irrevocably
consent to the nonexclusive jurisdiction and venue of the Courts of the State
of New York and the State or Federal Court located in Monroe County, New York
in connection with any action or proceeding arising out of or relating to this
Agreement or the transactions contemplated thereby.
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10.7 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
10.8 Interpretation. The article and section headings contained in
this Agreement are solely for the purpose of reference, are not part of the
agreement of the parties and shall not in any way affect the meaning or
interpretation of this Agreement.
10.9 Severability. The invalidity or unenforceability of any
particular provision of this Agreement shall be construed in all respects as if
such invalid or unenforceable provision were omitted. All provisions of this
Agreement shall be enforced to the full extent permitted by law.
10.10 Knowledge of Seller. When it is provided herein that a matter
is "to the knowledge" of Seller such matter has been verified by making inquiry
of the following individuals: Xxx Xxxxxxxx, Xxx Xxxxxxx, Xxxxx Xxxxx, Xxxxxx
Xxxxx and Xxx Xxxxxx.
10.11 No Third Party Beneficiaries. Nothing contained in this
Agreement, express or implied, is intended or shall be construed to confer upon
or give to any Person other than the parties hereto and their successors or
permitted assigns (but not collateral assignees referenced in Section 10.4(i),
any rights or remedies under or by reason of this Agreement.
10.12 Time; Deadlines. Without prejudice to whether any times or
dates in any other Section of this Agreement are of the essence, TIME IS OF THE
ESSENCE AS TO ALL DATES AND PERIODS SET FORTH IN SECTION 4.16 AND SECTION
7.1(b).
10.13 Entire Agreement. This Agreement, including the documents,
schedules, certificates and instruments referred to herein, is the entire
agreement and understanding of the parties hereto in respect of the
transactions contemplated by this Agreement. There are no restrictions,
promises, representations, warranties, covenants or undertakings, other than
those expressly set forth or referred to herein or therein. This Agreement
supersedes all prior agreements and understandings between the parties with
respect to the transactions contemplated hereby.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written.
BAUSCH & LOMB INCORPORATED
By:_________________________________
Name: Xxxxxxx X. XxXxxxxx
Title: Senior Vice President - Finance
STERI-OSS INC.
By:_________________________________
Name:_______________________________
Title:______________________________
S-O ACQUISITION CORP.
By:_________________________________
Name:_______________________________
Title:______________________________
