AGREEMENT OF SALE
By and Between
Merit Medical Systems, Inc.
and
Mallinckrodt Inc.
August 20, 1999
TABLE OF CONTENTS
RECITALS..........................................................................................................1
ARTICLE I
SALE OF ASSETS; TRANSACTION AGREEMENTS; CLOSING...............................................................1
1.1 Assets.................................................................................1
1.2 Excluded Assets........................................................................3
1.3 Assumed Liabilities....................................................................3
1.4 Excluded Liabilities...................................................................4
1.5 Assignment of Agreements...............................................................4
1.6 Additional Understandings..............................................................4
1.7 Purchase Price.........................................................................8
1.8 Closing................................................................................9
1.9 Closing Deliveries.....................................................................9
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF SELLER.....................................................................11
2.1 Organization, Existence and Good Standing.............................................11
2.2 Authority.............................................................................11
2.3 Consents and Approvals; No Violation..................................................11
2.4 Books and Records.....................................................................12
2.5 Absence of Undisclosed Liabilities....................................................12
2.6 Financial Statements..................................................................13
2.7 Absence of Changes....................................................................13
2.8 Contracts.............................................................................13
2.9 Title to Assets and Related Matters...................................................15
2.10 Compliance With Laws..................................................................16
2.11 Litigation............................................................................16
2.12 Bankruptcy............................................................................16
2.13 Personal Property.....................................................................16
2.14 Transactions with Affiliates..........................................................17
2.15 Employees and Labor Matters...........................................................17
2.16 Tax Matters...........................................................................18
2.17 Intellectual Property.................................................................18
2.18 Real Property.........................................................................20
2.19 Inventory.............................................................................21
2.20 Year 2000 Compliance..................................................................21
2.21 Assets Used to Conduct Business.......................................................22
2.22 Product Warranties; Defects...........................................................22
2.23 No Illegal Payment....................................................................22
2.24 Mexican Facility......................................................................22
i
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF PURCHASER..................................................................23
3.1 Organization, Existence and Good Standing.............................................23
3.2 Authority.............................................................................23
3.3 Consents and Approvals; No Violation..................................................23
3.4 Bankruptcy............................................................................24
ARTICLE IV
ADDITIONAL COVENANTS AND AGREEMENTS..........................................................................24
4.1 Expenses..............................................................................24
4.2 Public Announcements..................................................................24
4.3 Waiver of Bulk Sales Law Compliance...................................................24
4.4 Offer of Employment to Seller's Angleton Division Employees...........................24
4.5 Noncompetition........................................................................25
ARTICLE V
INDEMNIFICATION..............................................................................................26
5.1 Indemnification by Seller.............................................................26
5.2 Indemnification by Purchaser..........................................................26
5.3 Conditions for the Assertion of Third Party Claims....................................27
5.4 Limitations on Indemnification........................................................28
ARTICLE VI
MISCELLANEOUS................................................................................................30
6.1 Survival of Representations, Warranties,
Covenants and Agreements .............................................................30
6.2 Amendment and Modification............................................................30
6.3 Waiver; Consents......................................................................30
6.4 Further Assurances....................................................................30
6.5 Notices...............................................................................30
6.6 Assignment............................................................................31
6.7 Governing Law.........................................................................31
6.8 Jurisdiction..........................................................................32
6.9 Counterparts..........................................................................32
6.10 Interpretation........................................................................32
6.11 Entire Agreement......................................................................32
6.12 Time of Essence.......................................................................32
6.13 Construction..........................................................................32
6.14 Severability..........................................................................32
6.15 No Third-Party Beneficiaries..........................................................33
6.16 Incorporation of Exhibits and Schedules...............................................33
ii
ARTICLE VII
CERTAIN DEFINITIONS..........................................................................................33
7.1 "Accounts Receivable".................................................................33
7.2 "Affiliate"...........................................................................33
7.3 "Agreement"...........................................................................33
7.4 "Allocation Schedule".................................................................33
7.5 "Angleton Division"...................................................................33
7.6 "Assets"..............................................................................34
7.7 "CERCLA"..............................................................................34
7.8 "Closing".............................................................................34
7.9 "Closing Cash Amount".................................................................34
7.10 "Closing Date"........................................................................34
7.11 "Code"................................................................................34
7.12 "Contracts"...........................................................................34
7.13 "Damages".............................................................................34
7.14 "Disclosure Schedules"................................................................34
7.15 "Disposal"............................................................................34
7.16 "Encumbrance".........................................................................34
7.17 "Entity"..............................................................................35
7.18 "Environmental Claim".................................................................35
7.19 "Environmental Laws"..................................................................35
7.20 "Financial Statements"................................................................35
7.21 "GAAP"................................................................................35
7.22 "Governmental Authority"..............................................................36
7.23 "Governmental Authorization"..........................................................36
7.24 "Hazardous Materials".................................................................36
7.25 "Improvements"........................................................................36
7.26 "Intangible Personal Property"........................................................36
7.27 "Intellectual Property Assets"........................................................36
7.28 "Legal Requirement"...................................................................36
7.29 "Liability"...........................................................................36
7.30 "Licensed Intellectual Property Assets"...............................................37
7.31 "Material Contracts"..................................................................37
7.32 "Material Adverse Effect".............................................................37
7.33 "Material Adverse Change".............................................................37
7.34 "Medtronic Termination"...............................................................37
7.35 "Order"...............................................................................37
7.36 "Owned Intellectual Property Assets"..................................................37
7.37 "Person"..............................................................................37
7.38 "Proceeding"..........................................................................37
7.39 "Purchase Price"......................................................................37
7.40 "Purchaser"...........................................................................37
7.41 "Purchaser's Indemnified Persons".....................................................37
7.42 "RCRA"................................................................................37
7.43 "Real Property".......................................................................37
7.44 "Release".............................................................................38
iii
7.45 "Remediation".........................................................................38
7.46 "Seller"..............................................................................38
7.47 "Seller's Indemnified Persons"........................................................38
7.48 "Solid Waste".........................................................................38
7.49 "Tangible Personal Property"..........................................................38
7.50 "Tax".................................................................................38
7.51 "Tax Returns".........................................................................38
7.52 "Title Commitment"....................................................................38
7.53 "Transaction Agreements"..............................................................38
iv
AGREEMENT OF SALE
THIS AGREEMENT OF SALE ("Agreement") is entered into effective as of
August 20, 1999, by and between Merit Medical Systems, Inc., a Utah corporation
(the "Purchaser"), and Mallinckrodt Inc., a Delaware corporation ("Seller").
RECITALS
WHEREAS, Seller is in the business of manufacturing and marketing
certain medical devices through what Seller refers to as its "Angleton Division"
(hereinafter defined in Section 7.6); and
WHEREAS, Seller is the owner of certain real property located in
Brazoria County, Texas (the "Real Property") on which Real Property is located
certain buildings and improvements (the "Improvements"); and
WHEREAS, Purchaser desires to purchase from the Seller the Real
Property, the Improvements and substantially all of the personal property
(including intellectual property) used in the conduct of the Seller's business
associated with the Angleton Division, and certain other assets, all upon the
terms and conditions set forth in this Agreement, in order that the Purchaser
may carry out and conduct after the Closing the same business as was conducted
by Seller's Angleton Division prior to the date of the Closing; and
WHEREAS, the Purchaser is willing to assume certain obligations of the
Seller as more particularly set forth in this Agreement; and
WHEREAS, the Seller is making certain representations, warranties,
covenants and indemnities herein as an inducement to the Purchaser to enter into
this Agreement;
NOW THEREFORE, in consideration of the respective representations,
warranties, covenants and indemnities contained herein and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
ARTICLE I
SALE OF ASSETS; TRANSACTION AGREEMENTS; CLOSING
1.1 Assets. Subject to the terms and conditions of this Agreement, at
the Closing, the Seller shall sell, transfer and deliver to Purchaser, and
Purchaser shall purchase from the Seller, all of the Seller's right, title and
interest in and to the following properties, assets and rights:
-1-
a. Real Property
(i) The Real Property described on Exhibit A,
attached hereto and made a part hereof, which is all of the real property owned
by Seller's Angleton Division and the only real property used in connection with
the operation of the Angleton Division;
(ii) The Improvements;
(iii) Any and all personal property or equipment owned
by Seller and used in connection with the operation or maintenance of the Real
Property and the Improvements;
(iv) All contracts or agreements affecting the Real
Property or the Improvements which the Purchaser desires to acquire; and
(v) All miscellaneous assets owned by Seller and
related to the Real Property or the Improvements including, but not limited to,
maps, documents, licenses and permits, plans and specifications, surveys, and
reports or investigations pertaining to the Real Property.
b. Other Angleton Division Property
(i) All Tangible Personal Property of Seller used
solely or primarily in connection with Seller's Angleton Division, including,
without limitation, all inventories of raw materials, work-in-process and
finished goods located on the Real Property at the close of business on the
Closing Date (hereinafter "Inventory");
(ii) All Intangible Personal Property of Seller used
solely or primarily in connection with Seller's Angleton Division;
(iii) All Contracts including agreements, or rights,
whether written or oral, to perform services for, or provide products to any
third party or which run to the benefit of Seller, such as covenants not to
compete and confidentiality agreements, which relate solely or primarily to
Seller's Angleton Division;
(iv) All prepayments under any Contract; and
(v) Any other item of real or personal property,
whether tangible or intangible,
used solely or primarily in connection with, arising out of the operation of
Seller's Angleton Division.
The foregoing items described in Sections 1.1a. and 1.1b. are collectively
referred to herein as the "Assets".
-2-
It is the intention of the parties to this Agreement that Purchaser
shall acquire from the Seller all of the real and personal property of the
Seller used solely or primarily in connection with the business or operation of
Seller's Angleton Division, of whatever kind or nature, except for the
specifically excluded items described in Section 1.2 below.
1.2 Excluded Assets. Notwithstanding any other provision of this
Agreement to the contrary, Purchaser shall not acquire and Seller shall not sell
to Purchaser any of the following (the "Excluded Assets"):
a. the corporate record books and stock records of
Seller containing the articles of incorporation, bylaws, minutes of the meetings
of the board of directors and similar corporate governance documents;
b. the tax records of the Seller related to the Angleton
Division (except that Purchaser shall be given a copy of any of such records
which Purchaser shall request within 30 days after Seller's receipt of a written
request from Purchaser);
c. assets related to any pension or benefit plan of the
Seller;
d. any Accounts Receivable or cash of Seller; and
e. except as set forth in Section 1.6i., any rights to use the
names "Mallinckrodt Inc.", "Mallinckrodt Medical Services, Inc." or any other
derivative name or any trademark or service xxxx in any manner using the name
"Mallinckrodt".
1.3 Assumed Liabilities. Subject to the terms and conditions of this
Agreement, at the Closing, the Seller shall assign and transfer to the Purchaser
and Purchaser shall assume and be obligated to pay the following:
a. liabilities related to obligations under Contracts which
obligations arise on or after the Closing Date, including (without limitation)
all product and service warranties and liabilities related to products sold
after the Closing Date, and all liabilities and obligations related to breach of
contract or tort or any other obligation which arises as a result of events
occurring after the Closing Date. Purchaser is not assuming and Seller is
retaining all liabilities under the Contracts related to product warranties and
liabilities for products or services sold prior to the Closing Date and all
obligations and liabilities related to breach of contract or tort or any other
obligation which arises as a result of events occurring prior to the Closing
Date.
b. any Liabilities covered by Section 4.4 to be assumed by
Purchaser.
Those Liabilities referred to in the preceding items a. and b. are collectively
referred to herein as the "Assumed Liabilities". Though not an Assumed Liability
as defined hereunder, it is understood and agreed by Purchaser that Purchaser
-3-
shall be fully liable and responsible for all Liabilities arising out of the use
or possession by Purchaser of the Assets and the Assumed Liabilities subsequent
to the Closing Date, other than with respect to Excluded Liabilities. Purchaser
shall also be fully responsible to pay, perform and discharge, as and when due,
all obligations for which it is responsible pursuant to the terms hereof and
notwithstanding any other provision hereof.
1.4 Excluded Liabilities. Notwithstanding any other provision of this
Agreement to the contrary, Seller is not assigning and Purchaser is not assuming
and the Assumed Liabilities shall not include any liabilities related to any of
the following matters (the "Excluded Liabilities"):
a. any liabilities of the Seller related to any Environmental
Claim against Seller or related to the Real Property to the extent the factual
basis of such claim occurred prior to the Closing Date, including, but not
limited to, violation of any Environmental Laws occurring prior to the Closing
Date;
b. any Liability of the Seller arising as a result of the
Seller's breach of contract or agreement, the Seller's commission of a tort or
the Seller's violation of a Legal Requirement;
c. any liability for products or services sold or
provided by Seller prior to the Closing Date;
d. any Liability to any present or past employee of the Seller
relating to any pension or benefit plan of the Seller, including but not limited
to, the Liabilities described in Section 1.6b. other than as set forth in
Section 4.4;
e. any obligation of the Seller to pay any Tax of any kind or
nature related to the operations of the Seller prior to the Closing Date;
f. any Liability of Seller for borrowed money or any Liability
of Seller for any accounts payable or Liability incurred in connection with the
operation of Seller's Angleton Division on or prior to the Closing Date except
for the Assumed Liabilities;
g. any Liability incurred by the Seller for legal fees,
accounting fees, brokerage costs or any other cost or expense incurred in
connection with the transactions contemplated by this Agreement, including
escrow and closing costs and title insurance costs contemplated by this
Agreement; and
h. any Liability of Seller related to the advertising of
Seller's products, including, but not limited to, any advertising or contracts
related to trade shows, advertising in medical journals, contracts with public
relations firms or consultants and any other advertising of any kind or nature
whatsoever.
-4-
1.5 Assignment of Agreements. Subject to the terms and conditions of
this Agreement, at the Closing, the Purchaser shall take an assignment of all of
the Seller's covenants not to compete and confidentiality agreements which
Seller has with its employees of the Angleton Division.
1.6 Additional Understandings. In connection with the purchase of the
Assets by Purchaser from Seller and the execution of the Transaction Agreements
at the Closing, the parties hereto agree as follows:
a. The parties agree to allocate the Purchase Price among the
Assets for tax purposes in accordance with an allocation schedule (the
"Allocation Schedule"), which Allocation Schedule shall be agreed upon by the
parties, each acting reasonably and in good faith, by March 15, 2000 or such
later date as may be mutually agreed by both parties.
b. In connection with the acquisition of the Assets and
Purchaser's assumption of certain liabilities of the Seller, subject to the
provisions of Section 4.4 hereof, Purchaser shall have no obligation for, and
the parties specifically understand and acknowledge that Purchaser will not be
assuming any responsibility for or liability under, any profit sharing, Section
401(k), thrift-savings, simplified employee pension plan, deferred compensation
plan, severance pay, golden parachute, cafeteria plan, flexible compensation
plan, life insurance, medical, dental, disability, welfare or vacation plans of
the Seller or any other plan or arrangement of the Seller of any kind or
character. Subject to the provisions of Section 4.4, Purchaser does not and
shall not recognize or assume any liability with respect to any employee benefit
plan of the Seller, nor shall the inclusion by Purchaser of a prior employee of
the Seller in an employee benefit plan of Purchaser or an Affiliate of Purchaser
be deemed to constitute the adoption or continuation by Purchaser of any
employee benefit plan of the Seller.
c. Seller has an agreement with Future Med for the development
of a PTA catheter, a copy of which is attached hereto as Exhibit B. Seller will
on the Closing Date assign the Future Med contract to Purchaser. Furthermore,
Seller shall purchase from Future Med all of the inventory required to be
purchased by Seller on or prior to the Closing Date from Future Med. Seller
shall consign such inventory to Purchaser. Purchaser shall use reasonable
commercial efforts to sell such inventory in the normal course of Purchaser's
operations and, upon the sale of any unit of the Future Med inventory, Purchaser
shall pay to Seller Seller's cost for such inventory unit, plus the 3% royalty
described below. Such payment shall be made within 45 days after the end of each
calendar quarter in which the sale occurred. The terms of assignment of the
Future Med contract shall be that Purchaser shall succeed to all of the right,
title and interest of Seller under the Future Med contract, shall assume all
obligations of Seller arising under such contract which arise on or after the
Closing Date, and Purchaser shall grant to Seller a net royalty of 3% on all
revenues achieved by Purchaser in connection with such contract until Seller has
recovered $1,000,000. Upon the payment by Purchaser to Seller of net royalties
-5-
totaling $1,000,000, all of Seller's right, title and interest in the Future Med
contract and royalty shall terminate and be of no further force or effect.
d. The parties understand and acknowledge that Seller
distributes its Angleton Division products through a worldwide distribution
network. In order to facilitate the Purchaser operating a business following the
Closing substantially similar to the Angleton Division operations operated by
Seller prior to the Closing, Seller agrees to maintain in full force and effect
all foreign licenses or authorities to sell products which Seller has in effect
as of the Closing Date for the sale of the products produced by Seller's
Angleton Division. Such licenses shall be maintained for a period of up to 180
days following the Closing Date (the "Transition Period") and shall, during such
Transition Period, be assigned to Purchaser or an entity designated by Purchaser
at Purchaser's request, where possible, or novated in favor of Purchaser to the
extent such assignment is not possible. Seller will fully cooperate with and
assist Purchaser to obtain such licenses and authorizations to sell its products
during the Transition Period.
e. Purchaser agrees to sell the products Purchaser produces
from the Angleton Division to Seller for resale in the countries designated on
Exhibit C attached hereto and made a part hereof, such arrangement to be in
effect for three (3) years following the Closing Date. Such sale by Purchaser to
Seller of Purchaser's products produced from the Angleton Division shall be
subject to the transfer pricing set forth on Exhibit D attached hereto and made
a part hereof, and shall also be subject to such product warranties and
indemnities as Purchaser shall generally give to other purchasers of its
products. Notwithstanding the sale by Purchaser to Seller of its products for
resale in the countries specified on Exhibit C Purchaser and Seller understand
and agree Purchaser will be selling products directly in such countries or
through distributors and nothing in this contract shall be deemed to grant any
exclusive distribution rights to Seller. Except in those countries where
Purchaser will sell to Seller as specified on Exhibit C Seller agrees to
identify the distributors through whom Seller was selling its products worldwide
and to assist and cooperate, following the Closing, in enabling Purchaser to
establish distribution relationships with such distributors and to assist in
every commercially reasonable way to help Purchaser to continue to distribute
the Angleton Division products through such distributors.
f. Seller agrees to sell to Purchaser bismuth compounds and
barium compounds for a period five years after the Closing Date, but if and only
for so long as such products are produced and sold by Seller to other customers
of Seller. Initially, the prices and terms for the sale of barium compounds and
bismuth compounds are as set forth on Exhibit E attached hereto and made a part
hereof. All prices shall be adjusted periodically to reflect Sellers increases
in cost for the supply of any such compounds.
g. To the extent that Seller provides any management
information services, including inventory control, customer support, customer
tracking, fixed asset records, product sales records, payroll and personnel
records, or any other records or services at locations separate and apart from
the facilities which are being acquired by Purchaser pursuant to the terms of
this Agreement, Seller will provide such services to Purchaser, at its actual
cost for providing such services, on a transitional basis during the 90 day
-6-
period following the Closing or, if of shorter duration, until such time as
Purchaser can get its systems and operations fully functioning at its Salt Lake
City or Angleton Division headquarters. In connection therewith and to help
Purchaser transition to its own management information services, Seller agrees
to cooperate reasonably with Purchaser including, by way of example, not by way
of limitation, downloading all files, customer lists, product specifications,
fixed asset records, employee name and identification information, and salary
information, and other records as may be reasonably requested by Purchaser and
providing Purchaser with both computer compatible information and hard copies of
such information.
h. Seller agrees that Seller will make available to Purchaser
employees of Seller who are qualified and knowledgeable about all of the
products produced by Seller's Angleton Division to provide training to the
Purchaser's key employees in Salt Lake City or such other location as Purchaser
may request. Such training shall consist of full training regarding all of the
products, their specifications, manufacturing details and other information as
Purchaser shall reasonably request to make Purchaser fully informed of the
Angleton Division products, specifications, customers, sales force and any other
information which Purchaser shall reasonably request. Purchaser shall be
obligated to pay the out-of-pocket expenses, including airfare and hotel
expenses, for employees of Seller who travel to Salt Lake City to provide such
training. Such training shall be provided at times as mutually agreeable between
Purchaser and Seller, but Seller shall make every effort to accommodate
Purchaser's training needs as soon as possible following the Closing. In all
events, such training will be provided within 60 days of the Closing.
i. Notwithstanding the provisions of Section 1.2e., the
parties understand and acknowledge that part of the Assets being sold by Seller
to Purchaser include product inventory packaged in packages labeled with the
name "Mallinckrodt Inc." or "Mallinckrodt Medical Services, Inc." or other
names, trademarks or service marks containing the "Mallinckrodt" name or
derivatives thereof. The parties hereby agree that Purchaser shall be entitled
to sell all inventory packaged in Mallinckrodt labeled packages and to put
inventory into existing packaging marked with the name "Mallinckrodt" which
packaging comprises part of the inventory being purchased by Purchaser. In
addition, the Purchaser shall be entitled to notify all customers that it has
purchased the Angleton Division from Seller and shall be entitled to transition
its relationships with its customers from Seller to Purchaser. Notwithstanding
the foregoing, all new contracts or purchase contracts shall be under the name
Merit Medical Systems, Inc. or another name as Purchaser shall choose. Except as
set forth below, Purchaser shall not conduct business in the name of
Mallinckrodt, other than to liquidate the inventory and to transition the
Angleton Division production from Seller to Purchaser. Seller hereby grants to
Purchaser the continuing right to package all products produced by Purchaser
from the Angleton Division for resale by Seller in accordance with Section 1.6e.
in packaging designating such products as "Mallinckrodt" products. Such use of
the name "Mallinckrodt" on packaging of products shall be strictly limited to
products produced by Purchaser for resale by Seller in accordance with Section
1.6e.
-7-
j. Seller agrees that Seller will cooperate with Purchaser in
providing Governmental Authorities with the information necessary to allow
Purchaser to qualify as a successor employer for payroll tax purposes and will
assist Purchaser in qualifying as a successor employer if Purchaser so requests.
k. Seller agrees that any calls Seller receives (including,
without limitation, calls, faxes, written orders or other written communications
which Seller receives from any third party related to the sale or purchase of
products from the Angleton Division or with respect to Contracts) relative to
any matter concerning the on-going operation of the Angleton Division shall
promptly be forwarded by the Seller to Purchaser. Seller shall inform all of its
employees who are involved with the Angleton Division business of the obligation
to forward customer's calls, orders, contractual inquiries or other information
regarding the Angleton Division to Purchaser. Seller agrees that in the event
that any customer or other party in a contractual relationship with Purchaser
shall send to Seller any money owed to Purchaser, Seller shall promptly deliver
such funds to Purchaser. Purchaser agrees that any funds Purchaser receives with
respect to payment on accounts receivable or other payments which are the
property of Seller and which were not transferred to Purchaser pursuant to the
terms of this Agreement shall promptly be delivered by Purchaser to Seller.
l. Seller agrees that Purchaser shall have no responsibility
for any inventory previously sold by Seller and Purchaser shall have no
obligation to accept return of such inventory or any responsibility with respect
to warranties, product performance or product liability with respect to such
products. Any such inventory which any customer desires to return shall be the
sole and exclusive responsibility of Seller and Purchaser shall refer all such
return requests or any product liability questions or product performance
problems to Seller which relate to products sold on or prior to the Closing Date
by Seller; provided that (i) Purchaser shall provide Seller with replacement
products at a reasonable market price if Seller requires any such products to
replace products that are the subject of any valid warranty or other product
claims by any customer for which Seller is responsible, and (ii) Purchaser will
provide Seller with catheter evaluation by its quality control function with
respect to any products that are the subject of any warranty or other product
claims by any customer for which Seller is responsible, such evaluation to be
provided at Purchaser's cost.
1.7 Purchase Price. The total purchase price (the "Purchase Price") for
the Assets shall be comprised of (i) Seven Million Eight Hundred Fifty Thousand
Dollars ($7,850,000) ("Closing Cash Amount" and (ii) the assumption of the
Assumed Liabilities, and the Purchase Price will be subject to the adjustments
set forth in Sections 1.7e. and 1.7f. The Purchase Price shall be allocated
among the Assets as set forth in the Allocation Schedule. The Closing Cash
Amount minus the adjustment to be made pursuant to Section 1.7f. will be paid to
Seller by Purchaser at Closing.
-8-
a. The Seller and the Purchaser shall each pay one-half (2) of
any sales, use, transfer or transaction tax, if any, imposed by any Governmental
Authority attributable to and on account of the sale or transfer of any of the
Assets to Purchaser.
b. Prepaid expenses (including, but not limited to, rents,
utilities, contract payments, license and permit fees, and deposits) with
respect to the Assets paid by Seller shall be transferred to Purchaser at the
Closing.
c. Any escrow fees or other closing costs incurred in
connection with the purchase of the Real Property shall be paid one-half (2) by
Seller and one-half (2) by Purchaser. All Real Property and other property taxes
for the 1999 calendar year shall be prorated between Purchaser and Seller as of
the Closing Date.
d. The Seller shall pay all charges for a standard Texas form
Owner's Policy of Title Insurance (the "Owner's Title Policy") to be issued by a
title insurance underwriter reasonably acceptable to Purchaser through a title
company (the "Title Company".
e. The cost of Inventory, as shown on the balance sheet of
March 31, 1999 (which was net of certain inventory reserves), was $2,589,887.
The March 31, 1999 balance sheet contained an allowance of $175,000 for
inventory that is not saleable or usable, leaving a net inventory value as of
March 31, 1999 of $2,414,887. A joint inventory audit was carried out by the
parties on August 19, 1999, the day before the Closing Date. The joint inventory
audit determined the total value of the inventory to be $2,773,000. The parties
have agreed that there is $525,000 of unsaleable or unusable inventory, leaving
a net value of usable inventory of $2,248,00. The Closing Cash Amount (and the
Purchase Price) shall be reduced by $166,887 which represents the difference
between the net inventory value of $2,414,887 existing on March 31, 1999, and
$2,248,000 representing the net inventory value existing as of the date of the
joint inventory audit.
f. Seller shall calculate the fully accrued cost, as of the
close of business on the Closing Date, of all vacation owed to employees of the
Angleton Division which Purchaser is hiring and such amount shall be deducted
from the Closing Cash Amount at the Closing. The fully accrued cost shall
include the actual wage cost of the vacation time plus all tax or other burdens
which would be incurred if the value of such vacation time were required to be
paid in cash by the Seller to such employees.
1.8 Closing. The Closing is taking place at the offices of the Seller
or such other place as may be agreed to by the parties, on and as of the date
hereof.
-9-
1.9 Closing Deliveries.
a. At the Closing, the Seller is delivering to Purchaser
the following:
(i) a Xxxx of Sale (in the form attached hereto
as Exhibit F) transferring to Purchaser all of the Seller's right, title and
interest in and to all of the Seller's Tangible Personal Property and Intangible
Personal Property, free and clear of all Encumbrances, except for Encumbrances
represented by Assumed Liabilities and the terms of the Contracts and other
matters specifically disclosed by Seller; and
(ii) an Assignment and Assumption Agreement (in
the form attached hereto as Exhibit G) assigning to Purchaser all of Seller's
rights under the Contracts, free and clear of all Encumbrances, except for
Encumbrances represented by Assumed Liabilities and the terms of the Contracts
and other matters specifically disclosed by the Seller and except for any
consents to assignments of Contracts and other Assumed Liabilities; and
(iii) a Warranty Deed in favor of Purchaser, as
grantee, conveying good and indefeasible fee simple title to the Real Property
and Improvements (in the form attached hereto as Exhibit H), subject only to
Assumed Liabilities and such other exceptions as may be reasonably acceptable to
Purchaser; and
(iv) a standard Texas form Owner's Title Policy
(in the form attached hereto as Exhibit I) paid for by the Seller in the amount
of the Purchase Price attributable to the Real Property, covering the Real
Property and Improvements and insuring that the Purchaser is vested with a good,
indefeasible fee simple title to such Real Property and Improvements and to all
the easements, rights and benefits that are intended to be appurtenant to or to
benefit such Real Property, all subject only to such exceptions as may be
reasonably acceptable to Purchaser, and including such customarily available
endorsements and additional assurances as may be reasonably required by
Purchaser; and
(v) current evidence establishing that the
individuals acting on behalf of the Seller in connection with this Agreement and
the Transaction Agreements is/are authorized to so act and to bind the Seller;
and
(vi) an Affidavit given to Purchaser on behalf of
the Seller establishing that the Seller is not a "foreign person" or a "United
States real property holding corporation" as defined in the Foreign Investment
in Real Property Tax Act, specifying the Seller's U.S. Employer Identification
Number, specifying the Seller's office address and establishing that withholding
of tax is not required upon the disposition of the Seller's interest in the Real
Property; and
(vii) possession of the Tangible Personal Property
and the Real Property and the Improvements; and
-10-
(viii) copies or originals (as appropriate) of each
of the Transaction Agreements executed by all parties; and
(ix) Assignment of Patents and Assignment of
Trademarks transferring all Patents, Trademarks and other Intellectual Property
Assets to Purchaser in form sufficient for recording with all appropriate
Governmental Authorities (in the form attached hereto as Exhibit J; and
(x) copies of all consents (if any) obtained by
Seller to the assignment of the Contracts.
b. At the Closing Purchaser is delivering to the Seller the
following:
(i) a wire transfer in the amount of the Closing
Cash Amount net of the deduction described in Section 1.7(f) hereof; and
(ii) an Assignment and Assumption Agreement
assuming the Assumed Liabilities in the form attached hereto as Exhibit G; and
(iii) copies or originals (as appropriate) of the
Transaction Agreements executed by all parties; and
(iv) current evidence establishing that the
individuals acting on behalf of the Purchaser in connection with this Agreement
and the Transaction Agreements is/are authorized to so act and bind the
Purchaser.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF SELLER
The Seller represents and warrants to Purchaser that except as set
forth in the Disclosure Schedules to be delivered to Purchaser pursuant to the
terms of this Agreement, the following are correct and complete as of the date
of this Agreement; provided, however, that any item disclosed under any section
of the Disclosure Schedules shall be deemed to be disclosed only with respect to
the section to which such Disclosure Schedules references and shall not be
deemed to qualify or otherwise limit any other representation or warranty in
this Agreement unless and to the extent appropriately cross-referenced. Any
reference in this Article II to an agreement being "enforceable" shall be deemed
to be qualified to the extent such enforceability is subject to (i) laws of
general applicability relating to the bankruptcy, insolvency, moratorium and the
release of debtors and similar rights and remedies, and (ii) the availability of
specific performance, injunctive relief and other equitable remedies.
-11-
2.1 Organization, Existence and Good Standing. Seller is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Delaware and has full corporate power and authority to carry on its
business as now being conducted, to own and operate its properties and assets,
and to perform all its obligations under the Contracts, this Agreement and the
Transaction Agreements. Seller is duly qualified to do business as a foreign
corporation and is in good standing under the laws of each state or other
jurisdiction in which the properties and assets owned or leased and operated by
it or the nature of the business conducted by it make such qualification
necessary and where the failure so to qualify would have a Material Adverse
Effect.
2.2 Authority. The Seller has the absolute and unrestricted right,
power, authority and capacity to execute and deliver this Agreement, the
Transaction Agreements to be executed by the Seller and all other closing
documents and other documents anticipated to be entered into by the Seller in
connection with this Agreement and the Transaction Agreements, to perform its
obligations hereunder and thereunder and to consummate the transactions
contemplated hereby and thereby. No corporate proceedings on the part of the
Seller, which have not already been taken, are necessary to authorize the
execution and delivery of this Agreement or the Transaction Agreements, the
performance of the Seller's obligations hereunder or thereunder, or the
consummation of the transactions contemplated hereby or thereby. This Agreement
has been and the Transaction Agreements to which the Seller is a party have been
duly and validly executed and delivered by the Seller and this Agreement and
each of the Transaction Agreements constitutes the legal, valid and binding
agreement of the Seller enforceable against the Seller in accordance with its
terms. Each individual executing this Agreement and the Transaction Agreements
on behalf of the Seller, has the legal power, right and actual authority to bind
the Seller to the terms and conditions hereof and thereof.
2.3 Consents and Approvals; No Violation. Neither the execution and
delivery of this Agreement or the Transaction Agreements by Seller, the
consummation of the transactions contemplated hereby and thereby (including,
without limitation, the assignments and assumptions referred to in Section 1.9),
nor the compliance by the Seller with any of the provisions hereof and thereof
will, in any case where it might have any adverse effect on the Assets, the
Assumed Liabilities, or any of Seller's rights to any of the foregoing, or on
its ability to perform its obligations hereunder or under any of the Transaction
Agreements, (i) conflict with or violate any provision of the Articles of
Incorporation, Bylaws, or other charter or governing documents of the Seller,
(ii) result in a violation or breach of, or constitute (with or without due
notice or lapse of time or both) a default (or give rise to any right of
termination, cancellation or acceleration) under, any of the terms, conditions
or provisions of any note, Contract, agreement, commitment, bond, mortgage,
indenture, license, lease, pledge agreement or other instrument or obligation to
which the Seller is a party or by which the Seller or any of its properties or
assets may be bound, including, without limitation, any agreement with respect
to the sale by the Seller of any of its properties or assets, (iii) violate or
conflict with any provision of any Legal Requirement binding upon the Seller, or
(iv) result in, or require, the creation or imposition of, any Encumbrance upon
or with respect to any of the Assets, or impair the ability of the Seller to
-12-
carry out its obligations under this Agreement or the Transaction Agreements.
The execution and delivery of this Agreement and the other Transaction
Agreements by the Seller do not and the consummation of the transactions
contemplated hereby and thereby will not give rise to a right of termination,
cancellation or acceleration of any obligation or loss of any benefit under any
Contract or other agreement, permit, concession, license, statute, law,
ordinance, rule or regulation applicable to the Seller or any of the Assets,
except as would not have a Material Adverse Effect on the Assets and the ability
of Purchaser to carry on a business similar to the business carried on at the
Seller's Angleton Division prior to the Closing. No consent, approval, order or
authorization of, or registration, declaration or filing with, any court,
administrative agency or commission or other Governmental Authority is required
by or with respect to the Seller in connection with the execution and delivery
of this Agreement and the Transaction Agreements or the consummation of the
transactions contemplated hereby or thereby.
2.4 Books and Records. The books of account and other business records
of the Seller regarding the Assets, the Angleton Division of the Seller and the
results of operations of the Angleton Division of the Seller have all been made
available to Purchaser and such books and records are correct in all material
respects, and the books and records considered as a whole fairly represent the
operations of the Angleton Division of the Seller for the periods indicated
therein.
2.5 Absence of Undisclosed Liabilities. Except as and to the extent
fully reflected or reserved against on the Seller's Financial Statements or as
fully disclosed in writing to Purchaser on the Disclosure Schedules, the Seller,
as of the Closing Date, did not have any Liabilities, including, without
limitation, any Liabilities resulting from failure to comply with any Legal
Requirement, applicable to the Angleton Division of the Seller, due or to become
due and whether incurred in respect of or measured by the income or sales of the
Seller for any period, or arising out of any transaction entered into or any
state of facts existing, on or before the Closing Date, which could materially
adversely affect the Assets, give rise to an Encumbrance against the Assets or
materially adversely affect the Seller's ability to carry out the transactions
contemplated by this Agreement and the Transaction Agreements.
2.6 Financial Statements. The Seller has delivered to the
Purchaser:
a. unaudited balance sheets of the Angleton Division of the
Seller as at June 30, 1998 and the related unaudited statements of income, for
the fiscal year ended June 30, 1998, including the notes thereto, and
b. the unaudited balance sheet of the Angleton Division as of
March 31, 1999, and the related unaudited statement of income for the nine
months then ended.
All such financial statements delivered pursuant to this Section 2.6 (the
"Financial Statements") fairly present the financial condition and results of
operations of the Seller's Angleton Division as of the respective dates thereof
and for the periods therein referred to, all in accordance with Seller's
accounting principles consistently maintained and applied which do not deviate
-13-
from GAAP in any material respect. The Financial Statements referred to in this
section reflect the consistent application of such accounting principles
throughout the periods involved.
2.7 Absence of Changes. Since March 31, 1999, there has not been (i)
any Material Adverse Change, that would have a Material Adverse Effect on the
Assets or Seller's Angleton Division, except for the receipt on April 5, 1999 of
a termination notice from Medtronic, Inc. with respect to its contract with the
Angleton Division (such event hereinafter referred to as the "Medtronic
Termination"; (ii) any damage, destruction or loss, whether covered by insurance
or not, materially and adversely affecting the Assets or the Angleton Division
of the Seller; (iii) any change in the accounting methods followed by the Seller
with respect to its Angleton Division; (iv) except for the Medtronic
Termination, any entry into, termination or receipt of notice of termination of
any material agreement or commitment related to the Angleton Division except in
the ordinary course of business; (v) any dispute or any other occurrence, event
or condition of any character, which reasonably could be anticipated to give
rise to a legal or administrative action that might have a Material Adverse
Effect; (vi) any increase in or modification of benefits payable or to become
payable by Seller to any of the employees of Seller's Angleton Division, except
for increases in compensation payable by Seller to the employees of Seller's
Angleton Division in the ordinary course of business and consistent with past
practice; or (vii) any agreement to do any of the foregoing.
2.8 Contracts.
a. Section 2.8 of the Disclosure Schedules set forth a list of
all the Contracts that are material to the Angleton Division ("Material
Contracts" to which Seller is a party, which are included in the Assumed
Liabilities and which are of the kind described below in this Section 2.8a
("Material Contracts":
(i) any distributor, sales, advertising, agency
or manufacturer's representative contract;
(ii) any continuing contract for the purchase or
sale of materials, supplies, equipment or services involving in the case of any
such contract more than $50,000 over the life of the contract;
(iii) any trust indenture, mortgage, promissory
note, loan agreement or other contract for the borrowing of money, any currency
exchange, commodities or other hedging arrangement or any leasing transaction of
the type required to be capitalized in accordance with GAAP;
(iv) any contract for capital expenditures in
excess of $50,000;
-14-
(v) any contract limiting the freedom of the
Seller or Purchaser, following the Closing, to engage in any line of business or
to compete with any other Person (as that term is defined in the Securities
Exchange Act of 1934, as amended (the "Exchange Act");
(vi) any contract pursuant to which Seller leases
any real property;
(vii) any contract pursuant to which Seller leases
machinery or equipment necessary to run (a) the Mapics Software (including but
not limited to an IBM AS400 Server and Cisco 2501 router);
(viii) any contract with any affiliate of the
Seller;
(ix) any agreement of guaranty, indemnification,
or any similar commitment with respect to, the obligations, liabilities (whether
accrued, absolute, contingent or otherwise) or indebtedness of any other Person;
(x) any license, or other agreement to which
Seller is a party (or by which any Intellectual Property Assets owned or
licensed by Seller is bound or subject) and pursuant to which any person has
been or may be assigned, authorized to use, or given access to any Intellectual
Property Assets owned or licensed by Seller other than (A) access to or use of
standard object code product pursuant to customary standard non-exclusive
end-user, object code, internal-use software written license and
support/maintenance agreements entered into in the ordinary course of business,
the forms of which have been provided to Purchaser or (B) access provided in the
ordinary course of business under a customary standard written
nondisclosure/nonuse agreement, or in accordance with any standard
confidentiality provisions set forth in any agreement with any customers for
products or services of the Angleton Division;
(xi) any license, sublicense or other agreement
pursuant to which Seller has been or may be assigned or authorized to use, or
has or may incur any obligation in connection with, any third party Intellectual
Property Assets;
(xii) any agreement to indemnify, hold harmless or
defend any other person with respect to any assertion of personal injury, damage
to property or Intellectual Property Assets infringement, misappropriation or
violation or warranting the lack thereof, other than indemnification provisions
contained in a customary standard written end-user object code product license
arising in the ordinary course of business; and
(xiii) any employment contract.
b. The Seller has (i) performed all of the obligations
required to be performed by it under the Contracts, (ii) is entitled to all
benefits under, and is not in default in respect of, any Material Contract,
except in the case of clauses (i) or (ii) as would not have a Material Adverse
Effect. Each of the Contracts is in full force and effect, unamended, and there
-15-
exists no default or event of default or, to the knowledge of Seller, event,
occurrence, condition or act, with respect to Seller or with respect to the
other contracting party, or otherwise, that, with or without the giving of
notice, the lapse of time or the happening of any other event or conditions,
could reasonably be expected to become a default or event of default under any
Contract, which default or event of default could reasonably be expected to have
a Material Adverse Effect. True, correct and complete copies of all Contracts
have been made available to the Purchaser.
c. Section 2.8(c) of the Disclosure Schedules lists each
Material Contract for which the consent, waiver or approval of any third party
to such Material Contract was required thereunder in connection with the
transactions contemplated by this Agreement or for such Material Contract to
remain in effect without modification after the Closing. If, on and as of the
date hereof, Seller has not received consents for all of the Contracts for which
any consent or approval for assignment is required, Seller shall continue to
seek such consents after the Closing Date and shall hold any such Contracts not
effectively assigned as of the Closing Date in trust for the benefit of
Purchaser, as and to the extent necessary given the terms of any such Contracts
prohibiting or restricting assignment.
d. Other than as reflected in the Financial Statements or as
incurred in the ordinary course of business, no amounts have been paid in
advance in the form of fees or compensation to the Seller with respect to the
Contracts and no amount is owed by the Seller to any party for goods or services
received pursuant to the Contracts prior to the Closing. The parties understand
and agree that all prepaid fees shall be the property of Purchaser and
transferred by Seller to Purchaser at the Closing and all obligations under
Contracts arising prior to the Closing shall remain the obligations of Seller.
Such advance payments or amounts owed were paid or incurred in the ordinary
course of business.
e. Section 2.8e. of the Disclosure Schedules sets forth a
complete and accurate list of (i) the ten largest distributors for the Seller's
Angleton Division products during the 12 months ending June 30, 1999, indicating
the volume of products distributed by such distributor; (ii) the ten largest
customers (by dollar volume) of the Seller's Angleton Division during the 12
months ended June 30, 1999, and (iii) the ten largest suppliers of materials or
services to Seller's Angleton Division during the 12 months ended June 30, 1999,
indicating the nature of the product supplied.
2.9 Title to Assets and Related Matters. Except as set forth on
Section 2.9 of the Disclosure Schedules, the Seller owns and has good and
indefeasible title to or a valid and subsisting leasehold interest in, and the
power to sell or transfer, all of the Assets free and clear of all Encumbrances
and the claims or rights of any other party, except for Encumbrances represented
by Assumed Liabilities and the restrictions, conditions, and obligations in the
Contracts, matters affecting title to the Real Property disclosed on the Title
Commitment or in the Owner's Title Policy that are reasonably acceptable to
Purchaser and other matters disclosed on the Disclosure Schedules that are
reasonably acceptable to Purchaser.
-16-
2.10 Compliance With Laws. Except as set forth in Section 2.10 of the
Disclosure Schedules, the Seller is in compliance with all Legal Requirements
applicable to the ownership of the Assets and the operation of its Angleton
Division except where the failure so to comply would not have a Material Adverse
Effect, or materially adversely effect the Seller's ability to carry out its
obligations under this Agreement or the Transaction Agreements, and the Seller
has not received any Order, notice, or other communication from any Governmental
Authority of any alleged, actual, or potential violation and/or failure to
comply with any such Legal Requirement that might reasonably have any of the
foregoing effects.
2.11 Litigation. Except as set forth in Section 2.11 of the Disclosure
Schedules, the Seller is not subject to any Order in which relief is sought
involving, affecting, or relating to the ownership, operation, or use of the
Assets or the Angleton Division of the Seller or the matters covered by the
Transaction Agreements or which would prevent, delay, or make illegal the
transactions contemplated by this Agreement or the Transaction Agreements. There
are no Proceedings pending or threatened against, involving, affecting, or
relating to the Seller's ownership, operation, or use of the Assets or to the
conduct of its Angleton Division.
2.12 Bankruptcy. The Seller has not made any assignment for the
benefit of creditors, filed any petition in bankruptcy, been adjudicated
insolvent or bankrupt, petitioned or applied to any tribunal for any receiver,
conservator or trustee of it or any of its property or assets, or commenced any
proceeding under any reorganization arrangement, readjustment of debt,
conservation, dissolution or liquidation law or statute of any jurisdiction; and
no such action or proceeding has been commenced or threatened against the Seller
by any creditor, claimant, Governmental Authority or any other person.
2.13 Personal Property. The Seller has disclosed to Purchaser all the
Tangible and Intangible Personal Property owned, leased or licensed by the
Seller. The Seller has made available to the Purchaser true, correct and
complete copies of all material contracts, agreements, mortgages, leases and
commitments relating to or affecting any interest in the Tangible or Intangible
Personal Property of the Seller. Purchaser will be acquiring all of the Tangible
and Intangible Personal Property owned by the Seller. All of the Tangible
Personal Property owned or used primarily or exclusively by the Seller in
connection with the Seller's Angleton Division is located at one of the
following addresses:
0000 Xxxxx X Xxxxxx
Xxxxxxxx, XX 00000
Xxxxxxx Xxxxx
Xxxxxxxx, XX 00000
2.14 Transactions with Affiliates. Section 2.14 of the Disclosure
Schedules sets forth all relationships between Seller and its Angleton Division
and between Seller's Angleton Division and any other Affiliate of the Seller,
-17-
including any foreign entities. Such relationships include, but are not limited
to, any management information services or support services provided by Seller
to the Angleton Division; all services, supplies or products obtained by
Seller's Angleton Division from the Seller or any Affiliate of the Seller and
any other inter-company relationship which, once the Angleton Division has been
acquired by the Purchaser, will no longer be available to the Purchaser
following the Transition Period, but which is necessary or useful in connection
with the Purchaser's operation of a business identical to the Seller's Angleton
Division. In addition, except as set forth in Section 2.14 of the Disclosure
Schedules, neither the Seller nor any Affiliate of the Seller (a) is a
competitor, customer or supplier to Seller's Angleton Division, (b) has a right
to or an interest in any Asset, tangible or intangible, which is used in the
operations of Seller's Angleton Division, or (c) has any outstanding
indebtedness to Seller's Angleton Division.
2.15 Employees and Labor Matters.
a. Seller has provided Purchaser with a true and complete list
of all individuals employed by Seller's Angleton Division as of the date hereof
and the position of and base compensation plus any commission or bonus
arrangements payable to each such individual. Section 2.15 of the Disclosure
Schedules contains a list of any written, and a description of any oral,
employment agreements, consulting agreements or termination or severance
agreements to which Seller is a party which affect employees of the Angleton
Division.
b. Seller is not a party to or subject to a labor union or a
collective bargaining agreement or arrangement and is not a party to any labor
or employment dispute with respect to the employees of its Angleton Division.
c. To the knowledge of Seller, no employee of Seller's
Angleton Division has been injured in the work place or in the course of his or
her employment except for injuries that are covered by insurance or for which a
claim has been made under workers' compensation or similar laws. Seller has made
available to Purchaser information regarding accidents or injuries to workers
which occurred during the last five years for which any claim was made under
insurance or any workers' compensation laws.
d. Seller has complied in all material respects with the
verification requirements and the record-keeping requirements of the Immigration
Reform and Control Act of 1986 ("IRCA"; to the best knowledge of Seller, the
information and documents on which Seller relied to comply with IRCA are true
and correct; and there have not been any discrimination complaints filed against
Seller pursuant to IRCA.
e. Except as set forth in Section 2.15(a) of the Disclosure
Schedules, Seller has not received or been notified of any complaint by any
employee, applicant, union or other party of any discrimination or other conduct
forbidden by law or contract, nor to the knowledge of Seller, is there a basis
for any complaint, except such complaints as could not reasonably be expected to
have a Material Adverse Effect.
-18-
f. Seller's action in complying with the terms of this
Agreement will not violate any agreements with any of Seller's employees.
g. Seller has filed all required reports and information with
respect to its employees that are due prior to the Closing Date and otherwise
has complied in its hiring, employment, promotion, termination and other labor
practices with all applicable federal and state law and regulations, including
without limitation those within the jurisdiction of the United States Equal
Employment Opportunity Commission, United States Department of Labor and state
and local human rights or civil rights agencies, except to the extent that any
such failure to file or comply would not have a Material Adverse Effect.
2.16 Tax Matters. With respect to the Assets and the Angleton
Division, the Seller has filed or caused to be filed on a timely basis all Tax
Returns that are or were required to be filed by or with respect to it, either
separately or as a member of a group of corporations, pursuant to the Legal
Requirements of each Governmental Authority with taxing power over it or its
assets and all such Tax Returns are, in all material respects, correct and
complete. The Seller has made available to the Purchaser copies of all such Tax
Returns (if any) filed since January 1, 1995 which relate solely to the Angleton
Division. There exists no proposed tax assessment or any unpaid Taxes against or
with respect to the Seller that would affect the Assets, the Angleton Division
or the transactions contemplated hereby except as disclosed in the unaudited
balance sheets of Seller. With respect to the Angleton Division, all Taxes that
the Seller is or was required by law to withhold or collect have been duly
withheld or collected and, to the extent required, have been paid to the proper
Governmental Authority or other Person.
2.17 Intellectual Property.
a. "Intellectual Property Assets"shall mean all copyrights,
patents, trade secrets, trademarks, service marks, trade names, moral rights and
other forms of intellectual property and industrial property rights of any sort
throughout the world in and to inventions (whether or not patentable), ideas,
formulae, software (in source and object code form), process engineering, art
works, schematic drawings, processes, product plans, logos, know-how, databases,
employee lists, customer lists and all business, technical or financial
information. "Intellectual Property Assets" also include patent applications,
copyright applications and registrations, and trademark and service xxxx
applications and registrations. Intellectual Property Assets shall not include
the name "Mallinckrodt Inc." "Mallinckrodt Medical Services, Inc.", or any other
derivative of the name "Mallinckrodt".
b. Section 2.17b. of the Disclosure Schedules identifies all
patents, patent applications, copyrights, copyright applications, copyright
registrations, trademarks, trademark applications, trademark registrations,
service marks, service xxxx applications, and service xxxx registrations owned
by Seller and used solely or principally in connection with the Angleton
-19-
Division which, together with such trade secrets, know-how, processes, formulae
and other data and information owned by Seller and used solely or principally in
connection with the Angleton Division shall be referred to as the "Owned
Intellectual Property Assets" Schedule 2.17b. of the Disclosure Schedules
identifies all of the Intellectual Property Assets leased or licensed by Seller
relating to the Angleton Division, including, but not limited to, all patents,
patent applications, copyrights, copyright applications, copyright
registrations, trade marks, trade xxxx applications, trade xxxx registrations,
service marks, service xxxx applications and service xxxx registrations (the
"Licensed Intellectual Property Assets". (The Owned Intellectual Property Assets
and the Licensed Intellectual Property Assets are collectively referred to
herein as the AAngleton Intellectual Property Assets.) The Angleton Intellectual
Property Assets include all Intellectual Property Assets utilized by Seller
solely or principally in connection with the conduct of Seller's Angleton
Division as conducted prior to the Closing. Except as set forth on Section
2.17b. of the Disclosure Schedules, Seller is the sole owner of all right, title
and interest in and to all of said Owned Intellectual Property Assets free and
clear of all liens, Encumbrances, claims, interests, rights of use or
restrictions whatsoever and has the right to use all Licensed Intellectual
Property Assets, free and clear of all claims, Encumbrances or restrictions on
use, other than as set forth in the licenses which give rise to Seller's right
to use such Licensed Intellectual Property Assets. Except as set forth on
Section 2.17b. of the Disclosure Schedules, all actions required as of the
Closing Date to maintain all such applications, registrations, issuances or
filings in full force and effect have been taken. Except as set forth on Section
2.17b. of the Disclosure Schedules, there are no outstanding options, licenses,
or agreements of any kind relating to the Owned Intellectual Property Assets
(other than standard written agreements for use of products sold by the Angleton
Division in the ordinary course of business).
c. Seller has not received any notice from a third party that
any of its Angleton Division products have infringed or are infringing the
Intellectual Property Assets of any third party. Seller has not misappropriated
and is not misappropriating any trade secrets or proprietary confidential
information of any third party, and neither the products of Seller's Angleton
Division, nor the Owned Intellectual Property Assets include or embody any trade
secret or proprietary confidential information misappropriated by Seller from
any third party. There is not pending, nor to Seller's knowledge, threatened
against Seller, any claim or litigation contesting the right of Seller to engage
in its Angleton Division business or employ any of the Angleton Intellectual
Property Assets in Seller's Angleton Division.
d. Each employee, consultant or other person who, either alone
or in concert with others, developed, invented, discovered, derived, programmed
or designed any of the Owned Intellectual Property Assets, or any part thereof,
has assigned or licensed all of his or her rights relating to the Owned
Intellectual Property Assets to Seller. With respect to the Owned Intellectual
Property Assets, no employee of Seller is in material violation of any
employment contract, confidentiality, proprietary information or inventions
agreement, or any other contract or agreement relating to the relationship of
any such employee with Seller or any previous employer.
-20-
e. Seller has the right to transfer without payment to a third
party for which Purchaser would have any liability or responsibility, all the
Angleton Intellectual Property Assets being transferred pursuant to the terms of
this Agreement.
2.18 Real Property.
a. There are no pending, or to Seller's knowledge, any
threatened, Proceedings affecting the Real Property or in which the Seller is,
or to Seller's knowledge will be, a party by reason of the Seller's ownership of
the Real Property including, but not limited to, judicial, municipal or
administrative proceedings in eminent domain, alleged building code, health and
safety or zoning violations, alleged employment discrimination or unfair labor
practices, or worker's compensation, personal injuries or property damages
alleged to have occurred at the Real Property or by reason of the condition or
use of the Real Property.
b. There are no violations of any Legal Requirements relating
to the Seller's Real Property which might have a Material Adverse Effect. Such
Real Property is a permitted, conforming structure under applicable zoning and
building laws and ordinances and the present uses thereof are permitted
conforming uses under applicable zoning and building laws and ordinances. The
conveyance of such Real Property to Purchaser will not violate any Legal
Requirements.
c. Other than the amounts disclosed by presently existing tax
bills made available to Purchaser by the Seller, no other Taxes have been or
will be assessed against such Real Property for the tax year 1999. There are not
any special assessments or charges which have been levied against such Real
Property or, to the knowledge of Seller, which will result from work, activities
or improvements done to such Real Property by the Seller.
d. The Seller is the legal fee simple title-holder of the Real
Property and has good, indefeasible and insurable title to the Real Property,
free and clear of all liens, Encumbrances, claims, covenants, conditions,
restrictions, easements, rights of way, options, judgments or other matters,
except as disclosed by the Title Commitment for the Owner's Title Policy
covering the Real Property.
e. The Real Property is connected to and is served by water,
solid waste and sewage disposal, drainage, telephone, gas, electricity and other
utility equipment facilities and services required by law and which are adequate
for the present use and operation of the Real Property, and which are installed
and connected pursuant to valid permits and are in compliance with all Legal
Requirements.
f. The transfer and assignment to Purchaser of the Tangible
Personal Property comprising part of the Improvements does not require the
consent of any third parties. The Seller has, and at the Closing will deliver to
Purchaser, good and indefeasible title to all of the Improvements.
-21-
g. To the knowledge of Seller, the Real Property is not
contaminated by the presence of any Hazardous Materials in any amounts or
concentrations that would be in violation of any Environmental Law or that would
require any Remediation, and there is no Proceeding with respect to the Real
Property pursuant to which it is alleged that there are any Hazardous Materials
present on or under the Real Property in an amount or manner that would violate
any Environmental Law or pursuant to which there is any investigation as to the
presence of any Hazardous Materials on or under the Real Property. To Seller's
knowledge, no underground tank for storage of gasoline or other purpose is
located on the Real Property.
h. Permanent certificates of occupancy, and all licenses,
permits, authorizations and approvals if and to the extent required by all
Governmental Authorities having jurisdiction over the Real Property, have been
or will be issued for the Real Property on or as soon after the Closing Date as
possible.
i. The Real Property has full, free and adequate access to and
from public highways and roads and, to Seller's knowledge, no fact or condition
exists which could result in the termination of such access, or in the
termination or expiration of any conditional use permits, sign permits,
easements, rights-of-way or other governmental permits or approvals necessary
for the use of the Real Property in its current manner.
j. One Hundred Sixty-Two parking spaces are located on the
Real Property and no person other than Seller has the right to park on the Real
Property.
Except for the representations and warranties made in this Agreement,
Seller is conveying the Real Property "as is", "where is" and with all faults.
Except for the representations and warranties contained herein and the warranty
of title contained in the Warranty Deed, Seller expressly disclaims and
Purchaser by its acceptance hereof acknowledges and accepts that Seller has
disclaimed any and all representations, warranties or guaranties, of any kind,
oral or written, express or implied, or arising by operation of law (except as
to the title warranties contained in the Warranty Deed and except as provided in
this Agreement) of or concerning such Real Property.
2.19 Inventory. Except as set forth in Section 2.19 of the Disclosure
Schedules and except as determined in accordance with the joint procedures
contemplated by Section 1.7e. above, all of the inventory of the Seller related
to its Angleton Division (a) is useful or saleable in the normal course of
business, subject only to the reserve for inventory write down set forth on the
March 31, 1999 Balance Sheet, and such reserves which will be established on any
Balance Sheet of the Angleton Division on and as of the Closing Date by Seller
in a manner fully consistent with the past accounting practices and (b) is
carried in amounts, net of any reserves, that reflect the lower of cost or fair
market value of such inventory.
2.20 Year 2000 Compliance. With respect to any computer software or
systems used by Seller in the operation of its Angleton Division business as
presently conducted, the following representations and warranties shall apply:
There will be no failure or inability of such software or systems to accurately
process date data (including, but not limited to, calculating, comparing,
sequencing, storing and rendering) from, into, during and between the 20th and
21st centuries, including leap year calculations, nor will the software or
systems malfunction or produce any invalid or incorrect results as a result of,
or shall not be compatible with in all respects, dates on or after January 1,
2000 ("Year 2000 Compliance"). Year 2000 Compliance shall include, without
limitation, date data century recognition, calculations that accommodate same
century and multi-century formulas and date values, and date data values
correctly reflect the century.
-22-
2.21 Assets Used to Conduct Business. The Assets comprise all of the
assets, properties and rights of every type and description, real, personal,
tangible and intangible, used by the Seller solely or primarily in the conduct
of Seller's Angleton Division as currently conducted.
2.22 Product Warranties; Defects. Except as set forth on Schedule
2.22, each product manufactured, sold or delivered by the Seller in connection
with its Angleton Division has been in conformity with all applicable federal,
state, local and foreign laws and regulations, contractual commitments and all
expressed or implied warranties, except for such failures to conform as would
not, in the aggregate, have a Material Adverse Effect.
2.23 No Illegal Payment. Neither the Seller nor any of the directors,
officers, employees or agents of the Seller (a) has directly or indirectly (i)
given or agreed to give any illegal gift, contribution, payment or similar
benefit to any supplier, customer, governmental official or employee or any
other person who was, is, or may be in a position to help or hinder the Seller
(or assist in connection with any actual or proposed transaction), or (ii) made
or agreed to make any illegal contribution, or reimbursed any political gift
contribution made by any other Person, to any candidate for any federal, state,
local or foreign public office which might subject the Seller or any of the
Assets or the Angleton Division or the Purchaser's operation of the Angleton
Division following the Closing to any damage or penalty in any civil, criminal
or governmental litigation or proceeding, or (b) has established or maintained
any unrecorded fund or asset or made any false entries on any books or records
for any purpose with respect to its Angleton Division.
2.24 Mexican Facility. Seller owns and operates a manufacturing
facility in Ciudad Xxxxxx, Chihuahua, Mexico ("Mexican Facility". Waste from the
Mexican Facility is legally imported into the United States for disposal. For
regulatory identification and compliance purposes, the Mexican Facility was
registered under the name and address of the Angleton Division. Seller
represents and warrants to Purchaser that it has changed the registration of the
Mexican Facility to a Seller entity other than the Angleton Division and has
complied with all laws, rules, regulations, international protocols and/or
agreements, and other applicable requirements, necessary to: (1) change such
registration; and (2) otherwise properly notify the proper authorities of such
change and waste importation activities. None of the products or waste generated
at the Mexican Facility was for or had any relation to the Angleton Division.
-23-
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser represents and warrants to the Seller as follows. Any
reference in this Article III to an agreement being "enforceable" shall be
deemed to be qualified to the extent such enforceability is subject to (i) laws
of general applicable relating to the bankruptcy, insolvency, moratorium and the
release of debtors, and (ii) the availability of specific performance,
injunctive relief and other equitable remedies.
3.1 Organization, Existence and Good Standing. Purchaser is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Utah and has full corporate power and authority to carry on its
business as now being conducted, to own and operate its properties and assets,
and to perform all its obligations under this Agreement, the Contracts and the
Transaction Agreements. Purchaser is duly qualified to do business as a foreign
corporation and is in good standing under the laws of each state or other
jurisdiction in which the properties and assets owned or leased and operated by
it or the nature of the business conducted by it make such qualification
necessary and where the failure so to qualify would have a material adverse
effect on Purchaser's business or operations.
3.2 Authority. Purchaser has full power and authority to execute and
deliver this Agreement and the Transaction Agreements, to perform its
obligations hereunder and thereunder, and to consummate the transactions
contemplated hereby and thereby. This Agreement has been duly and validly
executed and delivered by Purchaser and constitutes the legal, valid and binding
agreement of Purchaser enforceable against Purchaser in accordance with its
terms. The Transaction Agreements to which Purchaser is a party have been duly
and validly executed and delivered by Purchaser and constitute the legal, valid,
and binding agreement of Purchaser, enforceable against Purchaser in accordance
with their terms. Each individual executing this Agreement and the Transaction
Agreements on behalf of the Purchaser, has the legal power, right and actual
authority to bind the Seller to the terms and conditions hereof and thereof.
3.3 Consents and Approvals; No Violation. No filing or registration
with, no notice to and no Governmental Authorization, consent or approval of any
Governmental Authority, creditor or other person in a contractual relationship
with Purchaser is necessary in connection with Purchaser's execution and
delivery of this Agreement or the Transaction Agreements, the performance of its
obligations hereunder or thereunder or the consummation of the transactions
contemplated hereby or thereby. Neither the execution and delivery of this
Agreement or the Transaction Agreements, the consummation of the transactions
contemplated hereby or thereby, nor the compliance by Purchaser with any of the
provisions thereof will, as of the Closing Date, (i) result in a violation or
breach of, or constitute (with or without due notice or lapse of time or both) a
default (or give rise to any right of termination, cancellation or acceleration)
under, any of the terms, conditions or provisions of any note, contract,
agreement, commitment, bond, mortgage, indenture, license, lease, pledge
agreement or other instrument or
-24-
obligation to which Purchaser is a party or by which Purchaser or any of its
properties or assets may be bound, (ii) violate or conflict with any provision
of any Legal Requirement binding upon Purchaser; or (iii) result in, or require,
the creation or imposition of any Encumbrance upon or with respect to any of the
properties now owned or used by Purchaser.
3.4 Bankruptcy. Purchaser has not made any assignment for the benefit
of creditors, filed any petition in bankruptcy, been adjudicated insolvent or
bankrupt, petitioned or applied to any tribunal for any receiver, conservator or
trustee of it or any of its property or assets, or commenced any proceeding
under any reorganization arrangement, readjustment of debt, conservation,
dissolution or liquidation law or statute or any jurisdiction; and no such
action or proceeding has been commenced or threatened against Purchaser by any
creditor, claimant, Governmental Authority or any other person.
ARTICLE IV
ADDITIONAL COVENANTS AND AGREEMENTS
4.1 Expenses. Except as otherwise expressly provided herein, each
party to this Agreement shall bear its respective expenses incurred in
connection with the preparation, execution and performance of this Agreement and
the transactions contemplated hereby, including all fees and expenses of agents,
representatives, counsel and accountants. The parties understand and acknowledge
that Purchaser is acquiring substantially all of the Assets of the Seller's
Angleton Division, and that while Purchaser has agreed to assume certain
liabilities of the Seller as specifically set forth in this Agreement, Purchaser
has not agreed to assume or pay any of Seller's costs incurred in consummating
the transactions contemplated hereby, including, but not limited to, any legal,
accounting, tax or transaction costs. Each of Seller and Purchaser shall be
solely obligated to pay any fees or commissions to any broker, investment banker
or similar Person who has acted on behalf of such party in connection with the
transactions contemplated by this Agreement.
4.2 Public Announcements. Any public announcement or similar publicity
with respect to this Agreement or the transactions contemplated hereby shall be
issued at such time and in such manner as Purchaser and Seller shall jointly
determine, but either party may make such announcements, give such notices and
provide such information to Governmental Authorities, employees, creditors,
Affiliates and the public as its counsel may advise is legally required.
4.3 Waiver of Bulk Sales Law Compliance. Purchaser hereby waives
compliance by Seller with the provisions of any applicable bulk sales or
transfer law and agrees that none of the proceeds of the sale of the Assets will
be applied as required by such law, but will be paid to Seller as herein
provided. Seller hereby agrees to pay any creditors of Seller such amounts as
are due and applicable to such creditors as a result of such noncompliance with
such law, except for the Assumed Liabilities being assumed by Purchaser.
-25-
4.4 Offer of Employment to Seller's Angleton Division Employees. The
Purchaser agrees to make an offer of employment to substantially all of the
employees of Seller's Angleton Division, such employment to be effective as of
the Closing Date, to work for the Purchaser in carrying on a business similar to
that conducted by the Seller at its Angleton Division prior to the Closing Date.
Each employee's offer of employment shall allow such employees to participate in
Purchaser's standard employee benefit plans and shall recognize such employee's
time of service with Seller in qualifying for Purchaser's benefit plans and for
all vesting and benefit calculation purposes. Such employee's continued
employment by Purchaser shall be on such terms as Purchaser shall determine and
shall be at the full discretion of Purchaser. Purchaser shall assume all
responsibility related to termination of such employees after they once have
become the employees of Purchaser. Each employee shall be given accrued vacation
equal to the accrued vacation such employee was owed by Seller, or, at the
employee's option after the Closing Date, Purchaser shall make a cash payment to
such employee equal to the value of such vacation time at the salary level of
employee as an employee of Seller and in the amount calculated by Seller for
purposes of a deduction from the Purchase Price as provided in Section 1.7f.
Subject to the terms of Purchaser's medical benefit plans, Purchaser shall
provide that all of the Seller's employees who come to work for Purchaser shall
be allowed coverage under Purchaser's medical plan without any pre-existing
condition limitation.
4.5 Noncompetition.
a. For and in consideration of the payment by Purchaser of the
Purchase Price herein and its other promises hereunder, Seller (on behalf of
itself and its Affiliates) agrees that, for a period of five (5) years from and
after the Closing Date, neither Seller nor any of its Affiliates will, anywhere
in the world, directly or indirectly, compete with Purchaser and its Affiliates,
or assist any other Person in competing with Purchaser and its Affiliates,
relative to the technology, product lines or commercial business of the Angleton
Division, as specifically described in the first two sentences of Section 7.5
below. Notwithstanding the immediately preceding sentence, nothing shall prevent
or restrict Seller or any of its Affiliates, either directly or indirectly, now
or in the future, from engaging in any lines of business in which it is
currently engaged through business activities occurring outside of the Angleton
Division, whether or not such lines of business are competitive with the
business of the Angleton Division.
b. It is agreed by the parties that the scope, time and
geographic restrictions contained in subsection (a) set forth immediately above
are reasonably and fairly related to the business cycle and geographic coverage
of the business of the Angleton Division.
c. Seller understands and agrees that, in the event of a
breach by it or its Affiliates of any obligations set forth in this Section 4.5,
Purchaser and/or its Affiliates may suffer irreparable damage for which their
remedies at law are inadequate and, therefore, in the event of any such breach,
Purchaser or any of its Affiliates (as appropriate) may receive, from a court of
appropriate jurisdiction, a temporary restraining order (without the necessity
of proving actual damages and without the requirement of posting any bond or
-26-
other security) an injunction, a decree for specific performance or such other
equitable relief as may be deemed appropriate under the circumstances, in
addition to any other remedies any of them may have at law and hereunder.
ARTICLE V
INDEMNIFICATION
5.1 Indemnification by Seller.
a. From and after the Closing Date and subject to the
limitations set forth in Section 5.4, Purchaser and each of Purchaser's
officers, directors, employees, counsel, agents, contractors, successors and
assigns (Purchaser and such persons are collectively referred to herein as
"Purchaser's Indemnified Persons" shall be indemnified and held harmless by the
Seller against, and reimbursed for, any Liability, damage, loss, obligation,
demand, judgment, fine, penalty, cost or expense, including reasonable
attorneys' fees and expenses, and the reasonable costs of investigation incurred
in defending against or settling such Liability, damage, loss, injury, harm,
detriment, Proceeding, settlement, award, punitive damage award, Tax, fee,
charge, cost or expense or claim therefor and any amounts paid in settlement
thereof, imposed on or reasonably incurred by Purchaser's Indemnified Persons
(including, without limitation, costs of attempting to avoid or in opposing the
imposition thereof, interest, penalties, costs of preparation and investigation,
and the reasonable fees, disbursements and expenses of attorneys, accountants
and other professional advisors) (collectively, "Damages" directly or
indirectly, arising out of or resulting from (i) any breach of or inaccuracy
with respect to any representation or warranty on the part of Seller under this
Agreement or any of the Transaction Agreements, (ii) any breach or
nonfulfillment of any covenant on the part of Seller in this Agreement or any of
the Transaction Agreements, (iii) any Excluded Liability or any Liability
associated with any Excluded Asset, (iv) any Taxes arising out of the operation
of the Angleton Division to the extent related to the period occurring on or
before the Closing Date, and (v) any violation of any Environmental Law arising
out of any acts or omissions to act by Seller in connection with the Angleton
Division on or prior to the Closing Date and any duty of Remediation under
Environmental Law with respect to Hazardous Materials located on or under the
Real Property on and as of the Closing Date and (vi) any liability associated
with Purchaser's waiver of bulk sales compliance by Seller in Section 4.3
hereof. "Damages" as used herein is not limited to matters asserted by third
parties, but includes Damages incurred or sustained by Purchaser's Indemnified
Persons in the absence of claims by a third party, subject in any case to the
limitation set forth in Section 5.4.
b. Subject to the limitations set forth in Section 5.4,
Seller, its successors and assigns, agrees to indemnify, defend and hold
harmless Purchaser's Indemnified Persons from and against any Damages arising
out of or in any way related to the: (1) Mexican Facility, (2) compliance with
any legal requirements associated with the importation of waste from Mexico into
the United States, (3) failure of Seller to properly transfer registration for
waste importation purposes from the Angleton Division to another Seller entity,
-27-
or (4) failure of Seller to properly notify the proper authorities of the change
of such registration. The provisions of this subsection (b) shall be in addition
to all other obligations and liabilities Seller may have to Purchaser at law or
equity with respect to the subject matter of the immediately foregoing indemnity
and shall survive the transactions contemplated herein to the extent set forth
in Section 5.4.
5.2 Indemnification by Purchaser. From and after the Closing Date and
subject to the limitations set forth in Section 5.4, Purchaser shall defend,
indemnify and hold harmless Seller and each of the Seller's officers, directors,
employees, counsel, agents, contractors, successors, assigns, and legal and
personal representatives (Seller and such persons are collectively referred to
as the "Seller's Indemnified Persons") from and against, and shall reimburse
Seller's Indemnified Persons for, all Damages, imposed on or incurred by
Seller's Indemnified Persons, directly or indirectly, relating to, resulting
from or arising out of (i) any inaccuracy in any representation or warranty of
Purchaser under this Agreement or the Transaction Agreement, (ii) any breach or
nonfulfillment of any covenant of Purchaser under this Agreement or the
Transaction Agreements, (iii) any failure to perform, pay and discharge the
Assumed Liabilities, and (iv) any Taxes arising out of the Angleton Division or
the use by Purchaser of the Assets or Assumed Liabilities related to the period
subsequent to the Closing Date.
5.3 Conditions for the Assertion of Third Party Claims. If any
Proceeding shall be brought or asserted under this Article against an
indemnified party or any successor thereto (the "Indemnified Person") in respect
of which indemnity may be sought under this Article from an indemnifying person
or any successor thereto (the "Indemnifying Person"), the Indemnified Person
shall give prompt written notice of such Proceeding to the Indemnifying Person
who shall assume the defense thereof, including the employment of counsel and
the payment of all expenses; provided, that any delay or failure to so notify
the Indemnifying Person shall relieve the Indemnifying Person of its obligations
hereunder only if the Indemnified Person has not given the Indemnifying Person
prompt written notice of such Proceeding within thirty (30) days of such
Proceeding being asserted against an Indemnified Person. In no event shall any
Indemnified Person be required to make any expenditure or bring any cause of
action to enforce the Indemnifying Person's obligations and liability under and
pursuant to the indemnifications set forth in this Article. The Indemnified
Person shall have the right to employ separate counsel in any of the foregoing
Proceedings and to participate in the defense thereof, but the fees and expenses
of such counsel shall be at the expense of the Indemnified Person. The
Indemnified Person's right to participate in the defense or response to any
Proceeding should not be deemed to limit or otherwise modify its rights and
obligations under this Article. In the event that the Indemnifying Person,
within thirty (30) days after notice from the Indemnified Person of any such
Proceeding, fails to assume the defense thereof, the Indemnified Person shall
have the right to undertake the defense, compromise or settlement of such
Proceeding for the account of the Indemnifying Person, subject to the right of
the Indemnifying Person to assume the defense of such Proceeding at any time
prior to the settlement, compromise or final determination thereof. If the
Indemnifying Person assumes the defense of any Proceeding, the Indemnified
Person shall, reasonably and in good faith, assist and cooperate in the defense
thereof (including reasonably making available documents which it may have in
-28-
its possession that may be useful in any such defense and making its employees
reasonably available for interview, deposition and testimony before any judge,
arbitrator or similar official). Anything in this Article to the contrary
notwithstanding, the Indemnifying Person shall not, without the Indemnified
Person's prior written consent, which consent shall not be unreasonably withheld
or delayed, settle or compromise any Proceeding or consent to the entry of any
judgment with respect to any Proceeding for anything other than money damages
paid by the Indemnifying Person. The Indemnifying Person may, without the
Indemnified Person's prior written consent, settle or compromise any such
Proceeding or consent to entry of any judgment with respect to any such
Proceeding that requires solely the payment of money damages by the Indemnifying
Person and that includes as an unconditional term thereof the release by the
claimant or the plaintiff of the Indemnified Person from all liability in
respect of such Proceeding.
5.4 Limitations on Indemnification.
a. The representations and warranties of Seller set forth in
Article II shall survive the Closing Date for a period of two (2) years, except
that the representations and warranties set forth in Sections 2.5, 2.9, 2.10,
2.13, 2.16, 2.17, 2.18, 2.23 and 2.24 shall survive the Closing Date for a
period of five (5) years and the representations and warranties set forth in
Sections 2.1, 2.2 and 2.3 shall survive the Closing Date indefinitely. Any claim
for indemnification by the Purchaser pursuant to clause (i) of Section 5.1(a)
above shall be submitted to Seller by Purchaser in a written notice in
accordance with the requirements hereof during the appropriate survival period
set forth above and shall otherwise not be effective.
b. No claim by Purchaser for indemnification pursuant to
either clause (ii) or clause (vi) of Section 5.1(a) shall be effective unless
such claim is asserted by written notice from Purchaser to Seller in accordance
with the requirements hereof prior to the longer of (A) the expiration of three
(3) years from and after the Closing Date or (B) the expiration of one hundred
twenty (120) days after the date on which any covenant which is the subject of
any claim for indemnification expires in accordance with the terms hereof.
c. Any claim by Purchaser for indemnification pursuant to
clause (iii) of Section 5.1(a) or pursuant to Section 5.1(b) shall be effective
at any time hereafter if such claim is asserted by written notice from Purchaser
to Seller in accordance with the requirements hereof.
d. No claim by Purchaser for indemnification pursuant to
clause (iv) of Section 5.1(a) shall be effective unless such claim is asserted
by written notice from Purchaser to Seller in accordance with the requirements
hereof prior to the end of one hundred twenty (120) days after the expiration of
any applicable statute of limitations governing such claim.
e. No claim by Purchaser for indemnification pursuant to
clause (v) of Section 5.1 shall be effective unless such claim is asserted by
written notice from Purchaser in accordance with the requirements hereof prior
to the expiration of five (5) years from and after the Closing Date.
-29-
f. The representations and warranties of Purchaser set forth
in Section 3.4 shall survive the Closing Date for a period of two (2) years and
all other representations and warranties of Purchaser set forth in Article III
shall survive the Closing Date indefinitely.
g. No claim by Seller for indemnification pursuant to clause
(ii) of Section 5.2 shall be effective unless such claim is asserted by written
notice from Seller to Purchaser in accordance with the requirements hereof prior
to the longer of (A) the expiration of three (3) years from and after the
Closing Date or (B) the expiration of one hundred twenty (120) days after the
date on which any covenant which is the subject of any claim for indemnification
expires in accordance with the terms hereof.
h. Any claim by Seller for indemnification pursuant to clause
(iii) of Section 5.2 shall be effective at any time hereafter if such claim is
asserted by written notice from Seller to Purchaser in accordance with the
requirements hereof.
i. No claim by Seller for indemnification pursuant to clause
(iv) of Section 5.2 shall be effective unless such claim is asserted by written
notice from Seller to Purchaser in accordance with the requirements hereof prior
to the end of one hundred twenty (120) days after the expiration of any
applicable statute of limitations governing such claim.
j. All claims for indemnification hereunder shall be made by
written notice to the other party, setting forth in detail the specifics of any
such claim, the basis for indemnification as well as, if known, the damages
associated with any such claim. No party shall make any claim for
indemnification hereunder against the other party unless it shall have a good
faith belief that it is entitled to indemnification hereunder.
k. Notwithstanding any other provision hereof, the Purchaser
shall not be entitled to recover any Damages hereunder pursuant to clauses (i)
or (ii) of Section 5.1(a) except to the extent the Damages claimed by Purchaser
in good faith under and pursuant to either of such clauses are in excess of
Seventy-Five Thousand Dollars ($75,000) in the aggregate. It is agreed that the
deductible set forth in the immediately preceding sentence applies only to
claims for indemnification made with respect to clauses (i) or (ii) of Section
5.1(a) and shall not have any effect whatsoever on the right of Purchaser to
collect, in accordance with the terms and provisions set forth herein, all
Damages for which it is entitled to indemnification under other applicable
provisions of Section 5.1.
l. Notwithstanding any other provision hereof, in no event
shall the liability of Seller for Damages pursuant to Section 5.1 hereof exceed
Three Million Seven Hundred Fifty Thousand Dollars ($3,750,000) in the
aggregate.
m. In no event shall any Indemnified Person be responsible and
liable for any Damages that are consequential, special, punitive, exemplary or
other than actual Damages; provided that, notwithstanding the immediately
-30-
foregoing, an Indemnifying Person shall be responsible and liable for any
Damages other than actual Damages awarded in connection with any judgment,
order, decree or other final resolution by a court, tribunal or other judicial
authority arising out of any Proceeding commenced by any third party for which
indemnification is available hereunder.
n. The sole and exclusive remedy of either party for monetary
relief hereunder shall be the indemnification provisions set forth in this
Article V; provided that, the immediately foregoing limitation shall be without
prejudice to the right any party may have in any particular circumstance to
receive any equitable relief and shall further be without prejudice to the right
of any party to receive monetary relief against the other party with respect to
any fraudulent action or other intentional wrongdoing in any manner related to
the transactions contemplated hereunder.
ARTICLE VI
MISCELLANEOUS
6.1 Survival of Representations, Warranties, Covenants and Agreements.
Notwithstanding any investigation made at any time by or on behalf of the
parties hereto, all of the representations and warranties of the Seller and
Purchaser shall survive the Closing of the transactions contemplated by this
Agreement (even if the Seller or Purchaser, as the case may be, knew or had
reason to know of any misrepresentation or breach of any warranty at the time of
the Closing) and continue in full force and effect thereafter, subject to the
limitations on survival set forth in Section 5.4 above.
6.2 Amendment and Modification. This Agreement may be amended,
modified, terminated, rescinded or supplemented only by written agreement of the
parties hereto.
6.3 Waiver; Consents. Except to the extent specifically provided
herein to the contrary (including, without limitation, the provisions of Section
5.4(n) above), the rights and remedies of the parties to this Agreement are
cumulative and not alternative. Any failure of a party to comply with any
obligation, covenant, agreement or condition herein may be waived by each party
affected thereby only by a written instrument signed by the party granting such
waiver. No waiver, or failure to insist upon strict compliance, by any party of
any condition or any breach of any obligation, term, covenant, representation,
warranty or agreement contained in this Agreement, in any one or more instances,
shall be construed to be a waiver of, or estoppel with respect to, any other
condition or any other breach of the same or any other obligation, term,
covenant, representation, warranty or agreement. Whenever this Agreement
requires or permits consent by or on behalf of any party hereto, such consent
may be given only in writing.
6.4 Further Assurances. The parties hereto agree (i) to furnish upon
request to each other such further information, (ii) to execute and deliver to
each other such other documents, and (iii) to do such other acts and things,
-31-
all as another party hereto may at any time reasonably request at and after the
Closing, for the purpose of carrying out the intent of this Agreement and the
documents referred to herein.
6.5 Notices. All notices and other communications hereunder shall be
in writing and shall be deemed to have been duly given when (i) delivered
personally, (ii) sent by telecopier (with receipt confirmed), provided that a
copy is mailed by registered or certified mail, return receipt requested within
two business days after being sent by telecopier, (iii) received by the
addressee, if sent by Express Mail, Federal Express or other express delivery
service (receipt requested), or (iv) three business days after being sent by
registered or certified mail, return receipt requested, in each case to the
other party at the following addresses and telecopier numbers (or to such other
address or telecopier number for a party as shall be specified by like notice;
provided that notices of a change of address or telecopier number shall be
effective only upon receipt thereof):
if to Seller to:
Xxxxxxx X. Xxxxxxx
Mallinckrodt Inc.
000 XxXxxxxxx Xxxx.
Xxxxxxxxx, XX 00000
Fax No. (000) 000-0000
with a copy to:
C. Xxxxxxx Xxxxxx
Mallinckrodt Inc.
000 XxXxxxxxx Xxxx.
Xxxxxxxxx, XX 00000
Fax No. (000) 000-0000
if to Purchaser, to:
Merit Medical Systems, Inc.
0000 Xxxx Xxxxx Xxxxxxx
Xxxxx Xxxxxx, XX 00000
Attn: Xxxx Xxxxxxxxxxxx
Fax No. (000) 000-0000
-32-
with a copy to:
Xxxxx X. Xxxxxxxx
Xxxx Xxxxxxxx Xxxxx Xxx & Xxxxxxxx
000 Xxxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxxx Xxxx Xxxx, XX 00000
Fax No. (000) 000-0000
6.6 Assignment. 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, but neither this Agreement nor any
of the rights, interests or obligations hereunder shall be assigned by any of
the parties hereto without the prior written consent of the other parties,
except that either party may assign this Agreement to an Affiliate that it
wholly owns or by which it is wholly owned, without the necessity of receiving
any prior written consent from the other party, except that no such assignment
shall relieve the assignor from any of its obligations hereunder unless the
other party shall give its written consent to any such relief. This Agreement is
not intended to and shall not confer upon any person other than the parties any
rights or remedies hereunder or with respect hereto.
6.7 Governing Law. This Agreement shall be governed by the laws of the
State of New York (regardless of the laws that might otherwise govern under
applicable New York principles of conflicts of law) as to all matters, including
but not limited to matters of validity, construction, effect, performance and
remedies.
6.8 Jurisdiction. Any process against Purchaser or of the Seller in,
or in connection with, any suit, action or proceeding arising out of or relating
to this Agreement or any of the transactions contemplated by this Agreement may
be served personally or by certified mail at the address of such party set forth
in Section 6.5 with the same effect as though served on it or him personally.
6.9 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same agreement. This Agreement may be
executed by facsimile signatures, each of which will be deemed an original
6.10 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. Unless otherwise provided, all references in this Agreement to
articles, sections or paragraphs refer to the corresponding articles, sections
or paragraphs of this Agreement. All words used herein shall be construed to be
of such gender or number as the circumstances require. Unless otherwise
specifically noted, the words "herein," "hereof," "hereby," "hereinabove,"
"hereinbelow," "hereunder," and words of similar import, refer to this Agreement
as a whole and not to any particular article, section,
-33-
subsection, paragraph, clause or other subdivision hereof. Whenever the term
"including" or a similar term is used in this Agreement, it shall be read as if
it were written "including by way of example only and without in any way
limiting the generality of the clause or concept to which reference is made."
6.11 Entire Agreement. This Agreement, including the exhibits and the
documents, instruments and schedules referred to herein and in the Transaction
Agreements, embodies the entire agreement and understanding of the parties
hereto in respect of the subject matter contained herein. There are no
restrictions, promises, representations, warranties, covenants, or undertakings
other than those expressly set forth or referred to herein and in the
Transaction Agreements. This Agreement supersedes all prior agreements and
understandings between the parties with respect to such subject matter.
6.12 Time of Essence. With regard to all time periods set forth or
referred to in this Agreement, time is of the essence.
6.13 Construction. The parties have jointly participated in the
negotiation and drafting of this Agreement. In the event of an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the parties and no presumptions or burdens of proof
shall arise favoring any party by virtue of the authorship of any of the
provisions of this Agreement.
6.14 Severability. Any term or provision of this Agreement that is
invalid or unenforceable in any situation in any jurisdiction shall not affect
the validity or enforceability of the remaining terms and provisions hereof or
the validity or enforceability of the offending term or provision in any other
situation or in any other jurisdiction. If the final judgment of the court of
competent jurisdiction declares that a term or provision hereof is invalid or
unenforceable, the parties shall replace any invalid or unenforceable term or
provision with a term or provision that is valid and enforceable that comes
closest to expressing the original intention of the invalid or unenforceable
term or provision, and this Agreement shall be enforceable as so modified.
6.15 No Third-Party Beneficiaries. This Agreement shall not confer any
rights or remedies upon any persons other than the parties and their respective
successors or permitted assigns.
6.16 Incorporation of Exhibits and Schedules. The exhibits and
Disclosure Schedules identified in this Agreement are incorporated herein by
reference and are a part hereof.
-34-
ARTICLE VII
CERTAIN DEFINITIONS
For the purposes of this Agreement, the following terms shall have the
meanings specified or referred to below whether or not capitalized when used in
this Agreement (and other terms not listed in this Article IX shall have the
meanings ascribed to them at and where defined). Any reference or citation to a
law, statute or regulation shall be deemed to include any amendments to that
law, statute or regulation and judicial and administrative interpretations of
it, but shall only be deemed to refer to any law, statute, regulation or
interpretation as it exists on and as of the Closing Date.
7.1 "Accounts Receivable" means all accounts receivable of the Seller
arising out of the Angleton Division business existing as at the Closing Date.
7.2 "Affiliate" means, with respect to a specified Person, any other
Person controlling such specified Person, controlled by such specified Person,
or under common control with such specified Person. For purposes of this
definition, "control" (including "controlling", "controlled by" and "under
common control with") means the possession, direct or indirect, of the power to
direct or cause the direction of the management and policies of a Person,
whether through the ownership of voting securities, by contract or otherwise.
7.3 "Agreement" means this Agreement of Sale, including the exhibits
and Disclosure Schedules hereto.
7.4 "Allocation Schedule" shall have the meaning set forth in Section
1.6b.
7.5 "Angleton Division" means the catheter manufacturing and
distribution business of the Seller located primarily in Angleton, Texas, but
also carried on from other places by the Seller, which includes compounding,
extrusion, brading, assembling of various diagnostic and interventional
cardiology, radiology and neuroradiology catheters and accessories. The Angleton
Division also includes all other products which Seller was buying through the
Angleton Division on an OEM basis and packaging under a Mallinckrodt label, such
as guidance wires, needles and injection tubes purchased from Lake Regent. The
Angleton Division business shall not be deemed to include any products purchased
or resold under agreement or understanding with Guidant.
7.6 "Assets" shall have the meaning specified in Section 1.1.
7.7 "CERCLA" means the Comprehensive Environmental Response
Compensation and Liability Act, 42 U.S.C. ' 9601 et. seq.
7.8 "Closing" shall have the meaning set forth in Section 1.8.
7.9 "Closing Cash Amount" shall have the meaning set forth in Section
1.7.
-35-
7.10 "Closing Date" means the date and time as of which the Closing
actually takes place, which shall be the date of execution hereof.
7.11 "Code" means the Internal Revenue Code of 1986, as amended from
time to time, or any successor law.
7.12 "Contracts" means all real property leases, vendor agreements,
supply contracts, Real Property service contracts, contracts with customers for
the provision of services or products (including all acknowledged or accepted
orders for products or services), confidentiality and non-competition agreements
with employees and contractors, and every other contract or agreement related
solely or principally to the Seller's Angleton Division business, all of which
are being assigned to Purchaser and all of which are deemed to be part of the
Intangible Personal Property and the Assets being assigned by Seller to
Purchaser pursuant to this Agreement and the Transaction Agreements.
7.13 "Damages" shall have the meaning specified in Section 5.1.
7.14 "Disclosure Schedules" means the disclosure schedules delivered by
Seller to the Purchaser on and as of the Closing Date.
7.15 "Disposal" (or "disposed") shall have the meaning specified in
RCRA.
7.16 "Encumbrance" means (i) any of the following relating to title or
use of the Assets: any lien, pledge, hypothecation, charge, mortgage, deed of
trust, security interest, encumbrance, equity, trust, equitable interest, claim,
easement, right-of-way, servitude, right of possession, lease tenancy, license,
encroachment, burden, intrusion, covenant, infringement, interference, proxy,
option, right of first refusal, community property interest, legend, defect,
impediment, exception, condition, restriction, reservation, limitation,
impairment, an imperfection of title; or (ii) any of the following additional
restrictions: restriction on or condition to the voting of any security,
restriction on the transfer of any security or other asset, restriction on the
receipt of any income derived from any security or other asset, and restriction
on the possession, use, exercise or transfer of any other attribute of
ownership, excluding restrictions imposed by law on assets or properties
generally.
7.17 "Entity" means any corporation (including any non-profit
corporation), general partnership, limited partnership, joint venture, joint
stock association, estate, trust, cooperative, foundation, union, syndicate,
league, consortium, coalition, committee, society, firm, company or other
enterprise, association, organization or entity of any nature, other than a
Governmental Authority.
7.18 "Environmental Claim" means any claim, demand, action, cause of
action, suit, adversarial proceeding, liability, criminal liability, judgment,
governmental or private investigation relating to Remediation or
-36-
compliance with any applicable Environmental Laws which is threatened, sought,
brought or imposed that is related to, or that seeks to impose Liability or may
result in Damage regarding the Seller, the Assets, the Real Property or
operations conducted at the Real Property prior to Closing Date for (i) any
actual or asserted violation or noncompliance with any applicable Environmental
Laws; (ii) injury to or death of any Person or Persons relating to Hazardous
Materials; or (iii) exposure to Hazardous Materials. An "Environmental Claim"
further includes a proceeding to issue, modify, revoke or terminate an
environmental permit, or to adopt or amend a regulation to the extent that such
a proceeding or occurrence attempts to redress violations of any applicable
environmental permit.
7.19 "Environmental Laws" includes without limitation, the laws
described on Exhibit K attached hereto and incorporated herein for all purposes
and any and all other laws, rules, regulations, ordinances, orders or guidance
documents, but only as and to the extent in effect on and as of the Closing
Date, of any federal, state or local executive, legislative, judicial,
regulatory or administrative agency, board or authority or any judicial or
administrative decision relating thereto that relate to (i) wetlands, pinelands
or other protected lands or the protection and preservation of wildlife species;
(ii) noise; (iii) radioactive materials (including naturally occurring
radioactive materials); (iv) explosives; (v) pollution, contamination,
preservation, protection, or clean-up of the air, surface water, ground water,
soil or wetlands; (vi) solid, gaseous or liquid waste generation, handling,
discharge, release, threatened release, treatment, storage, disposal or
transportation; (vii) exposure of persons or property to Hazardous Substances
and the effects thereof; (viii) injury to , death of or threat to the safety or
health of employees and any other persons; (ix) the manufacture, processing,
distribution in commerce, use, treatment, storage, disposal or Remediation of
Hazardous Materials; (x) the protection of human health or safety; (xi) the
implementation of spill prevention and/or disaster plans relating to Hazardous
Materials; (xii) community right-to-know and other disclosure laws; or (xiii)
maintaining, disclosing or reporting information to Governmental Authorities
under any Environmental Law.
7.20 "Financial Statements" shall have the meaning specified in Section
2.6 hereof.
7.21 "GAAP" means generally accepted United States accounting
principles, consistently applied.
7.22 "Governmental Authority" means any foreign governmental authority,
the United States of America, any State of the United States, any local
authority and any political subdivision of any of the foregoing, any
multi-national organization or body, any agency, department, commission, board,
bureau, court or other authority thereof.
7.23 "Governmental Authorization" means any permit (including without
limitation any Environmental Permit), license, franchise, approval, certificate,
consent, ratification, permission, confirmation, endorsement, waiver,
certification, registration, transfer, qualification or other authorization
issued, granted, given or otherwise made available by or under the authority of
any Governmental Authority or pursuant to any Legal Requirement.
-37-
7.24 "Hazardous Materials" means: (A) those substances included within
the definitions of "hazardous substance," "hazardous waste," "extremely
hazardous substance," "regulated substance," "hazardous materials" or "toxic
substances," under any Environmental Laws; (B) those substances listed in 49
C.F.R. 172.101 and in 40 C.F.R. Part 302; (C) any petroleum, oil or a fraction
or constituent thereof; (D) asbestos or any material containing more than one
percent (1%) asbestos that is friable or which bears a risk of becoming friable
if not abated; (E) polychlorinated biphenyls or formaldehyde; (F) any material
designated as a "hazardous substance" pursuant to 33 U.S.C. ' 1321 or listed
pursuant to 33 U.S.C. '1317; (G) explosives or radioactive materials (including
naturally occurring radioactive materials); (H) solid wastes that pose imminent
and substantial endangerment to health or the environment; (I) radon gas in an
ambient air concentration exceeding four picocuries per liter (4 Pci/l); or (J)
any other materials, products, wastes or substances that are currently
classified or regulated as hazardous or toxic under any Governmental
Regulations.
7.25 "Improvements" shall have the meaning specified in the
Recitals hereof.
7.26 "Intangible Personal Property" means all of the intangible
personal property of the Seller's Angleton Division, including but not limited
to Intellectual Property Assets, good will, Contracts, contract rights, permits,
licenses, customer lists, computer software and every other item of intangible
personal property owned, licensed, leased or held through any other means or
rights by the Seller and used solely or principally in the Seller's Angleton
Division business.
7.27 "Intellectual Property Assets" shall have the meaning set forth in
Section 2.17.
7.28 "Legal Requirement" means any law (including without limitation
any Environmental Laws), statute, ordinance, decree, requirement, Order, treaty,
proclamation, convention, rule or regulation (or interpretation of any of the
foregoing) of, and the terms of any Governmental Authorization issued by, any
Governmental Authority in all cases as in effect on the Closing Date.
7.29 "Liability" means any debt, obligation, duty or liability of any
nature (including any unknown, undisclosed, unfixed, unliquidated, unsecured,
unmatured, unaccrued, unasserted, contingent, conditional, inchoate, implied,
vicarious, joint, several or secondary liability), regardless of whether such
debt, obligation, duty or liability would be required to be disclosed on a
balance sheet prepared in accordance with GAAP.
7.30 "Licensed Intellectual Property Assets" shall have the meaning set
forth in Section 2.17(b).
7.31 "Material Contracts" has the meaning specified in Section 2.8.
7.32 "Material Adverse Effect" means any material, adverse effect upon
the business, operations, property, Assets, operating results, business
-38-
prospects or financial condition of the Seller's Angleton Division; provided,
however, that changes in conditions generally applicable to the industries and
lines of business in which the Seller's Angleton Division is involved or engaged
or general economic conditions shall not constitute a Material Adverse Effect.
7.33 "Material Adverse Change" means any material adverse change in the
condition (financial or otherwise), business, operations, properties, prospects,
assets or Liabilities of the Seller (whether or not covered by insurance).
7.34 "Medtronic Termination" has the meaning specified in Section
2.7.
7.35 "Order" means any order, judgment, injunction, edict, decree,
ruling, pronouncement, determination, decision, opinion, sentence, subpoena,
consent decree, writ or award issued, made, entered or rendered by any court,
administrative agency or other Governmental Authority or by any arbitrator.
7.36 "Owned Intellectual Property Assets" shall have the meaning set
forth in Section 2.17(b).
7.37 "Person" means any individual, Entity or Governmental Authority,
except where otherwise specifically noted.
7.38 "Proceeding" means any action, suit, litigation, arbitration,
lawsuit, claim, proceeding (including any civil, criminal, administrative,
investigative or appellate proceeding and any informal proceeding), prosecution,
contest, hearing, inquiry, inquest, audit, examination, investigation,
challenge, controversy or dispute commenced, brought, conducted or heard by or
before, or otherwise involving, any Governmental Authority or any arbitrator.
7.39 "Purchase Price" shall have the meaning set forth in Section 1.7.
7.40 "Purchaser" means Merit Medical Systems, Inc.
7.41 "Purchaser's Indemnified Persons" shall have the meaning set forth
in Section 5.1.
7.42 "RCRA" means the Resource Conservation and Recovery Act, 42
U.S.C. " 6901 et. seq.
7.43 "Real Property" shall have the meaning specified in the Recitals
hereof.
7.44 "Release" or ("released") shall have the meaning specified in
CERCLA.
7.45 "Remediation" means any action necessary in any given
circumstances to comply with the requirements of applicable Environmental Law
-39-
with respect to the Seller, Purchaser or the Real Property and any operation
thereon including, if and as necessary, (i) the removal and disposal or
containment (if containment is practical under the circumstances and is
permissible within Environmental Law) or monitoring of any and all Hazardous
Substances at any Real Property; (ii) the taking of necessary precautions as
required by Environmental Law to protect against the release or threatened
release of Hazardous Substances at, on, in, about, under, within or near the
air, soil, surface water, groundwater or soil vapor at any Real Property or any
surrounding areas thereof if caused by Seller or originating at the Real
Property; or (iii) any action necessary to meet the requirements of an
environmental permit.
7.46 "Seller" means Mallinckrodt Inc.
7.47 "Seller's Indemnified Persons" shall have the meaning set forth in
Section 5.2.
7.48 "Solid Waste" shall have the meaning ascribed to it in RCRA.
7.49 "Tangible Personal Property" means all of the tangible personal
property owned by the Seller and used exclusively or primarily in its Angleton
Division, including, but not limited to, furniture, fixtures, equipment,
business records, artwork, prepaid expenses, deposits, books, products,
promotional materials, manuals, training materials, supplies and any other item
of personal property owned by the Seller and used exclusively or primarily in
its Angleton Division.
7.50 "Tax" means any federal, state, local or foreign income, gross
receipts, license, payroll, employment, excise, severance, stamp, occupation,
premium, environmental, customs duties, franchise, profits, withholding, social
security (or similar), unemployment, disability, real property, personal
property, sales, use, transfer, registration, value added, estimated or other
tax of any kind whatsoever, including any interest, penalty or addition thereto.
7.51 "Tax Returns" means any return (including any information return),
report, statement, declaration, schedule, notice, notification, form,
certificate or other document or information filed with or submitted to, or
required to be filed with or submitted to, any Governmental Authority in
connection with the determination, assessment, collection or payment of any Tax
or in connection with the administration, implementation or enforcement of or
compliance with any Legal Requirement relating to any Tax.
7.52 "Title Commitment" means the commitment for Commonwealth Land
Title Insurance Company to issue the Owner's Title Policy to Purchaser which
title commitment was delivered by Seller to Purchaser prior to the date of this
Agreement.
7.53 "Transaction Agreements" shall mean all of the Agreements
specified in Sections 1.5 and 1.9 and any other agreement entered into or
document exchanged at the Closing which is necessary to close the transactions
contemplated by this Agreement in accordance with its terms.
-40-
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed on its behalf as of the date first above written.
"SELLER":
MALLINCKRODT INC.
By: /s/Xxxxxxx X. Xxxxxxx
-----------------------------
Its VP Corporate Development
"PURCHASER":
MERIT MEDICAL SYSTEMS, INC.
By: /s/Xxxx Xxxxxxx
----------------
Xxxx Xxxxxxx
Its CFO
-41-
LIST OF EXHIBITS
----------------
A Real Property Description
B Future Med Agreement
C Countries of Resale
D Transfer Pricing of Angleton Division Products
E Barium Compounds and Bismuth Compounds Pricing
F Xxxx of Sale
G Assignment and Assumption Agreement between Purchaser and Seller
H Warranty Deed to Purchaser
I Owners' Title Policy
J Assignment of Patents and Assignment of Trademarks
K Environmental Laws
-42-
