1
Exhibit 10.40
AMENDED AND RESTATED ASSETS PURCHASE AGREEMENT
AMONG
TT ACQUISITION COMPANY
(A DELAWARE CORPORATION),
TACTYL TECHNOLOGIES, INC.
(A CALIFORNIA CORPORATION)
AND
EQ CORPORATION
(A DELAWARE CORPORATION)
2
TABLE OF CONTENTS
Page
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DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
SALE AND PURCHASE OF ASSETSAND ASSUMPTION OF CERTAIN LIABILITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2.1 Sale and Purchase of Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2.2 Excluded Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.3 Assumption of Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.4 Purchase Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.5 Allocation of Purchase Price. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.6 Closing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.7 Delivery to the Acquiring Party . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.8 Delivery to Tactyl . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.9 Designee of the Acquiring Party . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.10 Further Assurances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.11 Transfer of Rights by the Shareholder . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
REPRESENTATIONS AND WARRANTIES OF TACTYL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.1 Corporate Status. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.2 Authorization. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.3 Consents and Approvals. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.4 Capitalization and Stock Ownership. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.5 Financial Statements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.6 Title to Assets and Related Matters. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.7 Real Property. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.8 Certain Personal Property. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.9 Non-Real Estate Leases. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.10 Accounts Receivable. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.11 Inventory. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.12 Liabilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.13 Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.14 Subsidiaries. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.15 Legal Proceedings and Compliance with Law. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.16 Contracts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
3.17 Insurance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
3.18 Patents and Other Intellectual Property. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
3.19 Employee Relations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
3.20 ERISA. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
3.21 Corporate Records. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
3.22 Absence of Certain Changes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
3.23 Previous Sales; Warranties. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
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3.24 Customers and Suppliers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
3.25 Finder's Fees. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
3.26 Accuracy of Information. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
3.27 Survival of Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
4.1 Corporate Status. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
4.2 Authorization. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
4.3 Consents and Approvals. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
4.4 Capitalization and Stock Ownership. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
4.5 Finder's Fees. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
4.6 Accuracy of Information. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
4.7 Survival of Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
REPRESENTATIONS AND WARRANTIES OF THE ACQUIRING PARTY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
5.1 Corporate Status. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
5.2 Authorization. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
5.3 Consents and Approvals. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
5.4 Accuracy of Information. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
5.5 Survival of Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
COVENANTS OF TACTYL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
6.1 Operation of the Business. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
6.2 Access. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
6.3 No Other Negotiations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
6.4 Maintenance of the Assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
6.5 Employees and Business Relations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
6.6 Confidentiality. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
6.7 Fulfillment of Conditions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
6.8 Disclosure of Certain Matters. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
6.9 Sensicon Transaction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
6.10 Satisfaction of Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
6.11 Consents and Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
6.12 Distributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
6.13 Powder-Free Products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
6.14 Value of Cash and Leased Equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
6.15 Safeskin License Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
COVENANTS OF THE SHAREHOLDER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
7.1 Audited Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
7.2 Supplemental Disclosure Schedule . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
7.3 Satisfaction of Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
7.4 No Other Negotiations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
7.5 Confidentiality. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
7.6 Expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
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7.7 Fulfillment of Conditions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
7.8 Disclosure of Certain Matters. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
7.9 Matters Regarding Tactyl . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
7.10 Consents and Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
7.11 Tax Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
COVENANTS OF THE ACQUIRING PARTY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
8.1 Confidentiality. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
8.2 Expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
8.3 Fulfillment of Conditions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
8.4 Disclosure of Certain Matters. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
POST-CLOSING COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
9.1 Confirmation of Closing Balance Sheet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
9.2 Corporate Name. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
9.3 Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
CONDITIONS PRECEDENT TO THE TRANSACTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
10.1 Conditions to Each Party's Obligations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
11.1 Grounds for Termination. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
11.2 Effect of Termination. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
11.3 Other Effects of Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
INDEMNIFICATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
12.1 By Tactyl and the Shareholder . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
12.2 By Acquiring Party . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
12.3 Procedure for Indemnification - Notice of Claims . . . . . . . . . . . . . . . . . . . . . . . . . . 28
12.4 Procedure for Indemnification -- Defense of Third Party Claims . . . . . . . . . . . . . . . . . . . 29
12.5 Indemnity Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
12.6 Disputed Claim Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
12.7 Compliance with Bulk Sales Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
PUBLIC ANNOUNCEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
CONTENTS OF AGREEMENT, AMENDMENT,PARTIES IN INTEREST, ASSIGNMENT, ETC. . . . . . . . . . . . . . . . . . . . . . . . 30
INTERPRETATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
NOTICES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
GOVERNING LAW AND ARBITRATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
17.1 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
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17.2 Arbitration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
AGREEMENT AS TO TACTYL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
COUNTERPARTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Exhibits
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A Definitions
B Xxxx of Sale
C Certain Assets
D Assumption Agreement
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AMENDED AND RESTATED ASSETS PURCHASE AGREEMENT
THIS AMENDED AND RESTATED ASSETS PURCHASE AGREEMENT is made as of March
____, 1997 by and among TT ACQUISITION COMPANY, a Delaware corporation (the
"Acquiring Party"), EQ CORPORATION, a Delaware corporation, which is the sole
shareholder of Tactyl ("Shareholder"), and TACTYL TECHNOLOGIES, INC., a
California corporation ("Tactyl").
Background
Tactyl owns the Purchased Assets and the Shareholder proposes to
acquire all of the outstanding shares of Tactyl pursuant to that certain
Agreement and Plan of Reorganization dated as of February 19, 1997 (the
"Reorganization Agreement") among the Shareholder, EQTT, and Tactyl.
Immediately after the closing of such acquisition, the Shareholder desires to
cause Tactyl to sell, and the Acquiring Party desires to purchase, the
Purchased Assets (as such term is defined in Section 2.1) and, as part of such
sale and purchase, the Acquiring Party is willing to assume certain obligations
and liabilities as set forth herein.
Witnesseth
NOW, THEREFORE, in consideration of the respective covenants contained
herein and intending to be legally bound hereby, the parties hereto agree as
follows:
ARTICLE I
DEFINITIONS
For convenience, certain terms used in more than one part of this
Agreement are listed in alphabetical order and defined or referred to in
Exhibit A hereto (such terms as well as any other terms defined elsewhere in
this Agreement shall be equally applicable to both the singular and plural
forms of the terms defined).
ARTICLE II
SALE AND PURCHASE OF ASSETS
AND ASSUMPTION OF CERTAIN LIABILITIES
2.1 Sale and Purchase of Assets. Subject to the terms and
conditions of this Agreement, at the Closing, Tactyl shall sell, transfer,
convey, assign and deliver to the Acquiring Party, and the Acquiring Party
shall purchase, acquire and accept from Tactyl, all the right, title and
interest of Tactyl in and to the Assets other than the Excluded Assets (such
assets being sold and purchased, the "Purchased Assets"), including, without
limitation, the following (except as such may refer or relate to the Excluded
Assets):
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(a) All interests in land, structures, improvements and
fixtures and all water lines, rights of way, uses, licenses, easements,
hereditaments, tenements and appurtenances belonging or appertaining thereto;
(b) All machinery, equipment, test equipment, tools,
vehicles, furniture, furnishings, leasehold improvements, goods, and other
tangible personal property;
(c) All prepaid items, unbilled costs and fees, and accounts,
notes and other receivables;
(d) All inventories and office and other supplies;
(e) All rights under any written or oral contract, agreement,
lease, plan, instrument, registration, license, certificate of occupancy, other
permit or approval of any nature, or other document, commitment, arrangement,
undertaking, practice or authorization;
(f) All rights under any patent, trademark, service xxxx,
trade name or copyright, whether registered or unregistered, and any
applications therefor, and the goodwill related thereto, including, without
limitation, all rights to the name "Tactyl Technologies";
(g) All designs, blueprints, technologies, methods,
formulations, data bases, trade secrets, know-how, inventions and other
intellectual property used in the Tactyl Business or under development;
(h) All computer hardware and software (including
documentation and related object and source codes);
(i) All rights or choses in action arising out of occurrences
before or after the Closing, including without limitation all rights under
express or implied warranties relating to the Assets;
(j) All information, files, records, data, plans, contracts
and recorded knowledge related to the foregoing;
(k) All customer and supplier lists; and
(l) Any other Asset not referred to in clauses (a) through
(k).
2.2 Excluded Assets. Tactyl shall not sell, transfer, convey,
assign or deliver any of the following Assets (the "Excluded Assets"):
(a) Cash and cash equivalents;
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(b) the corporate seals, articles of incorporation, minute
books, stock books, tax returns, books of account or other records having to do
with the corporate organization of Tactyl;
(c) the rights which accrue or will accrue to Tactyl under
this Agreement; and
(d) the Leased Equipment.
2.3 Assumption of Liabilities. At the Closing, the Acquiring Party
shall assume and be liable and responsible for (i) all Liabilities of the
Shareholder under Sections 6.8, 7.1, 7.5, 8.1 (provided, that (x) any reference
to "all reasonable efforts" in Section 8.1 shall mean such efforts as would be
exercisable by Safeskin Corporation, (y) the reference to "Parent" in the
penultimate line of the first paragraph of Section 8.1(d) and the first line of
the third paragraph of Section 8.1(d) shall mean the Acquiring Party or
Safeskin Corporation), and (z) the reference to "Parent" in the third line of
the third paragraph of Section 8.1(d) shall mean the Acquiring Party and
Safeskin Corporation), 8.2, 8.3 (provided, that the reference to "Parent" in
the fourth, fifth, sixth and eighth lines of Section 8.3(b) shall mean the
Acquiring Party and Safeskin Corporation), 8.4 (provided, that (aa) the
reference to "Parent" in the second line of the introductory paragraph of
Section 8.4 shall mean Safeskin Corporation and the Acquiring Party, (bb) any
reference to "Parent's past practice" or "past Parent accounting practices" in
Section 8.4 shall mean the past practice or past accounting practices of
Safeskin Corporation), (cc) the reference to "Parent" in the second line of
Section 8.4(e) shall mean Safeskin Corporation), 8.6, 8.7 (provided that any
reference to "Parent" shall mean the Acquiring Party and Safeskin Corporation),
11.1, 11.3 and 11.4 (as Indemnified Party), 11.5, 11.6 (provided, that any
reference to "commercially reasonable efforts" in Section 11.6 shall mean such
efforts as would be exercisable by Safeskin Corporation), and 11.7, and
Articles XIII, XIV, XVI, and XVII, of the Reorganization Agreement; (ii) all
Liabilities of Tactyl under the Sensicon License Agreement; (iii) all
Liabilities of Tactyl under the Safeskin License Agreement; (iv) all
Liabilities of the Shareholder and Tactyl for costs and expenses (including the
expense of any filing under the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of
1976) relating to vesting in the Acquiring Party good and marketable title to
the Purchased Assets and any requisite third party consents in connection
therewith; and (v) all other Liabilities of Tactyl, other than the Excluded
Liabilities (the Liabilities referred to in the foregoing clauses (i) through
(v) being referred to herein as the "Assumed Liabilities"). After the Closing,
the Acquiring Party will perform all of its obligations relating to the Assumed
Liabilities in accordance with the terms thereof. The Shareholder or Tactyl,
as the case may be, shall remain solely responsible for all of the Excluded
Liabilities. The term "Excluded Liabilities" shall mean (a) any Liabilities
for any federal, state or local tax of Tactyl or the Shareholder relating to
the consummation of the transactions contemplated by the Reorganization
Agreement and this Agreement, except for sales, transfer, and use taxes; (b)
all Liabilities of the Shareholder for costs and expenses (including attorneys'
fees) relating to the negotiation, execution and delivery of the Reorganization
Agreement and this Agreement, and the Shareholder's costs and expenses
(including attorneys' fees) of financing the purchase price under the
Reorganization Agreement; (c) any Liabilities (including, by way of example
only and not as a limitation, the Shareholder's obligations under Section 11.2
of the Reorganization Agreement) of the Shareholder and Tactyl under this
Agreement and the Reorganization Agreement (except for those Liabilities
described in (i) and (iv) above); (d) all Liabilities of Tactyl to its
shareholders, warrant holders and option
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holders for the Merger Consideration (as defined in the Reorganization
Agreement) due to such persons pursuant to Article 3 of the Reorganization
Agreement and such amounts as shall be due to dissenting shareholders of Tactyl
as provided in Article 3 of the Reorganization Agreement; and (e) all
Liabilities of Tactyl or the Shareholder relating to the Bank Lien including
any debt that the Bank Lien secures.
2.4 Purchase Price.Upon receipt of the instruments of sale,
conveyance, assignment, transfer of the Purchased Assets, and delivery and
being put in full possession of the Purchased Assets, and delivery of those
other documents described herein, all in accordance with this Agreement, the
Acquiring Party shall pay to Tactyl for the Purchased Assets an amount equal
to: (a) Eighteen Million Eight Hundred Thousand Dollars ($18,800,000), less (b)
the amount of cash and cash equivalents of Tactyl at the Closing (including (A)
cash in an amount equal to that cash paid by the Acquiring Party to Tactyl
under the Safeskin License Agreement prior to the Closing and (B) cash in an
amount equal to that cash paid to Tactyl prior to the Closing on account of a
sale of the Leased Equipment) as such amount shall be mutually agreed by the
Acquiring Party and Tactyl (the "Purchase Price"). As an additional contingent
portion of the Purchase Price, the Acquiring Party shall pay to Tactyl, if and
when the Acquiring Party pays any of the Contingent Payments under the
Reorganization Agreement, an amount equal to 9% of the portion of the
Contingent Payment then being paid.
2.5 Allocation of Purchase Price. The Acquiring Party, Tactyl and
the Shareholder agree that they reached the following approximate allocation of
the Purchase Price by arm's length negotiation, and that, as the actual amount
of the Purchase Price and the actual values of the Purchased Assets may change
between the date of this Agreement and the Closing, they will negotiate in good
faith to adjust such approximate allocation to reflect the appropriate
allocation as at the Closing. The Acquiring Party, Tactyl and the Shareholder
further covenant that none of them will take a position that is inconsistent
with such allocation (as adjusted at Closing) on any income tax return, before
any governmental agency charged with the collection of any income tax, in any
judicial proceeding or otherwise without the prior written consent of the other
parties to this Agreement.
Net Assets:
Accounts Receivable 775,000
Inventory 715,000
Other Current Assets 65,000
Liabilities [165,000] $ 1,390,000
Intangible Assets:
(Patents, Trademarks,
Know-How, Goodwill) $11,360,000
----------
$12,750,000
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The Acquiring Party, Tactyl and the Shareholder also agree to cooperate in
preparing all Internal Revenue Service forms and California or other state,
foreign or local tax forms required to be filed by any of them in respect of
the above allocation.
2.6 Closing. Unless this Agreement shall have been terminated and
the Transactions abandoned pursuant to Article XI, and subject to satisfaction
or waiver of the conditions to the Transactions set forth in Article X, the
Closing will be held at a mutually agreeable location, at 10:00 a.m., local
time, on or before March 14, 1997 or as promptly thereafter as practicable.
The date of the Closing shall be the "Closing Date" for purposes of this
Agreement. At the Closing, the parties shall determine whether all conditions
precedent to the completion of the Transactions have been complied with or
waived and shall deliver the various certificates and other documents required
by this Agreement.
2.7 Delivery to the Acquiring Party. At the Closing, Tactyl will
deliver to the Acquiring Party: (i) a duly executed Xxxx of Sale in the form
annexed hereto as Exhibit B; (ii) assignments of all leases described in
Section 3.6 of the Tactyl Disclosure Schedule; (iii) all documents of title
that Tactyl and the Acquiring Party shall have reasonably agreed are necessary
to transfer ownership to the Acquiring Party of the property listed in Section
3.7 of the Tactyl Disclosure Schedule; (iv) assignments of all patents,
trademarks, service marks, trade names, assumed names and copyrights, and all
applications therefor, which are set forth in Section 3.18 of the Tactyl
Disclosure Schedule; (v) executed copies of each of the consents referred to in
Section 3.3 of the Tactyl Disclosure Schedule; (vi) all documents containing or
relating to the Purchased Assets; (vii) all other previously undelivered
documents required to be delivered by Tactyl to the Acquiring Party at or prior
to the Closing in connection with the Transactions, including those
contemplated by Articles VI, VII and/or X; (viii) a Certificate of Amendment of
Articles of Incorporation changing Tactyl's name from Tactyl Technologies,
Inc.; (ix) all such other endorsements, assignments, and other documents as the
Acquiring Party shall reasonably require in connection with the consummation of
the transactions contemplated hereby; and (x) a certificate or certificates
signed by an officer of the Shareholder and an officer of Tactyl that (a) each
of the representations and warranties made by the Shareholder in this Agreement
were true and correct in all material respects at and as of the date hereof and
are true and correct in all material respects at and as of the time of the
Closing as though such representations and warranties were made again at and as
of the time of the Closing; (b) each of the representations and warranties made
by Tactyl in this Agreement were true and correct in all material respects at
and as of the date of the Effective Time and are true and correct in all
material respects at and as of the time of the Closing as though such
representations and warranties were made again at and as of the time of the
Closing (except for any changes consented to in writing by the Acquiring
Party); (c) the Shareholder or Tactyl, as applicable, has performed and
complied in all material respects with its respective obligations under this
Agreement that are to be performed or complied with by it on or prior to the
Closing; and (d) the resolutions of the respective Boards of Directors and
shareholders of Tactyl and the Shareholder approving this Agreement and the
Transactions, which shall be attached to such certificate or certificates, are
complete and correct copies of the resolutions adopted by those Boards and
shareholders and remain in full force and effect at the time of the Closing.
The documents described in this Section 2.7 shall be in form and substance
reasonably satisfactory to the Acquiring Party and counsel to the Acquiring
Party.
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2.8 Delivery to Tactyl. The Acquiring Party shall deliver to
Tactyl in accordance with Section 2.4 the Purchase Price by wire transfer to
the account designated by Tactyl. The Acquiring Party shall also deliver to
Tactyl (i) all previously undelivered documents required hereunder to be
delivered by the Acquiring Party to Tactyl at or prior to the Closing,
including those contemplated by Articles VIII and/or X; and (ii) a certificate
or certificates signed by an officer of the Acquiring Party that (a) each of
the representations and warranties made by the Acquiring Party in this
Agreement were true and correct in all material respects at and as of the date
hereof and are true and correct in all material respects at and as of the time
of the Closing as though such representations and warranties were made again at
and as of the time of the Closing; and (b) the Acquiring Party has performed
and complied in all material respects with its obligations under this Agreement
that are to be performed or complied with by it on or prior to the Closing; and
(c) the resolutions of the Board of Directors of the Acquiring Party (or
committee thereof) approving this Agreement and the Transactions, which shall
be attached to such certificate or certificates, are complete and correct
copies of the resolutions adopted by that Board and remain in full force and
effect at the time of the Closing.
2.9 Designee of the Acquiring Party. Tactyl and the Shareholder
acknowledge and agree that TT Acquisition Company may designate, by notice to
Tactyl, Safeskin (B.V.I.) Limited, a company organized under the laws of the
British Virgin Islands ("Safeskin BVI") to purchase certain of the Purchased
Assets (the "BVI Assets") and/or assume certain of the Assumed Liabilities (the
"BVI Liabilities") at the Closing; provided, that, the purchase by Safeskin BVI
of the BVI Assets or assumption by Safeskin BVI of the BVI Liabilities shall in
no way affect or diminish TT Acquisition Company's obligations with respect to
the Assumed Liabilities. If Safeskin BVI is so designated, for the purposes of
Sections 2.1, 2.3, 2.7, 2.10, and 9.2, the term "the Acquiring Party" shall be
deemed to refer to Safeskin BVI, but only with respect to the BVI Assets and
the BVI Liabilities, and to TT Acquisition Company, but only with respect to
the Purchased Assets that are not BVI Assets and the Assumed Liabilities that
are not BVI Liabilities. If Safeskin BVI is so designated, for the purposes of
all other Sections, the term "the Acquiring Party" shall be deemed to refer to
Safeskin BVI and TT Acquisition Company. If Safeskin BVI is so designated, TT
Acquisition Company shall cause Safeskin BVI to execute and deliver a signature
page to this Agreement promptly thereafter.
2.10 Further Assurances. After the Closing, Tactyl shall from time
to time, at the request of the Acquiring Party, and at the cost and expense of
the Acquiring Party, execute and deliver such other instruments of conveyance
and transfer and take such other actions as the Acquiring Party may reasonably
request, in order to more effectively consummate the Transactions and to vest
in the Acquiring Party good and marketable title to the Purchased Assets being
transferred hereunder (including, without limitation, assistance in the
collection or reduction to possession of any of such Purchased Assets).
2.11 Transfer of Rights by the Shareholder. As additional
consideration for the payment by the Acquiring Party of the Purchase Price and
as an inducement to the Acquiring Party to enter into this Agreement, subject
to the Effective Time having occurred and effective at the Closing, the
Shareholder hereby transfers and assigns to the Acquiring Party all of the
Shareholder's rights under and pursuant to the Reorganization Agreement
(including, without limitation, each of the
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Exhibits thereto) and the Agreement of Mutual Release from SmartHealth dated
February 19, 1997. Without limiting the foregoing, the Shareholder hereby
transfers and assigns to the Acquiring Party all of the Shareholder's rights
under and pursuant to Articles IV, VI, and XI of the Reorganization Agreement.
The Shareholder hereby agrees to execute all such documents and take all such
further actions, at the cost and expense of the Acquiring Party, as may be
reasonably requested by the Acquiring Party in order to carry out the purposes
of this Section.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
OF TACTYL
Tactyl hereby represents and warrants to the Acquiring Party as
follows:
3.1 Corporate Status. Tactyl is a corporation duly organized,
validly existing and in good standing under the laws under which it was
incorporated, and is qualified to do business as a foreign corporation in any
jurisdiction where it is required to be so qualified, except where the failure
to so qualify would not have a Material Adverse Effect. The Charter Documents
and bylaws of Tactyl that have been delivered to the Acquiring Party have been
duly adopted and are current, correct and complete.
3.2 Authorization. Tactyl has the requisite power and authority to
execute and deliver the Transaction Documents to which it is or will be a party
and to perform the Transactions to be performed by it. Such execution,
delivery and performance by Tactyl has been duly authorized by all necessary
corporate action. The Transaction Documents executed on or before the date
hereof constitute, and the Transaction Documents to be executed after the date
hereof will constitute, valid and binding obligations of Tactyl, enforceable
against Tactyl in accordance with their terms.
3.3 Consents and Approvals. Except for the consents specified in
Section 3.3 of the Tactyl Disclosure Schedule (the "Required Consents"),
neither the execution and delivery by Tactyl of the Transaction Documents to
which it is or will be a party, nor the performance of the Transactions to be
performed by Tactyl at or before Closing, will require any filing, consent or
approval or constitute a Default under (a) any Regulation or Court Order to
which Tactyl is subject, (b) the Charter Documents or bylaws of Tactyl, (c)
any Contract that is not a Minor Contract, Governmental Permit or other
document to which Tactyl is a party or by which the properties or other assets
of Tactyl may be subject.
3.4 Capitalization and Stock Ownership. The total authorized
capital stock of Tactyl consists of 40,000,000 shares of common stock of
Tactyl, with no par value ("Tactyl Common Stock"), 10,757,666 shares of which
are issued and outstanding on the date hereof and 12,000,000 shares of
preferred stock of Tactyl, with no par value ("Tactyl Preferred Stock"),
12,000,000 of which are issued and outstanding on the date hereof. Except as
specified in Section 3.4 of the Tactyl Disclosure Schedule, as of the date of
this Agreement there are no existing options, warrants, calls, commitments or
other rights of any character (including conversion or preemptive rights)
relating to the acquisition of any issued or unissued capital stock
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or other securities of Tactyl. As of the time of the Closing, there will be no
existing options, warrants, calls, commitments or other rights of any character
(including conversion or preemptive rights) relating to the acquisition of any
issued or unissued capital stock or other securities of Tactyl. All of the
outstanding Tactyl Shares are duly and validly authorized and issued, fully
paid and non-assessable. Section 3.4 of the Tactyl Disclosure Schedule
correctly lists the record owners of all of the Tactyl Shares and of all the
holders of options to purchase Tactyl Common Stock or Tactyl Preferred Stock.
Tactyl complied with all applicable Regulations in connection with the issuance
of all of the Tactyl Shares and all of the options to purchase Tactyl Common
Stock or Tactyl Preferred Stock.
3.5 Financial Statements. Tactyl has delivered to the Acquiring
Party complete copies of Tactyl's unaudited monthly financial statements
consisting of a balance sheet of Tactyl as of the end of each month from
December 1995 through November 1996 and the related statements of income,
retained earnings and cash flows for the periods then ended (the "Unaudited
Financial Statements"). Tactyl has delivered to the Acquiring Party correct
and complete copies of Tactyl's audited balance sheet at December 31, 1995 and
the related statements of income, retained earnings and cash flows for the
twelve months then ended, which financial statements have been audited by the
firm of Xxxxx, Nation and Xxxxx, X.X. (the "1995 Audited Financial
Statements"). The 1995 Audited Financial Statements present accurately in
conformity with GAAP applied on a consistent basis the consolidated financial
position and assets and liabilities of Tactyl as of the dates thereof and
Tactyl's consolidated results of operations and cash flows for the periods then
ended. The Shareholder has delivered to the Acquiring Party pursuant to
Section 7.1 of this Agreement a complete copy of Tactyl's 1996 Audited
Financial Statements, which present accurately in conformity with GAAP applied
on a consistent basis the consolidated financial position and assets and
liabilities of Tactyl as of the dates thereof and Tactyl's consolidated results
of operations and cash flows for the periods then ended. The balance sheet as
of August 31, 1996 is referred to herein as the "Tactyl Balance Sheet," and the
date thereof is referred to herein as the "Tactyl Balance Sheet Date."
3.6 Title to Assets and Related Matters. Tactyl has good and
marketable title to, or valid leasehold interests in, all of its Assets, free
from any Encumbrances except those specified in Section 3.6 of the Tactyl
Disclosure Schedule and except for the Bank Lien. The use of the Assets is not
subject to any Encumbrances (other than those specified in the preceding
sentence), and such use does not materially encroach on the property or rights
of anyone else. Except as specified in Section 3.6 of the Tactyl Disclosure
Schedule, all Real Property and tangible personal property of Tactyl are
suitable for the purposes for which they are used, in good working condition
and reasonable repair, free from any known defects, except such minor defects
that would not have a Material Adverse Effect.
3.7 Real Property. Section 3.7 of the Tactyl Disclosure Schedule
describes all real estate used in the operation of the Business as well as any
other real estate that is in the possession of or leased by Tactyl and the
improvements (including buildings and other structures) located on such real
estate (collectively, the "Real Property"), and lists any leases under which
any such Real Property is possessed (the "Real Estate Leases"). To the
knowledge of Tactyl or the Shareholder, Tactyl is not currently in Default
under any of the Real Estate Leases, and neither
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Tactyl nor the Shareholder is aware of any Default by any of the lessors
thereunder. Tactyl has no ownership interest in any Real Property. Section
3.7 of the Tactyl Disclosure Schedule also describes any other real estate
previously owned, leased or otherwise operated by Tactyl and the time periods
of any such ownership, lease or operation.
3.8 Certain Personal Property. Tactyl has delivered to the
Acquiring Party a complete fixed asset schedule, describing and specifying the
location of all items of tangible personal property that were included in the
Tactyl Balance Sheet. Except as specified in Section 3.8 of the Tactyl
Disclosure Schedule, since the Tactyl Balance Sheet Date, Tactyl has not
acquired any items of tangible personal property that have, in each case, a
carrying value in excess of $10,000. All of such personal property is in
operating condition, reasonable wear and tear excepted.
3.9 Non-Real Estate Leases. Section 3.9 of the Tactyl Disclosure
Schedule lists all assets and property (other than Real Property) that have
been used in the operation of the Business and that are possessed by Tactyl
under an existing lease, including all trucks, automobiles, forklifts,
machinery, equipment, furniture and computers. Section 3.9 of the Tactyl
Disclosure Schedule also lists the leases under which such assets and property
are possessed. All of such leases are referred to herein as the "Non-Real
Estate Leases." To the knowledge of Tactyl, Tactyl is not currently in Default
under any of the Non-Real Estate Leases, and Tactyl is not aware of any Default
by any of the lessors thereunder.
3.10 Accounts Receivable. Except as specified in Section 3.10 of
the Tactyl Disclosure Schedule, the accounts receivable of Tactyl are bona fide
accounts receivable created in the ordinary course of business and are good and
collectible within 60 days at the aggregate recorded amounts thereof.
3.11 Inventory. Except as specified in Section 3.11 of the Tactyl
Disclosure Schedule, all inventory of Tactyl consists of items of quality and
quantity saleable in the ordinary course of business at regular sales prices of
Tactyl in the ordinary course of its business. The inventory records for
Tactyl that have been delivered to the Acquiring Party are accurate with
respect to the data contained therein.
3.12 Liabilities. Except as specified in Section 3.12 of the Tactyl
Disclosure Schedule, Tactyl has no Liabilities, and none of the Assets of
Tactyl is subject to any Liabilities, except (a) to the extent specifically
disclosed on or provided for in the Tactyl Balance Sheet, (b) Liabilities
incurred since the Tactyl Balance Sheet Date that, individually or in the
aggregate, are not material to the Business or the Assets, (c) Liabilities
under any Contracts specifically disclosed on the Tactyl Disclosure Schedule
that were not required under GAAP to have been specifically disclosed or
reserved for on the Tactyl Balance Sheet, (d) Liabilities under this Agreement
and (e) Liabilities secured by the Bank Lien.
3.13 Taxes. Tactyl has duly filed all foreign, federal, state,
local and other tax returns that are required to be filed and that were due,
and has paid all material taxes and assessments that have become due pursuant
to such returns or pursuant to any assessment received. All taxes and other
assessments and levies that Tactyl has been required by law to withhold or to
collect have
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been duly withheld and collected and have been paid over to the proper
governmental authorities or are properly held by Tactyl for such payment.
There are no proceedings or other actions, nor is there any basis for any
proceedings or other actions, for the assessment and collection of additional
taxes of any kind for any period for which returns have or should have been
filed.
3.14 Subsidiaries. Except as specified in Section 3.14 of the
Tactyl Disclosure Schedule, Tactyl does not own, directly or indirectly, any
interest or investment (whether equity or debt) in any corporation,
partnership, business, trust, joint venture or other legal entity.
3.15 Legal Proceedings and Compliance with Law.
(a) Except as disclosed in Section 3.15 of the Tactyl
Disclosure Schedule, there is no Litigation that is pending or, to Tactyl's
knowledge, threatened against or related to Tactyl. To Tactyl's knowledge,
there has been no Default under any Regulations applicable to Tactyl, including
Regulations relating to pollution or protection of the environment, except for
any Defaults that would not have a Material Adverse Effect. There has been no
Default with respect to any Court Order applicable to Tactyl.
(b) Without limiting the generality of Section 3.15(a), and
except as set forth in Section 3.15 of the Tactyl Disclosure Schedule, there
has not been any Environmental Condition (defined below) (i) at the premises at
which the Business of Tactyl has been conducted, (ii) at any property owned,
leased or operated at any time by Tactyl or, to Tactyl's knowledge, by any
Person controlled by any Affiliate of Tactyl or any predecessor of Tactyl or
(iii) at any property at which wastes have been deposited or disposed by or at
the behest or direction of any of the foregoing, nor has Tactyl received
written notice of any such Environmental Condition. "Environmental Condition"
means any condition or circumstance, including the presence of Hazardous
Substances, whether created by any third party or otherwise, at or relating to
any such property or premises that would (i) require abatement or correction
under an Environmental Law (defined below), (ii) give rise to any civil or
criminal liability under an Environmental Law or (iii) create a public or
private nuisance. "Environmental Law" means all Regulations and Court Orders
relating to pollution or protection of the environment as well as any
principles of common law under which a party may be held liable for the release
or discharge of any materials into the environment.
(c) Tactyl has delivered to the Acquiring Party correct and
complete copies of any written reports, studies or assessments in the
possession or control of Tactyl that relate to any Environmental Condition.
(d) Except as set forth in Section 3.15 of the Tactyl
Disclosure Schedule, Tactyl has obtained and is in full compliance with all
governmental permits, licenses, registrations, certificates of occupancy,
approvals and other authorizations (the "Governmental Permits"), all of which
are listed in Section 3.15 of the Tactyl Disclosure Schedule along with their
respective expiration dates, that are required for the complete operation of
the Business of Tactyl as
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currently operated, except for such Governmental Permits, as to which the
failure to obtain or maintain full compliance would not have a Material Adverse
Effect. All of such Governmental Permits are currently valid and in full
force, and to Tactyl's or the Shareholder's knowledge, no revocation,
cancellation or withdrawal thereof has been threatened. Tactyl has filed such
timely and complete renewal applications as may be required with respect to
such Governmental Permits.
3.16 Contracts.
(a) Section 3.16 of the Tactyl Disclosure Schedule lists each
Contract of the following types to which Tactyl is a party, or by which it is
bound, except for (i) any Contract that may be terminated by Tactyl on not more
than 30 days' notice without any Liability and any Contract under which the
executory obligation of Tactyl involves an amount of less than $10,000 (such
excepted Contracts are referred to collectively as "Minor Contracts") and (ii)
any Contract evidencing the Bank Lien or loans secured thereby:
(i) Contracts with any present or former
shareholder, director, officer, employee, partner or consultant
of Tactyl or Affiliate thereof;
(ii) Contracts for the future purchase of, or
payment for, supplies or products, or for the lease of any
Asset from or the performance of services by a third party, in
excess of $25,000 in any individual case, or any Contracts for
the sale of inventory or products that involve an amount in
excess of $25,000 with respect to any one supplier or other
party;
(iii) Contracts to sell or supply products or to
perform services that involve an amount in excess of $25,000 in
any individual case;
(iv) Contracts to lease to or to operate for any
other party any Asset that involve an amount in excess of
$25,000 in any individual case;
(v) Any notes, debentures, bonds, conditional
sale agreements, equipment trust agreements, letter of credit
agreements, reimbursement agreements, loan agreements or other
Contracts for the borrowing or lending of money (including
loans to or from officers, directors, partners, shareholders or
Affiliates of Tactyl or any members of their immediate
families), agreements or arrangements for a line of credit or
for a guarantee of, or other undertaking in connection with,
the indebtedness of any other Person;
(vi) Any Contracts under which any Encumbrances
exist with respect to any Assets; and
(vii) Any other Contracts (other than Minor
Contracts and those described in any of (i) through (vi) above)
not made in the ordinary course of business.
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(b) Tactyl has not received any communication from, or given
any communication to, any other party indicating that Tactyl or such other
party, as the case may be, is in Default under any Contract where such Default
could have a Material Adverse Effect.
(c) The executory obligations of Tactyl under the Minor
Contracts do not exceed $500,000 in the aggregate.
3.17 Insurance. Section 3.17 of the Tactyl Disclosure Schedule
lists all policies or binders of insurance held by or on behalf of Tactyl or
relating to the Business or any of its Assets, specifying with respect to each
policy the insurer, the amount of the coverage, the type of insurance, the
risks insured, the expiration date, the policy number and any pending claims
thereunder. To the knowledge of Tactyl, there is no Default with respect to
any such policy or binder, nor has there been any failure to give any notice or
present any claim under any such policy or binder in a timely fashion or in the
manner or detail required by the policy or binder, except for any of the
foregoing that would not, individually or in the aggregate, have a Material
Adverse Effect. There is no notice of nonrenewal or cancellation with respect
to, or disallowance of any claim under, any such policy or binder that has been
received by Tactyl, except for any of the foregoing that would not,
individually or in the aggregate, have a Material Adverse Effect.
3.18 Patents and Other Intellectual Property.
(a) Tactyl does not currently use and has not used in the
operation of its Business (including in the development or marketing of
products and services) any patent, trademark, tradename, service xxxx,
copyright, trade secret or know-how, except for those listed in Section 3.18 of
the Tactyl Disclosure Schedule. Such items listed on the Tactyl Disclosure
Schedule are referred to herein as the "Intellectual Property." All of the
Intellectual Property, as specified in the Tactyl Disclosure Schedule, are
owned or otherwise lawfully used by Tactyl and Tactyl does not infringe upon or
unlawfully or wrongfully use any patent, trademark, tradename, service xxxx,
copyright or trade secret owned or claimed by another Person. Tactyl is not in
Default, and neither Tactyl nor the Shareholder has received any notice of any
claim of infringement or any other claim or proceeding, with respect to any
such Intellectual Property. Except as set forth in Section 3.18(a) of the
Tactyl Disclosure Schedule, no current or former employee of Tactyl and no
other Person owns or has any proprietary, financial or other interest, direct
or indirect, in whole or in part, in any of the Intellectual Property, or in
any application therefor.
(b) "Confidential Information" means those items of the
Intellectual Property that are confidential and any other confidential
information owned by Tactyl, including personnel information, technical
information, customer lists, other customer information and supplier
information. All employees and consultants of Tactyl who are involved in the
design, review, evaluation or development of products or Intellectual Property
have executed a nondisclosure and assignment of inventions agreement protecting
the confidentiality and value of the Intellectual Property and vesting in
Tactyl exclusive ownership of such Intellectual Property. To the knowledge of
Tactyl all Confidential Information that constitutes Intellectual Property is
currently valid and protectible and is not part of the public domain or
knowledge, nor to the knowledge of Tactyl, has it been used, divulged or
appropriated for the benefit of any Person other than Tactyl
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or otherwise to the detriment of Tactyl. Except as set forth in Section 3.18
of the Tactyl Disclosure Schedule, to Tactyl's knowledge, no such employee or
consultant is subject to any contractual or legal restrictions that might
interfere with its obligations to Tactyl. To Tactyl's knowledge, no employee
or consultant of Tactyl has used any Confidential Information of any other
Person in the course of his work for Tactyl.
3.19 Employee Relations. Except as specified in Section 3.19 of the
Tactyl Disclosure Schedule, Tactyl is not (a) a party to, involved in or, to
Tactyl's knowledge, threatened by, any labor dispute or unfair labor practice
charge or (b) currently negotiating any collective bargaining agreement, and
Tactyl has not experienced any work stoppage during the last three years.
Tactyl has delivered to the Acquiring Party a complete and correct list of the
names and salaries, bonus and other cash compensation of all employees
(including officers) of Tactyl.
3.20 ERISA.
(a) Section 3.20 of the Tactyl Disclosure Schedule contains
a complete list of all Benefit Plans sponsored or maintained by Tactyl or under
which Tactyl may be obligated. Tactyl has delivered to the Acquiring Party (i)
accurate and complete copies of all Benefit Plan documents and all other
material documents relating thereto, including all summary plan descriptions,
summary annual reports and insurance contracts, (ii) accurate and complete
detailed summaries of all unwritten Benefit Plans, (iii) accurate and complete
copies of the most recent financial statements and actuarial reports with
respect to all Benefit Plans for which financial statements or actuarial
reports are required or have been prepared and (iv) accurate and complete
copies of all annual reports for all Benefit Plans (for which annual reports
are required) prepared within the last three years. Each Benefit Plan
providing benefits that are funded through a policy of insurance is indicated
by the word "insured" placed by the listing of the Benefit Plan in Section 3.20
of the Tactyl Disclosure Schedule.
(b) All Benefit Plans conform (and at all times have
conformed) in all material respects to, and are being administered and operated
(and have at all time been administered and operated) in material compliance
with, the requirements of ERISA, the Code and all other applicable Regulations.
All returns, reports and disclosure statements required to be made under ERISA
and the Code with respect to all Benefit Plans have been timely filed or
delivered. There have not been any "prohibited transactions," as such term is
defined in Section 4975 of the Code or Section 406 of ERISA involving any of
the Benefit Plans, that could subject Tactyl to any material penalty or tax
imposed under the Code or ERISA.
(c) Except as is set forth in Section 3.20 of the Tactyl
Disclosure Schedule, any Benefit Plan that is intended to be qualified under
Section 401(a) of the Code and exempt from tax under Section 501(a) of the Code
has been determined by the Internal Revenue Service ("IRS") to be so qualified,
and such determination remains in effect and has not been revoked. Nothing has
occurred since the date of any such determination that is reasonably likely to
affect adversely such qualification or exemption, or result in the imposition
of excise taxes or income taxes on unrelated business income under the Code or
ERISA with respect to any Benefit Plan.
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(d) Tactyl does not have a defined benefit plan subject to
Title IV of ERISA. Tactyl has no current or contingent obligation to
contribute to any multiemployer plan (as defined in Section 3(37) of ERISA).
Tactyl has no liability with respect to any employee benefit plan (as defined
in Section 3(3) of ERISA) other than with respect to the Benefit Plans. For
purposes of this Section 3.20(d), the term "Tactyl" shall include any
corporation that is a member of any controlled group of corporations (as
defined in Section 414(b) of the Code) that includes Tactyl, any subsidiary of
Tactyl, any trade or business (whether or not incorporated) that is under
common control (as defined in Section 414(c) of the Code) with Tactyl or any
subsidiary of Tactyl, any organization (whether or not incorporated) that is a
member of an affiliated service group (as defined in Section 414(m) of the
Code) that includes Tactyl or any subsidiary of Tactyl and any other entity
required to be aggregated with Tactyl pursuant to the regulations issued under
Section 414(o) of the Code.
(e) There are no pending or, to the knowledge of Tactyl,
threatened claims by or on behalf of any Benefit Plans, or by or on behalf of
any individual participants or beneficiaries of any Benefit Plans, alleging any
breach of fiduciary duty on the part of Tactyl or any of its officers,
directors or employees under ERISA or any other applicable regulations, or
claiming benefit payments other than those made in the ordinary operation of
such plans, nor is there, to the knowledge of Tactyl, any basis for such claim.
The Benefit Plans are not the subject of any investigation, audit or action by
the IRS or the Department of Labor.
(f) Tactyl has made all required contributions under the
Benefit Plans including the payment of insurance premiums on a timely basis.
(g) With respect to any Benefit Plan that is an employee
welfare benefit plan (within the meaning of Section 3(1) of ERISA) (a "Welfare
Plan"), (i) each Welfare Plan for which contributions are claimed as deductions
under any provision of the Code is in material compliance with all applicable
requirements pertaining to such deduction, (ii) with respect to any welfare
benefit fund (within the meaning of Section 419 of the Code) related to a
Welfare Plan, there is no disqualified benefit (within the meaning of Section
4976(b) of the Code) that would result in the imposition of a tax under Section
4976(a) of the Code, (iii) any Benefit Plan that is a group health plan (within
the meaning of Section 4980B(g)(2) of the Code) materially complies, and in
each and every case has materially complied, with all of the requirements of
Section 4980B of the Code, ERISA and the applicable provisions of the Social
Security Act and (iv) all Welfare Plans may be amended or terminated at any
time on or after the Closing Date.
3.21 Corporate Records. The minute books of Tactyl contain
complete, correct and current copies of its Charter Documents and bylaws and of
all minutes of meetings, resolutions and other proceedings of its Board of
Directors and shareholders. The stock record book of Tactyl is complete,
correct and current.
3.22 Absence of Certain Changes. Since the Tactyl Balance Sheet
Date, except with respect to the merger with EQTT and the transfer to Sensicon
of the assets listed on Exhibit C or as specified in Section 3.22 of the Tactyl
Disclosure Schedule, Tactyl has conducted its Business in the ordinary course
and there has not been with respect to Tactyl:
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(a) any change in its Business or Liabilities that has had,
or is likely to have a Material Adverse Effect;
(b) any distribution or payment declared or made in respect
of its capital stock by way of dividends, purchase or redemption of shares or
otherwise;
(c) any increase in the compensation payable or to become
payable to any director, officer, employee or agent, except for merit and
seniority increases for non-officer employees made in the ordinary course of
business, nor any other change in any employment or consulting arrangement,
except as specified in Section 3.22 of the Tactyl Disclosure Schedule;
(d) any sale, assignment or transfer of Assets, or any
additions to or transactions involving any Assets, other than those made in the
ordinary course of business and other than the Bank Lien;
(e) other than in the ordinary course of business, any waiver
or release of any claim or right or cancellation of any debt held; or
(f) any payments to any Affiliate of Tactyl.
3.23 Previous Sales; Warranties. Except as set forth in Section
3.23 of the Tactyl Disclosure Schedule, all goods sold or distributed by Tactyl
were of merchantable quality, and Tactyl has not breached any express or
implied warranties in connection with the sale or distribution of such goods,
except for breaches that, individually and in the aggregate, would not have a
Material Adverse Effect. Tactyl has provided the Acquiring Party with true and
correct copies of all warranties (a) made by all Persons from whom Tactyl has
obtained any goods that have been resold or distributed by Tactyl, including
any goods that constituted parts included in other goods sold or distributed by
Tactyl and (b) made by Tactyl with respect to any goods that have been sold or
distributed by Tactyl.
3.24 Customers and Suppliers. Except as specified in Section 3.24
of the Tactyl Disclosure Schedule, Tactyl has good working relationships with
all of its customers and suppliers. Section 3.24 of the Tactyl Disclosure
Schedule lists any Contracts with customers or former customers of Tactyl that
have been terminated or canceled during the one year period prior to the date
hereof. Section 3.24 of the Tactyl Disclosure Schedule also contains a list of
(i) the names of each of the ten customers which, in the aggregate, for the
fiscal year ending December 31, 1996, and each of the three customers which, in
the aggregate for the fiscal years ending December 31, 1995 and 1994, were the
largest dollar volume customers of products sold by Tactyl for such years and
(ii) the total dollar amount of the sales for such years for all such
customers. None of such customers has given Tactyl notice terminating,
canceling or threatening to terminate or cancel any Contract or relationship
with Tactyl. Section 3.24 of the Tactyl Disclosure Schedule also contains a
list of the six suppliers of Tactyl that, in the aggregate, for the fiscal year
ending December 31, 1996, were the largest dollar volume suppliers of supplies
used by Tactyl. Except as set forth in Section 3.24 of the Tactyl Disclosure
Schedule, none of such
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suppliers has given Tactyl notice terminating, canceling or threatening to
terminate or cancel any Contract or relationship with Tactyl.
3.25 Finder's Fees. No Person retained by or on behalf of Tactyl is
or will be entitled to any commission or finder's or similar fee in connection
with the Transactions.
3.26 Accuracy of Information. No representation or warranty by
Tactyl in any Transaction Document, and no information contained therein or
otherwise delivered to Safeskin Corporation, TT Acquisition Company or Safeskin
BVI in connection with the Transactions, contains any untrue statement of a
material fact or omits to state any material fact necessary in order to make
the statements contained herein or therein not misleading. There is no fact
known to Tactyl that may materially adversely affect the Business that has not
been set forth in this Agreement or the other documents furnished to Safeskin
Corporation, TT Acquisition Company or Safeskin BVI on or prior to the date
hereof in connection with the Transactions.
3.27 Survival of Representations and Warranties. The
representations and warranties set forth in this Article III will survive the
Closing Date for a period of two years, except for the representations and
warranties set forth in Sections 3.13 and 3.15 hereof (and the representations
and warranties in Sections 3.12, 3.18 and 3.20(e) hereof, to the extent they
relate to issues addressed by Sections 3.13 and 3.15), which shall survive
through the term of the statute of limitations related thereto. Except as
expressly provided in any of the indemnification provisions contained in this
Agreement, the provisions of this Section shall not be applicable to and shall
not be deemed to modify or limit, any of the indemnification provisions
contained in this Agreement.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDER
The Shareholder hereby represents and warrants to the Acquiring Party
as follows:
4.1 Corporate Status. The Shareholder is a corporation duly
organized, validly existing and in good standing under the laws under which it
was incorporated, and is qualified to do business as a foreign corporation in
any jurisdiction where it is required to be so qualified, except where the
failure to so qualify would not have a Material Adverse Effect. The Charter
Documents and bylaws of the Shareholder that have been delivered to the
Acquiring Party have been duly adopted and are current, correct and complete.
4.2 Authorization. The Shareholder has the requisite power and
authority to execute and deliver the Transaction Documents to which it is or
will be a party and to perform the Transactions to be performed by it. Such
execution, delivery and performance by the Shareholder has been duly authorized
by all necessary corporate action. The Transaction Documents executed on or
before the date hereof constitute, and the Transaction Documents to be executed
after the date hereof will constitute, valid and binding obligations of the
Shareholder, enforceable against the Shareholder in accordance with their
terms.
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4.3 Consents and Approvals. Neither the execution and delivery by
the Shareholder of the Transaction Documents to which it is or will be a party,
nor the performance of the Transactions to be performed by the Shareholder at
or before Closing, will require any filing, consent or approval or constitute a
Default under (a) any Regulation or Court Order to which the Shareholder is
subject, (b) the Charter Documents or bylaws of the Shareholder, (c) any
Contract that is not a Minor Contract, Governmental Permit or other document to
which the Shareholder is a party or by which the properties or other assets of
the Shareholder may be subject.
4.4 Capitalization and Stock Ownership. As of the Effective Time
and as of the time of the Closing, the Shareholder will be the record and
beneficial owner of all of the outstanding shares of capital stock of Tactyl
and there will be no existing options, warrants, calls, commitments or other
rights of any character (including conversion or preemptive rights) relating to
the acquisition of any issued or unissued capital stock or other securities of
Tactyl other than the Bank Lien.
4.5 Finder's Fees. No Person retained by or on behalf of the
Shareholder is or will be entitled to any commission or finder's or similar fee
in connection with the Transactions.
4.6 Accuracy of Information. No representation or warranty by the
Shareholder in this Agreement and no information contained therein or otherwise
delivered by the Shareholder to Safeskin Corporation, TT Acquisition Company or
Safeskin BVI in connection with the Transactions, contains any untrue statement
of a material fact or omits to state any material fact necessary in order to
make the statements contained herein or therein not misleading. There is no
fact known to the Shareholder that may materially adversely affect the Business
that has not been set forth in this Agreement or the other documents furnished
to Safeskin Corporation, TT Acquisition Company or Safeskin BVI on or prior to
the date hereof in connection with the Transactions.
4.7 Survival of Representations and Warranties. The
representations and warranties set forth in this Article IV will survive the
Closing Date for a period of two years. Except as expressly provided in any of
the indemnification provisions contained in this Agreement, the provisions of
this Section shall not be applicable to and shall not be deemed to modify or
limit, any of the indemnification provisions contained in this Agreement.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE ACQUIRING PARTY
The Acquiring Party hereby represents and warrants to Tactyl as
follows:
5.1 Corporate Status. The Acquiring Party is a corporation duly
organized, validly existing and in good standing under the laws under which it
was incorporated. The Acquiring Party is qualified to do business as a foreign
corporation in any jurisdiction where it is required to be so qualified, except
where the failure to so qualify would not have a Material Adverse Effect.
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The Charter Documents and bylaws of each of the Acquiring Party have been duly
adopted and are current, correct and complete.
5.2 Authorization. The Acquiring Party has the requisite power and
authority to execute and deliver the Transaction Documents to which it is or
will be a party and to perform the Transactions to be performed by it. Such
execution, delivery and performance by the Acquiring Party has been duly
authorized by all necessary corporate action. The Transaction Documents
executed on or before the date hereof constitute, and the Transaction Documents
to be executed after the date hereof will constitute, valid and binding
obligations of the Acquiring Party, enforceable against such party in
accordance with their terms.
5.3 Consents and Approvals. Neither the execution and delivery by
the Acquiring Party of the Transaction Documents to which it is or will be a
party, nor the performance of the Transactions to be performed by the Acquiring
Party at or before Closing, will require any filing, consent or approval or
constitute a Default under (a) any Regulation or Court Order to which the
Acquiring Party is subject, (b) the Charter Documents or bylaws of the
Acquiring Party or (c) any Contract that is not a Minor Contract (with the
reference to Tactyl in the definition of Minor Contract being replaced by the
Acquiring Party), Government Permit or other document to which the Acquiring
Party is a party or by which the properties or other assets of the Acquiring
Party may be subject, other than compliance with any applicable requirements of
the Securities Exchange Act of 1934, as amended, and the Regulations
promulgated thereunder (the "Exchange Act").
5.4 Accuracy of Information. No representation or warranty by the
Acquiring Party in any Transaction Document, and no information contained
therein or otherwise delivered to Tactyl in connection with the Transactions,
contains any untrue statement of a material fact or omits to state any material
fact necessary in order to make the statements contained herein or therein not
misleading.
5.5 Survival of Representations and Warranties. The
representations and warranties set forth in this Article V will survive the
Closing Date for a period of two years.
ARTICLE VI
COVENANTS OF TACTYL
6.1 Operation of the Business. From the date hereof to the
Closing, Tactyl shall conduct Tactyl's Business solely in the ordinary course,
and shall refrain from the following actions in furtherance of and in addition
to such restriction (except as contemplated by this Agreement): amending
Tactyl's Charter Documents or bylaws; merging or consolidating with, or
acquiring all or substantially all of, or otherwise acquiring any business
operations of, any Person; issuing, repurchasing or redeeming, or committing to
do so, any shares of Tactyl's capital stock or rights to acquire same; selling
or otherwise disposing of any Assets other than in the ordinary course, other
than pledging such Assets as collateral under the Bank Lien; declaring any
dividends or paying any extraordinary bonuses, fees, commissions or any other
unusual distributions to the
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Shareholder, directors, management or other personnel; entering into any
Contract or otherwise incurring any Liability, even if in the ordinary course,
if Tactyl's executory obligation in any such individual case, or series of
related cases, exceeds $50,000, other than pursuant to the Bank Lien;
discharging or satisfying any Encumbrance or paying or satisfying any material
Liability except pursuant to the terms thereof or compromising, settling or
otherwise modifying any material claim or litigation; or making any capital
expenditure involving in any individual case, or series of related cases, more
than $100,000.
6.2 Access. Tactyl shall give the Acquiring Party and its
accountants, counsel and other representatives full access, without
unreasonably interfering with business operations, to all properties, books,
Contracts and records of Tactyl and to furnish to the Acquiring Party all such
documents, records and information as the Acquiring Party shall from time to
time reasonably request.
6.3 No Other Negotiations. Until the earlier of the Closing or the
termination of this Agreement, Tactyl shall not (a) solicit or encourage,
directly or indirectly, any inquiries, discussions or proposals for, (b)
continue, propose or enter into any negotiations or discussions looking toward
or (c) enter into any agreement or understanding providing for, any acquisition
of any capital stock of Tactyl or of any part of the Assets or the Business,
other than as contemplated or authorized hereby, nor shall Tactyl provide any
information to any Person (other than as contemplated by Section 6.2) for the
purpose of evaluating or determining whether to make or pursue any such
inquiries or proposals with respect to any such acquisition. Tactyl shall
immediately notify the Acquiring Party of any such inquiries or proposals or
requests for information for such purpose. Tactyl shall use commercially
reasonable efforts to cause its respective directors, officers, employees,
agents and other representatives to comply with the provisions of this Section
6.3.
6.4 Maintenance of the Assets. Tactyl shall continue to maintain
and service the Assets consistent with past practice. Tactyl shall not
directly or indirectly, sell or encumber all or any part of the Assets, other
than sales in the ordinary course of business and other than pledging such
Assets as collateral under the Bank Lien, or initiate or participate in any
discussions or negotiations or enter into any agreement to do any of the
foregoing.
6.5 Employees and Business Relations. Tactyl shall use
commercially reasonable efforts to keep available the services of its current
employees and agents and to maintain its relations and goodwill with its
suppliers, customers, distributors and any others having business relations
with it.
6.6 Confidentiality. Tactyl will hold, and will use commercially
reasonable efforts to cause the officers, directors, employees, accountants,
counsel, consultants, advisors and agents of each of them to hold, in
confidence, unless compelled to disclose by judicial or administrative process
or by other requirements of law, all confidential documents and information
concerning the Acquiring Party or the Acquiring Party's Affiliates furnished to
Tactyl in connection with the Transactions, except to the extent that such
information can be shown to have been (a) previously known on a nonconfidential
basis by such receiving party, (b) in the public domain through no
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fault of Tactyl or (c) later acquired by such receiving party from sources
other than the Acquiring Party or the Acquiring Party's Affiliates so long as,
to the knowledge of such receiving party, such sources are not subject to a
contractual or fiduciary duty of confidentiality with respect to such
information; provided that Tactyl may disclose such information to its
officers, directors, employees, accountants, counsel, consultants, financial
institutions in connection with the proposed Bank Lien, advisors and agents in
connection with the Transactions so long as such Persons are informed by such
disclosing party of the confidential nature of such information and are
directed by such disclosing party to treat such information confidentially. The
obligation of Tactyl to hold any such information in confidence shall be
satisfied if each such party exercises the same care with respect to such
information as it would take to preserve the confidentiality of its own similar
information. If this Agreement is terminated, Tactyl (i) will, and will use
commercially reasonable efforts to cause its respective officers, directors,
employees, accountants, counsel, consultants, advisors and agents to, destroy
or deliver to the Acquiring Party all documents and other materials, and all
copies thereof, obtained by it or on its behalf from the Acquiring Party or the
Acquiring Party's Affiliates in connection with this Agreement that are subject
to such confidence and (ii) will not use any information so obtained or
disclose or divulge such information to any other person and will keep
confidential any information so obtained; provided, however, that (after
reasonable measures have been taken to maintain confidentiality and after
giving reasonable notice to the other parties to this Agreement specifying the
information involved and the manner and extent of the proposed use or
disclosure thereof) (a) any disclosure of such information may be made by a
party hereto to the extent required by applicable laws or any judicial or
regulatory process and (b) such information may be used by such party as
evidence in or in connection with any pending or threatened litigation relating
to this Agreement or any transaction contemplated hereby. The obligations
arising under this Section 6.6 shall survive any termination or abandonment of
this Agreement.
6.7 Fulfillment of Conditions. Tactyl shall use commercially
reasonable efforts to fulfill the conditions specified in Section 10.1 to the
extent that the fulfillment of such conditions is within its control. The
foregoing obligation includes (a) the execution and delivery of the Transaction
Documents and (b) taking or refraining from such actions as may be necessary to
fulfill such conditions (including conducting the Business in such manner that
on the Closing Date the representations and warranties of Tactyl contained
herein shall be accurate as though then made, except as contemplated by the
terms hereof).
6.8 Disclosure of Certain Matters. During the period from the date
hereof through the Closing Date, Tactyl shall give the Acquiring Party prompt
written notice of any event or development that occurs that (a) had it existed
or been known on the date hereof would have been required to be disclosed under
this Agreement, (b) would cause any of the representations and warranties of
Tactyl contained herein to be inaccurate or otherwise misleading, (c) gives
Tactyl any reason to believe that any of the conditions set forth in Article X
will not be satisfied prior to the Termination Date or (d) is of a nature that
is or may be materially adverse to the operations, prospects or condition
(financial or otherwise) of Tactyl.
6.9 Sensicon Transaction. Prior to the Closing, Tactyl shall
deliver to the Acquiring Party a fully executed Assumption Agreement
substantially in the form attached hereto as Exhibit
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D evidencing, among other things, Sensicon's assumption of all liabilities
relating to Tactyl's condom business, whether existing as of the date thereof
or thereafter arising (other than Tactyl's normal operating overhead relating
to such assets prior to the Effective Time).
6.10 Satisfaction of Liabilities. Prior to and after the Closing,
Tactyl will perform all of its obligations, contractual or otherwise, and
discharge all of the Liabilities of Tactyl that are not Assumed Liabilities in
accordance with the terms thereof including, without limitation, the discharge
and release at or prior to the Closing of any Bank Lien securing any Purchased
Assets.
6.11 Consents and Approvals. Prior to the Closing, Tactyl shall
obtain all third party consents and approvals necessary or proper to consummate
the Transactions.
6.12 Distributions. From the Effective Time, Tactyl shall not,
without the knowledge and consent of the Acquiring Party, declare any dividends
nor pay out any extraordinary bonuses, fees, commissions or any other unusual
distributions to its shareholders, directors, management or other personnel,
except that Tactyl may pay up to $50,000 in bonuses.
6.13 Powder-Free Products. Tactyl shall not enter into any
continuing obligation to supply powder-free products to any person other than
SmartHealth (other than the obligation to provide product upgrades to certain
distributors, including Xxxxxxx & Xxxxxx and Xxxxxxxxxx X.X.), and shall fully
disclose to the Acquiring Party the arrangement between SmartHealth and Tactyl
with respect to all products and with respect to supply commitments ongoing
after the Closing Date.
6.14 Value of Cash and Leased Equipment. Prior to the Closing,
Tactyl, the Shareholder and the Acquiring Party shall agree upon the value of
Tactyl's cash and cash equivalents and the value of the Leased Equipment, each
as of the time of the Closing.
6.15 Safeskin License Agreement. Prior to the Closing, Tactyl shall
enter into the Safeskin License Agreement.
ARTICLE VII
COVENANTS OF THE SHAREHOLDER
7.1 Audited Financial Statements. The Shareholder shall,
immediately after its receipt thereof, deliver to the Acquiring Party complete
copies of Tactyl's audited balance sheet as at December 31, 1996 and the
related statements of income, retained earnings and cash flows for the twelve
months then ended, which financial statements shall have been audited by the
firm of Nation Xxxxx Hermes Diamond, P.C., whose opinion with respect to such
financial statements shall be unqualified (the "1996 Audited Financial
Statements"). The Shareholder shall exercise all reasonable efforts, short of
litigation, to cause Tactyl to deliver to it the 1996 Audited Financial
Statements so that it can timely deliver them to the Acquiring Party.
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7.2 Supplemental Disclosure Schedule. The Shareholder shall,
immediately after its receipt thereof, deliver to the Acquiring Party the
Supplemental Disclosure Schedule. The Shareholder shall exercise all
reasonable efforts, short of litigation, to cause Tactyl to deliver to it the
Supplemental Disclosure Schedule so that it can timely deliver it to the
Acquiring Party.
7.3 Satisfaction of Liabilities. Prior to and after the Closing,
the Shareholder will perform all of its obligations, contractual or otherwise,
and discharge all of the Liabilities of the Shareholder that are not Assumed
Liabilities in accordance with the terms thereof.
7.4 No Other Negotiations. Until the earlier of the Closing or the
termination of this Agreement, the Shareholder shall not (a) solicit or
encourage, directly or indirectly, any inquiries, discussions or proposals for,
(b) continue, propose or enter into any negotiations or discussions looking
toward or (c) enter into any agreement or understanding providing for, any
acquisition of any capital stock of Tactyl or of any part of the Assets or the
Business, other than as contemplated or authorized hereby, nor shall the
Shareholder provide any information to any Person for the purpose of evaluating
or determining whether to make or pursue any such inquiries or proposals with
respect to any such acquisition. The Shareholder shall immediately notify the
Acquiring Party of any such inquiries or proposals or requests for information
for such purpose. The Shareholder shall use commercially reasonable efforts to
cause its directors, officers, employees, agents and other representatives to
comply with the provisions of this Section 7.4.
7.5 Confidentiality. The Shareholder will hold, and will use
commercially reasonable efforts to cause the officers, directors, employees,
accountants, counsel, consultants, advisors and agents of each of them to hold,
in confidence, unless compelled to disclose by judicial or administrative
process or by other requirements of law, all confidential documents and
information concerning the Acquiring Party, the Acquiring Party's Affiliates or
Tactyl furnished to the Shareholder in connection with the Transactions, except
to the extent that such information can be shown to have been (a) previously
known on a nonconfidential basis by such receiving party, (b) in the public
domain through no fault of the Shareholder or (c) later acquired by such
receiving party from sources other than the Acquiring Party, the Acquiring
Party's Affiliates or Tactyl so long as, to the knowledge of such receiving
party, such sources are not subject to a contractual or fiduciary duty of
confidentiality with respect to such information; provided that the Shareholder
may disclose such information to its officers, directors, employees,
accountants, counsel, consultants, financial institutions in connection with
the proposed Bank Lien, advisors and agents in connection with the Transactions
so long as such Persons are informed by such disclosing party of the
confidential nature of such information and are directed by such disclosing
party to treat such information confidentially. The obligation of the
Shareholder to hold any such information in confidence shall be satisfied if
each such party exercises the same care with respect to such information as it
would take to preserve the confidentiality of its own similar information. If
this Agreement is terminated, the Shareholder (i) will, and will use
commercially reasonable efforts to cause its respective officers, directors,
employees, accountants, counsel, consultants, advisors and agents to, destroy
or deliver to the Acquiring Party all documents and other materials, and all
copies thereof, obtained by it or on its behalf from the Acquiring Party, the
Acquiring Party's Affiliates or Tactyl in connection with this Agreement that
are subject to such confidence and (ii) will not use any information so
obtained or disclose or divulge such
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information to any other person and will keep confidential any information so
obtained; provided, however, that (after reasonable measures have been taken to
maintain confidentiality and after giving reasonable notice to the other
parties to this Agreement specifying the information involved and the manner
and extent of the proposed use or disclosure thereof) (a) any disclosure of
such information may be made by a party hereto to the extent required by
applicable laws or any judicial or regulatory process and (b) such information
may be used by such party as evidence in or in connection with any pending or
threatened litigation relating to this Agreement or any transaction
contemplated hereby. The obligations arising under this Section 7.5 shall
survive any termination or abandonment of this Agreement.
7.6 Expenses. The Shareholder shall pay all of the legal,
accounting and other costs and expenses incurred by it relating to the
negotiation, execution and delivery of the Reorganization Agreement and this
Agreement, and the Shareholder's legal, accounting and other costs and expenses
of financing the purchase price under the Reorganization Agreement.
7.7 Fulfillment of Conditions. The Shareholder shall use
commercially reasonable efforts to fulfill the conditions specified in Section
10.1 to the extent that the fulfillment of such conditions is within its
control. The foregoing obligation includes (a) the execution and delivery of
the Transaction Documents and (b) taking or refraining from such actions as may
be necessary to fulfill such conditions (including conducting the business of
the Shareholder in such manner that on the Closing Date the representations and
warranties of the Shareholder contained herein shall be accurate as though then
made, except as contemplated by the terms hereof).
7.8 Disclosure of Certain Matters. During the period from the date
hereof through the Closing Date, the Shareholder shall give the Acquiring Party
prompt written notice of any event or development that occurs, which is known
to it, that (a) had it existed or been known on the date hereof would have been
required to be disclosed under this Agreement, (b) would cause any of the
representations and warranties of the Shareholder or Tactyl contained herein to
be inaccurate or otherwise misleading, (c) gives the Shareholder any reason to
believe that any of the conditions set forth in Article X will not be satisfied
prior to the Termination Date or (d) is of a nature that is or may be
materially adverse to the operations, prospects or condition (financial or
otherwise) of the Shareholder or Tactyl.
7.9 Matters Regarding Tactyl. The Shareholder has not taken and
will not take any action that has caused or resulted in or could reasonably be
expected to cause or result in the breach or failure to be true and correct, in
any material respect, of any of the representations, warranties and/or
covenants of Tactyl set forth in this Agreement.
7.10 Consents and Approvals. Prior to the Closing, the Shareholder
shall obtain all third party consents and approvals necessary or proper to
consummate the Transactions.
7.11 Tax Certificate. Prior to the Closing, the Shareholder shall
deliver to the Acquiring Party, with respect to Tactyl, a Certificate of
Release from the State Board of Equalization and a tax status certificate from
the Franchise Tax Board, each dated within reasonable proximity to the Closing
Date.
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ARTICLE VIII
COVENANTS OF THE ACQUIRING PARTY
8.1 Confidentiality. Until the Closing, the Acquiring Party will
hold, and will use commercially reasonable efforts to cause each of its
officers, directors, employees, accountants, counsel, consultants, advisors,
agents, and Safeskin Corporation to hold, in confidence, unless compelled to
disclose by judicial or administrative process or by other requirements of law,
all confidential documents and information concerning Tactyl furnished to the
Acquiring Party or Safeskin Corporation in connection with the Transactions,
except to the extent that such information can be shown to have been (a)
previously known on a nonconfidential basis by an Acquiring Party or Safeskin
Corporation, (b) in the public domain through no fault of an Acquiring Party or
Safeskin Corporation, or (c) later acquired by an Acquiring Party or Safeskin
Corporation from sources other than Tactyl so long as, to the knowledge of an
Acquiring Party or Safeskin Corporation, such sources are not subject to a
contractual or fiduciary duty of confidentiality with respect to such
information; provided that an Acquiring Party or Safeskin Corporation may
disclose such information to its officers, directors, employees, accountants,
counsel, consultants, advisors and agents in connection with the Transactions
so long as such Persons are informed by such Acquiring Party or Safeskin
Corporation of the confidential nature of such information and are directed by
such Acquiring Party or Safeskin Corporation to treat such information
confidentially. The obligation of the Acquiring Party to hold any such
information in confidence shall be satisfied if it exercises the same care with
respect to such information as it would take to preserve the confidentiality of
its own similar information. If this Agreement is terminated, the Acquiring
Party (i) will, and will use commercially reasonable efforts to cause the other
Acquiring Party, Safeskin Corporation and the officers, directors, employees,
accountants, counsel, consultants, advisors and agents of each of them to,
destroy or deliver to Tactyl all documents and other materials, and all copies
thereof, obtained by any either of them or on its behalf from Tactyl in
connection with this Agreement that are subject to such confidence and (ii)
will not use any information so obtained or disclose or divulge such
information to any other person and will keep confidential any information so
obtained; provided, however, that (after reasonable measures have been taken to
maintain confidentiality and after giving reasonable notice to the other
parties to this Agreement specifying the information involved and the manner
and extent of the proposed use or disclosure thereof) (a) any disclosure of
such information may be made by a party hereto to the extent required by
applicable laws or any judicial or regulatory process and (b) such information
may be used by such party as evidence in or in connection with any pending or
threatened litigation relating to this Agreement or any transaction
contemplated hereby. The obligations arising under this Section 8.1 shall
survive any termination or abandonment of this Agreement..
8.2 Expenses. The Acquiring Party shall pay all of the legal,
accounting and other expenses incurred by it in connection with the
negotiation, documentation and closing of the Transactions.
8.3 Fulfillment of Conditions. From the date hereof to the
Closing, the Acquiring Party shall use commercially reasonable efforts to
fulfill the conditions specified in Section 10.1 to the
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extent that the fulfillment of such conditions is within its control. The
foregoing obligation includes (a) the execution and delivery of the Transaction
Documents and (b) taking or refraining from such actions as may be necessary to
fulfill such conditions (including conducting the business of each of the
Acquiring Party in such manner that on the Closing Date the representations and
warranties of the Acquiring Party contained herein shall be accurate as though
then made).
8.4 Disclosure of Certain Matters. The Acquiring Party shall
provide to the Shareholder as soon as practicable after the date hereof (i) a
list of employees of Tactyl that it desires to hire as at the Closing and (ii)
a list of all of the required third party approvals of which it has knowledge
in connection with the Tactyl Contracts. During the period from the date
hereof through the Closing Date, the Acquiring Party shall give the Shareholder
prompt written notice of any event or development that occurs that (a) had it
existed or been known on the date hereof would have been required to be
disclosed under this Agreement, (b) would cause any of the representations and
warranties of the Acquiring Party contained herein to be inaccurate or
otherwise misleading, (c) gives the Acquiring Party any reason to believe that
any of the conditions set forth in Article X will not be satisfied prior to the
Termination Date or (d) is of a nature that is or may be materially adverse to
the operations, prospects or condition (financial or otherwise) of the
Acquiring Party.
8.5 Employment of Tactyl's Employees. Effective as of the Closing
Date, the Acquiring Party shall offer employment to those employees who then
are employed by Tactyl in the operation of the Business (except for Xxxx
Xxxxxxxxxxxx, Xxxxx Xxxxxxx, Xxxx Xxxxx, Xxxxxxx Xxxxxxx and Xxxxxxxx Xxxx),
the names of which employees will be confirmed in writing by Tactyl prior to
Closing, at wage or salary levels, as applicable, and with employee benefits
that are comparable to those wages, salaries and benefits of those employees at
Tactyl as of the date of this Agreement, provided, that such employees shall
not receive stock options or rights thereto.
ARTICLE IX
POST-CLOSING COVENANTS
9.1 Confirmation of Closing Balance Sheet. Tactyl and the
Shareholder shall provide assistance to the Acquiring Party, and Tactyl shall
allow the Acquiring Party to have access to the books and records of Tactyl,
during the 90 day period following the Closing Date for the purpose of
confirming Tactyl's balance sheet as at the Closing.
9.2 Corporate Name. In furtherance of the purchase by the
Acquiring Party of the corporate name "Tactyl Technologies", on or before the
first business day after the Closing Date, Tactyl shall, and the Shareholder
shall cause Tactyl to, amend its Articles of Incorporation to change its name
from "Tactyl Technologies, Inc.", and Tactyl and the Shareholder covenant that
Tactyl's new name will not be similar to "Tactyl Technologies, Inc." or be such
as to likely cause confusion to the public. Tactyl and the Shareholder further
covenant that neither of them shall, at any time, use any name that is similar
to "Tactyl Technologies, Inc." or that will likely cause confusion with that
name to the public.
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9.3 Confidentiality. Tactyl and the Shareholder agree that the
technologies, methods, formulations, designs, blueprints, formulations, data
bases, know-how, inventions, lists, data, business records and other trade
secrets or confidential information comprising part of the Purchased Assets are
confidential and that on the Closing Date all of such information will be the
exclusive property of the Acquiring Party and will constitute trade secrets or
confidential information owned by the Acquiring Party. Accordingly, neither
Tactyl nor the Shareholder will disclose to any third party, or use, any of
such information without the prior express written consent of the Acquiring
Party, which may be withheld in the Acquiring Party's sole and absolute
discretion.
ARTICLE X
CONDITIONS PRECEDENT TO THE TRANSACTIONS
10.1 Conditions to Each Party's Obligations. The respective
obligations of each party to consummate the Transactions shall be subject to
the satisfaction or waiver, at or prior to the Closing, of each of the
following conditions:
(a) Merger. The merger between Tactyl and EQTT shall be
effective, and the Shareholder shall not have waived in any respect any of the
conditions precedent to such merger specified in Article IX of the
Reorganization Agreement.
(b) No Governmental Order or Regulation. There shall not be
in effect any order, decree or injunction (whether preliminary, final or
appealable) of a United States federal or state court of competent
jurisdiction, and no Regulation shall have been enacted or promulgated by any
governmental authority or agency, that prohibits consummation of the
Transactions.
(c) Xxxx-Xxxxx-Xxxxxx. The waiting period required under the
Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976 shall have terminated for
all purposes.
ARTICLE XI
TERMINATION
11.1 Grounds for Termination. This Agreement may be terminated at
any time prior to the Closing Date:
(a) by mutual written consent of the Acquiring Party, Tactyl,
and the Shareholder;
(b) by any of the Acquiring Party, Tactyl or the Shareholder,
upon notice to the others, if the Effective Time under the Reorganization
Agreement has not occurred by April 30, 1997 (such date, as it may be extended
from time to time by the written agreement of the Acquiring Party, Tactyl and
the Shareholder, is referred to herein as the "Termination Date");
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provided, however, that the right to terminate this Agreement under this
paragraph (b) of Section 11.1 shall not be available to any party that has
breached in any material respect any of its covenants, representations or
warranties in this Agreement; or
(c) by the Acquiring Party or, if and only if the Shareholder
has exercised its right of termination under Section 10.1(f) of the
Reorganization Agreement, by the Shareholder, immediately upon its notice of
termination, if the merger of EQTT into Tactyl, the Reorganization Agreement,
and the other Transactions under the Reorganization Agreement are not approved
and adopted by the affirmative vote of at least sixty-five percent (65%) of the
holders of Tactyl Shares at the Tactyl Shareholder Meeting (as defined in the
Reorganization Agreement).
11.2 Effect of Termination. If this Agreement is terminated
pursuant to Section 11.1, the agreements contained in Sections 6.6, 7.5 and 8.1
shall survive the termination hereof.
11.3 Other Effects of Termination. In the event this Agreement is
terminated pursuant to Section 11.1(a), (b), or (c), neither Tactyl nor the
Shareholder shall have any liability (of any nature whatsoever) to the
Acquiring Party, or any of their Affiliates or assignees, unless the Acquiring
Party terminates this Agreement due to the fraudulent acts or willful
misconduct of Tactyl or the Shareholder. In the event this agreement is
terminated and the merger is not consummated pursuant to Section 11.1(a), (b)
or (c), the Acquiring Party shall have no liability (of any nature whatsoever)
to Tactyl or the Shareholder, or any of their Affiliates or assignees, unless
Tactyl or the Shareholder terminates this Agreement due to the fraudulent acts
or willful misconduct of the Acquiring Party.
ARTICLE XII
INDEMNIFICATION
12.1 By Tactyl and the Shareholder.
(a) Subject to Section 12.5, Tactyl shall reimburse and
indemnify and hold the Acquiring Party and Safeskin Corporation and their
respective directors, officers, representatives, employees, successors and
assigns harmless against any damage, loss, liability, deficiency, diminution in
value, action, suit, claim, proceeding, investigation, audit, demand,
assessment, fine, judgment, cost and other expense (including reasonable
accounting and legal expenses) ("Loss") arising out of or in connection with
(i) any misrepresentation or breach of warranty by Tactyl under this
Agreement, other than a misrepresentation or breach of warranty relating to
events arising or occuring prior to or at the Effective Time or (ii) any
nonfulfillment of any covenant or agreement by Tactyl under this Agreement.
(b) Subject to Section 12.5, Tactyl and the Shareholder shall
jointly and severally reimburse and indemnify and hold the Acquiring Party and
Safeskin Corporation and their respective directors, officers, representatives,
employees, successors and assigns harmless against any damage, loss, liability,
deficiency, diminution in value, action, suit, claim, proceeding,
investigation, audit, demand, assessment, fine, judgment, cost and other
expense (including
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reasonable accounting and legal expenses) ("Loss") arising out of or in
connection with (i) any misrepresentation, breach of warranty or nonfulfillment
of any covenant or agreement by the Shareholder under this Agreement, (ii) any
tax claim asserted against the Acquiring Party or Safeskin Corporation or their
respective directors, officers, representatives, employees, successors and
assigns with respect to any taxes of Tactyl relating to the liquidation and
dissolution of Tactyl or the transfer of any of Tactyl's property or assets to
any other person, firm or corporation, or (iii) any Excluded Liability.
Nothing herein shall in any way affect the Acquiring Party's right to seek
indemnification from the Indemnifying Shareholders under the Reorganization
Agreement with respect to any Loss.
12.2 By Acquiring Party. The Acquiring Party shall reimburse and
indemnify and hold the Shareholder and Tactyl and their respective directors,
officers, representatives, employees, successors and assigns harmless against
any Loss arising out of or in connection with any Assumed Liability.
12.3 Procedure for Indemnification - Notice of Claims. If an
indemnified party ("Indemnified Party") becomes aware of facts or circumstances
establishing a claim ("Claim") that an Indemnified Party has experienced or
incurred any Loss or may experience or incur any Loss which will give rise to a
right of set-off or indemnification under this Section 12, then such
Indemnified Party shall give written notice to the indemnifying party
("Indemnifying Party") of such Claim ("Indemnification Notice"). The
Indemnification Notice shall be provided as soon as reasonably practicable but
in no event more than thirty (30) days after the Indemnified Party has received
written notice or actual knowledge of such facts or circumstances (provide that
failure to give an Indemnification Notice shall not limit the Indemnifying
Party's indemnification obligation hereunder except to the extent that the
delay in giving, or failure to give, the Indemnification Notice materially
adversely affects the Indemnifying Party's ability to defend against a Claim).
To the extent reasonably practicable, the Indemnification Notice will describe
the nature, basis and amount of the Claim or set-off and include any relevant
supporting documentation. If the parties are unable to agree on whether the
Claim or set-off described in the Indemnification Notice is proper (a
"Permitted Indemnification Claim") within thirty (30) business days after the
date the Indemnifying Party received the Indemnification Notice, the disputed
issues shall be settled by arbitration in accordance with Section 17.2 below.
12.4 Procedure for Indemnification -- Defense of Third Party Claims.
(a) The Indemnified Party against whom a third party claim
("Third Party Claim") is made or brought shall give the Indemnifying Party an
opportunity to defend such Third Party Claim with counsel selected by the
Indemnifying Party and reasonably satisfactory to the Indemnified Party.
Notwithstanding the above, the Indemnified Party at all times shall have the
right to participate fully in the defense or settlement at its own expense.
Further, notwithstanding the above, if in the reasonable opinion of the
Indemnified Party, any such Third Party Claim involves an issue or matter that
could have a Material Adverse Effect on the business, operations, properties,
assets or prospects of the Indemnified Party, the Indemnified Party shall not
be obligated to give the Indemnifying Party the opportunity to defend the Third
Party Claim and shall
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have the right to control the defense or settlement of any such claim if it
pays all legal and related expenses, and any judgment or settlement shall be
included as part of the indemnification obligations of the Indemnifying Party
under this Agreement. If the Indemnified Party should elect to exercise such
right, the Indemnifying Party at all times shall have the right to participate
in, but not control, the defense or settlement of such Third Party Claim at its
own expense.
(b) Failure of an Indemnifying Party to give the Indemnified
Party written notice of its election to defend such Third Party Claim within
thirty (30) days after receipt of notice shall be deemed a wavier of its right
to defend such Third Party Claim. In that event, the Indemnified Party against
whom such Third Party Claim is made shall have the right, but not the
obligation, to undertake to defend and to compromise or settle the Third Party
Claim.
(c) The party that undertakes the defense shall periodically
apprise the other party of the progress of such defense. If the Indemnifying
Party undertakes the defense of a Third Party Claim, it shall not consent to
the entry of any judgment or enter into any settlement (except with the written
consent of the Indemnified Party, which consent shall not be unreasonably
withheld) which does not include as an unconditional term thereof, the giving
by the claimant to the Indemnified Party against whom such third Party Claim is
made a release from all liability in respect of such Third Party Claim (which
release may exclude only any obligations incurred in connection with any such
settlement). The Indemnified Party shall make available, at the Indemnifying
Party's expense, all information and assistance that the Indemnifying Party
reasonably may request.
12.5 Indemnity Payments. Any payments made (or amounts withheld)
under this Article XII shall be net of related tax effects and net of benefits
received by the Indemnified Party on account of insurance in respect of such
Indemnification Claims. The Acquiring Party shall use commercially reasonable
efforts to pursue recovery of any Loss covered or potentially covered by the
past or present insurance policies of the Acquiring Party.
12.6 Disputed Claim Payments. If any disputed issues ultimately are
resolved by an arbitrator pursuant to Section 17.2, and if the arbitrator's
determination of the disputed issues results in all or any portion of a Claim
properly being subject to set-off or indemnification pursuant to this Article
XI, (i) such Claim or portion thereof shall be final and binding upon the
Indemnifying Party and shall constitute a Permitted Indemnification Claim, and
(ii) the Indemnifying Party shall pay to the Indemnified Party the entire
amount of any Loss associated with any Permitted Indemnification Claim within
ten (10) days after such Claim is determined to be a Permitted Indemnification
Claim pursuant hereto.
12.7 Compliance with Bulk Sales Laws. The Acquiring Party, Tactyl
and the Shareholder hereby waive compliance by the Acquiring Party with the
bulk sales law of the State of California (Article 6 of the California Uniform
Commercial Code) and any other similar laws in any applicable jurisdiction in
respect of the transactions contemplated by this Agreement.
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ARTICLE XIII
PUBLIC ANNOUNCEMENTS
The Acquiring Party, the Shareholder and Tactyl will consult with each
other before issuing any press release or making any public statement with
respect to this Agreement and the Transactions and, except as may be required
by applicable law or stock exchange regulations, will not issue any such press
release or make any such public statement prior to receiving the written
approval of the other in advance of such press release or announcement.
ARTICLE XIV
CONTENTS OF AGREEMENT, AMENDMENT,
PARTIES IN INTEREST, ASSIGNMENT, ETC.
This Agreement sets forth the entire understanding of the parties
hereto with respect to the subject matter hereof, and supersedes that certain
Assets Purchase Agreement between Safeskin Corporation, the Shareholder and
Tactyl dated February 19, 1997. This Agreement may be amended, modified or
supplemented only by a written instrument duly executed by each of the parties
hereto. This Agreement shall be binding upon and inure to the benefit of and
be enforceable by the respective heirs, legatees, successors and permitted
assigns of the parties hereto. Except as permitted pursuant to Section 2.9 or
pursuant to the Bank Lien, no party may assign or delegate this Agreement or
any right, benefit or obligation hereunder at any time without the prior
written consent of the other parties hereto. Any term or provision of this
Agreement may be waived at any time by the party entitled to the benefit
thereof only by a written instrument duly executed by such party. The parties
hereto shall execute and deliver any and all documents and take any and all
other actions that may be deemed reasonably necessary by their respective
counsel to complete the Transactions.
ARTICLE XV
INTERPRETATION
Unless the context of this Agreement clearly requires otherwise, (a)
references to the plural include the singular, the singular the plural, the
part the whole, (b) "or" has the inclusive meaning frequently identified with
the phrase "and/or" and (c) "including" has the inclusive meaning frequently
identified with the phrase "but not limited to." The section and other
headings contained in this Agreement are for reference purposes only and shall
not control or affect the construction of this Agreement or the interpretation
thereof in any respect. Article, section, subsection, schedule and exhibit
references are to this Agreement unless otherwise specified. Each accounting
term used herein that is not specifically defined herein shall have the meaning
given to it under GAAP.
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ARTICLE XVI
NOTICES
All notices that are required or permitted hereunder shall be in
writing and shall be sufficient if personally delivered or sent by mail,
facsimile message or Federal Express or other delivery service. Any notices
shall be deemed given upon the earlier of the date when received at, or the
third day after the date when sent by registered or certified mail or the day
after the date when sent by Federal Express to the address or fax number set
forth below, unless such address or fax number is changed by notice to the
other party hereto:
If to THE ACQUIRING PARTY:
TT ACQUISITION COMPANY
c/o Safeskin Corporation
00000 Xxxx Xxxxx Xxxxx
Xxx Xxxxx, XX 00000
Attention: General Counsel
Tel. No. (000) 000-0000
Fax. No. (000) 000-0000
with a required copy to:
Xxxxxx, Xxxxx & Bockius LLP
0000 Xxxxx Xxxxxx
Xxxxxxxxx Xxxxx
Xxxxxxxxxxxx, XX 00000-0000
Attention: Xxxxxx X. Xxxxxxx, Esq.
Tel. No. (000) 000-0000
Fax. No. (000) 000-0000
If to TACTYL or the SHAREHOLDER:
Tactyl Technologies, Inc.
c/o EQ Corporation
(See Below)
-----------------------------
Attention:
Tel. No.
Fax. Xx.
-00-
00
XX Xxxxxxxxxxx
000 Xxxxxx Xxxx
Xxxxxx, XX 00000
Attention: Xxxx Xxxxxx, President
Tel. No. (000) 000-0000
Fax. No. (000) 000-0000
with a required copy to:
The Stamford Capital Group, Inc.
0000 Xxxx Xxxxxx
0xx Xxxxx
Xxxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxx
Tel. No. (000) 000-0000
Fax. No. (000) 000-0000
ARTICLE XVII
GOVERNING LAW AND ARBITRATION
17.1 Governing Law. This Agreement shall be construed and
interpreted in accordance with the laws of the State of California, without
regard to its provisions concerning conflict of laws.
17.2 Arbitration.
(a) Any dispute, controversy or claim arising out of the
terms of this Agreement or the breach hereof, including, without limitation,
interpretation, performance or termination, or any claim against any of the
officers or directors of any party hereto, shall be finally resolved by
arbitration as set forth in Section 17.2(b).
(b) Arbitration shall be conducted by the American
Arbitration Association, which shall administer the arbitration under its
commercial rules. Arbitration under this Section shall be initiated by a
written demand for arbitration specifying the controversy or claim on which
arbitration is sought, as well as the relief requested. Service of the
arbitration demand shall be effective if made pursuant to the notification
provisions contained in Article XVI of this Agreement. Each of Tactyl and the
Shareholder, collectively, and the Acquiring Party shall appoint one arbitrator
within 15 business days after receipt by the respondent of the demand to
arbitrate. The two arbitrators appointed by the parties shall, within 15
business days after their appointment, appoint a third, presiding arbitrator,
who shall not be affiliated with either of the arbitrators appointed by the
parties or the parties themselves. The two arbitrators shall endeavor to
appoint a third arbitrator with sufficient technical expertise and experience
to understand, evaluate, and decide the issue in dispute, but the selection of
such third arbitrator shall be in any event final and binding upon all parties.
If either party fails to nominate an arbitrator, or the two
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arbitrators appointed by the parties are unable to appoint a presiding
arbitrator, within the relevant stated period, the presiding arbitrator shall
be appointed by the American Arbitration Association in accordance with its
rules. The arbitration, including the rendering of the award, shall take place
in San Diego, California, and shall be the exclusive forum for resolving such
dispute, controversy or claim. For the purposes of this arbitration, this
Agreement shall be governed by the governing law described in Section 17.1 and
the arbitrators shall apply such governing law to any dispute, controversy or
claim arising out of the terms of this Agreement or the breach thereof. This
arbitration agreement is intended by the parties to be self-executing. The
arbitrators shall have sole jurisdiction to determine whether (i) a claim is
subject to arbitration, (ii) the arbitration may proceed even if one of the
parties refuses to attend or participate, and (iii) an award against that party
may be ordered pursuant to default or otherwise by the arbitrators. The
parties agree that they will arbitrate all claims agreed to be arbitrated
herein regardless of the existence of any related dispute, action, or special
proceeding between any or all of the parties hereto and/or any third party.
The arbitrators shall conduct the arbitration with all reasonable dispatch. In
the event the parties have submitted to arbitration a Claim under Section 12.3
for an anticipated Loss, not yet incurred, then the arbitrators may, in their
sole discretion, postpone resolution of the Claim until the time they
determine, in their sole discretion, to be the time when such Loss shall have
occurred or the time for occurrence shall have passed. During that time, any
set- off pursuant to Section 12.6 necessary to pay such Claim shall remain
withheld. The decision of the arbitrators shall be final and binding upon the
parties hereto, and judgment upon the award rendered by the arbitrators may be
entered in any court having jurisdiction thereof. The prevailing party(s)
shall be entitled to recover its reasonable attorneys' fees and its share of
the costs, as the arbitrators determine.
(c) Notwithstanding anything contained in this Article XVII,
each party shall have the right to institute judicial proceedings against the
other parties or anyone acting by, through or under such other parties in order
to enforce the instituting party's rights hereunder through specific
performance, injunction or similar equitable relief. Each party submits to the
exclusive jurisdiction of the courts of the State of California and the U.S.
federal courts for the Southern District of California for the purposes
thereof. Each party waives objections to venue in San Diego, California.
ARTICLE XVIII
AGREEMENT AS TO TACTYL
Notwithstanding anything to the contrary set forth herein, Tactyl
shall not be deemed a party to this Agreement until it shall have executed and
delivered to the Acquiring Party and the Shareholder a signature page of this
Agreement, and the Shareholder shall cause Tactyl to execute and deliver such
signature page immediately following the Effective Time.
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ARTICLE XIX
COUNTERPARTS
This Agreement may be executed in two or more counterparts, each of
which shall be binding as of the date first written above, and all of which
shall constitute one and the same instrument.
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[SIGNATURE PAGE TO AMENDED AND RESTATED
ASSETS PURCHASE AGREEMENT]
IN WITNESS WHEREOF, this Agreement has been executed by the parties
hereto as of the day and year first written above.
TT ACQUISITION COMPANY
By: /s/ Xxxxx X. Xxxxxx
--------------------------------
Title: Executive Vice-President,
Chief Financial Officer
EQ CORPORATION
By: /s/ Xxxx Xxxxxx
--------------------------------
Title: President
ACKNOWLEDGED AND AGREED:
TACTYL TECHNOLOGIES, INC.
By: /s/ Xxxx Xxxxxx
--------------------
Title: President
Dated: March 24, 1997
-----------------
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EXHIBIT A
"1995 Audited Financial Statements" is defined in Section 3.5.
"1996 Audited Financial Statements" is defined in Section 7.1.
"Affiliates" means, with respect to a particular party, persons or
entities controlling, controlled by or under common control with that party.
"Acquiring Party" is defined above in the preamble and in Section 2.9.
"Agreement" means this Agreement and the exhibits and schedules
hereto.
"Assets" means all of the assets, properties, goodwill and rights of
every kind and description, real and personal, tangible and intangible,
wherever situated and whether or not reflected in the most recent financial
statements, that are owned or possessed by Tactyl, other than those assets
relating to Tactyl's condom business (as identified on Exhibit B hereto).
"Assumption Agreement" is defined in Section 6.9.
"Assumed Liabilities" is defined in Section 2.3.
"Bank Lien" means any encumbrance created or proposed to be created on
any assets of the Shareholder, the Merger Subsidiary (as defined in the
Reorganization Agreement) and Tactyl in favor of any financial institution in
connection with the financing of the Transactions.
"Benefit Plans" means all employee benefit plans of Tactyl within the
meaning of Section 3(3) of ERISA and any related or separate Contracts, plans,
trusts, programs, policies, arrangements, practices, customs and
understandings, in each case whether formal or informal, that provide benefits
of economic value to any present or former employee of Tactyl, or present or
former beneficiary, dependent or assignee of any such employee or former
employee.
"Business" means the entire business, operations and facilities of
Tactyl, other than Tactyl's condom business and the assets (as identified on
Exhibit B hereto) and liabilities related thereto.
"BVI Assets" is defined in Section 2.9.
"BVI Liabilities" is defined in Section 2.9.
"Charter Documents" means an entity's certificate or articles of
incorporation, certificate defining the rights and preferences of securities,
articles of organization, general or limited partnership agreement, certificate
of limited partnership, joint venture agreement or similar document governing
the entity.
Exhibit A - 1
42
"Claim" is defined in Section 12.3.
"Closing" means the Closing of the Transactions.
"Closing Date" is defined in Section 2.6.
"Code" means the Internal Revenue Code of 1986, as amended, and the
Regulations promulgated thereunder.
"Confidential Information" is defined in Section 3.18(b).
"Contingent Payments" is defined in Section 8.1 of the Reorganization
Agreement.
"Contract" means any written or oral contract, agreement, lease,
instrument or other commitment that is binding on any Person or its property
under applicable law.
"Corporations Code" means the California Corporations Code.
"Court Order" means any judgment, decree, injunction, order or ruling
of any federal, state, local or foreign court or governmental or regulatory
body or authority that is binding on any Person or its property under
applicable law.
"Default" means (i) a breach, default or violation or (ii) the
occurrence of an event that with the passage of time or the giving of notice,
or both, would constitute a breach, default or violation.
"Effective Time" is defined in the Reorganization Agreement.
"Encumbrances" means any lien, mortgage, security interest, pledge,
restriction on transferability, defect of title or other claim, charge or
encumbrance of any nature whatsoever on any property or property interest.
"Environmental Condition" is defined in Section 3.15(b).
"Environmental Law" is defined in Section 3.15(b).
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"EQTT" means EQTT Acquisition Corporation, a California corporation.
"Exchange Act" is defined in Section 5.3.
"Excluded Assets" is defined in Section 2.2.
"Excluded Liabilities" is defined in Section 2.3.
Exhibit A - 2
43
"GAAP" means United States generally accepted accounting principles.
"Governmental Permits" is defined in Section 3.15(d).
"Hazardous Substances" means (i) any gasoline, fuel oil or any other
petroleum products, explosives, alcohols or chemical solvents or
polychlorinated biphenyls, (ii) any substance, waste, material or product
defined as hazardous, radioactive, extremely hazardous or toxic under any
Environmental Law and (iii) asbestos or asbestos-containing substances.
"Indemnification Claim" is defined in Section 12.3.
"Indemnification Notice" is defined in Section 12.3
"Indemnified Party" is defined in Section 12.3.
"Indemnifying Party" is defined in Section 12.3.
"Intellectual Property" is defined in Section 3.18(a).
"IRS" is defined in Section 3.20(c).
"Leased Equipment" means certain equipment, if any, that is an Asset
of Tactyl as of the date of this Agreement and which is, at the time of the
Closing, the subject of an operating lease to the Acquiring Party.
"Liability" means any direct or indirect liability, indebtedness,
obligation, expense, claim, loss, damage, deficiency, guaranty or endorsement
of or by any Person, absolute or contingent, accrued or unaccrued, due or to
become due, liquidated or unliquidated.
"Litigation" means any lawsuit, action, arbitration, administrative or
other proceeding, criminal prosecution or governmental investigation or
inquiry.
"Loss" is defined in Section 12.1.
"Material Adverse Effect" means a material adverse effect on the
financial condition, results of operations, liquidity, products, competitive
position, customers or customer relations of any Representing Party.
"Minor Contracts" is defined in Section 3.16(a).
"Non-Real Estate Leases" is defined in Section 3.9.
"Ordinary course" or "ordinary course of business" means the ordinary
course of business that is consistent with past practices.
"Permitted Indemnification Claim" is defined in Section 12.3.
Exhibit A - 3
44
"Person" means any natural person, corporation, partnership,
proprietorship, association, trust or other legal entity.
"Purchase Price" is defined in Section 2.6.
"Purchased Assets" is defined in Section 2.1.
"Real Estate Leases" is defined in Section 3.7.
"Real Property" is defined in Section 3.7.
"Regulation" means any statute, law, ordinance, regulation, order or
rule of any federal, state, local, or other governmental agency or body or of
any other type of regulatory body, including those covering environmental,
energy, safety, health, transportation, bribery, recordkeeping, zoning,
antidiscrimination, antitrust, wage and hour, and price and wage control
matters.
"Reorganization Agreement" is defined in the Background.
"Representing Party" means Tactyl when used in connection with terms
used in Section 3, the Shareholder when used in connection with terms used in
Section 4, and the Acquiring Party when used in connection with terms used in
Section 5.
"Required Consents" is defined in Section 3.3.
"Safeskin BVI" is defined in Section 2.9.
"Safeskin Corporation" means Safeskin Corporation, a Florida
corporation.
"Safeskin License Agreement" means the license agreement(s) to be
entered into between TT Acquisition Company and/or Safeskin BVI and Tactyl,
which agreement shall be on terms and conditions satisfactory to TT Acquisition
Company and/or Safeskin BVI and Tactyl.
"Sensicon" means Sensicon, a California corporation.
"Sensicon License Agreement" means the license agreement to be entered
into between Tactyl and Sensicon pursuant to the Reorganization Agreement.
"SmartHealth" means SmartHealth, an Arizona corporation.
"Supplemental Disclosure Schedule" means that disclosure schedule
provided by the Shareholder pursuant to Section 7.2 of this Agreement.
"Tactyl Balance Sheet" is defined in Section 3.5.
"Tactyl Balance Sheet Date" is defined in Section 3.5.
Exhibit A - 4
45
"Tactyl Common Stock" is defined in the Section 3.4.
"Tactyl Disclosure Schedule" means the Disclosure Schedule provided by
Tactyl in connection with this Agreement, and the Supplemental Disclosure
Schedule provided by Tactyl pursuant to Section 7.2 of this Agreement.
"Tactyl's knowledge" or "the Acquiring Parties' knowledge" or
"Shareholder's knowledge" means the knowledge of Tactyl or the Acquiring Party
or the Shareholder, as the case may be, or of any director, officer or other
employee of Tactyl, the Acquiring Party or the Shareholder, respectively.
"Tactyl Preferred Stock" is defined in Section 3.4.
"Tactyl Shares" means shares of Tactyl Common Stock and Tactyl
Preferred Stock.
"Termination Date" is defined in Section 11.1(b).
"Transaction Documents" means this Agreement, the Xxxx of Sale, the
Assumption Agreement and the other agreements and documents contemplated hereby
and thereby.
"Transactions" means the acquisition of the Purchased Assets and the
assumption of the Assumed Liabilities and the other transactions contemplated
by the Transaction Documents.
"Unaudited Financial Statement" is defined in Section 3.5.
Exhibit A - 5
46
EXHIBIT B
XXXX OF SALE
47
EXHIBIT C
CERTAIN ASSETS
48
EXHIBIT D
ASSUMPTION AGREEMENT
