EXHIBIT 2
Asset Purchase Agreement dated October 3, 1995
among Cordis Medical Products, Inc.,
Xxxxxxx Healthcare, Ltd., d/b/a Custom
Medical Products, ASH Enterprises, Inc.,
Out-Patient Products Company, Inc.,
Xxxxxxx Healthcare, Inc. and Cordis Corporation
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______________________________________________________________________________
______________________________________________________________________________
ASSET PURCHASE AGREEMENT
AMONG
CORDIS MEDICAL PRODUCTS, INC.,
XXXXXXX HEALTHCARE, LTD.,
D/B/A CUSTOM MEDICAL PRODUCTS,
ASH ENTERPRISES, INC.,
OUT-PATIENT PRODUCTS COMPANY, INC.,
XXXXXXX HEALTHCARE, INC.
(solely with respect to
Sections 3.1(b), 3.5, 3.6, 3.7, 3.32(a), 3.32(b), 3.33, 5.12, 7.6
and Article VIII)
AND
CORDIS CORPORATION
(solely with respect to
Article IV, Section 5.13 and Article VIII)
______________________________________________________________________________
Dated as of October 3, 1995
______________________________________________________________________________
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS.................................................1
SECTION 1.1. Certain Defined Terms. .........................1
SECTION 1.2. Other Definitional Provisions. .................2
ARTICLE II CLOSING; PURCHASE AND SALE.................................2
SECTION 2.1. Closing. .......................................2
SECTION 2.2. Purchased Assets. ..............................2
SECTION 2.3. Consideration; Purchase Price; Assumption
of Liabilities. ..............................3
SECTION 2.4. Allocation of Purchase Price. ..................5
SECTION 2.5. Escrow. ........................................5
ARTICLE III REPRESENTATIONS AND WARRANTIES OF
SELLER, PARENT AND THE PARTNERS...............................6
SECTION 3.1. Formation; Incorporation and Organization;
Good Standing; Due Authorization. ............6
SECTION 3.2. No Outstanding Rights. .........................9
SECTION 3.3. Purchased Assets; Asheville Plant. .............9
SECTION 3.4. Clear Title and Lack of Encumbrances. ..........10
SECTION 3.5. Non-Contravention. .............................10
SECTION 3.6. Consents, Approvals and Filings. ...............10
SECTION 3.7. Litigation and Investigations. .................11
SECTION 3.8. Pension and Benefit Plans. .....................11
SECTION 3.9. Authorizations. ................................12
SECTION 3.10. Payments. ......................................12
SECTION 3.11. Books and Records. .............................13
SECTION 3.12. Financial and Accounting Matters. ..............13
SECTION 3.13. Retained Liabilities. ..........................14
SECTION 3.14. Accounts Payable; Undisclosed Liabilities. .....14
SECTION 3.15. Operations in the Ordinary Course; No
Material Adverse Changes. ....................14
SECTION 3.16. Condition of FF&E; Inventory. ..................15
SECTION 3.17. Taxes. .........................................15
SECTION 3.18. Leases. ........................................15
SECTION 3.19. Subsidiaries; Affiliates. ......................16
SECTION 3.20. Contracts. .....................................16
SECTION 3.21. Certain Employees. .............................17
SECTION 3.22. Trade Unions. ..................................17
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SECTION 3.23. Location of Purchased Assets. ..................18
SECTION 3.24. Compliance with Laws. ..........................18
SECTION 3.25. Patents, Technology and Trademarks. ............18
SECTION 3.26. Infringement. ..................................19
SECTION 3.27. Insurance. .....................................19
SECTION 3.28. No Broker's or Finder's Fee. ...................20
SECTION 3.29. Environmental Matters. .........................20
SECTION 3.30. Potential Conflicts of Interest. ...............22
SECTION 3.31. WARN Act. ......................................23
SECTION 3.32. FDA and Other Regulatory Compliance. ...........23
SECTION 3.33. Disclosure. ....................................24
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF
CORDIS AND PURCHASER..........................................24
SECTION 4.1. Incorporation and Organization; Good
Standing; Due Authorization. .................24
SECTION 4.2. Non-Contravention. .............................25
SECTION 4.3. Consents, Approvals and Filings. ...............25
SECTION 4.4. No Broker's or Finder's Fee. ...................26
ARTICLE V COVENANTS...................................................26
SECTION 5.1. Consents. ......................................26
SECTION 5.2. Delivery of Books and Records; Access. .........26
SECTION 5.3. Retained Liabilities; Assumed Liabilities. .....27
SECTION 5.4. Further Assurances. ............................27
SECTION 5.5. Change of Name. ................................28
SECTION 5.6. Termination of Supply Agreement. ...............28
SECTION 5.7. Intentionally Deleted. .........................28
SECTION 5.8. Maintenance of Existence. ......................28
SECTION 5.9. Operations of Non-Medical Business. ............29
SECTION 5.10. Insurance. .....................................29
SECTION 5.11. License of "Alliance" Trademarks. ..............29
SECTION 5.12. Parent Guaranty. ...............................30
SECTION 5.13. Cordis Guaranty. ...............................30
ARTICLE VI CONDITIONS PRECEDENT.......................................31
SECTION 6.1. Conditions Precedent to the Obligations of
Seller to Complete the Closing. ..............31
SECTION 6.2. Conditions Precedent to the Obligations of
Purchaser to Complete the Closing. ...........32
ARTICLE VII EMPLOYEES AND EMPLOYEE BENEFIT
MATTERS.......................................................35
SECTION 7.1. Employment of New Employees. ...................35
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SECTION 7.2. Establishment of Employee Benefit Plans. .......35
SECTION 7.3. Severance. .....................................36
SECTION 7.4. Required Documentation. ........................36
SECTION 7.5. Reservations of Rights. ........................36
SECTION 7.6. No Solicitation or Hiring. .....................37
ARTICLE VIII INDEMNIFICATION..........................................37
SECTION 8.1. Survival of Representations and Warranties. ....37
SECTION 8.2. Indemnification. ...............................38
SECTION 8.3. Bulk Sales Laws. ...............................40
SECTION 8.4. General Indemnification Procedures. ............41
ARTICLE IX MISCELLANEOUS PROVISIONS...................................42
SECTION 9.1. Expenses. ......................................42
SECTION 9.2. Entire Agreement; Amendments. ..................42
SECTION 9.3. Schedules, Exhibits and Addenda. ...............43
SECTION 9.4. Headings; Certain Rules of Construction. .......43
SECTION 9.5. Notices. .......................................43
SECTION 9.6. No Waiver. .....................................45
SECTION 9.7. Successors; Assignment. ........................46
SECTION 9.8. No Third-Party Beneficiaries. ..................46
SECTION 9.9. Passage of Title and Risk of Loss. .............46
SECTION 9.10. Force Majeure. .................................46
SECTION 9.11. Announcements. .................................46
SECTION 9.12. Counterparts. ..................................47
SECTION 9.13. Severability. ..................................47
SECTION 9.14. Governing Law. .................................47
SECTION 9.15. Confidentiality. ...............................47
SECTION 9.16. Forum. .........................................49
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ADDENDA
Addendum I Definitions
EXHIBITS
Exhibit A Xxxx of Sale
Exhibit B Assumption Agreement
Exhibit C Escrow Agreement
Exhibit D Opinions of Seller's and Partners' Counsel
Exhibit E Deed
Exhibit F Non-Competition Agreement
Exhibit G Key Employees
Exhibit H-1 Opinions of Cordis' General Counsel
Exhibit H-2 Opinions of Cordis Medical Products' Counsel
SCHEDULES
Schedule 1.1(a) Assumed Liabilities
Schedule 1.1(b) Assumed Liabilities Scheduled Pursuant to Section
2.3(a)(i)(A)(I)
Schedule 1.2 Excluded Assets
Schedule 1.3 Prepaid Charges
Schedule 1.4 Deposits and Prepaid Rentals
Schedule 2.3 Outstanding Cordis Payables
Schedule 2.4 Allocation of Purchase Price
Schedule 3.1(a) List of Seller's Partners and Partner Ownership
Interests in Seller
Schedule 3.4 Permitted Encumbrances
Schedule 3.5(c) Conflicts; Acceleration of Debt
Schedule 3.6 Consents, Approvals and Filings
Schedule 3.7(a) Litigation
Schedule 3.8(a) Pension and Benefit Plans
Schedule 3.8(e) Qualified Plans
Schedule 3.9 Authorizations Necessary for Conduct of the Medical
Business
Schedule 3.12 Seller's Financial Statements
Schedule 3.13 Retained Liabilities
Schedule 3.14(a) Accounts Payable
Schedule 3.15 Material Adverse Changes
Schedule 3.16(a) FF&E
Schedule 3.16(b) Unmerchantable Inventory
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Schedule 3.18 Leases
Schedule 3.19 Subsidiaries; Affiliates
Schedule 3.20 Contracts
Schedule 3.21 Certain Employees
Schedule 3.23 Location of Purchased Assets
Schedule 3.25 Patents, Technology and Trademarks
Schedule 3.27 Insurance
Schedule 3.29(a) Current CMP Facilities
Schedule 3.29(b) Former CMP Facilities
Schedule 3.29(c) Compliance with Environmental Laws
Schedule 3.29(d) Environmental Permits
Schedule 3.30 Potential Conflicts of Interest
Schedule 3.31 WARN Act
Schedule 3.32 FDA and Other Regulatory Compliance Documents
Schedule 4.3 Consents, Approvals and Filings
Schedule 8 Excluded Contracts
v
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT ("AGREEMENT") is made as of October
3, 1995 among CORDIS MEDICAL PRODUCTS, INC., a North Carolina corporation
("PURCHASER") and a wholly owned subsidiary of Cordis, XXXXXXX HEALTHCARE,
LTD., a Georgia limited partnership doing business as "Custom Medical
Products" ("SELLER"), ASH ENTERPRISES, INC., a Georgia corporation and the
sole general partner of Seller ("GENERAL PARTNER"), OUT-PATIENT PRODUCTS
COMPANY, INC., a North Carolina corporation and the sole limited partner of
Seller ("LIMITED PARTNER", and together with the General Partner, the
"PARTNERS"), XXXXXXX HEALTHCARE, INC., a Delaware corporation and the parent
of the General Partner ("PARENT") (solely with respect to Sections 3.1(b),
3.5, 3.6, 3.7, 3.32(a), 3.32(b), 3.33, 5.12, 7.6 and Article VIII), and
CORDIS CORPORATION, a Florida corporation ("CORDIS") (solely with respect to
Article IV, Section 5.13 and Article VIII).
WHEREAS, Seller is in the business, among other things, of packing
and distributing to hospitals and other healthcare providers medical supplies
for surgical procedures, manufacturing and distributing to hospitals and
other healthcare providers medical drapes and accessory items used by
healthcare providers and distributing to hospitals and other healthcare
providers medical gowns and related apparel (the "MEDICAL BUSINESS");
WHEREAS, Seller desires to sell, convey, assign and/or license to
Purchaser, and Purchaser desires to purchase and assume, certain of the
assets and liabilities of Seller related to the Medical Business, subject to
the limitations, exclusions and other terms and conditions of this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants herein
contained and other good and valuable consideration given and received by
each party, receipt of which is hereby acknowledged, the parties hereto agree
as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. CERTAIN DEFINED TERMS.
For all purposes of this Agreement, certain capitalized terms
specified in ADDENDUM I shall have the meanings set forth in that ADDENDUM I,
except as otherwise expressly provided.
SECTION 1.2. OTHER DEFINITIONAL PROVISIONS.
References to "Sections" shall be to Sections of this Agreement
unless otherwise specifically provided. Any of the terms defined in ADDENDUM
I hereof may, unless the context otherwise requires, be used in the singular
or the plural, depending on the reference. Any reference herein to any
agreement, document or instrument, including, without limitation, this
Agreement, and any Schedules, Exhibits or Addenda hereto, unless expressly
noted otherwise, shall be a reference to each such agreement, document or
instrument as the same may be amended, restated, supplemented or otherwise
modified from time to time to the extent permitted hereunder.
ARTICLE II
CLOSING; PURCHASE AND SALE
SECTION 2.1. CLOSING.
The closing of the transactions contemplated hereby (the "CLOSING")
shall take place at the offices of Xxxxxxx & Xxxxxxx, P.A. in Asheville,
North Carolina at 10:00 a.m. (Eastern Time) on the Closing Date or at such
other place as shall be agreed upon by the parties hereto. The Closing shall
be deemed to have occurred only when (a) all of the events specified in
Sections 2.2 and 2.3 hereof shall have occurred, and (b) all of the
conditions precedent to the obligations of the parties to complete the
Closing set forth in Article VI hereof shall have been satisfied (or
satisfaction thereof shall have been waived). All Documents to be delivered
at the Closing shall be delivered by physical delivery and the Purchase
Price, less the deductions taken therefrom as set forth in Section 2.3(a)
hereof, shall be paid at the Closing by wire transfer to an account or
accounts designated in writing by Seller at least five (5) Business Days
prior to the Closing Date.
SECTION 2.2. PURCHASED ASSETS.
Upon the terms and subject to the conditions specified in this
Agreement, at the Closing, Seller shall sell, convey, assign, license and
otherwise transfer to Purchaser, and Purchaser shall purchase, acquire and
accept, the Purchased Assets, free and clear of all Encumbrances other than
the Permitted Encumbrances identified on SCHEDULE 3.4 hereto. In the event
the sale, lease, conveyance, assignment, license or transfer of any of the
Authorizations is unlawful or is not permissible under any agreement, or
under any Federal, state or local law, rule or regulation, such terms for the
purposes of this Agreement with respect to any such Authorizations shall be
deemed to mean and require (a) each of Seller's and/or either of the
Partners' relinquishment of all its right, title, benefit and interest in and
to and authority under, such Authorizations as of the Closing and (b) the
issuance or grant to Purchaser by the appropriate third party or
2
Governmental Body of an Authorization conferring upon Purchaser, as of the
Closing, all right, title, benefit, interest and authority at least equal to
that relinquished by Seller and/or either of the Partners, as the case may
be, including the right, authority and approval for Purchaser to conduct the
Medical Business from and after the Closing in the same manner as Seller
prior to the Closing upon the filing by Purchaser with the FDA after Closing
of required registrations with respect to certain business activities of the
Medical Business.
SECTION 2.3. CONSIDERATION; PURCHASE PRICE; ASSUMPTION
OF LIABILITIES.
(a) In consideration of the transfer to Purchaser of the Purchased
Assets, and upon the terms and subject to the conditions specified in this
Agreement, at the Closing Purchaser shall pay: (i) to Seller, (A) $6,527,261
(the "PURCHASE PRICE"), less the sum of (I) the estimated aggregate amount of
those Assumed Liabilities set forth on SCHEDULE 1.1(b) hereto, (II)
$458,269.86, representing the outstanding balance on the note secured by the
Deed of Trust as of the Closing Date, (III) $40,246.38 representing the
amount paid by Purchaser to Xxxxxxx Capital L.L.C. on behalf of Seller, (IV)
the Escrow Deposit, which shall be withheld from the Purchase Price pursuant
to the provisions of Section 2.5 hereof and (B)(I) $475,205, in respect of
all amounts owing to Seller from Cordis as set forth on SCHEDULE 2.3 hereto
(the "OUTSTANDING CORDIS PAYABLES"), and (II) $85,000, in respect of an
estimate of the "Monthly Shortfall" (as such term is defined in the Supply
Agreement), if any, through the Closing Date; (ii) to the Lender,
$458,269.86, representing the outstanding balance on the note secured by the
Deed of Trust as of the Closing Date; and (iii) to Xxxxxxx Capital L.L.C.,
$40,246.38. In addition, at the Closing Purchaser shall execute and deliver
to Seller the Assumption Agreement, pursuant to which Purchaser shall
covenant to pay, honor and discharge the Assumed Liabilities in a timely
manner and in accordance with their respective terms.
(b) All real and personal property taxes (other than sales taxes
payable in connection with Seller's sale of the Purchased Assets to
Purchaser, which sales taxes shall be paid by Purchaser), rents, insurance,
fuel, utility and other charges with respect to the tangible assets of Seller
transferred to Purchaser shall be prorated as of 12:01 a.m. (Eastern Time) on
the Effective Date. Such prorations shall be based on the most recent
financial information available to Seller as of the Closing Date. All sales
and use taxes (other than sales taxes payable in connection with Seller's
sale of the Purchased Assets to Purchaser, which sales taxes shall be paid by
Purchaser) and payroll taxes and other expenses and charges with respect to
the Medical Business shall be prorated, if appropriate, based on the period
to which they relate. Seller shall be responsible for all such expenses and
charges allocable to all times up to but not including the Effective Date and
Purchaser shall be responsible for all such expenses and charges allocable to
all times on and after
3
the Effective Date. As a part of the Closing, the Purchase Price shall be
adjusted to reflect estimated allocations of Accounts Payable for which
invoices have not yet been received but with respect to which the product,
materials or services to which such Accounts Payable relate have been
delivered or performed (and in the case of Inventory, included in the
Purchased Assets) on or prior to the Closing Date and other operating
expenses relating to the Purchased Assets up to but not including the
Effective Date. Such estimated allocations shall be agreed upon by Seller and
Purchaser. In addition, following the Closing and subject to the approval of
Seller (which shall not be unreasonably withheld), Purchaser shall have the
right to pay any accounts payable of Seller relating to the Medical Business
that are not set forth on SCHEDULE 3.14(a). Purchaser shall be entitled to
reimbursement from Seller at the Adjustment Closing in respect of any such
accounts payable paid by Purchaser.
(c) Prior to the Adjustment Closing, Purchaser and Seller shall
determine in good faith an appropriate adjustment for the estimated Assumed
Liabilities, the actual Monthly Shortfall, if any, through the Closing Date,
accounts payable paid by Purchaser with the permission of Seller as described
in subparagraph (b) above and the allocations described in subparagraph (b)
above and Purchaser or Seller, as appropriate, shall reimburse each other in
the amount of such adjustments, as well as for other collections made by one
party on behalf of the other party, at the Adjustment Closing. To the extent
Purchaser is entitled to such reimbursement, Purchaser shall be reimbursed
first from the Escrow Account to the extent that funds in the Escrow Account
are sufficient and, to the extent funds in the Escrow Account are
insufficient for such purposes, from Seller. To the extent Seller is entitled
to reimbursement, Purchaser shall reimburse Seller at the Adjustment Closing.
If Purchaser and Seller cannot resolve any disputes relating to amounts to
be paid at the Adjustment Closing within twenty (20) business days prior to
the proposed Adjustment Closing, the matter shall be resolved by the
Accounting Arbiter, whose determination shall be final and binding on the
parties. The fees and expenses of the Accounting Arbiter shall be shared
equally by Seller and Purchaser; PROVIDED, HOWEVER, that if the Accounting
Arbiter determines that the position taken by one of the parties with respect
to any adjustment is not a reasonable position, such party shall bear all of
the Accounting Arbiter's fees and expenses incurred in connection with the
Accounting Arbiter's examination of such position. In determining the
reasonableness of either parties' position, the Accounting Arbiter shall be
entitled to consider such facts and circumstances as the Accounting Arbiter,
in its sole discretion, deems appropriate, and may base its determination on
such factors as the Accounting Arbiter, in its sole discretion, deems
appropriate, including without limitation whether a party's position is
reasonable under GAAP. Purchaser shall pay all applicable sales, transfer
and use Taxes in connection with the transfer of the Purchased Assets.
4
(d) Except as specifically set forth in Section 2.3(a) above,
Purchaser shall not assume, pay, bear, perform or discharge (or cause to be
assumed, paid, borne, performed or discharged) any Liabilities of Seller or
any of its Affiliates, whether arising or asserted before or after the
Closing Date. Without limiting the generality of the foregoing, Purchaser
shall not assume, and Seller and its Affiliates shall continue to bear sole
responsibility for, any and all actions, causes of action and claims to
recovery under any one or more of Sections 544, 545, 546, 547, 548, 549, 550
and 553 of the United States Bankruptcy Code or under any corresponding
provision of state law (collectively, "AVOIDANCE ACTIONS") arising from the
conduct of the Medical Business on or prior to the Closing Date.
(e) Seller shall retain all rights and interest in all accounts
receivable of Seller outstanding as of the Closing Date and all accounts
receivable relating to products shipped or delivered on or prior to the
Closing Date. Purchaser shall use reasonable efforts, in its sole
discretion, to assist Seller in collecting such accounts receivable and shall
be reimbursed for the reasonable costs paid by Purchaser to any third party
(excluding Affiliates of Purchaser) in connection with such efforts;
provided, however, that in no event shall Purchaser be liable in respect of
any accounts receivable or any actions taken by Purchaser or its employees in
connection with the collection thereof, other than to reimburse Seller for
any amounts collected by Purchaser in respect thereof.
SECTION 2.4. ALLOCATION OF PURCHASE PRICE.
The Purchase Price of the Purchased Assets, the Assumed
Liabilities, the Non-Competition Agreement and any other intangible assets
being transferred pursuant to this Agreement shall be fairly allocated by
Seller and the Partners in accordance with the requirements of the U.S.
Department of Treasury Regulation Section 1.1060-1T, which allocation is set
forth on SCHEDULE 2.4 hereto. All Tax Returns filed by Seller, the Partners,
Purchaser and their respective Affiliates with respect to the transactions
contemplated hereby shall be consistent with such allocation (including
Internal Revenue Service Forms 8594, which Seller, the Partners and Purchaser
shall file at or after the Closing); PROVIDED, HOWEVER, that nothing
contained herein shall require Seller, the Partners, Purchaser or their
respective Affiliates to contest any issues with respect thereto beyond or
otherwise than by the exhaustion of administrative remedies before any tax
authority or agency, and none of Purchaser or any of its Affiliates shall be
required to litigate before any court any proposed deficiency or adjustment
by any tax authority or agency which challenges such allocation.
SECTION 2.5. ESCROW.
Solely to provide a source of payment for any adjustments to be
made at the Adjustment Closing as described in Sections 2.3(a) through
2.3(c), an interest
5
bearing escrow account (the "ESCROW ACCOUNT") will be created pursuant to the
Escrow Agreement attached hereto as EXHIBIT C (the "ESCROW AGREEMENT").
Purchaser shall deposit a portion of the Purchase Price in an amount equal to
$150,000 (the "ESCROW DEPOSIT") into the Escrow Account. The Escrow
Agreement shall provide, among other things, for the termination of the
Escrow Account, subject to the terms thereof, on the first Business Day
following the Adjustment Closing.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLER,
PARENT AND THE PARTNERS
Seller (with respect to all representations and warranties and on a
joint and several basis with Parent, the General Partner and/or the Limited
Partner with respect to those representations and warranties relating to
Parent, the General Partner and/or the Limited Partner), Parent (with respect
to only those representations and warranties relating to Parent contained in
Sections 3.1(b), 3.5, 3.6, 3.7, 3.32(a), 3.32(b) and 3.33), the General
Partner (with respect to only those representations and warranties relating
to Seller, Parent and/or the General Partner and on a joint and several basis
with Seller and/or Parent with respect to those representations and
warranties relating to Seller and/or Parent), and the Limited Partner (with
respect to only those representations and warranties relating to Seller
and/or the Limited Partner and on a joint and several basis with Seller with
respect to those representations and warranties relating to Seller) hereby
represent and warrant that:
SECTION 3.1. FORMATION; INCORPORATION AND ORGANIZATION; GOOD
STANDING; DUE AUTHORIZATION.
(a) Seller is a limited partnership duly formed, validly existing
and in good standing under the laws of the State of Georgia and has all
requisite power and authority to own and operate its properties, to carry on
its business as now being conducted, to execute and deliver this Agreement,
the Assumption Agreement, the Xxxx of Sale, the Deed, the Escrow Agreement,
the Non-Competition Agreement and all other agreements or documents executed
or delivered by Seller pursuant to this Agreement, to perform its obligations
hereunder and thereunder and to consummate the transactions contemplated
hereby and thereby. Seller is duly qualified and in good standing as a
foreign limited partnership in the State of North Carolina and in each other
jurisdiction where the nature of its business or the location of its
properties requires Seller to be so qualified, except where the failure to be
so qualified would not have a material adverse effect on the Medical
Business. The execution and delivery by Seller of this Agreement, the
Assumption
6
Agreement, the Xxxx of Sale, the Deed, the Escrow Agreement, the
Non-Competition Agreement and all other agreements or documents executed or
delivered pursuant to this Agreement, the performance by Seller of its
obligations hereunder and thereunder and the consummation by Seller of the
transactions contemplated hereby and thereby have been duly and validly
authorized and approved by all necessary actions on the part of Seller and
its partners, none of which actions have been modified or rescinded and all
of which actions remain in full force and effect. Each of this Agreement,
the Assumption Agreement, the Xxxx of Sale, the Deed, the Escrow Agreement
and the Non-Competition Agreement has been duly executed and delivered on
behalf of Seller by a duly authorized officer of the General Partner and
constitutes a valid and binding obligation of Seller, enforceable against
Seller in accordance with its terms, except as may be limited by bankruptcy,
insolvency, reorganization, moratorium or other laws affecting creditors'
rights (including, without limitation, the effect of statutory and other laws
regarding fraudulent conveyances, fraudulent transfers and preferential
transfers) and as may be limited by the exercise of judicial discretion and
the application of the principles of equity including, without limitation,
requirements of good faith, fair dealing, conscionability and materiality
(regardless of whether such agreement is considered in a proceeding in equity
or at law). SCHEDULE 3.1(a) sets forth the name and address of each partner
of Seller and the partnership interests legally or beneficially owned by such
Person as of the date of this Agreement.
(b) Parent is a corporation duly organized, validly existing and
in good standing under the laws of the State of Delaware and has all
requisite power and authority to execute and deliver this Agreement, the
Non-Competition Agreement and all other agreements or documents executed or
delivered by Parent pursuant to this Agreement, to perform its obligations
hereunder and thereunder and to consummate the transactions contemplated
hereby and thereby. The execution and delivery by Parent of this Agreement,
the Non-Competition Agreement and all other agreements or documents executed
or delivered pursuant to this Agreement, the performance by Parent of its
obligations hereunder and thereunder and the consummation by Parent of the
transactions contemplated hereby and thereby have been duly and validly
authorized and approved by all necessary actions on the part of Parent, none
of which actions have been modified or rescinded and all of which actions
remain in full force and effect. Each of this Agreement and the
Non-Competition Agreement has been duly executed and delivered by a duly
authorized officer of Parent and constitutes a valid and binding obligation
of Parent, enforceable against Parent in accordance with its terms, except as
may be limited by bankruptcy, insolvency, reorganization, moratorium or other
laws affecting creditors' rights (including, without limitation, the effect
of statutory and other laws regarding fraudulent conveyances, fraudulent
transfers and preferential transfers) and as may be limited by the exercise
of judicial discretion and the application of the principles of equity
including, without limitation, requirements of good faith, fair dealing,
conscionability and materiality
7
(regardless of whether such agreement is considered in a proceeding in
equity or at law).
(c) The General Partner is a corporation duly organized, validly
existing and in good standing under the laws of the State of Georgia, and has
all requisite power and authority to execute and deliver this Agreement, the
Non-Competition Agreement and all other agreements or documents executed or
delivered by the General Partner pursuant to this Agreement, to perform its
obligations hereunder and thereunder and to consummate the transactions
contemplated hereby and thereby. The General Partner is duly qualified and
in good standing as a foreign corporation in the State of North Carolina. The
execution and delivery by the General Partner on behalf of Seller of this
Agreement, the Assumption Agreement, the Xxxx of Sale, the Deed, the Escrow
Agreement, the Non-Competition Agreement and all other agreements or
documents executed or delivered by Seller pursuant to this Agreement, the
execution and delivery by the General Partner on its own behalf of this
Agreement, the Non-Competition Agreement and all other agreements or
documents executed or delivered by the General Partner pursuant to this
Agreement, the performance by the General Partner of its obligations
hereunder and thereunder and the consummation by the General Partner of the
transactions contemplated hereby and thereby have been duly and validly
authorized and approved by all necessary actions on the part of the General
Partner, none of which actions have been modified or rescinded and all of
which actions remain in full force and effect. Each of this Agreement, the
Assumption Agreement, the Xxxx of Sale, the Deed, the Escrow Agreement and
the Non-Competition Agreement has been duly executed and delivered by a duly
authorized officer of the General Partner, on behalf of the Seller and on its
own behalf, as applicable, and constitutes a valid and binding obligation of
the General Partner, enforceable against the General Partner in accordance
with its terms, except as may be limited by bankruptcy, insolvency,
reorganization, moratorium or other laws affecting creditors' rights
(including, without limitation, the effect of statutory and other laws
regarding fraudulent conveyances, fraudulent transfers and preferential
transfers) and as may be limited by the exercise of judicial discretion and
the application of the principles of equity including, without limitation,
requirements of good faith, fair dealing, conscionability and materiality
(regardless of whether such agreement is considered in a proceeding in equity
or at law).
(d) The Limited Partner is a corporation duly organized, validly
existing and in good standing under the laws of the State of North Carolina,
and has all requisite power and authority to execute and deliver this
Agreement, the Non-Competition Agreement and all other agreements or
documents executed or delivered by the Limited Partner pursuant to this
Agreement, to perform its obligations hereunder and thereunder and to
consummate the transactions contemplated hereby and thereby. The execution
and delivery by the Limited
8
Partner of this Agreement, the Non-Competition Agreement and all other
agreements or documents executed or delivered pursuant to this Agreement, and
the performance by the Limited Partner of its obligations hereunder and
thereunder and the consummation by the Limited Partner of the transactions
contemplated hereby and thereby have been duly and validly authorized and
approved by all necessary actions on the part of the Limited Partner, none of
which actions have been modified or rescinded and all of which actions remain
in full force and effect. Each of this Agreement and the Non-Competition
Agreement has been duly executed and delivered by a duly authorized officer
of the Limited Partner, and constitutes a valid and binding obligation of the
Limited Partner, enforceable against the Limited Partner in accordance with
its terms, except as may be limited by bankruptcy, insolvency,
reorganization, moratorium or other laws affecting creditors' rights
(including, without limitation, the effect of statutory and other laws
regarding fraudulent conveyances, fraudulent transfers and preferential
transfers) and as may be limited by the exercise of judicial discretion and
the application of the principles of equity including, without limitation,
requirements of good faith, fair dealing, conscionability and materiality
(regardless of whether such agreement is considered in a proceeding in equity
or at law).
SECTION 3.2. NO OUTSTANDING RIGHTS.
Other than sales of Inventory in the ordinary course of business,
there are no outstanding rights, options, agreements or other commitments
giving any Person any current or future right to require Seller or, following
the Closing Date, Purchaser, to sell or transfer to such Person or to third
parties any interest in Seller or any of the Purchased Assets.
SECTION 3.3. PURCHASED ASSETS; ASHEVILLE PLANT.
(a) Except for the Excluded Assets, the Purchased Assets
constitute all of the assets, tangible and intangible, real and personal, of
Seller. The Purchased Assets constitute all assets which are currently used
in the conduct of the Medical Business.
(b) The Asheville Plant and all of the Improvements have direct and
unobstructed access suitable in all material respects for use in connection
with the operation of the Medical Business conducted therefrom (i) to all
public utilities necessary for the uses to which the Asheville Plant and all
of the Improvements are presently devoted by Seller, and (ii) to a public
street. To the best knowledge of Seller, all Improvements lie entirely
within the boundaries of the Asheville Plant, and, except as described on
SCHEDULE 3.4 hereto, no structure of any kind encroaches on the Asheville
Plant. No portion of the Asheville Plant or any Improvements is the subject
of, or affected by, any condemnation or eminent domain proceedings currently
pending of which the Seller is aware or has received notice, and to the
9
best knowledge of Seller, no such proceedings have been instituted or are
threatened. Except as set forth on SCHEDULE 3.4 hereto, the Asheville Plant
and the Improvements are not subject to any covenant or other restriction
preventing or limiting Seller's right to convey its right, title and interest
in the Asheville Plant and the Improvements or to use the Asheville Plant and
the Improvements for the various purposes for which the Asheville Plant and
the Improvements are being used.
SECTION 3.4. CLEAR TITLE AND LACK OF ENCUMBRANCES.
Seller has, and at the Closing Purchaser will receive, upon
repayment of the note secured by the Deed of Trust, good and marketable title
to all of the Purchased Assets, and the Purchased Assets are free and clear
of all Encumbrances, except for Permitted Encumbrances described on SCHEDULE
3.4 hereto.
SECTION 3.5. NON-CONTRAVENTION.
The execution, delivery and performance of this Agreement, the
Assumption Agreement, the Xxxx of Sale, the Deed, the Escrow Agreement, the
Non-Competition Agreement and all other agreements or documents executed or
delivered pursuant to this Agreement by Seller, Parent and/or either or both
of the Partners do not, as to each such party, as applicable: (a) violate
its articles of incorporation, bylaws, partnership agreement or other
governing documents; (b) violate in any material respects any applicable
rule, regulation, ordinance, order, judgment, decree or award of any
Governmental Body, court or arbitrator to which Seller, Parent and/or either
or both of the Partners is bound or to which any of the Purchased Assets is
subject; or (c) except as set forth on SCHEDULE 3.5(c) hereto, conflict with,
result in a material breach of or constitute a material default under any
material contract, agreement or other instrument to which it, or any of its
Affiliates, is a party or by which any of the Purchased Assets are bound or
result in the creation or imposition of any Encumbrance on any of the
Purchased Assets.
SECTION 3.6. CONSENTS, APPROVALS AND FILINGS.
Except as set forth on SCHEDULE 3.6 hereto, no consent, approval,
authorization or determination of, or declaration, filing or registration
with, or other action by, any Governmental Body or any other Person is
required to be made or sought by Seller, Parent, either of the Partners or
any of their respective Affiliates, in connection with the execution,
delivery and performance of this Agreement, the Assumption Agreement, the
Xxxx of Sale, the Deed, the Escrow Agreement, the Non-Competition Agreement
and all other agreements or documents executed or delivered by Seller, Parent
or either of the Partners pursuant to this Agreement, and the consummation by
Seller, Parent and each of the Partners of the transactions contemplated
hereby and thereby.
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SECTION 3.7. LITIGATION AND INVESTIGATIONS.
(a) Other than as set forth on SCHEDULE 3.7(a) hereto, there is no
litigation, arbitration, investigation, audit or other proceeding by or
before any Governmental Body, court or arbitrator pending or, to the best
knowledge of Seller, threatened against Seller, Parent, either of the
Partners or any of their respective Affiliates, which, if determined
adversely, would have a material adverse effect on the Purchased Assets, the
Assumed Liabilities, this Agreement or the transactions contemplated hereby
or the continued operation of the Medical Business by Purchaser after the
Closing Date substantially in the manner in which it has been operated to
date.
(b) None of Seller or either of the Partners has engaged in any
transaction that will subject Seller (or any successor in interest) to any
Avoidance Action. Without limiting the generality of the foregoing, none of
Seller, either of the Partners nor any of their respective Affiliates has, to
their knowledge, (i) received any material payments from its or their account
debtors outside the ordinary and usual course, (ii) acquired or sold any
asset other than for reasonably equivalent value or (iii) conducted any
business with any debtor-in-possession or bankrupt estate other than in the
ordinary and usual course.
SECTION 3.8. PENSION AND BENEFIT PLANS.
(a) Except as set forth on SCHEDULE 3.8(a) hereto, Seller does not
(i) maintain any Plan or Other Arrangement or (ii) have any obligations under
any Plan or Other Arrangement. SCHEDULE 3.8(a) sets forth a list of all Plans
in which any employee of Seller currently participates.
(b) No Plan is subject to Title IV of ERISA.
(c) No Plan is an ESOP.
(d) Seller and each of its ERISA Affiliates have made all
contributions and other payments required by and due under the terms of each
Plan and Other Arrangement.
(e) SCHEDULE 3.8(e) hereto identifies all Qualified Plans. All
Qualified Plans and any related trust agreements or annuity agreements (or
any other funding Document) have been in material compliance with ERISA, the
Code (including, without limitation, the requirements for Tax qualification
described in Section 401 thereof), and all other laws. Within the last five
years, Seller and its ERISA Affiliates have received determination letters
issued by the Internal Revenue Service with respect to each Qualified Plan,
and Seller has
11
furnished to Purchaser true and complete copies of all such determination
letters. To the best knowledge of Seller, nothing has occurred since the
date of the most recent applicable determination letter that is reasonably
likely to adversely affect the tax-qualified status of any Qualified Plan.
(f) No ERISA Event has occurred or, to the best knowledge of
Seller, is reasonably expected to occur.
(g) No Plan is a funded Welfare Plan.
(h) All Welfare Plans and the related trusts that are subject to
Section 4980B(f) of the Code and Sections 601 through 607 of ERISA materially
comply with and have been administered in material compliance with the health
care continuation-coverage requirements for tax-favored status under Section
4980B(f) of the Code (formerly Section 162(k) of the Code), Sections 601
through 607 of ERISA and all proposed or final United States Department of
the Treasury regulations under Section 162 of the Code explaining those
requirements.
SECTION 3.9. AUTHORIZATIONS.
Set forth on SCHEDULE 3.9 hereto is a true and complete description
of all of the Authorizations owned or held by or issued to Seller and the
Partners in connection with the Medical Business, and Seller has all the
Authorizations necessary for the conduct of the Medical Business in the
ordinary and usual course and consistent with past practice and the use of
the Purchased Assets, except for such Authorizations the failure of which to
have would not have a material adverse effect on the Purchased Assets or the
Medical Business. Seller and/or either of the Partners, as the case may be,
are the duly authorized holders of all the Authorizations, all of which are,
except as set forth on SCHEDULE 3.9 hereto, in full force and effect. Except
as set forth on SCHEDULE 3.9 hereto, there is not now pending nor, to the
best knowledge of Seller, threatened, any action by or before any
Governmental Body to revoke, cancel, rescind, modify or refuse to renew any
of the Authorizations. True and complete copies of all the Authorizations
have been furnished to Purchaser.
SECTION 3.10. PAYMENTS.
None of Seller or either of the Partners, nor any partner,
director, officer or employee thereof, nor, to the best knowledge of Seller
and the Partners, any agent acting on behalf of or for the benefit of any of
the foregoing, has directly or indirectly: (a) offered or paid any
remuneration, in cash or in kind, to, or made any financial arrangements
with, any past or present customers, past or present suppliers or contractors
in order to obtain business or payments from such Persons
12
in violation of any applicable domestic or foreign national, state or local
law; (b) given or agreed to give, or is aware that there has been made or
that there is any agreement to make, any gift or gratuitous payment of any
kind, nature or description (whether in money, property or services) to any
customer or potential customer, supplier or potential supplier, contractor or
any other Person in violation of any applicable domestic or foreign national,
state or local law; (c) made or agreed to make, or is aware that there has
been made or that there is any agreement to make, any contribution, payment
or gift of funds or property to, or for the private use of, any governmental
official, employee or agent where either the contribution, payment or gift or
the purpose of such contribution, payment or gift is or was in violation of
any applicable domestic or foreign national, state or local law; (d)
established or maintained any unrecorded fund or asset for any purpose or
made any false or artificial entries on any of its books or records for any
reason; or (e) made, or agreed to make, or is aware that there has been made
or that there is any agreement to make, any payment to any Person with the
intention or understanding that any part of such payment would be used for
any purpose other than that described in the documents supporting such
payment in violation of any applicable domestic or foreign national, state or
local law.
SECTION 3.11. BOOKS AND RECORDS.
The Books and Records are true and complete in all material
respects and present fairly the financial position of Seller, and all
material financial transactions of Seller have been accurately recorded in
such Books and Records in all material respects.
SECTION 3.12. FINANCIAL AND ACCOUNTING MATTERS.
Seller has prepared and furnished to Cordis and Purchaser, and
there are included in SCHEDULE 3.12 hereto, the unaudited balance sheet of
Seller as at the end of the fiscal year ending March 31, 1995, and the
unaudited operating statement for such fiscal year. Seller also has prepared
and furnished to Cordis and Purchaser, and there are included in SCHEDULE
3.12 hereto, the unaudited balance sheets of Seller as at the end of each
calendar month ending after March 31, 1995, and the unaudited operating
statements for the respective months then ended. All the financial
statements, including the notes thereto, if any, included in SCHEDULE 3.12
(i) are complete and correct in all material respects and have been prepared
in accordance with the Books and Records of Seller, (ii) present fairly the
financial position of Seller as of the respective dates and the results of
operations for the respective periods indicated and (iii) have been prepared
in a consistent manner in accordance with the usual internal accounting
practices of Seller. SCHEDULE 3.12 hereto sets forth all changes in
accounting methods (for financial accounting purposes) at any time made,
agreed to, requested or required with respect to Seller.
13
SECTION 3.13. RETAINED LIABILITIES.
To the best knowledge of Seller and the Partners, SCHEDULE 3.13
hereto sets forth all Retained Liabilities of Seller existing on the date
hereof.
SECTION 3.14. ACCOUNTS PAYABLE; UNDISCLOSED LIABILITIES.
(a) SCHEDULE 3.14(a) hereto sets forth all Accounts Payable of
Seller relating to the Medical Business outstanding as of the date hereof.
Except as set forth on SCHEDULE 3.14(a) hereto, no such Account Payable was
invoiced more than 90 days before the date hereof. No such Account Payable
is subject to any setoffs, discounts (other than in the ordinary course of
business), allowances, claims, counterclaims or disputes on the part of
Seller.
(b) Seller has no material Liabilities, whether accrued,
contingent or otherwise (and to Seller's knowledge, there are no facts that
will result in any present or future charge, complaint, action, suit,
proceeding, hearing, investigation, claim, or demand against Seller giving
rise to any material Liability), except for (i) liabilities reflected in the
March 31, 1995 financial statements, (ii) Accounts Payable as set forth on
SCHEDULE 3.14(a) hereto and other liabilities which have arisen after March
31, 1995 in the ordinary course consistent with the provisions of Section
3.15 hereof, (iii) the Retained Liabilities set forth on SCHEDULE 3.13 hereto
and (iv) liabilities of Seller which do not relate to the Medical Business or
the Purchased Assets and which do not or will not have any material adverse
effect on the Medical Business, the Purchased Assets, Cordis or Purchaser.
SECTION 3.15. OPERATIONS IN THE ORDINARY COURSE; NO MATERIAL
ADVERSE CHANGES.
Since March 31, 1995, Seller has operated the Medical Business in
the ordinary and usual course and substantially in accordance with past
practices, except to the extent expressly contemplated or required by this
Agreement. Except as set forth on SCHEDULE 3.15 hereto, there have been no
material adverse changes in the business, financial condition, operating
results or prospects of Seller since March 31, 1995, and since March 31, 1995
none of the following events has occurred: (a) any material damage,
destruction or loss (not covered by insurance) with respect to any material
assets of Seller used in the Medical Business; (b) any transaction or
contract relating to the Medical Business and material to Seller or any
commitment for the same, entered into by Seller other than in the ordinary
and usual course of the Medical Business and consistent with past practices;
(c) any transfer, mortgage, pledge, encumbrance or disposition by Seller of
any of its assets, other than in the ordinary and usual course and consistent
with past practices and not material, either individually or in the
aggregate; (d) any receipt by Seller of
14
written or oral notice that any material contract, agreement or arrangement
to which Seller is a party and which is to be assumed by Purchaser has been
or will be canceled; or (e) any authorization, approval, agreement or
commitment by Seller to take any action described in subparagraphs (a)
through (d) above.
SECTION 3.16. CONDITION OF FF&E; INVENTORY.
(a) SCHEDULE 3.16(a) hereto sets forth a true and complete
description of all FF&E existing on the date hereof and on the Closing Date.
Except as set forth on such SCHEDULE 3.16(a), all of the items included in
FF&E that are material to the Medical Business are in normal working order
and good condition, except for ordinary wear and tear.
(b) Except as set forth on SCHEDULE 3.16(b), all Inventory of
Seller consists of items which are merchantable.
SECTION 3.17. TAXES.
(a) Purchaser will not be liable as transferee or otherwise for
any Seller Taxes with respect to periods on or prior to the Closing Date.
(b) There are no Encumbrances on any of the Purchased Assets or
the CMP Facilities arising out of, connected with or related to any Seller
Taxes. Seller has complied (and will comply for all periods through the
Closing) in all material respects with all Laws relating to the withholding
of Taxes and the payment of withheld Taxes to the applicable governmental or
quasi-governmental authority for periods on or prior to the Closing Date.
(c) Seller Taxes means all Taxes imposed on, assessed against,
collected with respect to or measured by the assets or operations of Seller
(including Taxes imposed upon partners of Seller with respect to the assets
or operations of Seller) that arise in, or are attributable to, any and all
periods (including the portion of any such periods) ending on or prior to the
Closing.
SECTION 3.18. LEASES.
SCHEDULE 3.18 hereto is a true and complete list of all Leases (a)
related to the Medical Business under which Seller is a lessor or lessee or
guarantor or (b) otherwise related to the Medical Business. All such Leases
are valid and binding and in full force and effect in accordance with the
terms thereof and have not been modified, amended, nor any provision thereof
waived and constitute the entire agreement between the lessor and lessee
thereunder with respect to the property leased thereunder. The lessors under
the Leases, if Seller is the lessee, are holding security deposits in the
amounts set forth on SCHEDULE 3.18
15
hereto. Seller is not in default in any material respect under any such
Lease, nor does any condition exist that, with notice or lapse of time or
both would constitute a material default thereunder. To the best knowledge
of Seller and the Partners, no other party to any such Lease (a) is in
default thereunder in any material respect nor does any condition exist that
with notice or lapse of time or both would constitute a material default
thereunder or (b) has threatened, or has expressed any intention, to cancel
or otherwise terminate any such Lease. All premises leased under the Leases
and which are related to the Medical Business are in good condition and
repair and are suitable in all material respects for the conduct of the
Medical Business thereon as currently conducted by Seller. True and complete
copies of all Leases have been furnished to Cordis and Purchaser.
SECTION 3.19. SUBSIDIARIES; AFFILIATES.
Except as set forth on SCHEDULE 3.19 hereto, Seller has no
Subsidiaries or Affiliates.
SECTION 3.20. CONTRACTS.
(a) Set forth on SCHEDULE 3.20 hereto is a list of all Customer
Contracts, and all other material contracts, agreements, commitments and
other instruments, oral or written, relating to the Purchased Assets, the
Assumed Liabilities or the Medical Business or by which Seller or any of its
properties, rights or assets relating to the Medical Business are bound or
materially affected, other than Leases (collectively, the "CONTRACTS").
Except as set forth on such SCHEDULE 3.20, Seller is not a party to any oral
or written (i) contract for the employment of any officer, employee,
consultant or independent contractor to be employed by Purchaser following
the Closing Date or providing for severance payments to any such officer,
employee, consultant or independent contractor; (ii) license agreement or
distributor, dealer, manufacturer's representative, sales agency,
advertising, property management or brokerage contract relating to the
Medical Business; (iii) contract for the future purchase or sale of medical
products, materials, supplies, services, merchandise or equipment relating to
the Medical Business involving payments of more than $5,000 over its
remaining term (including periods covered by any option to renew by either
party); (iv) contract for the purchase or sale of any of the Purchased Assets
other than Inventory sold or to be sold in the ordinary course of business
and consistent with past practice; (v) agreement or arrangement for the sale
of any of the Purchased Assets or the grant of any preferential rights to
purchase any of the Purchased Assets other than Inventory sold in the
ordinary course of business and consistent with past practice; (vi) contract
or other arrangement which contains any provisions requiring Seller to
indemnify any other party thereto; or (vii) mortgage, indenture, note,
guarantee or obligation for or relating to borrowed money and secured by any
of the Purchased Assets other than the Deed of Trust.
16
(b) Except as set forth on SCHEDULE 3.20 hereto, all of the
Contracts have been entered into in the ordinary and usual course. Except as
set forth on SCHEDULE 3.20 hereto, all of the Contracts that are to be
assigned to Purchaser hereunder are evidenced in writing, are duly and
validly executed by Seller, and have been executed by the other parties
thereto, and are in full force and effect as written in accordance with their
terms. Except as set forth on such SCHEDULE 3.20, to the best knowledge of
Seller no event has occurred which, with or without notice or the passage of
time or both, constitutes or would constitute a material breach or default by
Seller under any Contract that is to be assigned to Purchaser hereunder, and
no event has occurred, to the best knowledge of Seller and the Partners,
which (with or without notice or the passage of time or both) constitutes or
would constitute a material breach or default under any such Contract by any
other party. Except as set forth on SCHEDULE 3.20 hereto, there have been no
threatened cancellations by any third party of any material Contract to be
assigned to Purchaser hereunder.
SECTION 3.21. CERTAIN EMPLOYEES.
SCHEDULE 3.21 hereto correctly sets forth the annual salary or
hourly wage of each employee of Seller engaged in the Medical Business. No
changes in the basis for remuneration of such employees have been made,
promised or authorized by Seller from and including January 1, 1995 except as
disclosed on such SCHEDULE 3.21 and in the ordinary and usual course. Other
than general understandings which may exist for employment at will, no oral
promises have been made, and no oral understandings have been entered into,
between Seller or either of the Partners and any employee involved in the
Medical Business regarding changes in compensation, promotion or any other
change in status.
SECTION 3.22. TRADE UNIONS.
Neither Seller nor either of the Partners is a party to any
contract with any labor organization or other collective bargaining unit. No
trade union, council of trade unions, employee bargaining agency or
affiliated bargaining agent: (a) holds bargaining rights with respect to any
of the employees of Seller or either of the Partners by way of certification,
interim certification, voluntary recognition, designation or successor
rights; (b) has applied to be certified as the bargaining agent of any of the
employees of Seller or either of the Partners; or (c) to the best knowledge
of Seller and the Partners, is in the process of organizing or has threatened
to organize any of the employees of Seller or either of the Partners.
17
SECTION 3.23. LOCATION OF PURCHASED ASSETS.
The FF&E, Inventory, Books and Records and other tangible Purchased
Assets are located in the States and counties and at the addresses set forth
on SCHEDULE 3.23 hereto.
SECTION 3.24. COMPLIANCE WITH LAWS.
The operation of the Medical Business by Seller, the use of the
Purchased Assets, and the Assumed Liabilities do not violate any applicable
law, rule, ordinance, order, regulation, judgment, award, decree, restrictive
covenant, right of way, easement or other agreement (except any Environmental
Laws which shall be governed by Section 3.29), except where such violation
would not have a material adverse effect on the Purchased Assets or the
Medical Business. Seller has complied in all material respects with all
Federal, state and local laws, rules, regulations and ordinances affecting
the conduct of the Medical Business, the ownership or operation of the
Purchased Assets, and the sale of the Purchased Assets, except any
non-compliance which would not have a material adverse effect on Purchaser's
ability to conduct the Medical Business in the manner in which it was
conducted by Seller, on the ownership, possession or use of any of the
Purchased Assets, on the Assumed Liabilities, or on the consummation of the
transactions contemplated by this Agreement, and Seller has received no
notice of any such non-compliance. Seller has filed all forms, reports,
statements and other documents required to be filed with any Governmental
Body, except where the failure to file such forms, reports, statements or
other documents would not have a material adverse effect on the operation of
the Medical Business, and except for matters addressed in Section 3.8 or 3.17
hereof, which shall be governed by such Section 3.8 or 3.17, respectively.
SECTION 3.25. PATENTS, TECHNOLOGY AND TRADEMARKS.
SCHEDULE 3.25 hereto sets forth a true and complete list of all
Patents, Trademarks and trade secrets. Without limiting any other
representations and warranties contained in this Agreement, except as set
forth in SCHEDULE 3.25 hereto, Seller is the sole and exclusive owner of, is
the licensee to or otherwise has the lawful right to use all Patents,
Technology and Trademarks and has full power and authority to make the
assignments and to fulfill the obligations with respect to the assignment and
transfer of its right, title and interest in and to the Patents, Technology
and Trademarks pursuant to this Agreement. At the Closing Date, all of
Seller's right, title and interest in and to the Patents, Technology and
Trademarks shall be transferred by Seller to Purchaser, free and clear of any
and all Encumbrances. No Persons have any right, title, license, option or
interest in and to the Patents, Technology or Trademarks owned by Seller or
applications for letters patent filed thereon, or to the manufacture, use or
sale in connection
18
therewith. Except as set forth on SCHEDULE 3.25 no consents or licenses are
required from any Person for Seller to transfer to Purchaser all of its
right, title and interest in and to the Patents, Technology and Trademarks.
No notice has been received by Seller or either of the Partners, nor to the
best knowledge of Seller and the Partners, is any notice anticipated, that
any rights being transferred to Purchaser in the Patents, Technology or
Trademarks are invalid or unenforceable or that any infringement or
misappropriation of such rights that are proprietary, in whole or in part, by
any third party has occurred. There are no claims, disputes, investigations
or legal proceedings with respect to any Patents, Technology or Trademarks
pending or, to the best knowledge of Seller and the Partners, threatened
against Seller which, individually or in the aggregate, will materially
adversely affect the Purchased Assets or the continued operation of the
Medical Business as currently being conducted or which may involve or result
in Damages or restrictions in any manner whatsoever which in the aggregate or
individually is material.
SECTION 3.26. INFRINGEMENT.
The operation of the Medical Business and the use of the Patents,
Technology and Trademarks in the ordinary and usual course of the Medical
Business do not, to the best knowledge of Seller and the Partners, cause or
involve the infringement, misuse or misappropriation of any patent,
copyright, trade secret or other proprietary or intellectual property rights
(whether conferred by statute, code, common law or otherwise) of any third
person, including, without limitation, other letters patent heretofore issued
in the United States or upon any other applications for letters patent of
which Seller or the Partners are actually aware, or any proprietary,
technical or other information or trade secrets, which would have a material
adverse effect on the operation of the Medical Business. There are no
actions, suits, investigations or proceedings pending against Seller or
either of the Partners, or to the best of Seller's and each of the Partner's
knowledge (a) threatened against such parties before any court, arbitrator or
governmental body which arose out of or are based upon the ownership or use
of the Patents, Technology and Trademarks, including, without limitation,
claims for breach of warranty or products liability, and there is no judgment
or order of any governmental authority applicable to Seller or either of the
Partners which might have a material adverse effect on the value of the
Purchased Assets or the Medical Business, or (b) challenging the use or
ownership, in any respect, of the Patents, Technology and Trademarks, or (c)
asserting the invalidity of this Agreement as it applies to the sale,
transfer, licensing or use of the Patents, Technology and Trademarks.
SECTION 3.27. INSURANCE.
SCHEDULE 3.27 hereto sets forth a true and complete list of all
insurance policies maintained by or on behalf of Seller, specifying the
insurer, the amount of
19
the coverage (including applicable deductibles), the type of insurance and
the policy number. Such policies of insurance shall not be assigned to
Purchaser as part of the Purchased Assets; PROVIDED, HOWEVER, that Seller
shall name Cordis and Purchaser as a beneficiary on any tail insurance Seller
obtains in connection with the Closing.
SECTION 3.28. NO BROKER'S OR FINDER'S FEE.
None of Seller or either of the Partners, or any of their
respective Affiliates has incurred any Liability for any broker's or finder's
fees or commissions or similar payments in connection with any of the
transactions contemplated hereby.
SECTION 3.29. ENVIRONMENTAL MATTERS.
(a) Seller currently owns and/or leases real property at the
locations set forth on SCHEDULE 3.29(a) hereto, each of which are used in the
Medical Business (the "CURRENT CMP FACILITIES") and formerly owned or leased
real property at the locations set forth on SCHEDULE 3.29(b) hereto (the
"FORMER CMP FACILITIES") (together, the "CMP FACILITIES").
(b) Except as set forth on SCHEDULE 3.29(c) hereto:
(i) Seller, the CMP Facilities, and all
improvements thereon, have complied and are in
compliance with, in all material respects, all
Environmental Laws, except where the failure to comply
would not have a material adverse effect on the
Purchased Assets or Purchaser, and the Former CMP
Facilities, and all improvements thereon, have complied
with, in all material respects, all Environmental Laws,
except where the failure to comply would not have a
material adverse effect on the Purchased Assets or
Purchaser;
(ii) Seller has been duly issued, and currently
has, all permits, licenses, certificates and approvals
(collectively, "PERMITS") required in connection with
the Medical Business under any Environmental Law by any
Governmental Body, except where the failure to have any
such Permit will not have a material adverse effect on
the Purchased Assets or Purchaser. A true and complete
list of such Permits, all of which are valid and in
full force and effect, is set out in SCHEDULE 3.29(d).
Except in accordance with such Permits, there has been
no Release of Hazardous Material regulated by such
Permits;
(iii) there are no pending or, to the
knowledge of Seller, threatened actions, suits, orders,
claims, legal proceedings or other proceedings against
Seller based on, and neither Seller nor either of
20
the Partners has directly or indirectly received any formal
or informal notice of any complaint, order, directive,
citation, notice of responsibility, notice of potential
responsibility, or information request from any
Governmental Body or any other person or entity and
none of Seller or either of the Partners has knowledge
of any facts which might form the basis for any such
actions or notices against Seller arising out of or
attributable to: (A) the current or past presence,
Release, or threatened Release at or from any of the
CMP Facilities of Hazardous Materials; (B) the off-site
disposal or treatment of Hazardous Materials
originating on or from any of the CMP Facilities or the
businesses or assets of Seller; (C) any facility
operations, procedures or designs of Seller which do
not conform in all material respects to requirements of
the Environmental Laws; or (D) any material violation
of Environmental Laws at any of the CMP Facilities
involving Hazardous Materials;
(iv) Seller has not filed any notice under any
Environmental Law indicating past or present storage
for greater than 90 days, treatment, disposal or
Release of Hazardous Materials at any CMP Facility, and
the Medical Business does not involve the generation,
transportation, treatment, storage, or disposal of
hazardous waste, as defined under 40 C.F.R. Parts 260-
270 or any applicable state equivalent;
(v) to the knowledge of Seller, no underground
storage tanks, or underground piping associated with
such tanks, or surface impoundments, are currently or
have been at any time on or at any CMP Facility;
(vi) to the knowledge of Seller, no Encumbrance in
favor of any Person relating to or in connection with
any Environmental Claim has been filed or has attached
to any Current CMP Facility;
(vii) to the knowledge of Seller, Seller has
furnished to Cordis and Purchaser complete copies of
all environmental audits, assessments, inspections or
occupational health studies relating to the assets or
the conduct of the Medical Business known to and in the
possession of Seller undertaken by, or at the direction
of, any Governmental Body, Seller, either of the
Partners or any of their respective Affiliates, any
predecessor in interest or any prior potential
purchaser; and
(viii) to the knowledge of Seller, neither PCBs
nor asbestos-containing materials are present on or in
the Current CMP Facilities.
21
SECTION 3.30. POTENTIAL CONFLICTS OF INTEREST.
Except as set forth on SCHEDULE 3.30 hereto, neither of the
Partners and none of the directors or officers of either Partner or any
Person controlled by Seller or either Partner, or any such director or
officer, or any member of the immediate family of any of the foregoing and,
with respect to subparagraphs (b), (c) and (d) below, to the best knowledge
of Seller and the Partners, none of the other employees of Seller, either
Partner and/or any member of their immediate families nor any Affiliate:
(a) to the best knowledge of Seller and the Partners, owns,
directly or indirectly, any interest in (except for stock holdings not in
excess of ten percent (10%) held solely for investment purposes in securities
which are listed on a national securities exchange or which are regularly
traded in the over-the-counter market or stock held by Xxxxxx X. Xxxxxxx,
Xx., or his Affiliates in Parent), or is an owner, sole proprietor,
shareholder, partner, director, officer, employee, provider, consultant or
agent of, any Person which is a competitor, lessor, lessee or customer of, or
supplier of goods or services to, Seller, except where the value to such
Person of any such arrangement with Seller has been less than $10,000 in the
aggregate during each of the two years preceding the Closing Date;
(b) to the best knowledge of Seller and the Partners, owns,
directly or indirectly, in whole or in part, any real property, leasehold
interests, tangible property or intangible property with a fair market value
of $10,000 or more which Seller currently uses in the Medical Business;
(c) to the best knowledge of Seller and the Partners, has any
cause of action or other suit, action or claim whatsoever against, or owes
any amount to Seller, except for claims in the ordinary and usual course
(such as for accrued vacation pay, accrued benefits under employee benefit
plans of Seller and similar matters); and
(d) has, since January 1, 1994, engaged in any other material
transaction with Seller (other than in connection with the operation of
Seller in the ordinary course of business through the General Partner, with
loans made to the Seller or the General Partner, or such Person's employment
relationship, if any).
As used in this Section 3.30, an individual's immediate family
shall mean such individual's spouse, parents, children, siblings, mothers and
fathers-in-law, sons and daughters-in-law and brothers and sisters-in-law.
22
SECTION 3.31. WARN ACT.
SCHEDULE 3.31 hereto lists the full name, job title, job site and
unit, date of Employment Loss, and type of Employment Loss (termination,
layoff, or reduction in work hours) of each Employee of Seller who has
experienced an Employment Loss in the 90 days preceding the date of this
Agreement. Except pursuant to the transactions contemplated hereby, Seller
does not presently intend to take any action that would result in an
Employment Loss by any Employee of Seller between the date of this Agreement
and the Closing. "EMPLOYMENT LOSS" for this purpose shall mean (a) an
employment termination, other than a discharge for cause, voluntary
departure, or retirement, (b) a layoff exceeding six (6) months or (c) a
reduction in hours of work of more than fifty percent (50%), and "EMPLOYEE"
shall mean any employee, including officers, managers and supervisors, but
excluding employees who are employed for an average of fewer than 20 hours
per week or who have been employed for fewer than six of the preceding 12
months.
SECTION 3.32. FDA AND OTHER REGULATORY COMPLIANCE.
SCHEDULE 3.32 hereto sets forth a complete and accurate list,
referencing relevant records and documents, for the last five years, of (a)
all Food and Drug Administration ("FDA") and any other Governmental Body
inspector lists of observations or similar documents made at inspections,
including, but not limited to, Form(s) FDA-483, with respect to Seller and
provided to Seller, Parent or either of the Partners; (b) Regulatory or
Warning Letters, Notices of Adverse Findings or Section 305 notices relating
to the Medical Business issued by the FDA and provided to Seller, Parent or
either of the Partners or any similar letters or notices issued by any other
Governmental Body with respect to Seller and provided to Seller, Parent or
either of the Partners; (c) all United States Pharmacopoeia product problem
reporting program complaints or reports and MedWatch FDA forms 3500, device
experience network complaints received by Seller or of which it is actually
aware and reports filed by Seller pursuant to FDA's Medical Device Reporting
requirements (as set forth in 21 C.F.R. Part 803) ("MDRs"); (d) all product
recalls and safety alerts conducted by or issued by Seller, including notices
issued under 518 of the Federal Food, Drug, and Cosmetics Act; (e) any
injunctions, total or partial suspensions of production, seizures or civil
penalty actions begun by FDA or any other Governmental Body against Seller or
any of its products and known about by Seller, or any consent decrees entered
into by Seller with FDA or any other Governmental Body; (f) all 510(k)
orders, premarket approval applications and approvals ("PMA"), and
investigational device exemption applications and approvals, and supplements
and amendments thereto (hereinafter jointly referred to as "APPROVALS") for
devices sold by Seller relating to and necessary for the Medical Business and
all assurances, written and/or oral, that any modifications to devices
subject to such 510(k)s, PMAs or investigational device exemptions remain
covered by such FDA and any other Governmental Body approvals or that the
necessary
23
regulatory approvals have been obtained for such modifications; (g) all "not
substantially equivalent letters" from FDA and internal memoranda with
respect to any decisions not to file new 510(k)s for modifications made to
devices subject to any 510(k)s; (h) documentation demonstrating
pre-amendments or 510(k) exemption status of any of Seller's products; and
(i) any of the foregoing actually expected by the Seller. Seller has
delivered to Cordis and Purchaser copies of all documents referred to in
SCHEDULE 3.32 hereto. Seller has obtained all filings with, or notifications
to, all Governmental Bodies pursuant to applicable requirements of all FDA
laws, rules and regulations, and all corresponding state laws, rules and
regulations applicable to Seller and relating to the Medical Business.
Except as set forth on SCHEDULE 3.32 hereto, Seller is in compliance in all
material respects with all FDA laws, rules and regulations, and all
corresponding state laws, rules and regulations (including good manufacturing
practices for medical devices (as set forth in 21 C.F.R. Part 820)) relating
to medical device manufacturers and distributors or otherwise applicable to
the Medical Business and none of Seller or the Partners has knowledge that
any of Seller's consents, approvals, authorizations, registrations,
certification, permits, filings or notifications which it has received or
made to operate the Medical Business have been or are being revoked or
questioned.
SECTION 3.33. DISCLOSURE.
No representation or warranty by Seller, Parent or the Partners,
and no document, statement, certificate, Schedule, Exhibit or Addendum
furnished or to be furnished to Cordis or Purchaser pursuant to this
Agreement or otherwise in connection herewith, contains or will contain any
untrue statement of a material fact or omits or will omit to state any
material fact which is known to Seller, Parent or the Partners and which is
necessary in order to make the statements contained herein or therein not
misleading.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF CORDIS AND PURCHASER
Cordis and Purchaser hereby jointly and severally represent and
warrant to Seller that:
SECTION 4.1. INCORPORATION AND ORGANIZATION; GOOD STANDING; DUE
AUTHORIZATION.
Cordis and Purchaser are corporations duly organized, validly
existing and in good standing under the laws of the States of Florida and
North Carolina, respectively. Each of Cordis and Purchaser has all requisite
power and authority to execute and deliver, as applicable, this Agreement,
the Assumption Agreement, the Escrow Agreement and the Non-Competition
Agreement, and has all requisite
24
power and authority to perform its obligations hereunder and thereunder and
to consummate the transactions contemplated hereby and thereby. The
execution and delivery by each of Cordis and Purchaser, as applicable, of
this Agreement, the Assumption Agreement, the Escrow Agreement and the
Non-Competition Agreement, the performance by each of Cordis and Purchaser of
its obligations hereunder and thereunder and the consummation by each of
Cordis and Purchaser of the transactions contemplated hereby and thereby have
been duly and validly authorized and approved by all necessary actions on the
part of each of Cordis and Purchaser, none of which actions have been
modified or rescinded and all of which actions remain in full force and
effect. This Agreement has been duly executed and delivered by a duly
authorized officer of each of Cordis and Purchaser, and this Agreement
constitutes a valid and binding obligation of each of Cordis and Purchaser,
enforceable against each of Cordis and Purchaser in accordance with its
terms, except as may be limited by bankruptcy, insolvency, reorganization,
moratorium or other laws affecting creditors' rights (including, without
limitation, the effect of statutory and other laws regarding fraudulent
conveyances, fraudulent transfers and preferential transfers) and as may be
limited by the exercise of judicial discretion and the application of the
principles of equity including, without limitation, requirements of good
faith, fair dealing, conscionability and materiality (regardless of whether
such agreement is considered in a proceeding in equity or at law).
SECTION 4.2. NON-CONTRAVENTION.
The execution, delivery and performance of this Agreement, the
Assumption Agreement, the Escrow Agreement and the Non-Competition Agreement
by each of Cordis and Purchaser do not, as to each such party, as applicable:
(a) violate its articles of incorporation or bylaws; (b) violate any
applicable law, rule, regulation, ordinance, order, judgment, decree or award
of any Governmental Body, court or arbitrator; or (c) conflict with, result
in a material breach of or constitute a material default under any material
contract, agreement or other instrument to which it is a party or by which
any of its properties may be bound or affected.
SECTION 4.3. CONSENTS, APPROVALS AND FILINGS.
Except as set forth on SCHEDULE 4.3 hereto, no consent, approval or
authorization of, or declaration, filing or registration with, any
Governmental Body or any other Person is required to be made or sought by
Cordis or Purchaser in connection with the execution, delivery and
performance of this Agreement and the consummation by Cordis and Purchaser of
the transactions contemplated hereby.
25
SECTION 4.4. NO BROKER'S OR FINDER'S FEE.
Purchaser has not incurred any Liability for any broker's or
finder's fees or commissions or similar payments in connection with any of
the transactions contemplated hereby.
ARTICLE V
COVENANTS
SECTION 5.1. CONSENTS.
Seller and each of the Partners shall use their respective best
efforts to procure the written consents of all Persons necessary for the
assignment to Purchaser of the Leases and Contracts included in the Purchased
Assets and consummation of the other transactions contemplated by this
Agreement.
SECTION 5.2. DELIVERY OF BOOKS AND RECORDS; ACCESS.
At or promptly following the Closing, Seller shall provide to
Purchaser, and Purchaser shall be entitled to receive, the original general
ledger, the original customer records relating to customer pak specifications
and designs and pending customer purchase orders and copies of customer
records relating to accounts receivable, the original vendor records relating
to open vendor purchase orders, unpaid invoices (which shall be attached to
SCHEDULE 1.1 hereto) and purchased items specifications and designs, copies
of the personnel records relating to Employees hired by Purchaser, and the
original operational records relating to the Medical Business. Seller shall
be entitled to retain the original customer records relating to accounts
receivable, the original vendor records relating to paid invoices and/or
vouchers (provided that Seller hereby agrees to keep such records in
Asheville, North Carolina and make copies of such records available to
Purchaser upon twenty-four (24) hours' notice to Seller during the first
ninety (90) days following Closing), the original employee records relating
to payroll and employee benefits and the original tax records of Seller. In
addition, Seller shall be entitled to retain copies of the general ledger,
vendor records relating to unpaid invoices, and operational records relating
to the Medical Business. Purchaser shall be entitled to all other portions
of the Books and Records except as set forth above, or except as the parties
may otherwise mutually agree, it being understood that the parties shall use
their respective best efforts to resolve any disputes relating to the
retention or delivery of such other portions of the Books and Records.
Notwithstanding any other provision of this Agreement and the delivery of
such portions of the Books and Records as set forth above, after the Closing
Date, each party shall provide to the other party (subject to applicable
restrictions imposed by law), at no expense, reasonable access to such
records retained by such party
26
pursuant to this Agreement and copies of such Documents as are reasonably
requested by the other party in connection with claims, tax audits, lawsuits,
governmental investigations and similar matters for a period of three (3)
years (or, in the case of Federal tax matters, not less than the applicable
statute of limitations, plus extensions thereof agreed to by such party)
beginning on the Closing Date. During such three-year period (or longer if
applicable), each party shall retain and preserve such records. Each party
hereby agrees that it will not use any such records in violation of any of
the provisions of this Agreement and the transactions contemplated hereby,
including without limitation those restrictions set forth in the
Non-Competition Agreement.
SECTION 5.3. RETAINED LIABILITIES; ASSUMED LIABILITIES.
(a) All Retained Liabilities shall continue to be obligations and
liabilities solely of, and shall solely be legally and financially borne by,
Seller. In furtherance (and not in limitation) of the foregoing, Cordis and
Purchaser are not, and shall not be treated or viewed as, successor employers
or legal successors of Seller as a matter of law and Seller and the Partners
shall, subject to the provisions of Article VIII hereof, jointly and
severally indemnify and hold Cordis and Purchaser harmless from and against
any Damages or Liabilities arising from or in connection with or as a result
of any such treatment.
(b) Following the Closing, all Assumed Liabilities shall be
obligations and liabilities solely of, and shall solely be legally and
financially borne by, Purchaser. Purchaser shall, subject to the provisions
of Article VIII hereof, indemnify and hold Seller harmless from and against
any Damages or Liabilities arising from or in connection with the Assumed
Liabilities.
SECTION 5.4. FURTHER ASSURANCES.
(a) From and after the Closing, Purchaser, Seller and the Partners
each agree that it will act in a manner supporting its compliance and
compliance by its Affiliates with all its post-closing obligations under this
Agreement, including, without limitation, making all necessary filings and
submissions with all applicable Governmental Bodies and other Persons.
(b) Seller and each of the Partners, on the one hand, and
Purchaser on the other hand, shall, and shall cause each of their Affiliates
to, from time to time, at the request of the other, and without further
consideration, cause the execution and delivery of such instruments of
transfer and assumption and take such other actions or execute such other
Documents as the other may reasonably request in order more effectively to
convey, transfer to and vest in Purchaser, and to put Purchaser in possession
of, the Purchased Assets and in order more effectively
27
to release or protect Seller from any Assumed Liabilities and Purchaser from
any Retained Liabilities.
SECTION 5.5. CHANGE OF NAME.
Within 15 days following the Closing Date, Seller shall file with
the Secretary of State of the State of Georgia an amendment to the agreement
of limited partnership and registration of assumed name, if any, of Seller to
change, effective as of the Closing, its name from "Xxxxxxx Healthcare, Ltd.
d/b/a Custom Medical Products" to another name not containing the name
"Custom Medical Products," "CMP," "Alliance" or any derivatives thereof or
deviations therefrom (provided that Seller may use the name "Custom Apparel
Products") and shall do or cause to be done all other acts, including the
payment of any fees in connection therewith, to cause such amendments to
become effective. None of Seller, either of the Partners or any of their
respective Affiliates shall do business as, or use in the conduct of its
business or otherwise, the name "Custom Medical Products," "CMP," "Alliance"
or any other similar name.
SECTION 5.6. TERMINATION OF SUPPLY AGREEMENT.
Effective as of the Closing and upon payment by Cordis and
Purchaser of all amounts payable to Seller thereunder, that certain Agreement
dated April 5, 1993 between Seller and Cordis, as amended by (i) that certain
letter dated March 31, 1994 from Cordis to Seller, (ii) that certain
Amendment to Agreement dated as of Xxxxx 0, 0000, (xxx) that certain letter
of intent (the "LETTER OF INTENT") dated July 13, 1995 from Cordis to Seller
and executed by Seller on July 17, 1995 and (iv) that certain Amendment to
Agreement dated as of September 5, 1995 (collectively, the "SUPPLY
AGREEMENT") shall automatically terminate and cease to be of any further
force or effect.
SECTION 5.7. INTENTIONALLY DELETED.
Intentionally Deleted.
SECTION 5.8. MAINTENANCE OF EXISTENCE.
Seller shall maintain its limited partnership existence and remain
duly qualified and in good standing in all jurisdictions identified in
Section 3.1(a) hereof until the earlier of (a) such time as all Retained
Liabilities have been fully satisfied by Seller or (b) one (1) year from the
Closing Date. Each of the Partners shall maintain their respective corporate
existence and remain duly qualified and in good standing in all jurisdictions
identified in Sections 3.1(b) and (c) hereof for so long as they remain
liable as Indemnitors under this Agreement.
28
SECTION 5.9. OPERATIONS OF NON-MEDICAL BUSINESS.
Purchaser, Seller and each of the Partners hereby agree that for a
period not to exceed 90 days following the Closing Date, Seller shall be
entitled to use the Current CMP Facilities in connection with its operations
unrelated to the Medical Business in substantially the same manner in which
Seller currently uses the Current CMP Facilities, except as Purchaser may
otherwise reasonably require. Purchaser and Seller shall discuss in good
faith the terms upon which Seller shall be entitled to use the Current CMP
Facilities for such purposes; PROVIDED, HOWEVER, in no event shall Seller be
entitled to the use of the services of any New Employees in connection with
such operations or the sale of such operations or any assets related thereto.
Seller and each of the Partners hereby agree, subject to the provisions of
Article VIII hereof, to indemnify Cordis and Purchaser, jointly and
severally, from and against all Liabilities and Damages suffered or incurred
by Purchaser in connection with Seller's use of the Current CMP Facilities
following the Closing Date and the breach by Seller of the provisions of this
Section 5.9.
SECTION 5.10. INSURANCE.
Seller shall maintain all insurance policies described in Section
6.2(k) of this Agreement, in such form and substance as is reasonably
satisfactory to Purchaser in its sole discretion, until such time as all
Retained Liabilities have been fully satisfied. Seller shall also maintain
all insurance policies relating to the CMP Facilities for so long as Seller
uses the CMP Facilities as contemplated in Section 5.9, and shall name each
of Cordis and Purchaser as additional named insureds on such policies.
SECTION 5.11. LICENSE OF "ALLIANCE" TRADEMARKS.
Effective as of the Effective Date, Purchaser hereby grants Seller
a perpetual non-exclusive, royalty-free license to the "Alliance" Trademark
acquired by Purchaser pursuant to this Agreement. Seller and its successors
and assigns agree that they will not use such "Alliance" Trademark in
connection with any business that competes with the Medical Business or sell
any products using such Trademark in connection with the Medical Business and
Cordis and Purchaser and their respective successors and assigns agree that
they will not use the "Alliance" Trademark or grant permission to any other
person or entity to use such Trademark in the industrial safety and the
industrial clean room markets or sell or grant permission to any other person
or entity to sell any products using such Trademark in the industrial safety
and the industrial clean room markets. Purchaser agrees that Seller may
assign such license without Purchaser's consent to any entity that does not
compete with Cordis or Purchaser in the Medical Business; PROVIDED, HOWEVER,
that Seller will provide Purchaser notice of any such assignment. Seller
further agrees that it may not assign such license to any entity
29
that competes with Cordis and/or Purchaser in the Medical Business without
the express written consent of Purchaser, which Purchaser agrees may not be
unreasonably withheld. Cordis shall have no obligation whatsoever to protect
such Trademark; PROVIDED, HOWEVER, that if Cordis does not take steps to
protect such Trademark, Seller shall be entitled to take such actions to
protect its interest in such Trademark as it deems necessary.
SECTION 5.12. PARENT GUARANTY.
Subject to the limitations of Article VIII, Parent hereby
guarantees the full, complete and timely performance by Seller and the
General Partner of all indemnification obligations undertaken by Seller and
the General Partner under Sections 5.3(a), 5.9, 7.1(b) and Article VIII
(except that Parent's obligations hereunder shall not apply to
indemnification obligations arising from breaches of the Limited Partner's
representations and warranties or covenants); PROVIDED, HOWEVER, that in no
event shall Parent's liability exceed $3,500,000 in the aggregate with other
amounts paid pursuant to Parent's guaranty under this Section 5.12 in respect
of such guaranty except with respect to those indemnification obligations
under Sections 5.3(a), 7.1(b) and 8.2(a) relating to environmental and
employment matters (other than employee benefit matters which are separately
addressed below), for which the guaranty shall be limited to $6,000,000 in
the aggregate with other amounts paid pursuant to Parent's guaranty under
this Section 5.12, and except with respect to those indemnification
obligations under Sections 5.3(a), 7.1(b) and 8.2(a) relating to Tax and
employee benefit matters, for which the guaranty shall be unlimited. This
guaranty shall be Purchaser's and Cordis' sole remedy against Parent in
respect of such indemnification obligations of Seller and the General
Partner. In addition, this guaranty shall not apply to any liabilities
arising from the sale and distribution of Xxxxx-xxx procedure trays to the
extent that Cordis would have ultimately been liable for such liabilities if
the transactions contemplated by this Agreement had not been consummated.
SECTION 5.13. CORDIS GUARANTY.
Cordis hereby guarantees the full, complete and timely performance
by Purchaser of all obligations undertaken by Purchaser hereunder; PROVIDED,
HOWEVER, that in no event shall Cordis' liability exceed the amount of the
Assumed Liabilities.
30
ARTICLE VI
CONDITIONS PRECEDENT
SECTION 6.1. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF SELLER TO
COMPLETE THE CLOSING.
The obligations of Seller to effect the Closing and to carry out
its obligations under this Agreement shall be subject to the satisfaction (or
waiver by Seller) at or prior to the Closing, of the conditions set forth
below:
(a) all representations and warranties of Cordis and Purchaser in
this Agreement shall be true and correct in all material respects;
(b) Cordis and Purchaser shall have performed and complied in all
material respects with all agreements and obligations contained in this
Agreement required to be performed and complied with by them prior to or at
the Closing and all matters which this Agreement provides must be agreed upon
prior to the Closing Date shall have been so agreed;
(c) Seller shall have received all Documents required pursuant to
this Agreement to be delivered to Seller at or prior to the Closing and a
certificate of an officer of Purchaser and Cordis, dated the Closing Date, in
form and substance reasonably satisfactory to Seller, to the effect set forth
in subparagraphs (a) and (b) above;
(d) Seller shall have received certified copies of resolutions
adopted by the Board of Directors and sole shareholder of Purchaser
authorizing the execution, delivery and performance of this Agreement, the
Assumption Agreement, the Escrow Agreement, the Non-Competition Agreement and
all other agreements executed and delivered pursuant hereto, which
resolutions shall be in full force and effect on the Closing Date;
(e) Purchaser shall have duly executed and delivered the
Assumption Agreement, the Escrow Agreement and the Non-Competition Agreement;
(f) all required consents, approvals, waivers and authorizations
necessary to consummate the transactions contemplated in this Agreement,
including all consents and approvals set forth on SCHEDULES 3.6 and 4.3
hereof, and the expiration (or termination) of all pre-consummation waiting
periods under applicable law, required in the good faith belief of Seller,
for the consummation of such transactions or the operation of the Medical
Business thereafter, shall have been obtained or shall have occurred;
31
(g) there shall not be any pending or threatened litigation,
proceeding or other event that calls into question or challenges the validity
of this Agreement, or that might impede or delay the Closing, or that might
materially adversely affect the business, financial condition, operating
results or prospects of the Medical Business, the Purchased Assets, Cordis or
Purchaser, and all actual claims of which Seller is aware against the
Purchased Assets or the Medical Business arising therefrom shall have been
settled, released and discharged to Purchaser's reasonable satisfaction;
(h) Seller shall have received legal opinions dated the Closing
Date from (i) the general counsel of Cordis covering the matters set forth in
EXHIBIT H-1 and (ii) from counsel to Purchaser covering the matters set forth
in EXHIBIT H-2; and
(i) Cordis shall have paid all Outstanding Cordis Payables.
SECTION 6.2. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF PURCHASER
TO COMPLETE THE CLOSING.
The obligations of Purchaser to effect the Closing and to carry out
its obligations under this Agreement shall be subject to the satisfaction (or
waiver by Purchaser), at or prior to the Closing, of the conditions set forth
below:
(a) all representations and warranties of Seller, Parent and the
Partners in this Agreement shall be true and correct in all material respects;
(b) Seller and the Partners shall have performed and complied in
all material respects with all agreements and obligations contained in this
Agreement required to be performed and complied with by them prior to or at
the Closing and all matters which this Agreement provides must be agreed upon
prior to the Closing Date shall have been so agreed;
(c) Cordis and/or Purchaser shall have received all Documents
required pursuant to this Agreement to be delivered to Cordis and/or
Purchaser at or prior to the Closing and all such other Documents as
Purchaser may reasonably request in order to establish satisfaction of the
conditions precedent set forth in subparagraphs (a) and (b) above, including
(i) a certificate of the chief executive officer of the General Partner, on
behalf of itself and on behalf of Seller, (ii) a certificate of the chief
executive officer of Parent, and (iii) a certificate of the chief executive
officer of the Limited Partner, each dated the Closing Date, in form and
substance reasonably satisfactory to Purchaser, to the effect set forth in
such subparagraphs;
(d) except as set forth on SCHEDULE 3.15 hereto and in the
financial statements of Seller as of and for the periods ending August 31,
1995, there shall
32
not have been any material adverse change in the Purchased Assets or in the
business, financial condition, operating results or prospects of Seller since
June 30, 1995;
(e) there shall not be any pending or threatened litigation,
proceeding or other event that calls into question or challenges the validity
of this Agreement, or that might impede or delay the Closing, or that might
materially adversely affect the business, financial condition, operating
results or prospects of the Medical Business, the Purchased Assets, Cordis or
Purchaser, and all actual claims of which Seller is aware against the
Purchased Assets or the Medical Business arising therefrom shall have been
settled, released and discharged to Purchaser's satisfaction;
(f) all required consents, approvals, waivers and authorizations
necessary to consummate the transactions contemplated in this Agreement,
including all consents and approvals set forth on SCHEDULES 3.6 and 4.3
hereof, and any approvals required by Purchaser's Board of Directors, and the
expiration (or termination) of all pre-consummation waiting periods under
applicable law, required in the good faith belief of Purchaser, for the
consummation of such transactions or the operation of the Medical Business
thereafter, shall have been obtained or shall have occurred.
(g) Seller shall have duly executed and delivered the Assumption
Agreement, the Xxxx of Sale, the Deed, the Escrow Agreement and the
Non-Competition Agreement, and the Partners and Parent shall have duly
executed and delivered the Non-Competition Agreement;
(h) Purchaser shall have received certified copies of (i) the
written consent of the Partners authorizing the execution, delivery and
performance by Seller of this Agreement, the Assumption Agreement, the Xxxx
of Sale, the Deed, the Escrow Agreement, the Non-Competition Agreement and
each other agreement required pursuant to this Agreement to be delivered by
Seller, which consent shall be in full force and effect on the Closing Date,
(ii) the unanimous written consent of the Board of Directors of the General
Partner authorizing the execution, delivery and performance by the General
Partner, on behalf of Seller, of this Agreement, the Assumption Agreement,
the Xxxx of Sale, the Deed, the Escrow Agreement, the Non-Competition
Agreement and each other agreement required pursuant to this Agreement to be
delivered by Seller and authorizing the execution, delivery and performance
by the General Partner, on its own behalf, of this Agreement, the
Non-Competition Agreement and each other agreement required pursuant to this
Agreement to be delivered by the General Partner, which consent shall be in
full force and effect on the Closing Date, (iii) the unanimous written
consent of the Board of Directors of the Limited Partner authorizing the
execution, delivery and performance by the Limited Partner of this Agreement,
the Non-Competition
33
Agreement and each other agreement required pursuant to this Agreement to be
delivered by the Limited Partner, which consent shall be in full force and
effect on the Closing Date, (iv) the unanimous written consent of the Board
of Directors of Parent authorizing the execution, delivery and performance by
Parent of this Agreement, the Non-Competition Agreement and each other
agreement required pursuant to this Agreement to be delivered by Parent,
which consent shall be in full force and effect on the Closing Date, (v) the
agreement of limited partnership of Seller, together with all amendments
thereto, certified by the Secretary of the General Partner as in effect on
the Closing Date; (vi) the certificate of limited partnership of Seller,
together with all amendments thereto, certified as of a recent date (not more
than five (5) Business Days prior to the Closing) by the Secretary of State
of the State of Georgia, and (vii) the articles of incorporation and bylaws
of each of the Partners, together with all amendments thereto, certified by
the respective Secretaries as in effect on the Closing Date;
(i) Purchaser shall have received legal opinions dated the Closing
Date from counsel to Seller and each of the Partners covering the matters set
forth in EXHIBIT D;
(j) if required by Purchaser, in its sole discretion, Purchaser
shall have received, at its expense, in its sole discretion, satisfactory
environmental reports (including Xxxxx 0, Xxxxx 2 or other reports deemed
appropriate by Purchaser) on any or all of the CMP Facilities;
(k) Seller shall have (i) obtained from its insurance carriers
"tail" coverage on all "claims made" insurance policies naming each of Cordis
and Purchaser as additional named insureds, and (ii) made arrangements to
continue all insurance policies relating to the CMP Facilities for so long as
Seller continues to use the CMP Facilities as contemplated by Section 5.9,
and shall have named each of Cordis and Purchaser as additional named
insureds, which coverage shall be reasonably satisfactory to Purchaser in its
sole discretion, and Purchaser shall have received certificates evidencing
such insurance described in clauses (i) and (ii);
(l) Purchaser shall have received the Title Insurance Commitment
and the Survey with respect to the Asheville Plant, in form and substance
reasonably satisfactory to Purchaser in its sole discretion, at its sole
expense;
(m) Purchaser shall have received from Lender, in form and
substance satisfactory to Purchaser, a letter evidencing Lender's commitment
to cancel the Deed of Trust of record upon receipt of the amount set forth in
Section 2.3(a)(ii) hereof in satisfaction and in respect of the note secured
by the Deed of Trust and Lender's;
34
(n) Purchaser shall have entered into employment agreements or
arrangements, (containing, among other things, non-disclosure and non-compete
covenants) with the employees listed on EXHIBIT G hereto;
(o) Seller shall have paid, or made arrangements to pay at its
next scheduled payroll date, all salaries, including overtime pay, and other
compensation accrued to its employees as of the Closing Date and;
(p) Purchaser shall have received a release from Xxxxxxx Capital
L.L.C. releasing Purchaser from any and all obligations to Xxxxxxx Capital
L.L.C.
ARTICLE VII
EMPLOYEES AND EMPLOYEE BENEFIT MATTERS
SECTION 7.1. Employment of New Employees.
(a) As of the Closing, Purchaser shall have the right to offer
employment to all of the employees of Seller employed in connection with the
Medical Business and upon such terms as Purchaser shall determine in its sole
discretion. Such employees who accept such offers and thereby become
employees of Purchaser shall be referred to as "NEW EMPLOYEES." The parties
agree that the employment relationship between such New Employees and
Purchaser shall be a new employment relationship and that neither Cordis nor
Purchaser is intended to be, and are not, successors to Seller in any legal
sense with respect to the employment relationships existing prior to the
Closing between such New Employees and Seller. On the Closing Date,
Purchaser shall enter into employment agreements or arrangements (containing,
among other things, non-disclosure and non-compete covenants) with the
employees set forth on EXHIBIT G hereto. Purchaser and Seller shall
reasonably cooperate with each other in connection with actions to be taken
with respect to the New Employees.
(b) All past or present employees of Seller (including retirees)
who are not New Employees shall continue to be past or present employees or
retirees of Seller and Seller and each of the Partners shall, jointly and
severally, but except as provided in the proviso of Section 8.2(e), indemnify
and hold Cordis, Purchaser and their respective Affiliates harmless from and
against all Liabilities and Damages of whatsoever nature with respect to past
or present employees or retirees of Seller who are not New Employees.
SECTION 7.2. ESTABLISHMENT OF EMPLOYEE BENEFIT PLANS.
Neither Cordis nor Purchaser shall have any obligation to cover any
New Employees in their respective employee benefit plans. In the event
Cordis or Purchaser elects to cover any New Employees in any employee benefit
plans, such
35
coverage shall be upon such terms and conditions as determined by Cordis and
Purchaser in their sole discretion. None of Cordis, Purchaser, any of their
respective Affiliates or any of the Cordis benefit plans shall have any
obligation, Liabilities or responsibility for any benefit claim or Liability
incurred by or pertaining to any New Employee, past employee or retiree prior
to the Closing, except to the extent expressly provided herein.
SECTION 7.3. SEVERANCE.
Except as provided in the proviso of Section 8.2(e), Cordis and
Purchaser shall not be liable for obligations, Liabilities and
responsibilities for severance, termination indemnity, salary continuation or
other payments, Liabilities or benefits relating to employees of Seller.
SECTION 7.4. REQUIRED DOCUMENTATION.
In connection with the implementation of Sections 7.1 through 7.3
hereof, Seller and Purchaser shall cooperate in the preparation and filing of
all documentation required to be filed with the Internal Revenue Service, the
United States Department of Labor and any other Governmental Body.
SECTION 7.5. RESERVATIONS OF RIGHTS.
(a) Nothing herein expressed or implied shall confer upon any
Person (including any New Employee or any other past or present employees of
Seller) other than Seller any rights or remedies of any nature or kind
whatsoever, including any right to employment by Cordis, Purchaser or Seller
for any period or under any particular terms and conditions or any third
party beneficiary rights hereunder.
(b) Nothing herein shall prevent Cordis, Purchaser or Seller at
any time on or after the Effective Date from terminating, reassigning,
promoting or demoting individual personnel or changing adversely or favorably
the titles, powers, duties, responsibilities, functions, locations, salaries,
other compensation, or terms and conditions of employment of individual
officers and employees of Cordis, Purchaser or Seller, as the case may be.
(c) Nothing herein shall restrict in any way the right of Cordis,
Purchaser or Seller on or after the Effective Date to establish, amend or
terminate any employee benefit plan, arrangement, program, practice, policy
or procedure. Cordis, Purchaser and Seller shall be free at all times to
modify, add or eliminate any employee benefit plan, arrangement, program,
policy or procedure.
36
(d) Notwithstanding any other provision of this Agreement, except
as expressly provided in this Article VII, neither Cordis nor Purchaser shall
assume or be subject to any obligations, Liabilities or responsibilities of
any nature or kind whatsoever (including with respect to pensions, salaries,
employee benefits, salary continuation, severance and post-retirement medical
benefits and Liabilities as a result of their non-termination by Purchaser)
(i) with respect to former employees of Seller who have retired or terminated
employment on or prior to the Closing or who otherwise do not become New
Employees, (ii) with respect to employees thereof who do not accept
employment with Purchaser or (iii) with respect to any employees thereof
having recall rights as of the Closing Date and who are not recalled by
Purchaser. None of such employees shall be considered "New Employees"
hereunder.
SECTION 7.6. NO SOLICITATION OR HIRING.
Without the prior written consent of Purchaser, none of Seller,
Parent either of the Partners or any of their respective Affiliates or their
respective agents or representatives shall, for a period of two (2) years
after the Closing Date, solicit to hire or hire any New Employees or other
personnel employed on a permanent basis by Cordis or Purchaser. The
foregoing obligations of Seller, each of the Partners and their respective
Affiliates shall not apply to employees who are terminated or given notice
thereof by Purchaser.
ARTICLE VIII
INDEMNIFICATION
SECTION 8.1. SURVIVAL OF REPRESENTATIONS AND WARRANTIES.
Except as otherwise expressly provided herein, the representations
and warranties contained in this Agreement shall survive for a period of one
(1) year following the Closing; PROVIDED, HOWEVER, that all representations
and warranties dealing with Tax and environmental matters shall survive until
the expiration of any statute of limitations period relating to such Taxes or
environmental matters. It is understood and agreed that disclosure of any
items in the Schedules hereto which constitute Retained Liabilities shall not
relieve Seller or either of the Partners of their indemnification obligations
under this Agreement. Neither the period of survival, the liability of any
party with respect to the representations and warranties contained herein,
nor the indemnification obligations of any party contained in Section 8.2
hereof shall be reduced by any investigation made at any time by or on behalf
of any other party. If written notice of a Claim has been given prior to the
expiration of the applicable representations and warranties by the party for
whose benefit such representations and warranties have been made to the party
that made such representations and warranties, then the relevant
representations and warranties shall survive for the purpose of such
37
Claim, until such Claim has been finally resolved pursuant to the provisions
of Section 8.3 hereof. The remedies provided herein shall be cumulative and
shall not preclude the assertion by Cordis and Purchaser of any other rights
or them seeking any other remedies against Seller, Parent, either of the
Partners or their respective successors or assigns; PROVIDED, HOWEVER, that
Purchaser's contractual remedies in respect of breaches by Seller, Parent and
the Partners of representations and warranties and covenants and agreements
shall be limited to the indemnification provisions of this Agreement.
SECTION 8.2. INDEMNIFICATION.
Seller, Parent and each of the Partners, on the one hand, and
Cordis and Purchaser, on the other hand (each, as applicable, an
"INDEMNITOR"), shall indemnify and hold the other, any Affiliate (including
Cordis in the case of Purchaser) thereof, and each of their respective
partners, directors, officers, employees, attorneys and agents (each such
Person being referred to as an "INDEMNITEE") harmless from and against all
Liabilities and Damages suffered or incurred by any such Indemnitee arising
from or in connection with the following (collectively, "CLAIMS"):
(a) Retained Liabilities, whether or not disclosed to Purchaser
pursuant to this Agreement, as to which each of Seller and each of the
Partners shall be jointly and severally liable as an Indemnitor and Parent
shall only be liable as a guarantor as provided in Section 5.12;
(b) Assumed Liabilities, as to which Purchaser shall be the
Indemnitor;
(c) any material breach of any representation or warranty made by
such Indemnitor herein or in any agreement or document delivered pursuant
hereto (it being understood that (i) Seller shall be an Indemnitor with
respect to all representations and warranties and shall be an Indemnitor on a
joint and several basis with Parent, the General Partner and/or the Limited
Partner with respect to those representations and warranties relating to
Parent, the General Partner and/or the Limited Partner, (ii) the General
Partner shall be an Indemnitor with respect to only those representations and
warranties relating to Seller, Parent and/or the General Partner and shall be
an Indemnitor on a joint and several basis with Seller and/or Parent with
respect to those representations and warranties relating to Seller and/or
Parent, (iii) the Limited Partner shall be an Indemnitor with respect to only
those representations and warranties relating to Seller and/or the Limited
Partner and shall be an Indemnitor on a joint and several basis with Seller
with respect to those representations and warranties relating to Seller) and
(iv) Parent shall be an Indemnitor with respect to only those representations
and warranties relating to Parent;
38
(d) any material breach or non-fulfillment of any covenant or
agreement required to be performed by such Indemnitor hereunder or under any
agreement or document delivered pursuant hereto (it being understood that (i)
Seller shall be an Indemnitor with respect to all covenants and agreements of
Seller, Parent and/or the Partners and shall be an Indemnitor on a joint and
several basis with Parent, the General Partner and/or the Limited Partner
with respect to those covenants and agreements required to be performed by
Parent, the General Partner and/or the Limited Partner, (ii) the General
Partner shall be an Indemnitor with respect to only those covenants and
agreements required to be performed by Seller, Parent and/or the General
Partner and shall be an Indemnitor on a joint and several basis with Seller
and/or Parent with respect to those covenants and agreements required to be
performed by Seller and/or Parent, (iii) the Limited Partner shall be an
Indemnitor with respect to only those covenants and agreements required to be
performed by Seller and/or the Limited Partner and shall be an Indemnitor on
a joint and several basis with Seller with respect to those covenants and
agreements required to be performed by Seller) and (iv) Parent shall be an
Indemnitor with respect to only those covenants and agreements required to be
performed by Parent;
(e) any and all Liability to an Employee arising under the Worker
Adjustment and Retraining Notification ("WARN") Act of 1988, 29 U.S.C. Section
2101-2109, as well as any applicable state and local laws requiring notice to
Employees before terminations or layoffs, as to which each of Seller and the
Partners jointly and severally shall be the Indemnitors; PROVIDED, HOWEVER,
that Purchaser shall be the Indemnitor with respect to any such Liability to
the extent, and only to the extent, such Liability arises as a result of
Purchaser's failure to make a reasonable offer of employment to such Employee
or Purchaser's causation of an Employment Loss following the Closing;
(f) any and all Liability relating to, arising out of or in
connection with the matters set forth in that certain Warning Letter dated
June 26, 1995 from FDA to Parent as a result of the actions or inaction of
Seller, Parent or the Partners on or prior to the Closing Date, as to which
each of Seller and the Partners jointly and severally shall be the
Indemnitors, but only to the extent such Liability could not be avoided by
the reasonable action of the Purchaser in the ordinary course of the Medical
Business; and
(g) any and all Liability relating to, arising out of or in
connection with that certain Non-Competition Agreement dated as of February
28, 1993 by and among Xxxxxxx Xxxxxx and Company, Ltd., Parent, Atlanta
Healthcare Services, Inc., Xxxxxxx X. Xxxxxx, III and Isolyser Company, Inc.
(the "XXXXXX AGREEMENT"), as to which each of Seller, Parent and the Partners
jointly and severally shall be the Indemnitors.
39
The indemnification obligations of Seller and the Partners under Sections
5.3(a), 7.1(b) and 8.2(a) shall survive indefinitely, it being understood,
however, that the Parent's guaranty of such indemnification obligations of
the Seller and General Partner shall only survive for a period of three years
following the Closing except with respect to those indemnification
obligations of Seller and the General Partner under Sections 5.3(a), 7.1(b)
and 8.2(a) relating to Tax and employee benefit matters, for which the
guaranty shall survive indefinitely, and except with respect to those
indemnification obligations under Sections 5.3(a) and 8.2(a) relating to
environmental matters, for which the guaranty shall survive for the
applicable statute of limitations relating to such environmental matters, and
except with respect to those indemnification obligations under Sections
5.3(a), 7.1(b) and 8.2(a) relating to other employment matters, for which the
guaranty shall survive for three years. The indemnification obligations of
Purchaser under Sections 5.3(b) and 8.2(b) shall survive indefinitely. Each
parties' indemnification obligations under Section 8.2(c) (and the respective
guaranties of Parent and Cordis with respect thereto) shall survive for so
long as the representations or warranties to which such indemnification
obligations relate survive as provided in Section 8.1. Each parties'
indemnification obligations under Section 8.2(d) (and the respective
guaranties of Parent and Cordis with respect thereto) shall only survive for
a period of three years except with respect to those covenants and agreements
relating to Tax and environmental matters, which indemnification obligations
shall survive until the expiration of the applicable statute of limitations
period relating to such Tax or environmental matters. The indemnification
obligations of Seller and the Partners under Sections 5.9, 8.2(e), 8.2(f) and
8.3 (and the guaranty of Parent with respect thereto) shall survive for a
period of three years. The indemnification obligations of Purchaser under
Section 8.2(e) (and the guaranty of Cordis with respect thereto) shall
survive for a period of three years. The indemnification obligations of
Seller, Parent and the Partners under Section 8.2(g) shall survive
indefinitely.
SECTION 8.3. BULK SALES LAWS.
Seller and each of the Partners, on the one hand, and Purchaser, on
the other hand, hereby waive compliance by the other with the so-called "bulk
sales law" and any other similar laws in any applicable jurisdiction in
respect of the transactions contemplated by this Agreement. Seller and each
of the Partners shall indemnify Purchaser and its Affiliates from and hold
each of them harmless against, jointly and severally, any liabilities,
damages, costs, and expenses resulting from or arising out of (i) the
parties' failure to comply with the so-called "bulk sales law" or any other
similar laws in any jurisdiction in respect of the transactions contemplated
by this Agreement, but only to the extent such liabilities, damages, costs
and expenses relate to Retained Liabilities, or (ii) any action brought or
levy made as a result thereof, other than those liabilities which have been
expressly assumed, on such terms as expressly assumed, by Purchaser pursuant
to this Agreement. Purchaser shall indemnify Seller and each of the
40
Partners from and hold each of them harmless against any liabilities,
damages, costs, and expenses resulting from or arising out of (i) the
parties' failure to comply with the so-called "bulk sales law" or any other
similar laws in any jurisdiction in respect of the transactions contemplated
by this Agreement but only to the extent such liabilities, damages, costs and
expenses relate to Assumed Liabilities, or (ii) any action brought or levy
made as a result thereof.
SECTION 8.4. GENERAL INDEMNIFICATION PROCEDURES.
(a) Each Indemnitee shall give written notice to the Indemnitor of
any Claim or Claims asserted against the Indemnitee or any third party within
thirty (30) days after obtaining actual knowledge thereof, including any
pending or threatened claim against the Indemnitee which is reasonably likely
to give rise to a Claim against the Indemnitor hereunder, stating the nature
and basis of such Claim and the amount thereof, in reasonable detail, to the
extent then known by the Indemnitee. Failure to provide such notice shall
not act as a waiver of the Indemnitee's rights with respect to such Claim
unless, and only to the extent that, such failure materially adversely
affects the Indemnitor's ability to defend against, minimize or eliminate
Damages arising out of such Claim.
(b) In the event of any claim, litigation, investigation or
proceeding by or with any third party, the Indemnitee shall keep the
Indemnitor fully informed and, unless the Indemnitor exercises the right of
control set forth in the next following sentence, shall use all reasonable
efforts to defend such claim, litigation, investigation or proceeding with
its own legal counsel and present any defense reasonably suggested by the
Indemnitor or its counsel. The Indemnitor shall have the right to
participate in such third party claim or litigation by counsel and
accountants, at its own expense, and, upon notice to the Indemnitee, to
assume and control, at its own expense, the defense or prosecution thereof,
as the case may be, with counsel approved by the Indemnitee (which approval
shall not be unreasonably withheld or delayed), unless (i) the assumption or
control of such defense or prosecution by the Indemnitee has been authorized
in writing by the Indemnitor, (ii) the Indemnitee has reasonably concluded
that there may be legal defenses available to it that are different from or
in addition to those available to the Indemnitor (in which case the
Indemnitor will not have the right to direct, assume or control the defense
or prosecution of such action on behalf of the Indemnitee) or (iii) the
Indemnitor has not in fact employed counsel to assume the defense or
prosecution of such action within a reasonable time after receiving notice of
the commencement thereof, in each of which cases the reasonable fees and
expenses of counsel will be paid by the Indemnitor, and the Indemnitee shall
assume and control the defense or prosecution of such action, and the
Indemnitor shall reimburse or pay such fees and expenses as they are
incurred. If the Indemnitor assumes such defense or prosecution, it shall
have no liability for any legal or other expenses subsequently incurred by
the Indemnitee in connection with
41
such claim, litigation, investigation or proceeding (other than the
reasonable out-of-pocket costs and attorneys' fees of investigation and
cooperation with the Indemnitor that may be requested by the Indemnitor in
such defense or prosecution) but the Indemnitor shall thereafter indemnify
and hold the Indemnitee and its Affiliates harmless from and against all
Liabilities and Damages with respect to such claim, litigation, investigation
or proceeding in accordance with the terms of this Agreement. Subject to the
foregoing, the Indemnitee shall not make, or offer to make, any settlement of
any claim, litigation, investigation or proceeding which might give rise to a
right of indemnification from the Indemnitor without the consent of such
Indemnitor, which consent shall not be unreasonably withheld or delayed;
PROVIDED THAT the Indemnitee may do so without such consent if it elects to
waive its right of indemnification with respect to the amount of such
settlement in connection with such claim, litigation, investigation or
proceeding or the Indemnitor refuses to acknowledge liability for
indemnification under this Agreement and/or declines to defend the Indemnitee
in such claim, litigation or proceeding.
(c) The Indemnitor's liability under Sections 5.9, 8.2(c), 8.2(d),
8.2(e) and 8.2(f) shall be limited to the amount of the Purchase Price. The
Indemnitor's liability under Sections 5.3(a), 7.1(b), 8.2(a), 8.2(b), 8.2(g)
and 8.3 shall not be limited by the Purchase Price.
(d) In no event shall any payment be made with respect to any
Claim or Claims under Sections 5.9, 8.2(c), 8.2(d), 8.2(e), 8.2(f) and 8.3 to
the extent any such Claim or Claims under such Sections do not exceed
$50,000; PROVIDED, HOWEVER, that in the event any Claim or Claims, singly or
in the aggregate, exceed $50,000, then the indemnification provided for in
this Agreement with respect to such Sections shall apply to the extent such
Claim or Claims, singly or in the aggregate, exceed $50,000.
ARTICLE IX
MISCELLANEOUS PROVISIONS
SECTION 9.1. EXPENSES.
Except as otherwise expressly provided herein, each party shall
bear its own expenses (including those of its attorneys, accountants,
advisers or other agents or representatives) incident to the preparation,
negotiation, execution and delivery of this Agreement and the performance of
its obligations hereunder.
SECTION 9.2. ENTIRE AGREEMENT; AMENDMENTS.
This Agreement together with all other agreements and documents to
be executed and delivered in connection herewith constitutes a complete
statement of all of the agreements among the parties as of the date hereof
with respect to the
42
asset purchase contemplated hereby, supersedes all prior agreements,
understandings, negotiations and discussions, whether oral or written,
between them with respect thereto (including the Letter of Intent, the Supply
Agreement and that certain letter agreement regarding confidentiality between
Seller and Cordis dated December 9, 1994) and cannot be changed or terminated
orally. The parties hereto have not relied on any statements,
representations, warranties or covenants, whether oral or written, other than
those set forth in this Agreement and the agreements and documents required
to be delivered pursuant hereto.
SECTION 9.3. SCHEDULES, EXHIBITS AND ADDENDA.
The Schedules, Exhibits and Addenda to this Agreement shall be
construed with and as integral parts of this Agreement to the same extent as
if they were set forth verbatim herein; PROVIDED, HOWEVER, that in the event
of any conflict between any such Schedule, Exhibit or Addendum and this
Agreement, this Agreement shall control.
SECTION 9.4. HEADINGS; CERTAIN RULES OF CONSTRUCTION.
The headings in this Agreement are intended solely for convenience
of reference and shall be given no effect in the construction or
interpretation of this Agreement. The terms "herein," hereof," hereunder"
and any similar terms used in this Agreement refer to this Agreement, and all
references to "this Agreement" refer to this Agreement and the Schedules,
Exhibits and Addenda hereto, as amended from time to time. The terms
"including" or "include" shall mean "including, without limitation," or
"include, without limitation," as the case may be. In the case of each
reference to the "knowledge" or "best knowledge" of a party, "knowledge" will
be deemed to mean actual knowledge of such party or knowledge that such party
should have reasonably had under the circumstances.
SECTION 9.5. NOTICES.
All notices and other communications under this Agreement shall be
in writing and shall be deemed given (a) when delivered by hand or certified
mail, return receipt requested, postage prepaid, (b) when transmitted by
telecopier or (c) when received if sent by overnight courier, to the
addressee at the following addresses or telecopier numbers (or to such other
address or telecopier number as a party may specify from time to time by
notice hereunder):
43
(i) If to Seller, Parent or the General Partner:
Xxxxxxx Healthcare, Ltd.
d/b/a Custom Medical Products
c/o ASH Enterprises, Inc.
General Partner
0000 Xxxxx Xxxxx Xxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Attn.: Xx. Xxxxxx X. Xxxxxxx, Xx.
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
with a copy (which shall not constitute notice)
to:
Long, Xxxxxxxx & Xxxxxx
One Peachtree Center
000 Xxxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Attn.: Xxxxx X. Xxxxxxx, Esq.
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
(ii) If to the Limited Partner:
Out-Patient Products Company, Inc.
000 Xxxxxxxxx Xxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attn.: Xxxxx Xxxxxxxx
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
with a copy (which shall not constitute notice)
to:
Xxxxxxx Xxxx & Xxxxxxxx, P.A.
00 Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attn.: Xxxx X. Xxxxxxx, Xx. Esq.
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
44
(iii) If to Cordis or Purchaser:
Cordis Medical Products, Inc.
Cordis Corporation
0000 Xxxx Xxxxxx Xxxxx
Xxxxx 000
Xxxxx, Xxxxxxx 00000
Attn.: Xxxxxx X. Xxxxx
Vice President and Chief
Financial Officer
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
with a copy (which shall not constitute notice)
to:
Xxxxx & Xxxxxxx L.L.P.
000 Xxxxxxxxxx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000
Attn.: Xxxxxx X. Xxxxx, Esq.
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
and to:
Xxxxxxxx, Xxxxxxxx & Xxxxxx, P.A.
1900 Independence Center
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attn.: Xxxx X. Xxxxxx, Esq.
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
SECTION 9.6. NO WAIVER.
The failure of a party to insist upon strict adherence to any term
of this Agreement on any occasion shall not be considered a waiver or deprive
that party of the right to insist later on adherence thereto, or thereafter
to insist upon strict adherence to that term or any other term of this
Agreement. Any waiver must be in writing and signed by the party against whom
enforcement is sought in order to be effective.
45
SECTION 9.7. SUCCESSORS; ASSIGNMENT.
This Agreement shall inure to the benefit of, and be binding upon,
Seller, Parent, the Partners, Cordis and Purchaser and their successors and
may not be assigned without the prior written consent of the other parties,
and any attempted assignment without such consent shall be null and void.
SECTION 9.8. NO THIRD-PARTY BENEFICIARIES.
Except as otherwise provided in this Agreement, nothing herein is
intended to, or shall be construed to, confer upon any Person not a party
hereto any rights or benefits hereunder.
SECTION 9.9. PASSAGE OF TITLE AND RISK OF LOSS.
Legal and equitable title to, and risk of loss with respect to, the
Purchased Assets shall not pass to Purchaser until 12:01 a.m. on the
Effective Date.
SECTION 9.10. FORCE MAJEURE.
If any party or its Affiliates is rendered wholly or partially
unable by Force Majeure to carry out its obligations under this Agreement,
and if that party gives prompt written notice and full particulars of such
Force Majeure to the other party, the notifying party shall be excused from
performance of its obligations hereunder during the continuance of any
inability so caused, but for no longer period. Such cause shall be remedied
by the notifying party as far as possible with reasonable speed and effort,
but neither party shall have any obligation to settle any labor dispute. For
the purposes of this Agreement, "FORCE MAJEURE" shall mean acts of God,
industrial disputes, acts of public enemies or terrorists, war, other
military conflicts, blockades, insurrections, riots, epidemics, quarantine
restrictions, landslides, lightning, earthquake, fires, storms, floods,
washouts, arrests, civil disturbances, restraints by or actions of any
Governmental Body (including export or security restrictions on information,
material, personnel, equipment or otherwise), breakdowns of plant or
machinery, inability to obtain transport or supplies, and any other acts or
events whatsoever, whether or not similar to the foregoing, not within the
control of the party claiming excuse from performance, which by the exercise
of due diligence and reasonable effort said party shall not have been able to
overcome or avoid.
SECTION 9.11. ANNOUNCEMENTS.
Purchaser, Seller and the Partners shall consult with one another
in advance concerning the form and substance of any press release or other
public disclosures of the matters covered by this Agreement and shall use
their respective
46
best efforts to prohibit partners, directors, officers, employees or advisors
from granting press interviews or engaging in similar actions that would
result in public disclosure of such matters; PROVIDED, HOWEVER, that these
obligations shall not be deemed to prohibit any party from making any
disclosure which such party reasonably deems necessary in order to fulfill
such party's disclosure obligations required by applicable law or
regulations, provided written notice of such disclosure is promptly given to
the other party.
SECTION 9.12. COUNTERPARTS.
This Agreement may be executed in two or more counterparts, each of
which shall be considered an original, but all of which together shall
constitute one and the same instrument.
SECTION 9.13. SEVERABILITY.
If any term or provision of this Agreement or the application
thereof to any party hereto or set of circumstances shall, in any
jurisdiction and to any extent, be finally held to be invalid or
unenforceable, such term or provision shall only be ineffective as to such
jurisdiction, and only to the extent of such invalidity or unenforceability,
without invalidating or rendering unenforceable any other terms or provisions
of this Agreement or under any other circumstances, and the parties shall
negotiate in good faith a substitute provision which comes as close as
possible to the invalidated or unenforceable term or provision, and puts the
parties in a position as nearly comparable as possible to the position they
would have been in but for such finding of invalidity or unenforceability,
while remaining valid and enforceable.
SECTION 9.14. GOVERNING LAW.
The interpretation and construction of this Agreement and (unless
otherwise expressly provided herein), all amendments hereof and waivers and
consents hereunder shall, to the extent the particular subject matter is
controlled by state law, be governed by and be construed in accordance with
the substantive law of the State of North Carolina, without regard to the
conflicts of laws principles thereof.
SECTION 9.15. CONFIDENTIALITY.
(a) Subject to Section 9.15(b) hereof, each of the parties hereto
shall, and shall cause their respective Affiliates (and their respective
directors, officers, partners, employees and representatives) to, keep
confidential and not disclose to any Person (other than, with appropriate
undertakings of confidentiality, their respective directors, officers,
partners, employees, attorneys, accountants and
47
other advisers with a reasonable need to know such information) the existence
and terms of this Agreement and all Confidential Information relating to the
other parties and their respective Affiliates obtained by it or them from the
other parties or their respective Affiliates in preparation for, or in
connection with, this Agreement or the transactions contemplated hereby, and
use such information only in connection with this Agreement and such
transactions.
(b) The obligations imposed by Sections 9.15(a) and 9.15(b) hereof
shall not apply, or shall cease to apply, to any Confidential Information
when, and to the extent that, (i) such Confidential Information (A) was known
to the recipient or its Affiliates prior to the receipt of the Confidential
Information from the discloser thereof; (B) was, or becomes through no breach
of the recipient's obligations hereunder, known to the public; (C) becomes
known to the recipient or its Affiliates from sources other than the
discloser or its Affiliates under circumstances not involving any breach of
any confidentiality obligation between such source and the discloser or its
Affiliates; (D) is independently developed by the recipient or its
Affiliates; or (E) is required to be disclosed by law or applicable legal
process, or is necessary or advisable to be disclosed in order to comply with
any applicable statute or governmental rule, regulation, order, directive or
policy, any financial or accounting requirement, or any governmental requests
for additional information or documents thereunder; or (ii) the party to this
Agreement to which such Confidential Information relates expressly consents
thereto in writing. In addition, the obligations imposed on Purchaser and
Cordis by Sections 9.15(a) and 9.15(b) shall cease to apply to Confidential
Information related to the Medical Business after the Closing.
(c) In connection with its ownership and operation of the
Purchased Assets, Seller, the Partners and their respective Affiliates have
obtained Confidential Information relating to the business, operations,
properties, assets, products, condition (financial and otherwise),
liabilities, employee relations, customer, supplier, distributor and
franchise relations and prospects of the Medical Business. Following the
Closing of the transactions contemplated hereby, Seller, each of the Partners
and their respective Affiliates shall treat such information as confidential,
preserve the confidentiality thereof, not duplicate or use such information
and instruct their respective employees who have had access to such
information to keep confidential and not to use any such information unless
such information is now or is hereafter disclosed, through no act or omission
of Seller, either of the Partners or their respective Affiliates, in a manner
making it available to the general public.
48
SECTION 9.16. FORUM.
The parties hereby irrevocably submit to the exclusive jurisdiction
of any North Carolina State Court or Federal Court, in either case sitting in
Buncombe County, North Carolina, in any action or proceeding arising out of
or relating to this Agreement or the transactions contemplated hereby, and
each such party hereby irrevocably agrees that all claims in respect of any
such action or proceeding may be heard and determined in such North Carolina
State Court or Federal Court. The parties irrevocably consent to the service
of any and all process in any such actions or proceeding by mailing copies of
such process to such party at the address specified pursuant to Section 9.5.
The parties irrevocably confirm that service of process out of such courts,
in such manner, shall be deemed due service upon each of them for the
purposes of any such action or proceeding. The parties hereby irrevocably
waive (i) any objection each of them may have to the laying of venue of any
such action or proceeding in any of such courts, or (ii) any claim that each
of them may have that any such action or proceeding has been brought in an
inconvenient forum. The parties irrevocably agree that a final judgment in
any such action or proceeding shall be conclusive and may be enforced in
other jurisdictions by suit on the judgment or in any other manner provided
by law. Nothing in this Section shall effect the right of any party hereto
to serve legal process in any other manner permitted by law.
49
IN WITNESS WHEREOF, the parties have executed and delivered this
Agreement, or caused this Agreement to be duly executed and delivered on
their behalf, as of the date first above written.
CORDIS MEDICAL PRODUCTS, INC.
By: /s/ XXXXXXX X. XXXXX
---------------------------------------
Name: XXXXXXX X. XXXXX
Title: VICE PRESIDENT
XXXXXXX HEALTHCARE, LTD.,
D/B/A CUSTOM MEDICAL PRODUCTS
By: ASH Enterprises, Inc.,
its General Partner
By: /s/ Xxxxxx X. Xxxxxxx, Xx.
------------------------------------
Name:
Title:
ASH ENTERPRISES, INC.
By: /s/ Xxxxxx X. Xxxxxxx, Xx.
----------------------------------------
Name:
Title:
OUT-PATIENT PRODUCTS COMPANY, INC.
By: /s/ Xxxxx Xxxxxxxx
------------------------------------------
Name:
Title:
50
Solely with respect to Sections
3.1(b), 3.5, 3.6, 3.7, 3.32(a),
3.32(b), 3.33, 5.12, 7.6 and Article
VIII
XXXXXXX HEALTHCARE, INC.
By: /s/ Xxxxxx X. Xxxxxxx, Xx.
-----------------------------------------
Name:
Title:
Solely with respect to Article IV,
Section 5.13 and Article VIII
CORDIS CORPORATION
By: /s/ Xxxxxxx X. Xxxxx
-------------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Assist. Treasurer
51
ADDENDUM I
TO ASSET PURCHASE AGREEMENT
DATED AS OF OCTOBER 3, 1995
DEFINITIONS
"ACCOUNTING ARBITER" means a "Big 6" independent public accounting
and auditing firm selected by mutual agreement of Purchaser and Seller.
"ACCOUNTS PAYABLE" shall mean all Seller's obligations for the
payment of goods sold or leased or for services rendered to Seller on or
prior to the Closing Date, billed and unbilled, including, without
limitation, such obligations which remain outstanding at the time of
determination reflected on Seller's unaudited balance sheet dated as of March
31, 1995 and such obligations as of the date hereof listed on SCHEDULE
3.14(a) hereto relating to the Medical Business.
"ADJUSTMENT CLOSING" means the post-closing adjustment closing
scheduled to be held on the ninetieth (90th) day following the Closing Date
(or the next Business Day thereafter).
"AFFILIATE" shall mean, with respect to any Person, any other
Person directly or indirectly controlling, controlled by or under common
control with such first Person. The term "control" (including with
correlative meanings, the terms "controlling," "controlled by" and "under
common control with") shall mean possession, directly or indirectly, of the
power to direct or cause the direction of the management and policies of a
Person, whether by reason of ownership of voting stock, partnership
interests, by contract or otherwise. The term "Affiliates" shall include all
Subsidiaries of such Person.
"AGREEMENT" means this Asset Purchase Agreement.
"ASHEVILLE PLANT" shall mean that certain facility of Seller
located at Lots 1 and 14, Westside Commercial Park, in Asheville, North
Carolina and all streets, roads and public places, opened or proposed, and
all easements and rights of way, public and private, tenements,
hereditaments, rights and appurtenances, now or hereafter used in connection
with, or belonging, incident or appertaining thereto.
"ASSUMED LIABILITIES" shall exclusively mean those Liabilities
relating to the Medical Business which are being expressly assumed by
Purchaser, as set forth on SCHEDULE 1.1(a) hereto.
"ASSUMPTION AGREEMENT" shall mean that certain Assumption Agreement
to be executed by Seller and Purchaser, dated the Closing Date, substantially
in the form of EXHIBIT B hereto.
"XXXXXX AGREEMENT" shall have the meaning set forth in Section 8.2
hereof.
"AUTHORIZATIONS" shall mean all licenses, registrations, permits,
certificates, authorizations, provider agreements, warranties, guarantees and
franchises, together with any additions, renewals or modifications thereto,
whether or not issued by a Governmental Body, owned or held by Seller and/or
either of the Partners and required to carry on the Medical Business in the
ordinary and usual course and consistent with past practice, including those
identified on and copies of which are attached as SCHEDULE 3.9 hereto.
"AVOIDANCE ACTIONS" shall have the meaning set forth in Section 2.3
hereof.
"XXXX OF SALE" shall mean that certain General Xxxx of Sale and
Assignment to be executed by Seller, dated the Closing Date, substantially in
the form of EXHIBIT A hereto.
"BOOKS AND RECORDS" shall mean all books of account and other
books, documents, papers, files, credit history, customer records, personnel
records, financial records, inspection records and other business records of
every kind whatsoever pertaining to the Medical Business, the Purchased
Assets, or any of the employees of Seller, but not including the items
described in subparagraphs (c) and (d) of the definition of Excluded Assets.
"BUSINESS DAY" shall mean any day other than a Saturday, Sunday or
other day which is a legal holiday in the States of North Carolina, Florida
or Georgia.
"CAUSES OF ACTION" shall mean all claims, causes of action,
counterclaims, choses in action, rights of setoff and other rights of
recovery of any kind relating to or arising in connection with the Purchased
Assets or the Medical Business, including any mechanic's or materialman's
liens or any other liens, or any rights to payment or to enforce payment in
connection with services rendered, supplies furnished or other work performed
by or on behalf of Seller on or prior to the Closing Date. "Causes of
Action" shall not include any claims, causes of action, counterclaims, choses
in action, rights of setoff or other rights of recovery relating to or
arising in connection with the Excluded Assets or any business of Seller
other than the Medical Business.
"CLAIMS" shall have the meaning set forth in Section 8.2 hereof.
"CLOSING" shall have the meaning set forth in Section 2.1 hereof.
2
"CLOSING DATE" shall mean the day upon which the Closing occurs.
"CMP FACILITIES", "CURRENT CMP FACILITIES" and "FORMER CMP
FACILITIES" shall have the meanings set forth in Section 3.29(a) hereof.
"CODE" shall mean the Internal Revenue Code of 1986, as amended,
and any successor statute thereto, and all rules and regulations promulgated
thereunder.
"CONFIDENTIAL INFORMATION" shall mean, with respect to any Person,
all confidential or proprietary written, recorded or oral information, data,
records, files, lists, materials, documents, know-how or software (including
such information pertaining to research, development, engineering,
manufacturing, service, sale, marketing or other advertising materials,
technical information, training materials, manuals, intellectual property,
financial, operating, cost, performance, business, process, customers,
clients, patients, or prospects), owned, leased, held or used by such Person,
whether such confidential or proprietary nature is indicated orally or in
writing (by such terms or terms of similar effect) or in a context in which
the source of such information or data reasonably communicates, or the
recipient of such information or data should reasonably have understood, that
it should be treated as confidential or proprietary, whether or not the
specific word "confidential" or "proprietary" is used. The term
"Confidential Information" shall include all information relating to the
existence of this Agreement and the provisions hereof.
"CONTRACTS" shall have the meaning set forth in Section 3.20 hereof.
"CORDIS" shall have the meaning set forth in the introductory
paragraph of this Agreement.
"CUSTOMER CONTRACTS" shall mean all contracts, agreements, orders
and commitments with or to medical supplies distributors and manufacturers,
hospitals or other parties for products or services provided by or to Seller
entered into in the ordinary and usual course of conducting the Medical
Business, including those set forth on SCHEDULE 3.20 hereto.
"DAMAGES" shall mean any losses, injuries, liabilities, damages
(including consequential, special, punitive and incidental damages), claims,
demands, judgments, settlements, fines, penalties, expenses and costs
(including those relating to any investigation or any defense or prosecution
of any proceedings, and reasonable fees and expenses of attorneys,
accountants, experts and other consultants).
"DEED" shall mean that certain special warranty deed, dated the
Closing Date and executed by Seller, substantially in the form of EXHIBIT E.
3
"DEED OF TRUST" shall mean that certain Deed of Trust dated October
22, 1993 by Seller in favor of Lender, securing a certain note dated October
22, 1993 in the principal amount of $488,000.
"DOCUMENTS" shall mean any paper or other material (including
computer storage media) on which is recorded (by letters, numbers or other
marks) during the last seven years information that may be evidentially used,
including without limitation, legal opinions, mortgages, indentures, notes,
instruments, leases, agreements, insurance policies, reports, studies,
financial statements (including the notes thereto), other written financial
information, schedules, certificates, charts, maps, plans, photographs,
letters, memoranda and all similar materials.
"EFFECTIVE DATE" shall mean the day next following the Closing Date.
"EMPLOYEE" shall have the meaning set forth in Section 3.31 hereof.
"EMPLOYMENT LOSS" shall have the meaning set forth in Section 3.31
hereof.
"ENCUMBRANCE" shall mean any security interest, mortgage, lien,
pledge, claim, lease, agreement, right of first refusal, option, limitation
on transfer or use or assignment or licensing, restrictive easement, charge
or any other restriction of any kind with respect to any property or assets
(tangible or intangible), including any restriction on the ownership, use,
voting, transfer, possession, receipt of income or other exercise of any
attributes of ownership of such property or assets (whether tangible,
intangible, real or personal).
"ENVIRONMENTAL CLAIM" shall mean any accusation, allegation, notice
of violation, claim, demand, abatement order or other order or direction
(conditional or otherwise) by any Governmental Body or any Person for any
damage, including, without limitation, personal injury (including sickness,
disease or death), tangible or intangible property damage, contribution,
indemnity, indirect or consequential damages, damage to the environment,
nuisance, pollution, contamination or other adverse effects on the
environment, or for fines, penalties or restrictions, in each case relating
to, resulting from or in connection with Hazardous Materials and relating to
Seller or any CMP Facility.
"ENVIRONMENTAL LAWS" shall mean all Federal, state and local
statutes, ordinances, orders, rules, regulations, plans, guidances, policies
or decrees and the like relating to (a) environmental matters, including,
without limitation, those relating to fines, injunctions, penalties, damages,
contribution, cost recovery compensation, losses or injuries resulting from
the Release or threatened Release of Hazardous Materials, (b) the generation,
use, storage, transportation, treatment or
4
disposal of Hazardous Materials, or (c) occupational safety and health,
industrial hygiene, land use or the protection of human, plant or animal
health or welfare, in any manner applicable to Seller or any of its
properties, including, without limitation, the Comprehensive Environmental
Response, Compensation, and Liability Act (42 U.S.C. Section 9601 ET SEQ.),
and any analogous future or present local, state and Federal statutes and
regulations promulgated pursuant thereto, each as amended or supplemented.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974 and all rules and regulations promulgated thereunder, each as amended or
supplemented.
"ERISA AFFILIATE" as applied to any Person, shall mean (a) any
corporation which is, or was at any time, a member of a controlled group of
corporations within the meaning of Section 414(b) of the Code of which that
Person is, or was at any time, a member, (b) any trade or business (whether
or not incorporated) which is, or was at any time, a member of a group of
trades or businesses under common control within the meaning of Section
414(c) of the Code of which that Person is, or was at any time, a member and
(c) any member of an affiliated service group within the meaning of Section
414(m) or (o) of the Code of which that Person, any corporation described in
clause (a) above or any trade or business described in clause (b) above is,
or was at any time, a member.
"ERISA EVENT" shall mean (a) a "reportable event" within the
meaning of Section 4043 of ERISA and the regulations issued thereunder with
respect to any Pension Plan (excluding those for which the provision for
30-day notice to the PBGC has been waived by regulation), (b) the failure to
meet the minimum funding standard of Section 412 of the Code with respect to
any Pension Plan (whether or not waived in accordance with Section 412(d) of
the Code) or the failure to make by its due date a required installment under
Section 412(m) of the Code with respect to any Pension Plan or the failure to
make any required contribution to a Multiemployer Plan, (c) the provision by
the administrator of any Pension Plan pursuant to Section 4041(a)(2) of ERISA
of a notice of intent to terminate such plan in a distress termination
described in Section 4041(c) of ERISA, (d) the withdrawal by Seller or any
ERISA Affiliate of Seller from any Pension Plan with two or more contributing
sponsors or the termination of any such Pension Plan resulting in liability
pursuant to Sections 4063 or 4064 of ERISA, (e) the institution by the PBGC
of proceedings to terminate any Pension Plan, or the occurrence of any event
or condition which might constitute grounds under ERISA for the termination
of, or the appointment of a trustee to administer, any Pension Plan, (f) the
imposition of liability on Seller or any ERISA Affiliate of Seller pursuant
to Section 4062(e) or 4069 of ERISA or by reason of the application of
Section 4212(c) of ERISA, (g) the withdrawal by Seller or any ERISA Affiliate
of Seller in a complete or partial withdrawal (within the meaning of Sections
4203 and 4205 of ERISA) from any Multiemployer Plan if there is any potential
liability therefor, or the receipt by
5
Seller or any ERISA Affiliate of Seller of notice from any Multiemployer Plan
that it is in reorganization or insolvency pursuant to Section 4241 or 4245
of ERISA, or that it intends to terminate or has terminated under Section
4041A or 4042 of ERISA, (h) the occurrence of an act or omission which could
give rise to the imposition on Seller or any ERISA Affiliate of Seller of
fines, penalties, taxes or related charges under Chapter 43 of the Code or
under Section 409 or 502(c), (i) or (l) or 4071 of ERISA in respect of any
Plan, (i) the written assertion of a material claim (other than routine
claims for benefits) against any Plan other than a Multiemployer Plan or the
assets thereof, or against Seller or any ERISA Affiliate of Seller in
connection with any such Plan, (j) receipt from the Internal Revenue Service
of notice of the failure of any Pension Plan (or any other Plan intended to
be qualified under Section 401(a) of the Code) to qualify under Section
401(a) of the Code, or the failure of any trust forming part of any Pension
Plan to qualify for exemption from taxation under Section 501(a) of the Code
or (k) the imposition of a lien pursuant to Section 401(a)(29) or 412(n) of
the Code or pursuant to ERISA with respect to any Pension Plan.
"ESOP" shall mean an employee stock ownership plan, as such term is
defined in Section 4975(e)(7) of the Code.
"ESCROW ACCOUNT" shall have the meaning set forth in Section 2.5
hereof.
"ESCROW AGENT" shall mean First Union National Bank of Florida or
such other bank or trust company as the parties may agree upon.
"ESCROW AGREEMENT" shall mean that certain Escrow Agreement to be
executed by Seller, Purchaser and the Escrow Agent, dated the Closing Date,
substantially in the form of EXHIBIT C hereto.
"ESCROW DEPOSIT" shall have the meaning set forth in Section 2.5
hereof.
"EXCLUDED ASSETS" shall mean the following assets of the Seller to
be excluded from the Purchased Assets: (a) any cash or cash equivalents; (b)
the assets and employer rights relating to employee benefit plans of Seller,
the obligations in respect of which are not being assumed by Purchaser or any
Cordis employee benefit plan; (c) the agreement of limited partnership,
minute books and partnership interest transfer records; (d) all accounts
receivable and books of account relating thereto; (e) those Contracts set
forth on SCHEDULE 8 hereto; and (f) those other assets set forth as being
excluded assets on SCHEDULE 1.2 hereto, including without limitation those
assets related to Seller's industrial gown and drape business.
"FDA" shall have the meaning set forth in Section 3.32 hereof.
6
"FF&E" shall mean all furniture, fixtures, furnishings, equipment
and all other tangible personal property (other than Inventory and the
Excluded Assets) owned, leased, held or used by Seller in the Medical
Business, including the property identified and described on SCHEDULE 3.16(a)
hereto.
"FORCE MAJEURE" shall have the meaning set forth in Section 9.10
hereof.
"GAAP" shall mean generally accepted accounting principles set
forth in the opinions and pronouncements of the Accounting Principles Board
of the American Institute of Certified Public Accountants and statements and
pronouncement of the Financial Accounting Standards Board which are
applicable to the circumstances at the time or for the period in question.
"GENERAL PARTNER" shall have the meaning set forth in the
introductory paragraph of this Agreement.
"GOODWILL" shall mean the goodwill of Seller.
"GOVERNMENTAL BODY" shall mean any United States or other national,
state, municipal or local government, domestic or foreign, any subdivision,
agency, entity, commission or authority thereof, or any quasi-governmental or
private body exercising any regulatory, taxing, importing or other
governmental or quasi-governmental authority.
"HAZARDOUS MATERIALS" shall mean (a) any chemical, material or
substance at any time defined as or included in the definition of "hazardous
substance," "hazardous waste," "hazardous material," "infectious wastes,"
"infectious material," "bloodborne pathogen," "etiologic agent," "infectious
substance," "medical waste," "regulated medical waste," "toxic substance" or
any other formulations intended to define, list or classify substances by
reason of deleterious properties such as ignitibility, corrosivity,
reactivity, carcinogenicity, infectious nature, radioactivity, toxicity,
reproductive toxicity, "TCLP toxicity" or words of similar import under any
applicable Environmental Law or publications promulgated pursuant thereto,
(b) any oil, petroleum, petroleum fraction or petroleum derived substance,
(c) any flammable substances or explosives, (d) any radioactive wastes,
substances or other materials, (e) asbestos in any form, (f) urea
formaldehyde foam insulation, (g) electrical equipment which contains any oil
or dielectric fluid containing levels of polychlorinated biphenyls in excess
of fifty parts per million, (h) pesticides and (i) any other chemical,
material or substance which is limited or regulated by any Governmental Body
or which may or could pose a hazard to the health and safety of the owners,
occupants, employees or any Persons in the vicinity of any CMP Facility.
7
"IMPROVEMENTS" shall mean all buildings, structures, fixtures, and
other improvements now or hereafter actually or constructively attached to
the Asheville Plant, and all modifications, additions, restorations, or
replacements of the whole or any part thereof.
"INDEMNITEE" shall have the meaning set forth in Section 8.2 hereof.
"INDEMNITOR" shall have the meaning set forth in Section 8.2 hereof.
"INVENTORY" shall mean all supplies, raw materials,
work-in-process, finished goods and materials used or consumed in the Medical
Business.
"LEASES" shall mean all lease agreements and other agreements
(other than Excluded Assets) for the lease, use or occupancy of, or of space
in, certain facilities, buildings, offices, warehouses, structures,
improvements, appurtenances, personal property, equipment and fixtures used
by Seller in connection with the Medical Business, including those identified
and described in SCHEDULE 3.18 hereto.
"LENDER" shall mean First-Citizens Bank & Trust Company.
"LETTER OF INTENT" shall have the meaning set forth in Section 5.6
hereof.
"LIABILITIES" shall mean all debts, adverse claims, Damages,
liabilities, judgments, commitments and obligations of any nature, whether
accrued, contingent or otherwise and whether known or unknown, including
those arising under any law (including the common law) or any rule or
regulation of any Governmental Body or imposed by any court or any arbitrator
in a binding arbitration resulting from, arising out of or relating to the
assets, activities, operations, actions or omissions of a Person, or products
manufactured or sold thereby or services provided thereby, or under
contracts, agreements (whether written or oral), leases, commitments or
undertakings thereof.
"LIMITED PARTNER" shall have the meaning set forth in the
introductory paragraph of this Agreement.
"MDRs" shall have the meaning set forth in Section 3.32 hereof.
"MEDICAL BUSINESS" shall have the meaning set forth in the first
recital of this Agreement.
"MULTIEMPLOYER PLAN" shall mean a "multiemployer plan" as such term
is defined in Section 3(37) of ERISA.
8
"NEW EMPLOYEES" shall have the meaning set forth in Section 7.1(a)
hereof.
"NON-COMPETITION AGREEMENT" shall mean that certain Non-Competition
Agreement, dated the Closing Date, among Seller, each of the Partners, Parent
and Purchaser substantially in the form of EXHIBIT F hereto.
"OTHER ARRANGEMENT" shall mean a benefit program or practice
providing for bonuses, incentive compensation, vacation pay, severance pay,
insurance, restricted stock, stock options, employee discounts, company cars,
tuition reimbursement or any other perquisite or benefit (including any
fringe benefit under Section 132 of the Code) to employees, officers or
independent contractors that is not a Plan.
"OUTSTANDING CORDIS PAYABLES" shall have the meaning set forth in
Section 2.3(a).
"PARENT" shall have the meaning set forth in the introductory
paragraph of this Agreement.
"PARTNERS" shall have the meaning set forth in the introductory
paragraph of this Agreement.
"PATENTS" shall mean all United States and foreign patents and
registered industrial designs, patent applications or divisionals or
continuations-in-part thereof or the equivalent thereof, issuances thereon or
reissues or extensions thereof, including any foreign counterparts thereof
and any other government-issued or granted indicia of invention ownership
throughout the world now or hereafter filed and all rights to apply for
patents and all rights with respect to the enforcement worldwide thereof,
used in the Medical Business or used or owned by or licensed to Seller for
its use in the Medical Business, including any and all rights to xxx for the
infringement or unauthorized use thereof (whether past, present or future)
and the recovery of damages or royalties related thereto, including, without
limitation, those set forth on SCHEDULE 3.25 hereto.
"PBGC" shall mean the Pension Benefit Guaranty Corporation, or any
successor thereto.
"PCBs" shall mean polychlorinated biphenyls.
"PENSION PLAN" shall mean an "employee pension benefit plan" as
such term is defined in Section 3(2) of ERISA.
"PERMITS" shall have the meaning set forth in Section 3.29(b).
9
"PERMITTED ENCUMBRANCE" shall mean (a) those Encumbrances set forth
in SCHEDULE 3.4 hereto, (b) Leases identified on SCHEDULE 3.18 hereto and (c)
with respect to real property and interests in real property, easements,
covenants, encroachments, rights-of-way and other restrictions of record,
liens for Taxes, assessments and other governmental charges which are not due
and payable, and zoning and other similar restrictions which do not, either
in any single case or in the aggregate, materially impair the use, as
presently conducted, of the facilities used in connection with the Medical
Business or all or any significant portion of the Purchased Assets by
Purchaser at the Closing.
"PERSON" shall mean any individual, corporation, partnership, joint
venture, trust, unincorporated organization, other entity or Governmental
Body.
"PLAN" shall mean any plan, program or arrangement, whether or not
written, that is or was an "employee benefit plan," as such term is defined
in Section 3(3) of ERISA and (a) which was or is established or maintained by
Seller or any of its Affiliates, (b) to which Seller or any of its Affiliates
contributed or was obligated to contribute or to fund or provide benefits, or
(c) which provides or promises benefits to any Person who performs or who has
performed services for Seller or any of its Affiliates and because of those
services is or has been (i) a participant therein or (ii) entitled to
benefits thereunder.
"PMA" shall have the meaning set forth in Section 3.32. hereof.
"PREPAID CHARGES" shall mean all prepaid expenses, taxes, fees and
other charges relating to and incurred in the ordinary and usual course of
the Medical Business, including those identified and described on SCHEDULE
1.3 hereto.
"PURCHASED ASSETS" shall mean all right, title, benefit and
interest of Seller in and to all real, personal and mixed assets of Seller,
both tangible and intangible, used in, or necessary to, the conduct of the
Medical Business in the ordinary and usual course (other than the Excluded
Assets), including, without limitation, all right, title, benefit and
interest of Seller in and to (a) all FF&E, (b) all Patents and Trademarks,
(c) all Customer Contracts, and all rights, whether now existing or hereafter
arising, thereunder, (d) all Technology, whether fully developed or in
process, and all rights associated therewith, (e) all Confidential
Information, (f) all Causes of Action, other than counterclaims and rights of
set-off relating to Retained Liabilities or the Excluded Assets, (g) such
portions of the Books and Records as set forth in this Agreement, (h) all
Leases, and all rights, whether now existing or hereafter arising,
thereunder, including the benefit of all deposits and prepaid rental payments
given by Seller pursuant thereto, including the deposits and prepaid rental
payments identified and described on SCHEDULE 1.4 hereto, (i) all Contracts
(other than those set forth on SCHEDULE 8 hereto), and all rights of Seller,
whether now existing or hereafter arising, thereunder, including the benefit
of all deposits given by Seller pursuant thereto, including the deposits
10
identified and described on SCHEDULE 1.4 hereto, (j) all Inventory existing
on the Closing Date, (k) to the extent assignable, the full benefit of all
Authorizations, (l) Goodwill, (m) all Prepaid Charges, (n) the name "Custom
Medical Products," any derivations thereof or deviations therefrom (provided
that Seller may use the name "Custom Apparel Products") and all associated
rights, (o) the Asheville Plant, (p) all Improvements, (q) al l rights as
landlord (whether named as such therein or by assignment or otherwise) under
all leases and subleases, if any, of the Asheville Plant and the
Improvements, and any and all amendments, modifications, supplements,
renewals and extensions thereof, together with all rents, royalties, security
deposits, revenues, issues, earnings, profits, income and other benefits of
the Asheville Plant or the Improvements or any part thereof, and (r) all
other assets, tangible or intangible, real or personal, including without
limitation those reflected in Seller's unaudited balance sheet dated March
31, 1995, other than those identified as Excluded Assets. Notwithstanding
the foregoing, Purchased Assets shall not include the Excluded Assets.
"PURCHASE PRICE" shall have the meaning set forth in Section 2.3
hereof.
"PURCHASER" shall have the meaning set forth in the introductory
paragraph of this Agreement.
"QUALIFIED PLAN" shall mean a Pension Plan that satisfies, or is
intended by Seller to satisfy, the requirements for tax qualification
described in Section 401 of the Code.
"RELEASE" shall mean any emission, spill, seepage, leak, escape,
leaching, discharge, injection, pumping, pouring, emptying, dumping, disposal
or release of Hazardous Materials from any source (including, without
limitation, the CMP Facilities and properties adjacent to the CMP Facilities)
into or upon the environment, including the air, soil, improvements, surface
water, groundwater, the sewer, septic system, storm drain, or waste
treatment, storage or disposal systems at, on, above or under the CMP
Facilities.
"RETAINED LIABILITIES" shall mean (a) all liabilities that would be
reflected on a balance sheet prepared in accordance with GAAP, except as
expressly included in the Assumed Liabilities, (b) all contingent Liabilities
existing on the Closing Date, (c) all Damages and Liabilities (including,
without limitation, environmental, intellectual property infringement,
employee injury, occupational disease or disablement, worker's compensation
and product liability Damages, regulatory, labor, employment, tax and
negligence liabilities) resulting from, relating to or arising out of,
Seller's conduct on or prior to the Closing Date, whether asserted before or
after the Closing Date, (d) all Damages and Liabilities with respect to all
present or future litigation, proceedings, claims or investigations based on
Seller's conduct or conditions of the CMP Facilities occurring, or any cause
11
of action arising, on or prior to the Closing Date, (e) except as provided in
the proviso of Section 8.2(e), all Damages and Liabilities with respect to
employees, former employees or retirees of Seller arising on or prior to the
Closing Date, (f) all Damages and Liabilities resulting from the performance
by Seller of any Contract or Lease on or prior to the Closing Date,
regardless of whether Purchaser has been assigned such Lease or Contract as
part of the Purchased Assets, including, without limitation, overpayments,
deficiencies in performance or deliveries and compliance with laws or
regulations, (g) all Liabilities existing on the Closing Date other than
Assumed Liabilities, (h) all Liabilities relating to, arising out of or in
connection with the Xxxxxx Agreement, and (i) all other Liabilities related
to the Purchased Assets and the Medical Business resulting from actions,
omissions or operations on or prior to the Closing Date, whether asserted
before or after the Closing Date and whether or not disclosed to Cordis and
Purchaser pursuant to this Agreement.
"SCHEDULES" shall mean the schedules referred to and identified
herein.
"SELLER" shall have the meaning set forth in the introductory
paragraph of this Agreement.
"SUBSIDIARY" of any Person shall mean any other Person which, now
or at any time hereafter, is directly or indirectly owned 50% or more (in
terms of voting securities or other voting ownership or partnership interest)
by such first Person; PROVIDED, HOWEVER, that such other Person shall be
deemed to be a "Subsidiary" only so long as the foregoing test continues to
be met.
"SUPPLY AGREEMENT" shall have the meaning set forth in Section 5.6
hereof.
"SURVEY" means the survey for the parcel or parcels of real
property constituting the Asheville Plant, prepared by a registered land
surveyor licensed in the State of North Carolina (the "SURVEYOR"), certified
by the Surveyor to Purchaser and Purchaser's successors and assigns, and
showing (a) the location of all lot and street lines, (b) the location of
encroachments, overhangs or projections by buildings or improvements erected
on adjacent lands or on such real property, (c) means of ingress and egress
to public roads, (d) the location of all utility and other easements, rights
of way, set-back lines and other matters of record affecting such real
property, and (e) a description and the location of all existing improvements
(including parking areas).
"TAXES" shall mean any and all taxes, charges, fees, levies and
other governmental assessments and impositions of a similar kind, payable to
any Federal, state, local or foreign governmental taxing authority or agency,
including (a) income, franchise, profits, gross receipts, minimum,
alternative minimum, estimated, AD VALOREM, value added, sales, use, service,
real or personal property, capital stock, license, payroll, withholding,
disability, employment, social security,
12
workers compensation, unemployment compensation, utility, severance,
production, excise, stamp, occupation, premiums, windfall profits, transfer
and gains taxes, (b) customs duties, imposts, charges, levies or other
similar assessments of any kind, and (c) interest, penalties and additions to
tax imposed with respect thereto.
"TAX RETURN" shall mean any return, declaration, report, claim for
refund or information return or statement relating to Taxes, including any
schedule or attachment thereto, and including any amendment thereof, required
to be filed with the Internal Revenue Service or any other Governmental Body
or tax authority or agency, whether domestic or foreign, including any
consolidated, combined or unitary tax return.
"TECHNOLOGY" shall mean all technical information used in the
Medical Business (including, without limitation, invention disclosures, trade
secrets and know-how, assemblies and detail drawings, design manufacturing
and assembling techniques and methods, design information, parts lists,
databases, computer software and documentation, source code listings, mask
works, technical data, user, operation and maintenance manuals, servicing and
installation instructions relating to manufacturing processes and apperati,
design and production processes, test and inspection techniques and
procedures, material handling techniques, inspection methods and standards
used in the Medical Business), and all copyrights and all other literary
property and author rights whether or not copyrightable, and all derivative
works thereof, in written and electronic form, and any and all renewals,
reissues and extensions of copyrights for any of the foregoing, and any
copyright applications, registrations and certificates for any of the
foregoing, that may be secured under the laws now or hereafter in force and
effect in the United States of America or in any other country or countries,
and all trade secret rights arising under the common law, state or federal
law or the laws of any foreign country, and the unencumbered right to
exercise all such rights in all media and by any manner and means now known
or hereafter devised, including but not limited to the right to secure all
copyrights in Purchaser's name, throughout the world, in perpetuity, in each
case used in connection with the Medical Business or used or owned by or
licensed to Seller for its use in connection with the Medical Business, and
any and all rights to register, patent or secure protection of such, and all
rights of action and claims for damages and benefits arising from past,
present and future infringements of such copyrights and trade secret rights
together with the right to xxx for and in the name of Purchaser and to
collect the same for Purchaser's use, or the use of its successors, assigns
or other legal representatives, all throughout the world for the legal
duration thereof. Notwithstanding the foregoing, Technology shall not include
technical information included in the Excluded Assets.
"TITLE INSURANCE COMMITMENT" means an irrevocable title insurance
commitment issued by Commonwealth Land Title Insurance Company (Commitment
ID: E033349).
13
"TRADEMARKS" shall mean all words, symbols, icons, logos and other
indicia of origin adopted or listed in connection with the Medical Business
anywhere in the world, as a trademark, service xxxx or trade name, and the
goodwill of the Medical Business symbolized by such trademarks, service marks
or trade names, including all United States Federal and state and all foreign
registrations, extensions, renewals, applications for registrations of such
or rights to register the same worldwide, used in connection with the Medical
Business or used or owned by or licensed to Seller for its use in connection
with the Medical Business, all licenses or consents to use with respect
thereto, and any and all rights of enforcement with respect to the foregoing,
including all rights worldwide to xxx for the infringement or unauthorized
use thereof (whether past, present or future) and the recovery of damages or
royalties related thereto, including, without limitation, those set forth on
SCHEDULE 3.25 hereto.
"WELFARE PLAN" shall mean an "employee welfare benefit plan" as
such term is defined in Section 3(1) of ERISA.
14
The Exhibits and Schedules to the Asset Purchase Agreement have
been intentionally omitted pursuant to Item 601(b)(2) of Regulation S-K
promulgated by the Securities and Exchange Commission. Such Schedules and
Exhibits are listed on pages iv and v of the Agreement and will be provided
to the Commission supplementally upon request as required by applicable law.
