ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement is made and entered into as of the 6th day
of October, 1997, by and between BM Acquisition Corp., a Delaware corporation
(the "Buyer"), Thermo Electron Corporation, a Delaware Corporation ("Thermo"),
Bear Medical Systems, Inc., a California corporation ("Bear Medical"), Bicore
Monitoring Systems, Inc. ("Bicore"), a California corporation, Allied Health
Care Products AG ("Bear AG"), a Swiss corporation and Bear Medical Systems
Foreign Sales Corporation ("Bear FSC"), a Virgin Islands corporation (Bear
Medical, Bicore, Bear AG and Bear FSC are herein individually referred to as the
"Seller" and collectively referred to as the "Sellers") and Allied Healthcare
Products, Inc., a Delaware corporation (the "Stockholder").
The Buyer desires to purchase, and the Sellers desire to sell, all of
the Business of the Sellers for the consideration set forth below and the
assumption by the Buyer of certain of the Sellers' liabilities set forth below
relating to the Business.
NOW THEREFORE, in consideration of the premises and the mutual
covenants, agreements and provisions herein contained, the parties hereto agree
as follows:
AGREEMENT
The parties, intending to be legally bound, agree as follows:
1. DEFINITIONS
For purposes of this Agreement, the following terms have the meanings
specified or referred to in this Section 1:
"Accounts Receivable" -- as defined in Section 3.8.
"Affiliate" - as that term is defined in Rule 12b-2 under the Exchange
Act.
"Applicable Contract"-- any Contract (a) under which any Seller has or
may acquire any rights, (b) under which any Seller has or may become subject to
any obligation or liability, or (c) by which any Seller or any of the assets
owned or used by any Seller is or may become bound.
"Assets" -- as defined in Section 2.1.
"Assumed Liabilities" -- as defined in Section 2.4.
"August Balance Sheet" -- as defined in Section 3.4.
"August Income Statements" -- as defined in Section 3.4.
"Balance Sheet Date" -- as defined in Section 3.4.
"Business" -- all of the business of the Sellers, including without
limitation the design and manufacture of infant and adult ventilators and
pulmonary monitors for hospitals and homecare applications.
"Buyer" -- as defined in the first paragraph of this Agreement.
"Closing" -- as defined in Section 2.7.
"Closing Balance Sheet" -- as defined in Section 2.5.
"Closing Date" -- as defined in Section 2.7.
"Code" -- the Internal Revenue Code of 1986 or any successor law, and
regulations issued by the IRS pursuant to the Internal Revenue Code or any
successor law.
"Competitive Business" -- as defined in Section 8.19.
"Consent" -- any approval, consent, ratification, waiver, or other
authorization (including any Governmental Authorization).
"Contemplated Transactions" -- all of the transactions contemplated by
this Agreement, including:
(a) the sale of the Assets by the Sellers to the Buyer;
(b) the performance by the Buyer, the Sellers and the
Stockholder of their respective covenants and obligations under this Agreement;
and
(c) Buyer's acquisition and ownership of the Assets and exercise
of control over the Assets.
"Contract" -- any agreement, contract, obligation, promise, or
undertaking (whether written or oral and whether express or implied) that is
legally binding.
"Cowen Balance Sheet" -- as defined in Section 3.4.
"Cowen Offering Memorandum" -- the Xxxxx & Company Confidential
Information Memorandum dated April 1997 relating to the Allied Health Care
Products, Inc. Ventilation Products Division.
"Damages" -- as defined in Section 7.2.
"Disclosure Letter" -- the disclosure letter delivered by the Sellers to
the Buyer concurrently with the execution and delivery of this Agreement and
attached hereto as Exhibit A and incorporated into this Agreement as a part
hereof.
"Draft Closing Balance Sheet" -- as defined in Section 2.5.
"Encumbrance" -- any charge, claim, community property interest,
condition, equitable interest, lien, mortgage, option, pledge, security
interest, right of first refusal, or restriction of any kind, including any
restriction on use, voting (in the case of any security), transfer, receipt of
income, or exercise of any other attribute of ownership.
"Environment" -- soil, land, surface or subsurface strata, surface
waters (including navigable waters and ocean waters), groundwater, drinking
water supply, stream sediments, ambient air (including indoor air), plant and
animal life, and any other environmental medium or natural resource.
"Environmental, Health and Safety Liabilities" -- any cost, damages,
expense, liability, obligation, or other responsibility arising from or under
Environmental Law, Occupational Safety and Health Law, a Contract or other
obligation relating to:
(a) any environmental, health, or safety matters or conditions
(including on-site or off-site contamination, occupational safety and health,
and regulation of chemical substances or products);
(b) fines, penalties, judgments, awards, settlements, legal or
administrative proceedings, damages, losses, claims, demands and response,
remedial, or inspection costs and expenses arising under Environmental Law or
Occupational Safety and Health Law;
(c) financial responsibility under Environmental Law or
Occupational Safety and Health Law for cleanup costs or corrective action,
including any cleanup, removal, containment, or other remediation or response
actions ("Cleanup") required by applicable Environmental Law or Occupational
Safety and Health Law (whether or not such Cleanup has been required or
requested by any Governmental Body or any other Person) and for any natural
resource damages, provided such Liabilities shall not include any Damages
incurred by the Buyer arising from the performance of any remediation, or giving
of any notice to any Governmental Body, to the extent not required by any
applicable Environmental Law or Occupational Safety and Health Law, it being
understood that the cost of performing any study, assessment or other action in
connection with any such non-required remediation shall not be considered
Damages; or
(d) any other compliance, corrective, or remedial measures
required under Environmental Law or Occupational Safety and Health Law.
The terms "removal," "remedial," and "response action" include the types of
activities covered by the United States Comprehensive Environmental Response,
Compensation, and Liability Act, 42 U.S.C. Sec. 9601 et seq., as amended
("CERCLA").
"Environmental Law" -- any Legal Requirement designed:
(a) to advise appropriate authorities, employees, and the public
of intended or actual releases of pollutants or hazardous or toxic substances or
materials, violations or discharge limits, or other prohibitions and of the
commencement of activities, such as resource extraction or construction, that
could have an adverse impact on the Environment;
(b) to permit or license, or to prevent or acceptably minimize
the release of pollutants or hazardous or toxic substances or materials into the
Environment;
(c) to reduce the quantities, prevent the release, protect the
Environment against, and minimize the hazardous characteristics of wastes that
are generated including any air, water or noise pollution;
(d) to assure that products are designed, formulated, packaged,
or used so that they do not present unreasonable risks to human health or the
Environment when used or disposed of;
(e) to protect the Environment, including any resources,
species, or ecological amenities;
(f) to acceptably minimize the risks inherent in transportation,
handling, disposal, use, or storage of hazardous or toxic substances,
pollutants, oil, petroleum, contaminants, pesticides, chemicals or other
potentially harmful substances;
(g) to clean up pollutants that have been released, prevent the
threat of release, or pay the costs of such cleanup, remediation or prevention;
or
(h) to make responsible parties pay private parties, or groups of
them, for damages done to their health or Environment, or to permit
self-appointed representatives of the public interest to recover for injuries
done to public assets.
"ERISA" -- the Employee Retirement Income Security Act of 1974 or any
successor law, and regulations and rules issued pursuant to that Act or any
successor law.
"ERISA Affiliate" -- as defined in Section 3.11.
"Exchange Act" -- the Securities Exchange Act of 1934 or any successor
law, and regulations and rules issued pursuant to that Act or any successor law.
"Excluded Assets" -- as defined in Section 2.2.
"Excluded Liabilities" -- as defined in Section 2.4.
"Facilities" -- any real property, leaseholds, or other interests owned,
leased or operated by any Seller (or any predecessor Persons) and any buildings,
plants, structures, or equipment owned, leased or operated by any Seller (or any
predecessor Persons).
"Financial Statements" -- as defined in Section 3.4.
"GAAP" -- generally accepted accounting principles.
"Governmental Authorization" -- any approval, consent, license, permit,
waiver, exemption or variance, or other authorization issued, granted, given, or
otherwise made available by or under the authority of any Governmental Body or
pursuant to any Legal Requirement.
"Governmental Body" -- any:
(a) nation, state, county, city, town, village, district, or
other jurisdiction of any nature;
(b) federal, state, local, municipal, foreign, or other
government;
(c) governmental or quasi-governmental authority of any nature
(including any governmental agency, branch, department, official, or entity and
any court or other tribunal);
(d) multi-national organization or body; or
(e) body exercising, or entitled or purporting to exercise, any
administrative, executive, judicial (including court), legislative, police,
regulatory, or taxing authority or power of any nature.
"Hazardous Activity" -- the distribution, generation, handling,
importing, management, manufacturing, processing, production, refinement,
Release, storage, transfer, transportation, treatment, or use (including any
withdrawal or other use of groundwater) of Hazardous Materials in, on, under,
about, or from the Facilities or any part thereof into the Environment, and any
other act, business, operation, or thing that increases the danger, or risk of
danger, or poses an unreasonable risk of harm to persons or property on or off
the Facilities, or that may affect the value of the Facilities or any Seller.
"Hazardous Materials" -- any substance that is listed, deemed,
designated, or classified as, or otherwise determined to be, hazardous,
radioactive, or toxic or a pollutant or a contaminant under or pursuant to any
Environmental Law, including any admixture or solution thereof, and specifically
including petroleum and all derivatives thereof or synthetic substitutes
therefor and polychlorinated biphenyls, pesticides, asbestos or asbestos
containing materials.
"Hired Employees" -- as defined in Section 8.15.
"Indemnified Persons" -- as defined in Section 7.2.
"Indemnity Basket" -- as defined in Section 7.4.
"IRS" -- the United States Internal Revenue Service or any successor
agency, and, to the extent relevant, the United States Department of the
Treasury.
"Knowledge" -- shall mean, with respect to any Seller or the
Stockholder, the actual knowledge of Xxx Xxxxxxxx, Xxxxx Xxxxx, Xxxxxxxxx
Xxxxxxx, Xxxxx XxXxx, Xxxx Xxx, Xxx Xxxxxxxx, Xxxx Xxxxxxx and Xxx Xxxxxxxx;
provided, however, it is understood that such persons shall have made an inquiry
of the Sellers' or Stockholder's personnel or representatives, as the case may
be, who are reasonably competent to determine the accuracy of the statement in
question (and the results thereof were reported to such person). All references
to "Sellers' Knowledge" or "Knowledge of the Sellers" contained herein shall be
deemed to include the Stockholder's Knowledge.
"Legal Requirement" -- any federal, state, local, municipal, foreign,
international, multinational, or other, constitution, law, ordinance, Order,
principle of common law, regulation, requirement, statute or treaty.
"License Period" -- as defined in Section 8.26.
"Material Adverse Effect" -- any loss to the Sellers, taken as a whole,
in excess of $250,000.
"Material Applicable Contact" -- as defined in Section 3.15.
"Material Event" -- any event or condition that would be reasonably
likely to result in Damages to the Business of at least $1,000,000.
"Minimum Claim Amount" -- as defined in Section 7.4
"Net Asset Benchmark" -- as defined in Section 2.5.
"Neutral Auditors" -- as defined in Section 2.5.
"New Receivable" -- as defined in Section 8.25.
"Occupational Safety and Health Law" -- any Legal Requirement designed
to provide safe and healthful working conditions and to reduce occupational
safety and health hazards, and any program, whether governmental or private
(such as those promulgated or sponsored by industry associations and insurance
companies), designed to provide safe and healthful working conditions.
"Order" -- any award, decision, injunction, judgment, order, ruling,
subpoena, or verdict entered, issued, made, or rendered by any court,
administrative agency, or other Governmental Body or by any arbitrator.
"Ordinary Course of Business" -- an action taken by a Person will be
deemed to have been taken in the "Ordinary Course of Business" only if:
(a) such action is consistent with the past practices of such
Person and is taken in the ordinary course of the normal day-to-day operations
of such Person;
(b) such action is not required to be authorized by the board of
directors of such Person (or by any Person or group of Persons exercising
similar authority), is not required to be specifically authorized by the parent
company (if any) of such Person, and does not require any other separate or
special authorization of any nature; and
(c) such action is similar in nature and magnitude to actions
customarily taken, without any separate or special authorization, in the
ordinary course of the normal day-to-day operations of other Persons that are in
the same line of business as such Person.
"Organizational Documents" -- (a) the articles or certificate of
incorporation and the bylaws of a corporation; (b) the partnership agreement and
any statement of partnership of a general partnership; (c) the limited
partnership agreement and the certificate of limited partnership of a limited
partnership; (d) any charter or similar document adopted or filed in connection
with the creation, formation, or organization of a Person; and (e) any amendment
to any of the foregoing.
"Person" -- any individual, corporation (including any non-profit
corporation), general or limited partnership, limited liability company, limited
liability partnership, joint venture, estate, trust, association, organization,
or other entity or Governmental Body.
"Plans" -- as defined in Section 3.11.
"Proceeding" -- any action, arbitration, audit, hearing, investigation,
litigation, or suit (whether civil, criminal, administrative, investigative, or
informal) commenced, brought, conducted, or heard by or before, or otherwise
involving, any Governmental Body or arbitrator.
"Purchase Price" -- as defined in Section 2.3.
"Release" -- any spilling, leaking, emitting, discharging, depositing,
escaping, leaching, dumping, or other releasing into the Environment (including
the abandonment or discarding of barrels, containers, tanks or other
receptacles).
"Restricted Employee" -- as defined in Section 8.17.
"Securities Act" -- the Securities Act of 1933 or any successor law, and
regulations and rules issued pursuant to that Act or any successor law.
"Seller" or "Sellers" -- as defined in the first paragraph of this
Agreement.
"Stockholder" -- as defined in the first paragraph of this Agreement.
"Subsidiary" -- with respect to any Person (the "Owner"), any
corporation or other Person of which securities or other interests having the
power to elect a majority of that corporation's or other Person's board of
directors or similar governing body, or otherwise having the power to direct the
business and policies of that corporation or other Person (other than securities
or other interests having such power only upon the happening of a contingency
that has not occurred), are held by the Owner or one or more of its
Subsidiaries.
"Tax" -- any tax (including without limitation any income, capital
gains, gross receipts, license, payroll, employment, excise, severance, stamp,
occupation, premium, windfall profits, environmental (including without
limitation taxes under Code Section 59A), customs duties, capital stock,
franchise, profits, withholding, social security (or similar), unemployment,
disability, social security, business license, occupation, business
organization, stamp, environmental, real property, personal property, sales,
use, transfer, registration, value added, alternative or add-on minimum,
estimated, or other tax, fee, levy, assessment or other fiscal charges of any
kind whatsoever, including any fine, interest, penalty, or addition thereto,
whether disputed or not), imposed, assessed, or collected by or under the
authority of any Governmental Body or payable pursuant to any tax-sharing
agreement or any other Contract relating to the sharing or payment of any such
tax.
"Tax Return" -- any return, declaration, report, claim for refund, or
information return or statement relating to Taxes, including without limitation
any schedule or attachment thereto, and any amendment thereof.
"Thermo" -- as defined in the first paragraph of this Agreement.
"Threat of Release" -- a substantial likelihood of a Release that may
require action in order to prevent or mitigate damage to the Environment that
may result from such Release.
"Threatened" -- a claim, Proceeding, dispute, action, or other matter
will be deemed to have been "Threatened" if any demand or statement has been
made (orally or in writing) or any notice has been given (orally or in writing),
or if any other event has occurred or any other circumstances exist, that would
lead a prudent Person to conclude that such a claim, Proceeding, dispute, action
or other matter is likely to be asserted, commenced, taken, or otherwise pursued
in the future.
"1997 Balance Sheet" -- as defined in Section 3.4.
"1997 Income Statements" -- as defined in Section 3.4.
2. SALE AND TRANSFER OF ASSETS; CLOSING
2.1 SALE OF ASSETS. At the Closing, the Buyer shall purchase, acquire
and accept, and the Sellers shall assign, transfer, convey and deliver, all of
the Sellers' right, title and interest in and to, the assets, properties and
rights (contractual or otherwise) of every kind, nature and description owned or
used by the Sellers (collectively, the "Assets") free and clear of any
Encumbrances. The Assets shall include, without limitation, the following:
(a) INVENTORIES. All inventories of raw materials,
work-in-process, finished products and resale merchandise, scrap inventory, and
expendable manufacturing supplies.
(b) MACHINERY AND EQUIPMENT. All machinery and equipment used in
the research and development, manufacture, production, assembly, test, handling,
distribution, demonstration and sale of products, together with the spare-parts
inventories and all manufacturing or production tools and maintenance supplies
pertaining thereto.
(c) INTELLECTUAL PROPERTY RIGHTS AND TRADEMARKS. All patents,
trademarks, service marks, copyrights, trade names and applications therefor,
including without limitation, the names "Bear Medical Systems" and "Bicore
Monitoring Systems".
(d) TECHNICAL INFORMATION AND INTANGIBLES. All inventions,
discoveries (whether patentable or unpatentable), processes, designs, know-how,
trade secrets, proprietary data, software programs and intellectual property of
all kinds, including drawings, plans, specifications, processes, patents, dies,
designs, blue prints, records, data, product development records, production
outlines, diskettes, source code, object code, flow charts, information, media
or knowledge and procedures, and customer and supplier lists.
(e) CONTRACTS. All real and personal property leases, licenses,
sales, distribution, and supply Contracts, purchase Contracts and sales orders,
and any prepaid items, warranties and all causes of action and claims related
thereto.
(f) MOTOR VEHICLES. All cars, trucks and other motor vehicles,
automotive equipment and other rolling stock.
(g) BOOKS AND RECORDS. All books, records and accounts,
correspondence, production records, technical, accounting, manufacturing and
procedural manuals, and customer lists; employment records, studies, reports or
summaries relating to any environmental conditions or consequences of any
operation, as well as all studies, reports or summaries relating directly to the
general condition of the Sellers; and any confidential information which has
been reduced to writing relating to or arising out of the Business.
(h) PERMITS AND APPROVALS. To the extent transferable, all
Governmental Authorizations of the Sellers.
(i) CLAIMS. All claims, deposits, prepayments, refunds, security
interests, causes of action, choses in action, rights of recovery, rights of
setoff, rights of recoupment, rights under warranties and other similar assets
except to the extent such assets relate to Excluded Liabilities or Excluded
Assets.
(j) FURNITURE AND FIXTURES. All office furniture, office
equipment and supplies and computer hardware.
(k) ACCOUNTS RECEIVABLE. All trade and other accounts receivable
and notes and loans receivable and any rights of recovery or setoff of every
type and character.
(l) MISCELLANEOUS SUPPLIES. All catalogs, brochures, product
literature, product-related application notes, manuals, technical papers, other
printed materials, shipping and packaging materials and labels, cartons and
shipping containers, palettes, shipping equipment, graphics, artwork,
photographic film, slides, negatives, color separations, printer's and
photographer's plates and so-called "camera-ready materials" and sales and
advertising materials.
(m) BANK ACCOUNTS. Each of Bear Medical's bank accounts nos.
12330-54341, 12335-54339 and 12337-54338 with Bank of America, Concord,
California and Bear AG's bank accounts nos. 257.450.60F and 257.450.01X with
Union Bank of Switzerland, Zug Switzerland.
2.2 EXCLUDED ASSETS. Notwithstanding anything to the contrary
herein, the Assets shall not include the following assets of the Sellers (the
"Excluded Assets"):
(a) The Contracts and Plans listed on EXHIBIT B hereto.
(b) CASH AND SECURITIES. All cash, bank accounts (except those
accounts specified in Section 2.1(m)), money market accounts, certificates of
deposit, and similar short term assets having maturity dates within 90 days of
issuance.
(c) CLAIMS. All claims, deposits, prepayments, refunds, security
interests, causes of actions, choses inaction, rights of recovery, rights of
setoff, rights of recoupment, rights under warranties and other similar assets
to the extent such assets relate to Excluded Liabilities or other Excluded
Assets.
(d) FRANCHISE. Each of the Sellers' franchise as a corporation,
its minute books, capital stock transfer records and similar records relating to
its organization, existence, capitalization and capital stock.
(e) AGREEMENT. All rights of the Sellers that accrue or will
accrue under this Agreement.
(f) INSURANCE. All of the Seller's insurance policies, including
without limitation those policies set forth on Part 3.16 of the Disclosure
Letter.
2.3 PURCHASE PRICE FOR THE ASSETS. Subject to Section 2.5, the aggregate
purchase price for the Assets shall be $37,500,000 (the "Purchase Price").
2.4 ASSUMPTION OF LIABILITIES. At the Closing, the Buyer shall assume
all liabilities of each Seller of any nature, known or unknown, fixed,
contingent or otherwise, arising out of or relating primarily to the Business
(the "Assumed Liabilities"). Notwithstanding the foregoing, the Buyer shall not
assume any liabilities or obligations of the Sellers of any nature, known or
unknown, fixed, contingent or otherwise arising out of or relating to the
following, all of which shall remain obligations of the Sellers (the "Excluded
Liabilities"): (a) for any Taxes resulting from the conduct of the business of
the Sellers on or prior to the Closing Date (b) under any Plans listed on
EXHIBIT B and any Plans maintained at any time by the Stockholder for the
benefit of the Sellers' employees (c) under any Contracts listed on EXHIBIT B,
(d) relating to any Excluded Assets, (e) any liabilities or obligations imposed
on any Seller by virtue of being a member of a group of affiliated companies
that includes the Stockholder or another Affiliate thereof, including, for
example, joint and several liability under the Code or ERISA, (f) for any
product liability claims resulting from occurrences on or prior to the Closing
Date regardless of whether such claim is brought before or after the Closing
Date, (g) for any claims or obligations relating to the Proceedings listed on
Part 3.13 of the Disclosure Letter, (h) resulting from any claim by a
stockholder or former stockholder of any Seller, or any other Person, seeking to
assert, or based upon ownership or rights of ownership of any shares of capital
stock or securities of, or equity interest in, any Seller, or any rights under
any Organizational Documents of any Seller, (i) costs, expenses, obligations and
liabilities incurred or accrued by the Sellers in connection with this Agreement
or the Contemplated Transactions but excluding any costs, expenses, obligations
and liabilities arising out of the failure to obtain any consents or waivers
with respect to Contracts to be assigned to the Buyer hereunder, (j) all
indebtedness for borrowed money including without limitation the Sellers' loan
agreements and subordinated debt agreements listed on Part 3.29 of the
Disclosure Letter.
2.5 POST-CLOSING ADJUSTMENT. The Purchase Price set forth in Section
2.3 shall be subject to adjustment after the Closing Date as follows:
(a) Within 30 days after the Closing Date, the Stockholder shall
prepare and deliver to the Buyer a balance sheet reflecting the net tangible
assets of the Sellers as of the Closing Date (a "Draft Closing Balance Sheet").
The Stockholder shall prepare the Draft Closing Balance Sheet in accordance with
GAAP and on a basis consistent with the principles and procedures upon which the
Seller's balance sheet dated January 31, 1997 contained in the Cowen Offering
Memorandum was prepared, which in turn was derived from the Sellers' financial
statements as of January 31, 1997; provided, such Closing Balance Sheet shall
include a reserve for warranty claims of $800,000, a $1.27 million LIFO Reserve
and a $750,000 excess and obsolete inventory reserve. Further, the Closing
Balance Sheet shall not reflect any Excluded Assets or Excluded Liabilities,
including without limitations Taxes, and shall not contain any regular payroll
or accrued vacation reserves relating to employees of the Stockholder who will
become employees of the Buyer after the Closing. For purposes of this Agreement,
"net tangible assets" shall mean tangible Assets (which includes patents but
excludes goodwill), minus Assumed Liabilities.
(b) The Buyer shall deliver to the Stockholder within 15 days
after receiving the Draft Closing Balance Sheet a detailed statement describing
its objections (if any) thereto. Failure of the Buyer so to object to the Draft
Closing Balance Sheet shall constitute acceptance thereof, whereupon such Draft
Closing Balance Sheet shall be deemed to be the "Closing Balance Sheet." The
Buyer and the Stockholder shall use reasonable efforts to resolve any such
objections, but if they do not reach a final resolution within 15 days after the
Stockholder has received the statement of objections, the Buyer and the
Stockholder shall select a nationally recognized accounting firm mutually
acceptable to them (which shall not be the regular accounting firm used by the
Buyer, any Seller or the Stockholder) (the "Neutral Auditors") to resolve any
remaining objections. If the Buyer and the Stockholder are unable to agree on
the choice of Neutral Auditors, they shall select as Neutral Auditors a
nationally recognized "Big Six" accounting firm by lot (after excluding their
respective regular independent accounting firms). The Neutral Auditors shall
determine on a basis consistent with the principles and procedures set forth in
Section 2.5(a), within 30 days after their appointment, whether the objections
raised by the Buyer are valid. The Draft Closing Balance Sheet that is the
subject of objections by the Buyer shall be adjusted in accordance with the
Neutral Auditors' determination and, as so adjusted, shall be the Closing
Balance Sheet. Such determination by the Neutral Auditors shall be conclusive
and binding upon the Buyer, the Sellers and the Stockholder. The Buyer, on the
one hand, and the Stockholder, on the other hand, shall share equally the fees
and expenses of the Neutral Auditors.
(c) If the net tangible assets as shown on the Closing Balance
Sheet are less than the Net Asset Benchmark, the Sellers shall pay to the Buyer,
by wire transfer in immediately available funds, within ten business days after
the date on which the Closing Balance Sheet is finally determined pursuant to
this Section 2.5, an amount equal to such deficiency (plus interest thereon from
the Closing Date at the interest rate equal to the base rate of BankBoston as
announced from time to time).
(d) If the net tangible assets as shown on the Closing Balance
Sheet are greater than the Net Asset Benchmark, the Buyer shall pay to the
Sellers, by wire transfer in immediately available funds, within ten business
days after the date on which the Closing Balance Sheet is finally determined
pursuant to this Section 2.5, an amount equal to such excess (plus interest
thereon from the Closing Date at the interest rate equal to the base rate of
BankBoston as announced from time to time).
(e) As used in this Section 2.5, "Net Asset Benchmark" means
$9,700,000.
2.6 ALLOCATION OF PURCHASE PRICE; CERTAIN TAX INFORMATION. The Sellers
and the Buyer agree that at the Closing the Purchase Price shall be
provisionally allocated among the Assets as provided on EXHIBIT C to be attached
hereto at the Closing. The final allocation of the Purchase Price shall differ
from the provisional allocation only to reflect changes in the book value of the
net tangible Assets as shown on the Closing Balance Sheet. The Buyer and the
Sellers each shall report the federal, state, provincial, foreign and local
income and other tax consequences of the transaction contemplated hereby in a
manner consistent with such allocation. In addition, the
Sellers agree to provide the Buyer with certain of the Sellers' base period
research credit information relating to Section 41 of the Code. Specifically,
the Sellers will provide the Buyer information relating to their gross receipts
from 1984-1988; the qualified research expenditures for the same period; and the
gross receipts of the Sellers for the last four taxable years prior to the
Closing Date.
2.7 THE CLOSING. The closing of the transactions contemplated by this
Agreement (the "Closing") shall occur at the offices of Thermo Electron
Corporation, 00 Xxxxx Xxxxxx, Xxxxxxx, Xxxxxxxxxxxxx, at 10:00 a.m. on the fifth
business day following satisfaction or waiver of each of the conditions
contained in this Agreement, or on such other date as the Buyer and Bear Medical
may mutually agree (such date being herein referred to as the "Closing Date").
2.8 DELIVERIES BY THE SELLERS TO THE BUYER. At the Closing, the Sellers
and the Stockholder shall deliver, or cause to be delivered, to the Buyer:
(a) such executed assignments, patent assignments, trademark
assignments, bills of sale, certificates of title, or other documents, each
dated the Closing Date, as shall be necessary, in the reasonable opinion of the
Buyer and its counsel to transfer to the Buyer all of the Sellers' and/or
Stockholder's right, title and interest in and to the Assets;
(b) an opinion of Dickstein, Shapiro, Xxxxx & Xxxxxxxx LLP,
counsel to the Sellers, in the form reasonably satisfactory to the Buyer and its
counsel;
(c) consents to the assignment of the Contracts listed on
EXHIBIT E; and
(d) executed copies of such other agreements contemplated
hereunder to which any of the Sellers are party.
2.9 DELIVERIES BY THE BUYER TO THE SELLERS. At the Closing, the Buyer
shall deliver to the Sellers:
(a) the Purchase Price by wire transfer to the account
designated by the Sellers;
(b) an opinion of Xxxx X. Xxxxxxxxx, Esq. general counsel to the
Buyer, in the form reasonably satisfactory to the Sellers and their counsel; and
(c) an executed assumption agreement and such other documents,
each dated as of the Closing Date, as shall be necessary, in the reasonable
opinion of the Sellers and their counsel, for the assumption by the Buyer of all
of the Assumed Liabilities.
2.10 NONASSIGNABILITY. Anything contained in this Agreement or any
agreement executed in connection herewith to the contrary notwithstanding,
neither this agreement nor any agreement executed in connection herewith shall
constitute an assignment, transfer, sublicense or sublease of, or an agreement
to assign, transfer, sublicense or sublease any right, title or interest
in, to or under any, contract, license, lease, commitment, sales order, purchase
order or other agreement, or any claim or right to any benefit arising
thereunder or resulting therefrom, if an attempted assignment, transfer,
sublicense or sublease thereof, without the consent or waiver of a third party
thereto (including a Governmental Body) would constitute a breach thereof or a
violation of any Legal Requirement, or in any way adversely affects the rights
of the Buyer or any Sellers thereunder, unless and until such consent or waiver
has been duly obtained or such assignment, transfer, sublicense or sublease has
otherwise become lawful. In the event and to the extent that the Sellers are
unable, with the assistance and cooperation of the Buyer, to obtain any such
required consent or waiver, the Sellers shall use reasonable efforts to provide
the Buyer the benefits of any such contract, license, lease, commitment, sales
order, purchase order or other agreement.
3. REPRESENTATIONS AND WARRANTIES OF THE SELLERS
The Sellers, jointly and severally, represent and warrant to the Buyer
as follows:
3.1 ORGANIZATION AND GOOD STANDING. Each of the Sellers is a corporation
duly organized, validly existing, and in good standing under the laws of the
state or other jurisdiction of its incorporation or organization, with full
corporate power and authority to conduct its business as it is now being
conducted, to own or use the properties and assets that it purports to own or
use, and to perform all its obligations under Applicable Contracts. Each of the
Sellers is duly qualified to do business as a foreign corporation and is in good
standing under the laws of each state or other jurisdiction in which either the
ownership or use of the properties owned or used by it, or the nature of the
activities conducted by it, requires such qualification, except where the
failure to so qualify, individually or in the aggregate, would not have a
Material Adverse Effect. None of the Sellers is in default under or in violation
of any provision of any of its Organizational Documents, or any other document,
instrument or agreement setting forth the terms and conditions of any shares of
capital stock or other securities of any Seller, or the rights and obligations
of any holder of any such securities. Set forth in Part 3.1 of the Disclosure
Letter is a list of the jurisdictions of incorporation of the Sellers and a list
of all states or other jurisdictions in which each of the Sellers is qualified
to do business.
3.2 AUTHORITY; NO CONFLICT.
(a) Each of the Sellers has the absolute and unrestricted right,
power and authority to execute and deliver this Agreement and to perform its
obligations hereunder. All corporate and other actions and proceedings to be
taken by or on the part of each Seller, the Stockholder or its Subsidiaries to
authorize and permit the execution and delivery by each Seller of this Agreement
and the instruments required to be executed and delivered by each Seller
pursuant hereto, the performance by each Seller of the obligations hereunder and
the consummation by each Seller of the transactions contemplated herein, have
been duly and properly taken. This Agreement has been duly executed and
delivered by each Seller and constitutes the legal, valid and binding obligation
of each Seller, enforceable against each Seller in accordance with its terms.
(b) Except as set forth in Part 3.2 of the Disclosure Letter,
neither the execution and delivery of this Agreement nor the consummation or
performance of any of the Contemplated Transactions will, directly or indirectly
(with or without notice or lapse of time): (i) contravene, conflict with, or
result in a violation of (A) any provision of the Organizational Documents of
any Seller, or (B) any resolution adopted by the board of directors or the
stockholders of any Seller; (ii) contravene, conflict with, or result in a
violation of, or give any Governmental Body or other Person the right to
challenge any of the Contemplated Transactions or to exercise any remedy or
obtain any relief under, any Legal Requirement or any Order to which any Seller,
or any of the assets owned or used by any Seller, may be subject; (iii)
contravene, conflict with, or result in a violation or breach of any provision
of, or give any Person the right to declare a default or exercise any remedy
under, or to accelerate the maturity or performance of, or to cancel, terminate,
or modify, any Applicable Contract (iv) result in the imposition or creation of
any Encumbrance upon or with respect to any of the assets owned or used by any
Seller; or (v) entitle any employee or other person to severance or other
payments by any Seller or create any other obligation to an employee or other
person, including any increase in benefits.
(c) Except as set forth in Part 3.2 of the Disclosure Letter, no
Seller will be required to give any notice to, make any filing with, or obtain
any Consent from any Governmental Body or to obtain any material Consents from
any nongovernmental Person in connection with the execution and delivery of this
Agreement or the consummation or performance of any of the Contemplated
Transactions.
3.3 SUBSIDIARIES. Set forth in Part 3.3 of the Disclosure Letter is a
list of all Subsidiaries of each Seller, including, with respect to each
Subsidiary, its jurisdiction of incorporation. All of the outstanding capital
stock of each Subsidiary has been duly authorized and validly issued, is fully
paid, nonassessable and free of preemptive rights, and is owned beneficially and
of record by the respective Seller or by another Subsidiary of a Seller free and
clear of any Encumbrance or restriction of any nature, including, without
limitation, any restriction on transfer or voting. No shares of any Subsidiary's
capital stock are reserved for issuance, and there are no options, warrants,
convertible instruments or other rights, agreements or commitments, contingent
or otherwise, obligating a Subsidiary to issue, sell or purchase shares of
capital stock. No Seller or any Subsidiary thereof is a partner or joint
venturer with any other person. No Seller or any Subsidiary thereof is subject
to any obligation, contingent or otherwise, to provide funds to or make an
investment (in the form of a loan, capital contribution or otherwise) in any
entity. No Seller or any Subsidiary thereof has any equity interest in any
corporation, partnership or other business entity other than the Subsidiaries
listed on the Disclosure Letter.
3.4 FINANCIAL STATEMENTS. The Sellers have delivered to the Buyer: (a)
an unaudited consolidated balance sheet of the Sellers as at June 30, 1997 (the
"1997 Balance Sheet"), and the related unaudited consolidated statements of
income, retained earnings and cash flows for the fiscal year then ended (the
"1997 Income Statements") as such results and amounts reflected in the 1997
Balance Sheet and 1997 Income Statements were included in the audited
consolidated balance sheet of the Stockholder as of June 30, 1997 and the
audited consolidated statements of
income, retained earnings and cash flows of the Stockholder for the fiscal year
ended, (b) an unaudited consolidated balance sheet of the Sellers (the "August
Balance Sheet") as at August 31, 1997 (the "Balance Sheet Date") and the related
unaudited consolidated statements of income, retained earnings and cash flows
for the two-month period then ended (the "August Income Statements") and (c) an
unaudited consolidated balance sheet of the Sellers (the "Xxxxx Balance Sheet")
as at January 31, 1997 contained in the Xxxxx Offering Memorandum. The 1997
Balance Sheet, the August Balance Sheet, 1997 Income Statements, the August
Income Statements and the Xxxxx Balance Sheet are referred to collectively as
the "Financial Statements". The Financial Statements have been derived from the
books and records of the Sellers and have been prepared in a consistent manner
and fairly present, in all material respects, the financial condition and the
results of operations and cash flows of the Sellers as at the respective dates
of and for the periods referred to therein all in accordance with GAAP other
than those exceptions to GAAP described in Part 3.4 of Disclosure Letter.
3.5 BOOKS AND RECORDS. The books of account, minute books, and other
records of the Sellers, all of which have been made available to the Buyer, are
complete and correct in all material respects.
3.6 TITLE TO PROPERTIES; ENCUMBRANCES. Except as set forth in Part 3.6
of the Disclosure Letter, the Sellers have valid and legally enforceable title
to all of the Assets free and clear of any Encumbrances whatsoever, and the
consummation of the Contemplated Transactions will vest in the Buyer all of the
Sellers' right, title and interest in and to the Assets.
3.7 CONDITION AND SUFFICIENCY OF ASSETS. The Assets are free from
material defects, are in good operating condition and repair, normal wear and
tear excepted, and are adequate for the uses to which they are being put. The
Assets are the only assets necessary for the continued conduct of the Business
after the Closing in substantially the same manner as conducted prior to the
Closing. Each of the Assets which is not owned by a Seller is in such condition
that upon the return of such property to its owner in its present condition at
the end of the relevant lease term or as otherwise contemplated by the
applicable agreements between such Seller and the owner or lessor thereof, the
obligations of such Seller to such owner or lessor will have been discharged in
all material respects.
3.8 ACCOUNTS RECEIVABLE. All trade and other accounts receivable of the
Sellers are reflected properly on the Sellers' books and records in accordance
with GAAP. All trade and other accounts receivable of the Sellers that are
reflected on the August Balance Sheet (except for those collected in full prior
to the Closing Date) or on the accounting records of the Sellers as of the
Closing Date (collectively, the "Accounts Receivable") represent or will
represent valid obligations arising from sales actually made or services
actually performed in the Ordinary Course of Business. To the Sellers'
Knowledge, there is no contest, claim, or right of set-off with any maker of an
Account Receivable relating to the amount or validity of such Account
Receivable.
3.9 NO UNDISCLOSED LIABILITIES. The Sellers have no liabilities or
obligations of any nature (whether absolute, accrued, contingent, or otherwise),
except for (a) liabilities or obligations set forth on the face of (rather than
in any notes thereto), or fully reserved against in,
the August Balance Sheet, (b) current liabilities incurred since the Balance
Sheet Date in the Ordinary Course of Business, (c) contractual liabilities
incurred in the Ordinary Course of Business which are not required by GAAP to be
reflected on a balance sheet; (d) liabilities described in Parts 3.2, 3.6, 3.10,
3.11, 3.13, 3.15, 3.25, 3.27, 3.28 and 3.29 of the Disclosure Schedule and (e)
such other liabilities which, individually or in the aggregate, do not exceed
$125,000; provided, however, none of the liabilities described above, other than
Excluded Liabilities, results from, arises out of, or relates to, is in the
nature of, or was caused by any breach of contract (other than breach of
warranty), tort, infringement or violation of law.
3.10 TAXES. Except as set forth in Part 3.10 of the Disclosure Letter,
each of the Sellers has prepared, or had prepared on its behalf, and duly and
timely filed all Tax Returns that it was required to file. All such Tax Returns
were correct and complete in all material respects. None of the Sellers is the
beneficiary of any extension of time within which to file any Tax Return. All
material Taxes owed by the Sellers have been paid when due, other than those
being contested in good faith and where adequate reserves (determined in
accordance with GAAP) have been established therefor. All Taxes of the Sellers
attributable to Tax periods or portions thereof ending on or prior to the
Closing Date, including Taxes that may become payable by the Sellers in future
periods in respect of any transactions or sales occurring on or prior to the
Closing Date, that have not yet been paid have, in the aggregate, been
adequately reflected as a liability on the books of the Sellers in accordance
with GAAP. None of the Sellers is currently being audited or examined by any
Governmental Body, no deficiencies for any Tax have been asserted against any
Seller that have not been paid in full and there are no pending Proceedings
relating to Taxes commenced against any Seller and to the Sellers' Knowledge no
such Proceeding has been Threatened. To the Sellers' Knowledge, no claim or
inquiry with respect to any material amount of Taxes has been made within the
past two years against any Seller by an authority in a jurisdiction where any
such Seller did not file Tax Returns that such Seller is or may be subject to
any Tax by that jurisdiction. Without limiting the generality of the foregoing,
each of the Sellers has withheld or collected and duly paid all material Taxes
required to have been withheld or collected and paid in connection with payments
to foreign persons, sales and use Tax obligations, and amounts paid or owing to
any employee, independent contractor, creditor, stockholder or other person.
Except as set forth in Part 3.10 of the Disclosure Letter, none of the Sellers
is party to any Tax allocation or sharing agreement or is a member of an
affiliated group filing a consolidated federal income Tax Return. The
representations and warranties set forth in this Section 3.10 are not applicable
to the extent the Assets and the Business cannot be made subject to Tax liens
and the Buyer cannot be made liable for Taxes or otherwise incur Damages as a
result thereof relating to the matters constituting breaches of such
representations and warranties.
3.11 EMPLOYEE BENEFITS. Part 3.11 of the Disclosure Letter contains a
true, correct and complete list of all benefit plans (as defined in Section 3(3)
of ERISA) and all pension, benefit, profit sharing, retirement, deferred
compensation, welfare, insurance, disability, bonus, vacation pay, severance pay
and other similar plans, programs and agreements, whether reduced to writing or
not, relating to any of the employees of any Seller (the "Plans") and, except as
set forth in Part 3.11 of the Disclosure Letter, none of the Sellers has any
obligations, contingent or otherwise, past or present, under the terms of any
Plan. With respect to all Plans, each of the Sellers is in compliance in all
material respects with all applicable Legal Requirements, including
ERISA. Each of the Sellers has, in all material respects, performed all
obligations required to be performed by it under, and is not in material
violation of, and there has been no material default or material violation by
any other party with respect to, any of the Plans and the Sellers have made all
required contributions thereto. There are no pending or, to the Knowledge of the
Sellers, Threatened Proceedings by employees or former employees of any Seller,
or beneficiaries or spouses of any of the above, involving any Plan. The Sellers
have provided the Buyer with copies of each Plan that is in writing and with a
written summary of each oral Plan. None of the Sellers nor any ERISA Affiliate
(as defined below) contributes to or has an obligation to contribute to or has
contributed to or had an obligation to contribute to within the past six years,
a "multi-employer" plan as defined in Section 4001(a)(3) of ERISA. None of the
Sellers nor any ERISA Affiliate has withdrawn from a multi-employer plan in a
complete or partial withdrawal that resulted in any unsatisfied employer
liability. None of the Sellers has maintained or contributed to any employee
benefit plan that is subject to Section 412 of the Code or Title IV of ERISA.
"ERISA Affiliate" means an entity which is a member of (i) a controlled group of
corporations (as defined in Section 414(b) of the Code), (ii) a group of trades
or businesses under common control (as defined in Section 414(c) of the Code),
or (iii) an affiliated service group (as defined in Section 414(m) of the Code
or the regulations under Section 414(o) of the Code), any of which includes any
Seller.
3.12 COMPLIANCE WITH LEGAL REQUIREMENTS.
(a) Except as set forth in Part 3.12 of the Disclosure Letter and
except for such events which, individually or in the aggregate, would not result
in Damages in excess of $125,000: (i) each of the Sellers is, and at all times
since February 10, 1995, has been, in compliance in all material respects with
each Legal Requirement that is or was applicable to it or to the conduct or
operation of its business or the ownership or use of any of its assets; (ii) no
event has occurred or circumstance exists that (with or without notice or lapse
of time) may constitute or result in a violation by any Seller of, or a failure
on the part of any Seller to comply with, any Legal Requirement in any material
respect; (iii) none of the Sellers has received, at any time since February 10,
1995, any notice or other communication (whether oral or written) from any
Governmental Body or any other Person regarding any actual, alleged, possible,
or potential violation of, or failure to comply with, any Legal Requirement.
(b) Part 3.12 of the Disclosure Letter sets forth a list of all
Governmental Authorizations material to the Business. Such listed Governmental
Authorizations are the only Governmental Authorizations necessary for the
conduct of the business as currently conducted. Except as set forth in Part 3.12
of the Disclosure Letter and except for such events which, individually or in
the aggregate, would not result in Damages in excess of $125,000: (i) each of
the Sellers is, and at all times since February 10, 1995 has been, in compliance
in all material respects with each such Governmental Authorization, (ii) no
event has occurred or circumstance exists that may (with or without notice or
lapse of time) constitute or result directly or indirectly in a violation of or
a failure to comply with any term or requirement of any such Governmental
Authorization; and (iii) none of the Sellers has received at any time since
February 10, 1995 any notice or other communication (whether oral or written)
from any Governmental Body or any other Person regarding (A) any actual,
alleged, possible, or potential violation of or failure to
comply with any term or requirement of any such Governmental Authorization, or
(B) any actual, proposed, possible, or potential revocation, withdrawal,
suspension, cancellation, termination of, or modification to any such
Governmental Authorization.
(c) For purposes of this Section 3.12(c), the "Products" shall
mean the ventilator and pulmonary monitor products and all other devices
manufactured and sold by the Sellers. Each of the Sellers and each Product in
current commercial distribution, is currently duly registered (in the case of
the Sellers) and listed (in the case of each Product) with the United States
Food and Drug Administration ("FDA") under section 510 of the Federal Food, Drug
and Cosmetic Act, 21 U.S.C. 301 et seq. (the "FDA Act"), and the applicable
rules and regulations thereunder. Each Product in current commercial
distribution is a Class II medical device as defined under 21 U.S.C. 360c (a)
(1) (A), (B) and applicable rules and regulations thereunder and was first
marketed under, and is covered by, a premarket notification submission to the
FDA in compliance with 21 U.S.C. 360 (k) and the applicable rules and
regulations thereunder or was on the market prior to May 28, 1976. To the
Knowledge of the Sellers, each of the Sellers is currently in compliance with,
and each Product in current commercial distribution is manufactured, prepared,
assembled and processed in compliance with the Quality System Regulations set
forth in 21 C.F.R. part 820. To the Knowledge of the Sellers, each of the
Sellers is in compliance in all material respects with the written procedures,
recordkeeping and FDA reporting requirements for Medical Device Reporting set
forth in 21 C.F.R. part 803. The premises of Bear Medical and its records
relating to the Products were most recently inspected by the FDA in July 10-23,
1997 and a true and complete copy of the report of such inspection has been
furnished to the Buyer. To the Knowledge of the Sellers, such Sellers have taken
corrective actions to address all observations noted therein. Since July 23,
1997, the FDA has not inspected such premises and records. None of the Sellers
is subject to any enforcement proceedings by the FDA and to the Knowledge of the
Sellers no Proceedings have been Threatened. None of the Sellers has introduced
in commercial distribution during the period of six calendar years immediately
preceding the date hereof any Products which were upon their shipment by any
Seller adulterated or misbranded in violation of 21 U.S.C. 331.
(d) For purposes of this Section 3.12, Legal Requirements shall
not include Legal Requirements relating to Environmental Law, ERISA or Taxes.
3.13 LEGAL PROCEEDINGS; ORDERS.
(a) Except as set forth in Part 3.13 of the Disclosure Letter,
there is no pending Proceeding involving claims or amounts in excess of
$100,000, excluding Proceedings relating to Taxes,: (i) that has been commenced
by or against any Seller or that otherwise relates to or may affect, the
business of, or any of the assets owned or used by, any Seller, or (ii) that
challenges, or that may have the effect of preventing, delaying, making illegal,
or otherwise interfering with, any of the Contemplated Transactions. To the
Knowledge of the Sellers, (A) no such Proceeding has been Threatened, and (B) no
event has occurred or circumstance exists that may give rise to or serve as a
basis for the commencement of any such Proceeding.
(b) Except as set forth in Part 3.13 of the Disclosure Letter
there is no Order involving claims or amounts in excess of $100,000 to which any
Seller, or any of the assets owned or used by any Seller, is subject. Each of
the Sellers is in full compliance with all of the terms and requirements of each
Order to which it, or any assets owned or used by it, is subject.
3.14 ABSENCE OF CERTAIN CHANGES AND EVENTS. Except as set forth in Part
3.14 of the Disclosure Letter, since the Balance Sheet Date, each of the Sellers
has conducted its business only in the Ordinary Course of Business and there has
not been any:
(a) except in the Ordinary Course of Business, payment or
increase by any Seller of any bonuses, salaries, commissions or other
compensation to any stockholder, director, officer, or employee or entry into
any employment, severance, or similar Contract with any stockholder, director,
officer, or employee;
(b) adoption of, or increase in the payments to or benefits
under, any profit sharing, bonus, deferred compensation, savings, insurance,
pension, retirement, or other employee benefit plan for or with any employees of
any Seller;
(c) damage to or destruction or loss of any asset or property of
any Seller, whether or not covered by insurance, having a Material Adverse
Effect;
(d) except in the Ordinary Course of Business, sale (other than
sales of inventory in the Ordinary Course of Business), lease, or other
disposition of any asset or property of any Seller or mortgage, pledge, or
imposition of any Encumbrance on any asset or property of any Seller;
(e) except in the Ordinary Course of Business, cancellation or
waiver of any claims or rights with a value to any Seller in excess of $75,000;
(f) material change in the accounting methods used by any Seller;
(g) material adverse change in the financial condition, assets,
liabilities, earnings, business or prospects of the Sellers, taken as a whole;
(h) indebtedness or other liability or obligation (whether
absolute, accrued, contingent or otherwise) incurred, or other transaction
(except that reflected in this Agreement) engaged in, by any Seller, except
those in the Ordinary Course of Business which are, individually and in the
aggregate, less than $75,000 in amount;
(i) acquisition of any assets other than in the Ordinary Course
of Business;
(j) material reduction in the rate of, or gross margins
associated with, bookings or orders for the products or services of any Seller;
or
(k) agreement, whether oral or written, by any Seller to do any
of the foregoing.
3.15 CONTRACTS; NO DEFAULTS.
(a) Part 3.15(a) of the Disclosure Letter contains a complete and
accurate list of each of the following Applicable Contracts in effect as of the
date hereof, whether oral or written, along with a description of all oral
Applicable Contracts: (i) each agreement that involves aggregate future payments
by any Seller of more than $75,000; (ii) each supply, distributorship, sales
agency, franchise, joint venture or partnership agreement; (iii) each agreement
not made in the Ordinary Course of Business which is to be performed after the
Closing; (iv) each outstanding commitment to make a capital expenditure, capital
addition or capital improvement involving an amount in excess of $50,000; (v)
each real or personal property lease; (vi) each agreement to be assumed by the
Buyer relating to the loan of money or availability of credit to or from any
Seller; (vii) each agreement limiting the freedom of any Seller to compete in
any line of business or with any Person; (viii) each agreement, contract,
arrangement or understanding between any Seller and any present or former
employee, or other agreements relating to the provision of services; (ix) each
license agreement relating to patents, trademarks, know-how or other
intellectual property, whether as licensee or licensor; (x) each collective
bargaining agreement or other contract or commitment to or with any labor union
or other group of employees; (xi) each mortgage, pledge, security, title
retention, or similar agreement encumbering any of the Assets; (xii) each
agreement providing for payments to or by any Person based on sales, purchases,
revenues, profits or assets; (xiii) each guaranty or similar undertaking with
respect to the obligations of any other Person; (xiv) each agreement relating to
the acquisition or disposition of significant assets, businesses or companies
within the past five years; and (xv) each other agreement which cannot be
terminated by any Seller without consequences of a default or termination having
a Material Adverse Effect. In addition, Part 3.15(a) of the Disclosure Letter
contains a complete and accurate list of all Contracts to which the Stockholder
is a party that relate to the Business. The Sellers have delivered to the Buyer
true and complete copies of all of the Contracts listed in Part 3.15(a) of the
Disclosure Letter.
(b) Except as set forth in Part 3.15(b) of the Disclosure Letter,
each Contract ("Material Applicable Contract") identified or required to be
identified in Part 3.15(a) of the Disclosure Letter, including any Contracts
entered into after the date hereof that otherwise would be required to be
identified in Part 3.15(a) of the Disclosure Letter but for the fact it was
entered into after the date hereof, is in full force and effect and is valid and
enforceable in accordance with its terms. Except as set forth in Part 3.15(b) of
the Disclosure Letter and except for any noncompliance the effect of which would
not, individually or in the aggregate, result in Damages in excess of $50,000:
(i) each Seller is, and at all times since January 1, 1995 has been, in
compliance with all applicable terms and requirements of each Material
Applicable Contract to which it is a party; (ii) each other Person that has any
obligation or liability under any Material Applicable Contract is, and at all
times since January 1, 1995 has been, in compliance with all applicable terms
and requirements of such Material Applicable Contract; and (iii) no Seller has
given to or received from any other Person, at any time since January 1, 1995,
any notice or other
communication (whether oral or written) regarding any actual, alleged, possible,
or potential violation or breach of, or default under, any Material Applicable
Contract.
(c) There are no renegotiations of, attempts to renegotiate, or
outstanding rights to renegotiate any material amounts paid or payable to any
Seller under any Material Applicable Contract with any Person having the
contractual or statutory right to demand or require such renegotiation and no
such Person has made written demand for such renegotiation.
3.16 INSURANCE. Part 3.16 of the Disclosure Letter sets forth a list
(including the name of the insurer, the name of the policyholder, the name of
each insured, the policy number and periods of coverage, and the scope of
coverage) of all policies of fire, theft, casualty, liability, burglary,
fidelity, workers compensation, business interruption, environmental, product
liability, automobile and other forms of insurance under which any Seller is the
beneficiary, including any self-insurance arrangement affecting any Seller. No
Seller nor the Stockholder has received any notice from any insurer under any
such policy disclaiming coverage or canceling or materially amending any such
policy. Such policies or extensions or renewals thereof in such amounts will be
outstanding and in full force and effect without interruption until the Closing
Date. Each of the Sellers and the Stockholder, as applicable, has paid all
premiums due, and has otherwise performed all of its obligations under, each
such policy. Each of the Sellers and the Stockholder, as applicable, has given
proper and timely notice to the insurer of all claims that may be insured under
such policies. Each of the Sellers is covered by insurance in scope and amount
sufficient to satisfy the insurance provision of each written arrangement listed
or required to be listed in Part 3.15 of the Disclosure Letter. The Sellers have
delivered true and complete copies of all such insurance policies to the Buyer.
3.17 ENVIRONMENTAL MATTERS. Except as set forth in Part 3.17 of the
Disclosure Letter and except for such events which, individually or in the
aggregate, would not have a Material Adverse Effect:
(a) Each of the Sellers is, and has been, in compliance with all
Environmental Laws. None of the Sellers has received any actual or Threatened
order, notice, or other communication from (i) any Governmental Body or private
citizen acting in the public interest, (ii) the current or prior owner or
operator of any Facilities, or (iii) any other Person, of any actual or
potential violation or failure to comply with any Environmental Law, or of any
actual or Threatened obligation to undertake or bear the cost of any
Environmental, Health and Safety Liabilities with respect to any of the
Facilities or any other properties or assets (whether real, personal, or mixed)
in which any Seller (or any predecessor) has or had an interest, or with respect
to any property or facility at or to which Hazardous Materials were generated,
manufactured, refined, transferred, imported, used, transported or processed by
any Seller (or any predecessor), or any other Person for whose conduct any
Seller is or may be held responsible, or from which Hazardous Materials have
been transported, treated, stored, handled, transferred, disposed, recycled, or
received.
(b) There are no pending or, to the Knowledge of the Sellers,
Threatened claims, Encumbrances, or other restrictions of any nature, resulting
from any Environmental,
Health and Safety Liabilities or arising under or pursuant to any Environmental
Law, with respect to or affecting any of the Facilities or any other properties
and assets (whether real, personal, or mixed) in which any Seller (or any
predecessor) has or had an interest.
(c) None of the Sellers nor to the Knowledge of the Sellers, any
other Person for whose conduct any Seller is or may be held responsible, has any
Environmental, Health and Safety Liabilities with respect to the Facilities or
any other properties and assets (whether real, personal, or mixed) in which any
Seller (or any predecessor) has or had an interest, or to the Knowledge of the
Sellers, at any property geologically or hydrologically adjoining the Facilities
or any other such property or assets.
(d) There has been no Release or, to the Knowledge of the
Sellers, Threat of Release, of any Hazardous Materials at or from the Facilities
or to the Knowledge of the Sellers, at any other locations where any Hazardous
Materials were generated, manufactured, refined, transferred, transported,
produced, imported, used, or processed at, from or by the Facilities, or at,
from or by any other properties and assets (whether real, personal, or mixed) in
which any Seller (or any predecessor) has or had an interest, or to the
Knowledge of the Sellers any geologically or hydrologically adjoining property,
whether by any Seller or any other Person.
(e) The Sellers have delivered to the Buyer true and complete
copies and results of any reports, studies, analyses, tests, or monitoring
possessed or initiated by any Seller or the Stockholder pertaining to Hazardous
Materials or Hazardous Activities in, on, or under the Facilities, or concerning
compliance by any Seller, or any other Person for whose conduct any Seller is or
may be held responsible, with Environmental Laws or Occupational Safety and
Health Laws.
(f) Part 3.17 of the Disclosure Letter sets forth or describes in
reasonable detail: (i) all landfills, surface impoundments, pits, underground
injections xxxxx, waste piles, incinerators and any other units used by any
Seller since January 1, 1995 for the handling, treatment, recycling, storage or
disposal of Hazardous Materials, (ii) all underground or above-ground storage
tanks at the Facilities or on any property owned or operated at any time by any
Seller (or any predecessor) and (iii) a list of all haulers or carriers of
Hazardous Materials used by any Seller since January 1, 1995 to handle,
transport or dispose of any Hazardous Materials.
3.18 EMPLOYEES; LABOR DISPUTES. Part 3.18 of the Disclosure Letter
contains a list of all persons employed by the Sellers as of the date hereof,
along with the position and the annual rate of compensation of each such person
and indicates which employees have entered into a confidentiality and assignment
of inventions agreement with a Seller. To the Sellers' Knowledge, no key
employee or group of employees employed by any Seller has any plans to terminate
employment with such Seller (other than for the purpose of accepting employment
with the Buyer following the Closing) or not to accept employment with the
Buyer. None of the Sellers is, or since January 1, 1995, has been, a party to
any collective bargaining or other labor Contract nor are any of their employees
covered by any such Contract. Since January 1, 1995, there has not been, there
is not presently pending or existing, and to the Knowledge of the Sellers, there
is not
Threatened, any strike, slowdown, picketing, work stoppage, labor arbitration or
proceeding in respect of the grievance of any employee, application or complaint
filed by an employee or union with the National Labor Relations Board or any
comparable Governmental Body, organizational activity, or other labor dispute
against or affecting any Seller or any Seller's premises, and no application for
certification of a collective bargaining agent is pending or to the Knowledge of
the Sellers is Threatened. To the Knowledge of the Sellers, no event has
occurred or circumstance exists that could provide the basis for any work
stoppage or other labor dispute. There is no lockout of any employees by any
Seller, and no such action is contemplated by any Seller.
3.19 INTELLECTUAL PROPERTY. The Sellers own or have adequate licenses to
use, free and clear of any Encumbrance or obligation of payment, all patents,
trademarks, trade names, service marks, brand names and copyrights, and
applications therefor, used in the conduct of the Business or the use of which
is necessary for the conduct of the Business (the "Intangibles"). Set forth in
Part 3.19 of the Disclosure Letter is a complete list and summary description of
all Intangibles and licenses or sublicenses entered into or granted by or to any
Seller with respect thereto and the countries of registration as of the date
hereof. The Sellers own or possess adequate rights to use, free and clear of any
Encumbrance or obligation of payment, all inventions, technology, technical
know-how, processes, designs, trade secrets, vendor and customer lists and other
confidential information required for or used in the Business ("Trade Secrets").
No Person has made any claim or demand upon any Seller pertaining to, and no
Proceedings are pending, or to the Knowledge of the Sellers Threatened, which
challenge the rights of any Seller in respect of any Intangibles or Trade
Secrets. No Intangible owned or used by any Seller is subject to any Order. None
of the Sellers has infringed or engaged in the unauthorized use of, or violated
any confidentiality agreement that pertains to, any patent, trademark, trade
name, service xxxx, brand name or copyright, or any invention, technology,
technical know-how, process, design, trade secret or other intellectual property
of another Person. To the Knowledge of the Sellers, there has been no
infringement or unauthorized use of any Intangible or Trade Secret by any other
Person. Except as set forth in Part 3.19 of the Disclosure Letter, no patent
maintenance or other fees with respect to any patents owned by any of the
Sellers will be due within six (6) months after the Closing Date.
3.20 DISCLOSURE. To the Knowledge of the Sellers, no statement in the
Disclosure Letter contains any untrue statement of a material fact or omits to
state a material fact necessary, in light of the circumstances under which they
were made, in order make such statements not misleading.
3.21 RELATIONSHIPS WITH AFFILIATES. Except as set forth in Part 3.21 of
the Disclosure Letter, no Affiliate of any Seller has, or at any time after
January 1, 1994 has had, any interest in any property (whether real, personal,
or mixed and whether tangible or intangible) used in or pertaining to the
Business. Except as set forth in Part 3.21 of the Disclosure Letter, none of the
Sellers nor any Affiliate of any Seller owns, or has owned, of record or as
beneficial owner, an equity interest or any other financial or profit interest
in any Person that has (i) had business dealings or a financial interest in any
transaction with any Seller, or (ii) engaged in a Competing Business except for
ownership of less than one percent of the outstanding capital stock of any
Competing Business that is publicly traded on any recognized exchange or in the
over-the-counter
market. Except as set forth in Part 3.21 of the Disclosure Letter, no Affiliate
of any Seller is a party to any Contract with, or has any claim or right
against, any Seller.
3.22 BROKERS OR FINDERS. None of the Sellers nor any officers or agents
thereof have incurred any obligation or liability, contingent or otherwise, for
brokerage or finders' fees or agents' commissions or other similar payment in
connection with the Contemplated Transactions for which the Buyer may be held
liable.
3.23 NO TERMINATION OF RELATIONSHIP. To the Knowledge of the Sellers no
distributor, customer, supplier, lender, key employee or other person which has
an existing relationship with any Seller which is material to the Sellers,
intends not to continue such relationship with the Buyer substantially on the
same terms after the Closing as a result of the execution of this Agreement or
the performance of the Contemplated Transactions.
3.24 CUSTOMERS AND SUPPLIERS. No unfilled customer orders or commitments
obligating any Seller to process, manufacture or deliver products or perform
services, which orders or commitments are material, individually or in the
aggregate, to the Sellers will result in a material loss to the business of the
Sellers upon completion of performance. No purchase orders or commitments of any
Seller, which orders or commitments are material, individually or in the
aggregate, to the Sellers, are materially in excess of normal requirements for
the Sellers, nor are prices provided therein materially in excess of current
market prices for the products or services to be provided thereunder. No
material supplier of any Seller has indicated within the past year that it will
stop, or materially decrease the rate of supplying materials, products, or
services to such Seller and no material customer of any Seller has indicated
within the past year that it will stop, or materially decrease the rate of,
buying materials, products or services from such Seller. Part 3.24 of the
Disclosure Letter sets forth a list of (a) each customer that accounted for more
than 5% of the revenues of the Sellers during the last fiscal year and (b) each
supplier that is the sole supplier of any significant product or component to
the Sellers.
3.25 RECALLS. Except as set forth in Part 3.25 of Disclosure Letter, no
products of the Sellers have been recalled since January 1, 1992 and, to the
Knowledge of the Sellers, there is no basis for any such recall.
3.26 [INTENTIONALLY OMITTED ]
3.27 PRODUCT AND SERVICE WARRANTIES. The Sellers have provided the Buyer
with copies of the current standard warranty used for each of the products and
services of the Sellers. Part 3.27 of the Disclosure Letter describes any and
all other product or service warranties made by or on behalf of the Sellers that
deviate materially from the current standard warranties and which remain in
effect on the date hereof, or pursuant to which any Seller has any remaining
obligations.
3.28 PROPERTY, PLANT AND EQUIPMENT.
(a) None of the Sellers owns, or is obligated to purchase, any
real property.
(b) Part 3.28 (b) of the Disclosure Letter, lists and briefly
describes all real property leased or subleased by any Seller. The Sellers have
delivered to the Buyer correct and complete copies of the leases and subleases
listed in Section 3.28(b), which have not been amended or modified since the
date thereof, of the Disclosure Letter. With respect to each lease and sublease
listed in Section 3.28(b) of the Disclosure Letter:
(i) the lease or sublease is legal, valid, binding,
enforceable, and in full force and effect;
(ii) except as set forth in Section 3.28 (b) of the
Disclosure Letter, the lease or sublease is assignable to the Buyer without the
consent or approval of or any payment to any party, does not require any
permission or consent upon a change of control of such Seller, will continue to
be legal, valid, binding, enforceable, and in full force and effect on identical
terms following the consummation of the transactions contemplated hereby
(including the assignments and assumptions referred to in Section 2 above);
(iii) to the Sellers' Knowledge no party to the lease or
sublease is in material breach or default, and no event has occurred which, with
notice or lapse of time, could constitute a material breach or default or permit
termination, modification, or acceleration thereunder;
(iv) no party to the lease or sublease has repudiated
any provision thereof;
(v) there are no disputes, oral agreements, or
forbearance programs in effect as to the lease or sublease;
(vi) with respect to each sublease, the representations
and warranties set forth in subsections (i) through (v) above are true and
correct with respect to the underlying lease;
(vii) no Seller has assigned, transferred, conveyed,
mortgaged, deeded in trust, or encumbered any interest in the leasehold or
subleasehold;
(viii) all facilities leased or subleased thereunder have
received all approvals of Governmental Bodies (including Governmental
Authorizations) required in connection with the operation thereof and have been
operated and maintained in accordance with applicable Legal Requirements; and
(ix) all facilities leased or subleased thereunder are
supplied with utilities and other services necessary for the operation of said
facilities.
3.29 INDEBTEDNESS AND GUARANTIES. Part 3.29 of the Disclosure Letter
sets forth a true and complete list (indicating the obligor, the beneficiary,
the amount and date of maturity or expiration), including the names of the
parties thereto, of all debt instruments, loan agreements, indentures,
guaranties or other written obligations which relate to (i) indebtedness for
borrowed money or (ii) money loaned to others, provided that the Sellers shall
not be required to list any such obligations which (a) individually total less
than $75,000 or (b) are general corporate obligations of the Sellers, which are
not secured by any of the Assets, and which do not constitute an Assumed
Liability. All of the aforesaid items were entered into in the Ordinary Course
of Business, are valid and binding, in full force and effect and are enforceable
in accordance with their respective terms; there exists no breach or default, or
any event which with notice or lapse of time or both, would constitute a breach
or default by any party thereto; and there are no prepayment penalties
associated therewith.
3.30 CORPORATE PRACTICES. To the Knowledge of the Sellers, none of the
Sellers has, directly or indirectly: (i) used any corporate funds for unlawful
contributions, gifts, entertainment or other unlawful expenses relating to
political activity; (ii) made any unlawful payment to foreign or domestic
government officials or employees, or to foreign or domestic political parties
or campaigns, from corporate funds; (iii) violated any provisions of the Foreign
Corrupt Practices Act of 1977; (iv) established or maintained any unlawful or
unrecorded fund of monies or other assets; (v) made any false or fictitious
entry on its books or records; (vi) made any unlawful bribe, rebate, payoff,
influence payment, kickback or other unlawful payment to any person; (vii) made
any unlawful bribe, kickback, finder's fee, commission or other payment or
compensation of a similar or comparable nature to any person or entity, private
or public, regardless of form, whether in money, property or services, to obtain
favorable treatment in securing business or to obtain special concessions, or to
pay for favorable treatment for business secured or for special concessions
already obtained; (viii) knowingly submitted, or caused to be submitted, any
materially false claims against the U.S. Government or (ix) made, or caused to
be made, any false statements to the U.S. Government subject to prosecution
under 18 U.S.C. Section 1001.
3A. REPRESENTATIONS AND WARRANTIES OF THE STOCKHOLDER
The Stockholder represents and warrants to the Buyer as follows:
3A.1 ORGANIZATION AND GOOD STANDING. The Stockholder is a
corporation duly organized, validly existing, and in good standing under the
laws of the State of Delaware.
3A.2 AUTHORITY; NO CONFLICT.
(a) The Stockholder has full power and authority (including full
corporate power and authority) to execute and deliver this Agreement and to
perform its obligations hereunder. All corporate and other actions and
proceedings to be taken by or on the part of the Stockholder to authorize and
permit the execution and delivery by the Stockholder of this Agreement and the
instruments required to be executed and delivered by the Stockholder pursuant
hereto, the performance by the Stockholder of its obligations hereunder and the
consummation by the Stockholder of the transactions contemplated herein, have
been duly and properly taken. This
Agreement has been duly executed and delivered by the Stockholder and
constitutes the legal, valid and binding obligation of the Stockholder,
enforceable against the Stockholder in accordance with its terms.
(b) Neither the execution and delivery of this Agreement by the
Stockholder nor the consummation or performance of any of the Contemplated
Transactions by the Stockholder and the Sellers will contravene, conflict with
or result in a violation under or give any Person the right to prevent, delay,
or otherwise interfere with any of the Contemplated Transactions pursuant to:
(i) any provision of the Stockholder's Organizational Documents; (ii) any
resolution adopted by the board of directors of the Stockholder; (iii) any Legal
Requirement or Order to which the Stockholder may be subject; or (iv) any
Contract to which the Stockholder is a party or by which the Stockholder may be
bound.
The Stockholder is not and will not be required to obtain any Consent from any
Person in connection with the execution and delivery of this Agreement by the
Stockholder and the Sellers or the consummation or performance of any of the
Contemplated Transactions by the Stockholder and the Sellers.
4. REPRESENTATIONS AND WARRANTIES OF THE BUYER
The Buyer and Thermo represent and warrant to the Sellers as follows:
4.1 ORGANIZATION AND GOOD STANDING. Each of the Buyer and Thermo is
a corporation duly organized, validly existing, and in good standing under the
laws of the State of Delaware.
4.2 AUTHORITY; NO CONFLICT.
(a) Each of the Buyer and Thermo has the absolute and
unrestricted right, power, and authority to execute and deliver this Agreement
and to perform its obligations under this Agreement. All corporate and other
actions and proceedings to be taken by or on the part of the Buyer and Thermo to
authorize and permit the execution and delivery by the Buyer and Thermo, as
applicable, of this Agreement and the instruments required to be executed and
delivered by each of the Buyer and Thermo pursuant hereto, the performance by
the Buyer and Thermo of its obligations hereunder and the consummation by each
of the Buyer and Thermo of the transactions contemplated herein, have been duly
and properly taken. This Agreement has been duly executed and delivered by each
of the Buyer and Thermo and constitutes the legal, valid, and binding obligation
of the Buyer and Thermo, enforceable against them in accordance with its terms.
(b) Except as set forth in EXHIBIT F, neither the execution and
delivery of this Agreement by the Buyer or Thermo nor the consummation or
performance of any of the Contemplated Transactions by the Buyer or Thermo will
give any Person the right to prevent, delay, or otherwise interfere with any of
the Contemplated Transactions pursuant to: (i) any provision of either the
Buyer's or Thermo's Organizational Documents; (ii) any resolution adopted
by the board of directors or the stockholders of the Buyer or Thermo; (iii) any
Legal Requirement or Order to which the Buyer or Thermo may be subject; or (iv)
any Contract to which the Buyer or Thermo is a party or by which the Buyer or
Thermo may be bound.
Except as set forth in EXHIBIT F, neither the Buyer or Thermo is or will be
required to obtain any Consent from any Person in connection with the execution
and delivery of this Agreement by the Buyer or Thermo or the consummation or
performance of any of the Contemplated Transactions by the Buyer or Thermo.
4.3 CERTAIN PROCEEDINGS. There is no pending Proceeding that has been
commenced against the Buyer or Thermo that challenges, or may have the effect of
preventing, delaying, making illegal, or otherwise interfering with, any of the
Contemplated Transactions. To the Buyer's and Thermo's knowledge, no such
Proceeding has been Threatened.
4.4 BROKERS AND FINDERS. Neither Thermo, the Buyer nor its officers and
agents have incurred any obligation or liability, contingent or otherwise, for
brokerage or finders' fees or agents' commissions or other similar payment in
connection with this Agreement for which any Seller or the Stockholder may be
liable.
5. CONDITIONS TO OBLIGATIONS
5.1. CONDITIONS TO OBLIGATIONS OF THE BUYER. The obligations of the
Buyer to consummate the transactions contemplated hereby are subject to the
satisfaction, on or before the Closing, of the following conditions (unless
waived in writing by the Buyer in the manner provided in Section 8.6 hereof):
(a) REPRESENTATIONS, WARRANTIES AND PERFORMANCE OF THE SELLERS
AND THE STOCKHOLDER. No event shall have occurred at any time and no condition
shall exist which makes any of the representations or warranties of the Sellers
or the Stockholder contained in this Agreement untrue or incorrect on the date
when made or, in all material respects (other than such representations and
warranties which are qualified by materiality, Material Adverse Effect or a
minimum dollar limitation), on the Closing Date (or if a representation or
warranty is made as of a specific date, untrue or incorrect as of such date)
except any such event or condition that would not (together with all other such
events or conditions) be a Material Event; provided, however, that if any event
or condition shall exist which makes any of the representations or warranties of
the Sellers or the Stockholder contained in this Agreement untrue or incorrect
on the date when made or, in all material respects (other than such
representations and warranties which are qualified by materiality, Material
Adverse Effect or a minimum dollar limitation), on the Closing Date (or, if a
representation or warranty is made as of a specific date, untrue or incorrect as
of such date), and such event or condition would not (together with all other
such events or conditions) be a Material Event, then the Sellers shall indemnify
the Buyer for any Damages resulting from such event or condition pursuant to
Section 7, subject to the Indemnity Basket, and; provided, further, if any such
event or condition would (together with all other such events or conditions) be
a Material Event and neither party terminates this Agreement pursuant to Section
9, then the Sellers shall set aside in escrow and indemnify the Buyer for any
such
Damages resulting from such event or condition pursuant to Section 7 and the
limit on the aggregate indemnity obligations of the Sellers and the Stockholder
set forth in Section 7.4 shall be increased by the amount of such Damages. The
Sellers and the Stockholder shall have performed the obligations and complied
with the covenants required to be performed or to be complied with by them under
this Agreement, in all material respects, prior to the Closing.
(b) AUTHORIZATION. All action necessary to authorize the
execution, delivery and performance hereof by the Sellers and the Stockholder
and the consummation of the transactions contemplated hereby shall have been
duly and validly taken by the Sellers and the Stockholder. The Sellers shall
have furnished the Buyer with a copy of all resolutions adopted by their
respective Boards of Directors and shareholders in connection with such actions,
certified by the Secretary or an Assistant Secretary of such Seller, together
with copies of such other instruments and documents as the Buyer shall have
reasonably requested.
(c) GOVERNMENT CONSENTS; XXXX-XXXXX-XXXXXX. Any Governmental Body
having jurisdiction over any Seller or the Stockholder or over the Buyer or
Thermo, to the extent that its consent or approval is required by applicable
Legal Requirements for the performance of this Agreement or the consummation of
the transactions contemplated hereby shall have granted any necessary consent or
approval. Further, the waiting period and any extensions thereof as prescribed
by the regulations promulgated under Xxxx-Xxxxx-Xxxxxx shall have expired or
terminated without receipt of any objections or commencement of litigation or
threat thereof (in each case that has not been withdrawn) by the Federal Trade
Commission or any other appropriate Governmental Body to restrain or prevent the
transactions contemplated thereby.
(d) PERMITS AND APPROVALS. Any and all consents, permits,
waivers, approvals or other actions listed on EXHIBIT E shall have been
obtained, and shall be in full force and effect, and no such consent, permit,
waiver, approval or other action shall contain any provision that in the
reasonable judgment of the Buyer is unduly burdensome.
(e) GOOD STANDING CERTIFICATES. Each of the Sellers and the
Stockholder shall have delivered to the Buyer a corporate good standing
certificate from its jurisdiction of incorporation.
(f) OFFICER'S CERTIFICATE. Each of the Sellers and the
Stockholder shall have delivered to the Buyer a certificate executed by an
officer of such Seller and the Stockholder, as applicable, dated the Closing
Date, certifying to the fulfillment of the conditions specified in Section
5.1(a).
(g) LEGAL OPINION. The Buyer shall have received from Dickstein,
Shapiro, Xxxxx & Xxxxxxxx LLP, counsel to the Sellers, an opinion in the form
reasonably satisfactory to the Buyer and its counsel.
(h) DOCUMENTS SATISFACTORY. The form and substance of all legal
matters contemplated herein and of all papers used or delivered hereunder shall
be reasonably acceptable to the Buyer, and the Buyer shall have received all
documents that it may have reasonably
requested in connection with the transactions contemplated hereby, in form and
substance reasonably satisfactory to it.
(i) BACKLOG. The aggregate backlog of the Sellers as of the
Closing Date will be greater than or equal to $3,000,000. For purposes of this
Section 5.1(i), "backlog" means all firm orders and commitments for the Sellers'
products and services which orders and commitments contain terms and conditions
that are consistent with the Sellers' practices over the past year.
(j) ALLIED CONTRACTS. Allied shall have assigned to the Buyer all
of its right, title and interest in and to the Product Development and License
Agreement dated June 30, 1997 with LynOnx (including all intellectual property
relating to the Computerized Weaning Protocols assigned by LynOnx to the
Stockholder); the Agreement dated March 21, 1996 with Ohmeda, Inc.; each of the
Distributor Agreements listed on Schedule 3.15 relating solely to Sellers'
products; and to the extent assignable, a partial interest in and to each
Distributor Agreement listed on Schedule 3.15 covering the distribution of both
the Sellers' and the Stockholder's products, to the extent such Agreements
relate to the Sellers' products.
Section 5.2. CONDITIONS TO OBLIGATIONS OF THE SELLERS. The obligations
of the Sellers to consummate the transactions contemplated hereby are subject to
the satisfaction, on or before the Closing, of the following conditions (unless
waived by the Sellers in writing in the manner provided in Section 8.6 hereof):
(a) REPRESENTATIONS, WARRANTIES AND PERFORMANCE OF THE BUYER AND
THERMO. The representations and warranties set forth in Section 4 hereof shall
be accurate, in all material respects, on and as of the date hereof, and on and
as of the Closing Date as though made on and as of the Closing Date, and the
Buyer and Thermo shall have performed the obligations and complied with the
covenants required to be performed or to be complied with by it under this
Agreement, in all material respects, prior to the Closing.
(b) AUTHORIZATION. All action necessary to authorize the
execution, delivery and performance hereof by the Buyer and Thermo and the
consummation of the transactions contemplated hereby shall have been duly and
validly taken by the Buyer and Thermo. The Buyer shall have furnished the
Sellers with a copy of all resolutions adopted by its Board of Directors in
connection with such actions, certified by the Secretary or an Assistant
Secretary of the Buyer, together with copies of such other instruments and
documents as the Sellers shall have reasonably requested.
(c) GOVERNMENT CONSENTS; XXXX-XXXXX-XXXXXX. Any Governmental Body
having jurisdiction over the Sellers and the Stockholder or over the Buyer and
Thermo, to the extent that its consent or approval is required by applicable
Legal Requirements for the performance of this Agreement or the consummation of
the transactions contemplated hereby shall have granted any necessary consent or
approval. Further, the waiting period and any extensions thereof as prescribed
by the regulations promulgated under Xxxx-Xxxxx-Xxxxxx shall have expired or
terminated without receipt of any objections or commencement of litigation or
threat thereof (in each case that has not been withdrawn) by the Federal Trade
Commission or any other appropriate Governmental Body to restrain or prevent the
transactions contemplated thereby.
(d) PERMITS AND APPROVALS. Any and all consents, permits,
approvals, waivers or other actions listed on EXHIBIT E shall have been
obtained.
(e) GOOD STANDING CERTIFICATES. The Buyer shall have delivered
to the Sellers a corporate good standing certificate from its jurisdiction of
incorporation.
(f) OFFICER'S CERTIFICATE. The Buyer shall have delivered to
the Sellers a certificate executed by an officer of the Buyer, dated the Closing
Date, certifying to the fulfillment of the conditions specified in Section
5.2(a).
(g) DOCUMENTS SATISFACTORY. The form and substance of all legal
matters contemplated herein and of all papers used or delivered hereunder shall
be reasonably acceptable to the Sellers, and the Sellers shall have received all
documents that they may have reasonably requested in connection with the
transactions contemplated hereby, in form and substance reasonably satisfactory
to them.
(h) OTHER REPRESENTATIONS. It is the explicit intent and
understanding of each of the parties hereto that neither party hereto nor any of
its Affiliates, representatives or agents is making any representations or
warranty whatsoever, oral or written, express or implied, other than those set
forth in this Agreement, the Disclosure Letter and any other certificate or
document delivered pursuant to this Agreement, and neither party is relying on
any statement, representations or warranty, oral or written, express or implied
made by the other party hereto or such other party's Affiliates, representatives
or agents, except for the representations and warranties set forth in this
Agreement, the Disclosure Letter and any other certificate or document delivered
pursuant to this Agreement. EXCEPT AS OTHERWISE SPECIFICALLY SET FORTH IN THIS
AGREEMENT, THE PARTIES EXPRESSLY DISCLAIM ANY IMPLIED WARRANTY OR REPRESENTATION
AS TO THE CONDITION, MERCHANTABILITY OR SUITABILITY AS TO ANY OF THE ASSETS
OWNED BY THE SELLERS AND EXCEPT AS OTHERWISE SPECIFICALLY SET FORTH IN THIS
AGREEMENT, IT IS UNDERSTOOD THAT THE BUYER TAKES THE ASSETS "AS IS" AND "WHERE
IS".
6. PRE-CLOSING COVENANTS
6.1 BEST EFFORTS. Each of the Buyer, the Stockholder and the Sellers
shall use its reasonable best efforts to take all actions and to do all things
necessary, proper or advisable to consummate the transactions contemplated by
this Agreement.
6.2 NOTICES AND CONSENTS. Prior to the Closing, the Sellers shall
cooperate with the Buyer to obtain all such waivers, permits, consents,
approvals or other authorizations from third parties and Governmental Bodies,
and shall effect all such filings and notices with or to third parties and
Governmental Bodies, as may be necessary or desirable in connection with the
transactions contemplated by this Agreement (including without limitation those
listed in Part 3.2 of the Disclosure Letter).
6.3 OPERATION OF BUSINESS. Except as contemplated by this Agreement,
during the period from the date of this Agreement to the Closing, each of the
Sellers shall conduct its operations and business in the Ordinary Course of
Business and in compliance with all applicable laws and regulations and, to the
extent consistent therewith, use its best efforts to preserve intact its current
business organization, keep available the services of its current officers and
employees and preserve its relationships with customers, suppliers and others
having business dealings with it to the end that the goodwill and ongoing
business of the Sellers shall not be impaired in any material respect. Without
limiting the generality of the foregoing, prior to the Closing, the Sellers
shall not, without the written consent of the Buyer (not to be unreasonably
withheld or delayed):
(a) except in the Ordinary Course of Business, make any payment
of or increase in any bonuses, salaries, commissions or other compensation to
any stockholder, director, officer, or employee or enter into any employment,
severance, or similar Contract with any stockholder, director, officer, or
employee;
(b) adopt, or increase the payments to or benefits under, any
profit sharing, bonus, deferred compensation, savings, insurance, pension,
retirement, or other employee benefit plan for any employees of any Seller;
(c) sell (other than sales of inventory in the Ordinary Course of
Business), lease, or otherwise dispose of any asset or property of any Seller or
mortgage, pledge, or incur any Encumbrance on any asset or property of any
Seller;
(d) except in the Ordinary Course of Business, cancel or waive
any claims or rights with a value to any Seller in excess of $75,000;
(e) materially change the accounting methods used by any
Seller;
(f) incur any indebtedness or other liability or obligation
(whether absolute, accrued, contingent or otherwise) except those in the
Ordinary Course of Business;
(g) acquire any assets other than in the Ordinary Course of
Business;
(h) terminate any Contracts listed, or enter into any Contracts
that would otherwise be required to be listed, in Part 3.15(a) of the Disclosure
Letter;
(i) enter into any agreements, whether oral or written, to do
any of the foregoing.
6.4 FULL ACCESS. From the date of this Agreement until the Closing Date,
the Sellers shall afford the officers, attorneys, accountants and other
authorized representatives of the Buyer access, upon reasonable notice and
during normal business hours, to all management personnel,
offices, properties and except as prohibited by law, financial and accounting
books and records, contracts, other records and documents of the Sellers, and
the Buyer shall be permitted to make abstracts from, or copies of, all such
books and records and other written material. The Sellers shall furnish to the
Buyer such financial and operating data and other information with respect to
the Sellers as the Buyer shall reasonably request.
6.5 NOTICE OF BREACHES; UPDATES.
(a) The Sellers shall promptly deliver to the Buyer written
notice of any event or development that would (i) render any statement,
representation or warranty of the Sellers or the Stockholder in this Agreement
(including exceptions set forth in the Disclosure Letter) inaccurate or
incomplete in any material respect, (ii) constitute or result in a breach by the
Sellers or the Stockholder of, or a failure by the Sellers or the Stockholder to
comply with, any agreement or covenant in this Agreement applicable to the
Sellers or the Stockholder, or (iii) result in a Material Event. No such
disclosure shall be deemed to avoid or cure any such misrepresentation or
breach.
(b) The Buyer shall promptly deliver to the Sellers written
notice of any event or development that would (i) render any statement,
representation or warranty of the Buyer in this Agreement inaccurate or
incomplete in any material respect, or (ii) constitute or result in a breach by
the Buyer of, or a failure by the Buyer to comply with any agreement or covenant
in this Agreement applicable to the Buyer. No such disclosure shall be deemed to
avoid or cure any such misrepresentation or breach. Further, the Buyer shall
promptly deliver to the Sellers written notice of any event or development that
would (i) render any statement, representation or warranty of the Sellers in
this Agreement inaccurate or incomplete in any material respect, (ii) constitute
or result in a breach by the Sellers of, or a failure by the Sellers to comply
with any agreement or covenant in this Agreement applicable to the Sellers, or
(iii) result in a Material Event. No such disclosure shall be deemed to avoid or
cure any such misrepresentation or breach or the Buyer's rights to
indemnification with respect to such breaches.
6.6 EXCLUSIVITY. The Sellers shall not, and the Sellers shall cause
their Affiliates and each of their officers, directors, employees,
representatives, and agents not to, directly or indirectly, (a) encourage,
solicit, initiate, engage or participate in discussions or negotiations with any
person or entity (other than the Buyer) concerning any merger, consolidation,
sale of material assets or other business combination involving any Seller or
(b) provide any non-public information concerning the business, properties or
assets of any Seller to any person or entity (other than the Buyer).
6.7 CREDIT SUPPORT. Stockholder has guaranteed Sellers' performance with
respect to two letter of credit arrangements disclosed in Part 3.29 of the
Disclosure Letter. It is the parties' understanding that the Stockholder intends
to terminate such guarantees within 30 days after the Closing Date.
7. INDEMNIFICATION; REMEDIES
7.1 SURVIVAL. All representations, warranties, covenants, and
obligations in this Agreement, the Disclosure Letter and any other certificate
or document delivered pursuant to this Agreement will survive the Closing; the
right to indemnification, reimbursement, or other remedy based on such
representations, warranties, covenants, and obligations will not be affected by
any investigation conducted with respect to, or any Knowledge acquired (or
capable of being acquired) about the accuracy or inaccuracy of or compliance
with, any such representation, warranty, covenant, or obligation.
7.2 INDEMNIFICATION AND REIMBURSEMENT BY THE SELLERS AND THE
STOCKHOLDER. The Sellers and the Stockholder will, jointly and severally,
indemnify and hold harmless the Buyer, its representatives, stockholders,
controlling persons, and affiliates (collectively, the "Indemnified Persons"),
and will reimburse the Indemnified Persons, for any loss, liability, claim,
damage, expense (including costs of investigation and defense and reasonable
attorneys' fees) or diminution of value, whether or not involving a third-party
claim (collectively, "Damages"), arising from or in connection with:
(a) any breach of any representation or warranty made by the
Sellers or the Stockholder in this Agreement, the Disclosure Letter, or any
other certificate or document delivered by any Seller or the Stockholder
pursuant to this Agreement;
(b) any breach by the Sellers or the Stockholder of any covenant
or obligation of any Seller or the Stockholder in this Agreement;
(c) any Excluded Liability;
(d) any claim by any Person for brokerage or finder's fees or
commissions or similar payments based upon any agreement or understanding
alleged to have been made by any such Person with any Seller or the Stockholder;
or
(e) any breach by the Stockholder subsequent to the Closing of
any obligations which were not assigned to the Buyer arising from any
Distributor Agreement listed on Schedule 3.15.
For purposes of determining the amount of Damage and whether or not a
Damage or Damages individually or in the aggregate exceed the limitation amounts
set forth in Section 7 hereof, Damages shall be determined after giving effect
to any federal, state, foreign or local tax benefit obtained or received by the
Person incurring the Damage, and after giving effect to any other third party
reimbursements or other payments received with respect to any such Damages.
Further, it is the parties' understanding that the Sellers and the Stockholder
are not required to indemnify the Buyer for Damages relating to liabilities of
the Sellers to the extent reflected or reserved against on the Closing Balance
Sheet and claims relating to any breach of Sellers' product or service
warranties.
7.3 INDEMNIFICATION AND REIMBURSEMENT BY THE BUYER. The Buyer will
indemnify and hold harmless each of the Sellers and the Stockholder, and each of
their respective representatives, stockholders, controlling persons and
affiliates, and will reimburse each of the Sellers and the Stockholder, and each
of their respective representatives, stockholders, controlling persons and
affiliates for any Damages arising from or in connection with (a) any breach of
any representation or warranty made by the Buyer in this Agreement or in any
certificate delivered by the Buyer pursuant to this Agreement, (b) any breach by
the Buyer of any covenant or obligation of the Buyer in this Agreement, (c) any
claim by any Person for brokerage or finder's fees or commissions or similar
payments based upon any agreement or understanding alleged to have been made by
such Person with the Buyer (or any Person acting on its behalf) in connection
with any of the Contemplated Transactions, (d) any Assumed Liabilities, (e) any
liability arising out of the conduct of the Business by the Buyer after the
Closing Date or (f) any breach by the Buyer of any obligations which were
assigned to the Buyer arising from any Distributor Agreement listed on Schedule
3.15.
7.4 LIMITATIONS ON INDEMNIFICATION. None of the Sellers nor the
Stockholder will have any liability for indemnification under Section 7.2(a)
with respect to any representation or warranty in Section 3, other than those in
Sections 3.1, 3.2(a) and (b), 3.6, 3.10, 3.17, and 3.22 and Sections 3A.1 and
3A.2, unless on or before the second anniversary of the Closing Date the
Stockholder is given notice of a claim specifying the factual basis of that
claim in reasonable detail to the extent then known by the Buyer. None of the
Sellers nor the Stockholder will have any liability for indemnification under
Section 7.2(a) with respect to any representation or warranty in Section 3.17
unless on or before the fourth anniversary of the Closing Date the Stockholder
is given notice of a claim specifying the factual basis of that claim in
reasonable detail to the extent then known by the Buyer. None of the Sellers nor
the Stockholder will have any liability for indemnification under Section 7.2(a)
with respect to any representation or warranty in Sections 3.1 (other than the
first sentence thereof), 3.10 or 3.22 or Sections 3A.1 or 3A.2 unless on or
before the seventh anniversary of the Closing Date the Stockholder is given
notice of a claim specifying the factual basis of that claim in reasonable
detail to the extent then known by the Buyer. None of the Sellers nor the
Stockholder will have any liability under Section 7.2(a) with respect to any
representation or warranty in the first sentence of Section 3.1, Sections 3.2(a)
and (b) and Section 3.6, unless on or before ninety (90) days after the
expiration of the statute of limitations applicable to the underlying claim
giving rise to indemnification the Stockholder is given notice of a claim
specifying the factual basis of that claim in reasonable detail to the extent
then known by the Buyer. The Buyer will have no liability for indemnification
under Section 7.3(a) with respect to any representation or warranty in Section 4
unless on or before the second anniversary of the Closing Date the Buyer is
given notice of a claim specifying the factual basis of that claim in reasonable
detail to the extent then known by the Sellers. A claim for indemnification or
reimbursement under Sections 7.2 (b) or (d) or Sections 7.3(b), (c), or (e)
shall be made prior to ninety (90) days after the expiration of the statute of
limitations applicable to the underlying claim giving rise to the
indemnification claim, and a claim for indemnification or reimbursement under
Sections 7.2(c), 7.2(e), 7.3(d) and 7.3(f) may be made at any time. None of the
Sellers nor the Stockholder shall have any indemnity obligations to the Buyer
for claims under Section 7.2(a) until the aggregate cumulative amount of the
Buyer's indemnity claims for Damages against the Sellers and the Stockholder
under Section 7.2(a) herein exceeds $250,000
whereupon the Buyer shall be entitled to recover the entire aggregate cumulative
amount of all such indemnity claims in excess of $125,000 (the "Indemnity
Basket"); PROVIDED, HOWEVER, the Sellers' and the Stockholder's aggregate
indemnity obligations to the Buyer for claims under Section 7.2(a), excluding
claims based on representations and warranties contained in the first sentence
of Section 3.1, Sections 3.2(a) and (b) and Section 3.6, shall, in no event,
exceed $5,000,000. Further, the Sellers and the Stockholder shall not be
required to indemnify the Buyer for Damages relating to a claim which is
otherwise indemnifiable under this Section 7 if such claim for indemnification
involves less than $25,000 (the "Minimum Claim Amount"); provided, however, that
(X) for purposes of determining whether the Minimum Claim Amount has been
exceeded, all claims arising out of the same or similar circumstances shall be
treated as a single claim, and (Y) with respect to any indemnifiable claim that
exceeds the Minimum Claim Amount, the entire claim (not just the amount in
excess of $25,000) shall be indemnifiable.
7.5 PROCEDURES FOR INDEMNIFICATION -- THIRD PARTY CLAIMS.
(a) Promptly after receipt by an indemnified party under Section
7.2 or Section 7.3 of notice of the commencement of any Proceeding against it,
such indemnified party will, if a claim is to be made against an indemnifying
party under such Section, give notice to the indemnifying party of the
commencement of such claim, but the failure to notify the indemnifying party
will not relieve the indemnifying party of any liability that it may have to any
indemnified party, except to the extent that the indemnifying party demonstrates
that the defense of such action is prejudiced by the indemnified party's failure
to give such notice.
(b) If any Proceeding referred to in Section 7.5(a) is brought
against an indemnified party and it gives notice to the indemnifying party of
the commencement of such Proceeding, the indemnifying party will be entitled to
participate in such Proceeding and, to the extent that it wishes (unless (i) the
indemnifying party is also a party to such Proceeding and the indemnified party
determines in good faith that joint representation would be inappropriate, or
(ii) the indemnifying party fails to provide reasonable assurance to the
indemnified party of its financial capacity to defend such Proceeding and
provide indemnification with respect to such Proceeding), to assume the defense
of such Proceeding with counsel reasonably satisfactory to the indemnified
party, provided the indemnifying party shall consult with the indemnified party
regarding any material strategic decisions with respect to such Proceeding and
shall allow the indemnified party the right to participate in such Proceeding
and, after notice from the indemnifying party to the indemnified party of its
election to assume the defense of such Proceeding, the indemnifying party will
not, as long as it diligently conducts such defense, be liable to the
indemnified party under this Section 7 for any fees of other counsel or any
other expenses with respect to the defense of such Proceeding, in each case
subsequently incurred by the indemnified party in connection with the defense of
such Proceeding, other than reasonable costs of investigation. If the
indemnifying party assumes the defense of a Proceeding, (i) no compromise or
settlement of such claims may be effected by the indemnifying party without the
indemnified party's consent (which consent shall not be unreasonably withheld or
delayed) unless (A) there is no finding or admission of any violation of Legal
Requirements or any violation of the rights of any Person and no effect on any
other claims that may be made against the indemnified party, and (B) the sole
relief provided is monetary damages that are paid in full by the
indemnifying party; and (ii) the indemnified party will have no liability with
respect to any compromise or settlement of such claims effected without its
consent. If notice is given to an indemnifying party of the commencement of any
Proceeding and the indemnifying party does not, within ten days after the
indemnified party's notice is given, give notice to the indemnified party of its
election to assume the defense of such Proceeding, the indemnifying party will
be bound by any determination made in such Proceeding or any compromise or
settlement effected by the indemnified party in good faith, after notice to the
indemnifying party and provided the indemnified party provides the indemnifying
party a reasonable opportunity to consult with the indemnified party regarding
such settlement or compromise. Notwithstanding the foregoing, if a customer or a
supplier of any Seller asserts that the Buyer is liable to such customer or
supplier for a monetary obligation which may constitute or result in Damages for
which the Buyer may be entitled to indemnification pursuant to this Section 7
and the Buyer reasonably determines that it has a valid business reason to
fulfill such obligations, then (i) the Buyer shall be entitled to satisfy such
obligation without prior notice to or consent from the Sellers or the
Stockholder, (ii) the Buyer may make a claim for indemnification pursuant to
this Section 7 and (iii) the Buyer shall be reimbursed, in accordance with the
provisions of this Section 7, for any such Damages for which it is entitled to
indemnification pursuant to the provisions of this Section 7; PROVIDED, HOWEVER,
that if the Buyer makes a claim for indemnification in accordance with this
sentence the Sellers and the Stockholder shall not be deemed to have waived any
defense to such claim by the Buyer, notwithstanding the Buyer's prior
satisfaction of the obligation for which indemnification is sought, and it shall
not be a defense to the Buyer's claim for indemnification that the Buyer has
satisfied the obligation for which indemnification is sought.
(c) Notwithstanding the foregoing, if an indemnified party
determines in good faith that there is a reasonable probability that a
Proceeding may adversely affect it or its affiliates other than as a result of
monetary damages for which it would be entitled to indemnification under this
Agreement, the indemnified party may, by notice to the indemnifying party,
assume the exclusive right to defend, compromise, or settle such Proceeding, but
the indemnifying party will not be bound by any determination of a Proceeding so
defended or any compromise or settlement effected without its consent (which may
not be unreasonably withheld).
(d) Each of the Sellers and the Stockholder hereby consents to
the non-exclusive jurisdiction of any court in which a Proceeding is brought
against any Indemnified Person for purposes of any claim that an Indemnified
Person may have under this Agreement with respect to such Proceeding or the
matters alleged therein, and agrees that process may be served on the Sellers
and the Stockholder with respect to such a claim anywhere in the world.
7.6 PROCEDURE FOR INDEMNIFICATION -- OTHER CLAIMS. A claim for
indemnification for any matter not involving a third-party claim may be asserted
by notice to the party from whom indemnification is sought.
7.7 EXCLUSIVE REMEDY. Except with respect to claims for fraud or with
respect to breaches of Sections 2.1, 2.7, 8.2, 8.14, 8.16, 8.17 and 8.18, the
sole and exclusive remedy of the Buyer, the Sellers and the Stockholder against
each other arising out of this Agreement, or
otherwise arising out of the Buyer's acquisition of the Assets, shall be to
assert a claim for indemnification under Section 7 hereto.
8. GENERAL PROVISIONS
8.1 EXPENSES. Except as otherwise expressly provided in this Agreement,
each of the Buyer and the Sellers will bear their respective expenses incurred
in connection with the preparation, execution, and performance of this Agreement
and the Contemplated Transactions, including all fees and expenses of agents,
representatives, counsel, and accountants. In the event of termination of this
Agreement, the obligation of each party to pay its own expenses will be subject
to any rights of such party arising from a breach of this Agreement by another
party.
8.2 PUBLIC ANNOUNCEMENTS. Any public announcement or similar publicity
with respect to this Agreement or the Contemplated Transactions will be issued,
if at all, by the Buyer only with the consent of Bear Medical, and by the
Sellers or the Stockholder, only with the consent of the Buyer, none of which
consents will unreasonably be withheld. The content of any public announcement
by the Buyer will be subject to review and approval by Bear Medical, and the
content of any public announcement by any of the Sellers or the Stockholder will
be subject to review and approval by the Buyer, none of which approvals will
unreasonably be withheld. The Sellers and the Buyer will consult with each other
concerning the means by which the Sellers' employees, customers, and suppliers
and others having dealings with the Sellers will be informed of the Contemplated
Transactions, and the Buyer will have the right to be present for any such
communication.
8.3 NOTICES. All notices, consents, waivers, and other communications
under this Agreement must be in writing and will be deemed to have been duly
given when actually received or if earlier, one day after deposit with a
nationally recognized overnight delivery service, charges prepaid, or three days
after deposit in the U.S. mail by certified mail, return receipt requested,
postage prepaid, in each case to the appropriate addresses and telecopier
numbers set forth below (or to such other addresses and telecopier numbers a
party may designate by notice to the other party):
Sellers and Stockholder :
c/o Allied Healthcare Products, Inc.
0000 Xxxxxxxx Xxxxxx
Xx. Xxxxx, Xxxxxxxx 00000
Attn: President
with a copy to:
Xxx X. Xxxxx, Esq.
Dickstein, Shapiro, Xxxxx & Xxxxxxxx, LLP
0000 X Xxxxxx XX
Xxxxxxxxxx, XX 00000
Telecopy No.: (000) 000-0000
Buyer:
BM Acquisition Corp.
c/o Thermo Electron Corp.
000 Xxxxxxx Xxxx/X.X. Xxx 0000
Xxxxx Xx, XX 00000
Telecopy No.: (000) 000-0000
Attention: Xxxx X. Xxxxxx
with a copy to:
Thermo Electron Corporation
00 Xxxxx Xxxxxx
Xxxxxxx, XX 00000-0000
Attention: General Counsel
Telecopy No.: (000) 000-0000
8.4 JURISDICTION; SERVICE OF PROCESS. Any action or proceeding seeking
to enforce any provision of, or based on any right arising out of, this
Agreement may be brought against any of the parties in the courts of the State
of Delaware, or, if it has or can acquire jurisdiction, in the United States
District Court for the District of Delaware and each of the parties consents to
the jurisdiction of such courts (and of the appropriate appellate courts) in any
such action or proceeding and waives any objection to venue laid therein.
Process in any action or proceeding referred to in the preceding sentence may be
served on any party anywhere in the world.
8.5 FURTHER ASSURANCES. The parties agree (a) to furnish upon request to
each other such further information, (b) to execute and deliver to each other
such other documents, and (c) to do such other acts and things, all as the other
party may reasonably request for the purpose of carrying out the intent of this
Agreement and the documents referred to in this Agreement.
8.6 WAIVER. The rights and remedies of the parties to this Agreement are
cumulative and not alternative. Neither the failure nor any delay by any party
in exercising any right, power, or privilege under this Agreement or the
documents referred to in this Agreement will operate as a waiver of such right,
power, or privilege, and no single or partial exercise of any such right, power,
or privilege will preclude any other or further exercise of such right, power,
or privilege or the exercise of any other right, power, or privilege. To the
maximum extent permitted by applicable law, (a) no claim or right arising out of
this Agreement or the documents referred to in this Agreement can be discharged
by one party, in whole or in part, by a waiver or renunciation of the claim or
right unless in writing signed by the other party; (b) no waiver that may be
given by a party will be applicable except in the specific instance for which it
is given; and (c) no notice to or demand on one party will be deemed to be a
waiver of any obligation of such party or of the right of the party giving such
notice or demand to take further action without notice or demand as provided in
this Agreement or the documents referred to in this Agreement.
8.7 ENTIRE AGREEMENT AND MODIFICATION. This Agreement supersedes all
prior agreements between the parties with respect to its subject matter and
constitutes (along with the documents referred to in this Agreement) a complete
and exclusive statement of the terms of the agreement between the parties with
respect to its subject matter. This Agreement may not be amended except by a
written agreement executed by the party to be charged with the amendment.
8.8 DISCLOSURE LETTER. In the event of any inconsistency between the
statements in the body of this Agreement and those in the Disclosure Letter
(other than an exception expressly set forth as such in the Disclosure Letter
with respect to a specifically identified representation or warranty), the
statements in the body of this Agreement will control.
8.9 ASSIGNMENTS, SUCCESSORS, AND THIRD-PARTY RIGHTS. No party hereto may
assign any of its rights under this Agreement without the prior written consent
of the other party except that the Buyer may assign any of its rights under this
Agreement to any Affiliate of the Buyer. Subject to the preceding sentence, this
Agreement will apply to, be binding in all respects upon, and inure to the
benefit of the successors and permitted assigns of the parties. Nothing
expressed or referred to in this Agreement will be construed to give any Person
other than the parties to this Agreement any legal or equitable right, remedy,
or claim under or with respect to this Agreement or any provision of this
Agreement. This Agreement and all of its provisions and conditions are for the
sole and exclusive benefit of the parties to this Agreement and their successors
and assigns.
8.10 SEVERABILITY. If any provision of this Agreement is held invalid or
unenforceable by any court of competent jurisdiction, the other provisions of
this Agreement will remain in full force and effect. Any provision of this
Agreement held invalid or unenforceable only in part or degree will remain in
full force and effect to the extent not held invalid or unenforceable.
8.11 SECTION HEADINGS; CONSTRUCTION. The headings of Sections in this
Agreement are provided for convenience only and will not affect its construction
or interpretation. All references to "Sections" refer to the corresponding
Sections of this Agreement. All words used in this Agreement will be construed
to be of such gender or number as the circumstances require. Unless otherwise
expressly provided, the word "including" does not limit the preceding words or
terms.
8.12 TIME OF ESSENCE. With regard to all dates and time periods set
forth or referred to in this Agreement, time is of the essence.
8.13 GOVERNING LAW. This Agreement will be governed by and construed
under the laws of the Commonwealth of Massachusetts without regard to conflicts
of laws principles.
8.14 CONFIDENTIALITY. Except as required by law or legal process, each
of the Sellers and the Stockholder agrees that it will not disclose any trade
secrets, proprietary or other confidential information relating to the Business
transferred hereunder to the Buyer, without the prior written consent of the
Buyer. If any Seller or the Stockholder is required by law or legal process to
disclose any such information, such Seller or the Stockholder shall give the
Buyer
prompt written notice thereof, and in any event prior to such Seller's or
Stockholder's actual disclosure of such information, so that the Buyer may seek
a protective order or other appropriate remedy. The Sellers and the Stockholder
agree to cooperate with the Buyer, at Buyer's expense, to obtain any such
protective order or other remedy to assure that confidential treatment will be
accorded such confidential information. The obligations of the Sellers and the
Stockholder shall not apply to information which becomes generally available to
the public other than as a result of a breach of this provision by any Seller or
the Stockholder or any of their respective employees, representatives or agents.
8.15 EMPLOYEES, EMPLOYEE BENEFITS. On the Closing Date, the Buyer shall
offer employment to all Sellers' employees and certain Stockholder employees, as
listed on Schedule 8.15(a), provided such employees, other than those employees
listed on Schedule 8.15(b) who continue to be out on leave of absence as of the
Closing Date, are available to begin work on the Closing Date. The Buyer's
offers of employment shall be for positions comparable to those the employees
held in the Sellers' business at a comparable salary. The Buyer's offers shall
be for employment-at-will, and under such other terms and conditions as the
Buyer normally applies to similarly-situated employees in its or its Affiliates'
other businesses. For purposes of this Agreement, employees of the Sellers who
accept employment with the Buyer shall be referred to as "Hired Employees." As
soon as practicable after the Closing, the account balances of the Hired
Employees under the Sellers' 401(k) Plan shall be directly rolled over from the
Sellers' 401(k) Plan to the Buyer's 401(k) Plan or, to the extent permitted
under Code Sections 401(k) and 411(d)(6) and the regulations thereunder, shall
be made available for distribution from the Seller's 401(k) Plan to the Hired
Employees at their election, provided that Hired Employees with outstanding
loans under Sellers' 401(k) Plan, must make such election, at their discretion,
within 120 days from the Closing Date it being understood that the Buyer shall
not assume the Sellers' Frozen Employee Deferred Compensation and Profit Sharing
Plan, that the Seller intends to terminate such Plan before or after the Closing
and that the Buyer and the Seller will share equally all administrative costs
and expenses associated with the termination of such Plan. All direct rollovers
of account balances from the Sellers' 401(k) Plan to the Buyer's 401(k) Plan
shall be made in cash and promissory notes representing loans made to Hired
Employees; PROVIDED, HOWEVER, that a Hired Employee shall be permitted to
transfer only one loan to the Buyer's 401(k) Plan. The Buyer shall assume
accrued vacation liabilities of up to $27,490 for those employees of the
Stockholder who become employees of the Buyer after the Closing; provided,
however, if any such former Stockholder employee resigns from the employ of the
Buyer on or before December 31, 1997, the Stockholder shall reimburse the Buyer
for all payments made by the Buyer to such former Stockholder employee with
respect to accrued vacation time.
8.16 ACCESS TO HISTORICAL FINANCIAL INFORMATION. The Sellers and the
Stockholder shall make available, and direct and authorize their independent
public accountants to make available, to the Buyer and to the independent public
accountants representing the Buyer (at no cost to the Buyer), all working papers
pertaining to the examination by the Sellers' and the Stockholder's accountants,
as the case may be, of the accounting records of the Sellers, and shall provide
such cooperation as the Buyer shall reasonably request in connection with the
Buyer's preparation of any financial statements relating to the business of the
Sellers required to be included in any filing
made by the Buyer or any affiliate of the Buyer with the Securities and Exchange
Commission pursuant to the Securities Act or the Exchange Act.
8.17 SOLICITATION. For a period of two years after the Closing Date,
none of the Sellers nor the Stockholder shall, either directly or indirectly as
a stockholder, investor, partner, director, officer, employee or otherwise,
solicit or attempt to induce any Restricted Employee to terminate his or her
employment with the Buyer or any affiliate of the Buyer. For purposes of this
agreement, a "Restricted Employee" shall mean any person, other than employees
terminated involuntarily by the Buyer, who (i) either (A) hold or have access to
trade secrets or other confidential information relating to the business of the
Sellers or (B) had annual base salary in 1996 of at least $50,000, and (ii)
either (X) was an employee of the Buyer or any affiliate of the Buyer on either
the date of this Agreement or the Closing Date or (Y) was an employee of any
Seller on either the date of this Agreement or the Closing Date and who is
employed by the Buyer immediately after the Closing. Further, for a period of
two years after the Closing Date, the Buyer shall not, either directly or
indirectly as a stockholder, inventor, partner, director, officer, employee or
otherwise, solicit or attempt to solicit any employee of the Stockholder or any
Subsidiary of the Stockholder so long as such employee is employed by the
Stockholder or any Subsidiary of the Stockholder other than pursuant to general
solicitations for employment including through newspapers or similar
advertisements or through search firms provided that such solicitations are not
directed at Stockholder employees or employees of its Subsidiaries.
8.18 NON-COMPETITION.
(a) For a period of five years after the Closing Date, the
Stockholder shall not, nor shall it permit any of its Subsidiaries or affiliates
to, either directly or indirectly as a stockholder (other than ownership of less
than one percent of the outstanding equity in a publicly held company),
investor, partner, director, officer, employee, consultant or otherwise, engage
in a Competitive Business anywhere in the world. For purposes of this Agreement,
a "Competitive Business" means the business of the Sellers as currently
conducted or as it is currently intended to be conducted in the future.
(b) The Stockholder agrees that the duration and geographic scope
of the non-competition provision set forth in this Section 8.18 are reasonable.
In the event that any court determines that the duration or the geographic
scope, or both, are unreasonable and that such provision is to that extent
unenforceable, the parties agree that the provision shall remain in full force
and effect for the greatest time period and in the greatest area that would not
render it unenforceable. The parties intend that this non-competition provision
shall be deemed to be a series of separate covenants, one for each and every
county of each and every state of the U.S. and each and every political
subdivision of each and every country outside the U.S. where this provision is
intended to be effective.
8.19 CERTIFICATE OF AMENDMENT. At least one (1) day prior to Closing,
each of the Sellers, other than Bear AG, shall deliver to the Buyer a duly
executed and acknowledged certificate of amendment to its articles or
certificate of incorporation or other appropriate document which is required to
change its corporate name to a new name bearing no resemblance
to its present name so as to make its present name available to the Buyer. The
Buyer is hereby authorized to file such certificate or other document (at the
Sellers' expense) in order to effectuate such change of name at or after the
Closing as the Buyer shall elect.
8.20 TRANSITION SERVICES. At the Closing the Buyer and the Stockholder
shall enter into an Agreement relating to (i) the supply of compressor products
by the Stockholder to the Buyer and (ii) the warehousing of certain of the
Stockholder's products at the Buyer's facility.
8.21 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which will be deemed to be an original copy of this
Agreement and all of which, when taken together, will be deemed to constitute
one and the same agreement.
8.22 TRANSFER TAXES. The Buyer shall pay all sales, use, excise and
transfer taxes which may be payable in connection with the sale and transfer of
the Assets.
8.23 THERMO GUARANTEE. Thermo hereby agrees to guarantee the payment and
performance obligations of the Buyer set forth in Sections 2.1, 2.4, 2.5, 2.9
and 7, which guarantee shall continue until all such obligations to be performed
by the Buyer have been performed or otherwise discharged.
8.24 COOPERATION IN LITIGATION. From and after the Closing Date, each
party shall fully cooperate with the other in the defense or prosecution of any
litigation or proceeding already instituted or which may be instituted hereafter
against or by such other party relating to or arising out of conduct of the
Business by the Sellers or the Buyer or their respective Affiliates prior to or
after the Closing Date (other than litigation among the Sellers and the Buyer
and/or their respective Subsidiaries, Affiliates or parent companies arising out
of the transactions contemplated by this Agreement). The party requesting such
cooperation shall pay the reasonable out-of-pocket expenses incurred in
providing such cooperation and by its officers, directors, employees and agents,
but shall not be responsible for reimbursing such party or its officers,
directors, employees and agents for their time spent in such cooperation.
8.25 COLLECTION OF ACCOUNTS RECEIVABLE. Each of the Sellers and the
Stockholder agrees that it shall forward promptly to the Buyer any moneys, check
or instruments received by any of them after the Closing Date with respect to
the Accounts Receivable purchased by the Buyer pursuant to this Agreement and
any account receivable arising out of the sale of inventory by the Buyer in the
Ordinary Course of Business after the Closing Date (a "New Receivable"). Each of
the Stockholder and the Sellers shall provide to the Buyer such reasonable
assistance as the Buyer may request with respect to the collection of any such
Accounts Receivable or New Receivable provided the Buyer pays the reasonable
out-of-pocket expenses of the Sellers and the Stockholder incurred in providing
such assistance.
8.26 TRADEMARK USE. Effective as of the Closing Date, the Stockholder
hereby grants to the Buyer the fully paid license to continue to use the name
"Allied" without warranty and at Buyer's sole risk and expense in connection
with products sold and services provided by the Business on a transitional basis
during the period beginning on the Closing Date and ending on the
date which is 180 days after the Closing Date (the "License Period"). All use of
the name "Allied" hereunder shall inure solely to the benefit of the
Stockholder. Upon the expiration of the License Period, the Buyer shall cease
and shall not thereafter commence use of the name "Allied." The foregoing
license shall be personal to the Buyer and the Buyer shall not have any right to
transfer, directly or indirectly, by sublicense, assignment or otherwise, any of
the rights conferred hereby to any other person or entity; provided, however,
that the Buyer may transfer such license to an Affiliate of the Buyer in the
event that any such entity or entities succeeds to all or any substantial
portion of the Business provided that such Affiliate shall have first agreed in
writing to be bound by the provisions of this Section 8.26.
9. TERMINATION
9.1 TERMINATION EVENTS. Subject to the other provisions of this Section
9, this Agreement may, by written notice given at or prior to the Closing in the
manner hereinafter provided, be terminated and abandoned:
(a) By either the Sellers and the Stockholder, on the one hand, or the
Buyer, on the other, if a material default or breach shall be made by
the other with respect to (i) the due and timely performance of any of
its covenants and agreements contained herein, or (ii) the due
compliance with any of its representations and warranties contained in
Sections 3 and 3A or Section 4, as the case may be, except (in the case
of the Sellers and the Stockholder) for any lack of compliance that
arises from an event or condition that (together with all other events
or conditions) would not be a Material Event, and such breach or default
has not been (i) cured within 15 days after notice thereof is given to
the breaching party or (ii) waived by the non-breaching party;
(b) (i) by the Buyer if all of the conditions set forth in Section 5.1
shall not have been satisfied on or before November 30, 1997, or in the
event of a second request by the Federal Trade Commission or other
appropriate Governmental Body pursuant to either parties'
Xxxx-Xxxxx-Xxxxxx filing, December 31, 1997, other than through failure
of the Buyer to fully comply with its obligations hereunder, or shall
not have been waived by it on or before such dates; or (ii) by the
Sellers and the Stockholder if all of the conditions set forth in
Section 5.2 shall not have been satisfied on or before November 30,
1997, or in the event of a second request by the Federal Trade
Commission or other appropriate Governmental Body pursuant to either
parties' Xxxx-Xxxxx-Xxxxxx filing, December 31, 1997, other than through
failure of the Sellers and the Stockholder to fully comply with their
obligations hereunder, or shall not have been waived by it on or before
such dates;
(c) By either the Sellers, the Stockholder or the Buyer if there
shall have occurred a Material Event; or
(d) by mutual written consent of the Sellers, the Stockholder and the
Buyer.
9.2 EFFECT OF TERMINATION. In the event this Agreement is terminated
pursuant to Section 9.1, all further obligations of the parties hereunder shall
terminate; PROVIDED, HOWEVER,
that if this Agreement is so terminated by one party pursuant to Section 9(a) or
9(b)(i) or (ii) because one or more of the conditions to such party's
obligations hereunder is not satisfied as a result of the other party's failure
to comply with its obligations under any provision of this Agreement, it is
expressly agreed and understood that such party's right to pursue all legal
remedies for breach of contract or otherwise, including, without limitation,
damages relating thereto, shall also survive such termination unimpaired. No
termination of this Agreement shall act to terminate or otherwise impair the
obligations set forth in Sections 8.1 and 8.2.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
BUYER:
BM ACQUISITION CORP.
By:____________________________
Name:__________________________
Title:_________________________
THERMO ELECTRON CORPORATION
By:____________________________
Name:__________________________
Title:_________________________
SELLERS:
BEAR MEDICAL SYSTEMS, INC.
By:____________________________
Name:__________________________
Title:_________________________
BICORE MONITORING SYSTEMS, INC.
By:____________________________
Name:__________________________
Title:_________________________
ALLIED HEALTH CARE PRODUCTS AG
By:____________________________
Name:__________________________
Title:_________________________
BEAR MEDICAL SYSTEMS FOREIGN
SALES CORPORATION
By:____________________________
Name:__________________________
Title:_________________________
STOCKHOLDER:
ALLIED HEALTHCARE PRODUCTS, INC.
By:____________________________
Name:__________________________
Title:_________________________
AA972760021
LIST OF EXHIBITS AND SCHEDULES
Exhibit A Disclosure Letter
Exhibit B Excluded Contracts
Exhibit C Purchase Price Allocation
Exhibit D Intentionally Omitted
Exhibit E Consents to Contract Assignments
Exhibit F Non-Contravention; Buyer's Consents
Exhibit 8.15(a) Hired Employees
Exhibit 8.15(b) Employees on Leave
