EXHIBIT(c)(4)
PURCHASE AGREEMENT
THIS PURCHASE AGREEMENT (the "Agreement") is entered into as of
___________, 1995 by and among PSICOR, Inc., a Pennsylvania corporation
("Seller"), Xxxxxxx Holdings, Inc., a Delaware corporation ("Purchaser"), and
Psicor Office Laboratories, Inc. a New Jersey corporation (the "Company").
RECITALS
WHEREAS, Seller has entered into an Agreement and Plan of Merger,
dated as of November 22, 1995 (the "Merger Agreement"), with Xxxxxx Healthcare
Corporation, a Delaware corporation ("Xxxxxx"), and Baxter CVG Services II,
Inc., a Pennsylvania corporation and wholly owned subsidiary of Baxter
("Baxter Sub"), pursuant to which Baxter will acquire Seller, on the terms and
conditions set forth in the Merger Agreement, by means of a tender offer by
Baxter Sub (the "Offer") for all outstanding shares of common stock, no par
value, of Seller, at $17.50 per share, net to the seller in cash, followed by
a merger (the "Merger") of Baxter Sub into Seller (capitalized terms used herein
and not otherwise defined are used as defined in the Merger Agreement); and
WHEREAS, as an inducement to Baxter to acquire Seller, and as a
condition to Xxxxxx'x willingness to enter into the Merger Agreement and
consummate the transactions contemplated thereby, Seller has agreed to sell to
Purchaser all of the Seller's right, title and interest in all of the
outstanding shares (the "Company Shares") of common stock, no par value, of the
Company, together with all of Seller's rights, interests, liabilities and
obligations relating to the Company, if no higher offer for the Company is
accepted by Seller in accordance with the terms of the Merger Agreement; and
WHEREAS, the Board of Directors of Seller has been informed of the
material facts as to the relationship to Seller of Purchaser and its
shareholders and as to the transactions contemplated hereunder and, by majority
vote of the disinterested directors has determined that such transactions are
fair to Seller and
that it is advisable and in the best interests of Seller and its shareholders to
engage in such transactions; and
WHEREAS, Purchaser desires to purchase the Company Shares on the terms
and conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the premises and the
representations, warranties and agreements contained herein, the parties hereto
agree as follows:
1. PURCHASE AND SALE. On the terms and subject to the conditions
set forth in this Agreement, at the Closing Date, Seller shall sell to
Purchaser, and Purchaser shall purchase and acquire from Seller, all of Seller's
right, title and interest in the Company Shares, together with all of Seller's
rights, interests, liabilities, and obligations relating to the Company,
including without limitation those set forth in Schedule 1(a) hereto, but
specifically excluding the intercompany liabilities, obligations and
indebtedness identified on Schedule 1(b) hereto and such additional items as
shall be added to Schedule 1(b) subject to the reasonable agreement of the
parties, for an aggregate purchase price of $4 million, subject to adjustment as
provided in Section 2.2(b) below (the "Purchase Price").
2. DELIVERY OF STOCK AND PAYMENT OF THE PURCHASE PRICE.
2.1 CLOSING DATE. The closing of the transactions contemplated by
Section 1 (the "Closing") shall take place at a time and on a date to be
specified by the parties, consistent with the terms of the Put Option
Agreement (as defined below); provided, however, that in no event shall the
Closing occur prior to January 4, 1996. The Closing shall occur at the offices
of Skadden, Arps, Slate, Xxxxxxx & Xxxx, 000 Xxxxx Xxxxx Xxxxxx, Xxx Xxxxxxx,
Xxxxxxxxxx 00000, unless another date or place is agreed to in writing by the
parties hereto. The date on which the Closing is held shall be referred to in
this Agreement as the "Closing Date."
2.2 PAYMENT OF THE PURCHASE PRICE.
(a) At the closing, Purchaser shall deliver to Seller the
Purchase Price, payable as follows: (i) the sum of $1 million (the "Cash Pay-
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ment"), such amount to be subject to adjustment as provided in Section 2.2(b)
below, by wire transfer of immediately available funds to an account designated
by Seller and (ii) a $3 million principal amount note due on the tenth
anniversary of the Closing (the "Note"), in the form set forth in Exhibit 2.2
attached hereto.
(b) The Cash Payment shall be adjusted as follows:
(i) if the amount of the Closing Intercompany Account
Balance (as defined below) is greater than the Year-end Intercompany Account
Balance (as defined below), the Cash Payment shall be increased by an amount
equal to the difference between the Closing Intercompany Account Balance and
the Year-end Intercompany Account Balance.
(c) The Company shall deliver, no earlier than five business
days before the Closing Date (such date, the "Determination Date"), (i) a
consolidated pro forma balance sheet of the Company as of the Determination Date
prepared in accordance with this Section 2.2(c) (the "Closing Balance Sheet") in
substantially the form (including without limitation the line items, columns and
headings) of, and prepared in a manner consistent with, the September 30, 1995
balance sheet included in the Company's Year-end Financial Statements (as
defined below) (the "Year-end Balance Sheet"), and (ii) a calculation of the
estimated adjustment, if any, to the Cash Payment under Section 2.2(b). The
Closing Balance Sheet shall be prepared in accordance with generally accepted
accounting principles, applied on a basis consistent with the accounting
principles used in preparing the Year-end Balance Sheet. The parties shall
promptly review the Closing Balance Sheet promptly following the Determination
Date and reasonably agree on the amount of such adjustment, if any, prior to the
Closing Date. Xxxxxx and Xxxxxx Sub shall be deemed to be third party
beneficiaries of this Section 2.2.
(d) As used in this Agreement, (i) "Year-end Intercompany
Account Balance" shall be the intercompany account balance as reflected on the
Year-end Balance Sheet with respect to the Company (excluding any intercompany
debt which Seller and the Company hereby covenant shall be forgiven prior to the
Closing), and (ii) "Closing Intercompany Account Balance" shall be such
Intercompany Account Balance, if any, as reflected on the Closing Balance Sheet
(including without limitation the amounts to be added thereto pursuant to
Section 5 of the Put Option Agreement, dated November 22, 1995, by and
between Seller and Purchaser (the "Put Option Agreement") and Section 8.1
hereof).
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2.3 STOCK CERTIFICATES. At the Closing Date, Seller shall deliver to
Purchaser stock certificates evidencing the Company Shares duly endorsed in
blank for transfer to Purchaser, or accompanied by a separate stock transfer
power duly endorsed in blank.
3. REPRESENTATIONS AND WARRANTIES.
3.1 REPRESENTATIONS AND WARRANTIES OF SELLER. Seller hereby
represents and warrants to Purchaser and the Company as follows:
(a) Seller has the corporate power and authority to execute and
deliver this Agreement and to consummate the transactions contemplated hereby.
(b) The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been duly and validly
authorized by Seller's Board of Directors, and no other corporate proceedings on
the part of Seller are necessary, as a matter of law or otherwise, to authorize
this Agreement and to consummate the transactions so contemplated.
(c) This Agreement has been duly and validly executed and
delivered by Seller and is a valid and binding agreement of Seller, enforceable
against it in accordance with its terms, except (i) as such enforcement may be
subject to bankruptcy, insolvency or similar laws now or hereafter in effect
relating to creditors rights, and (ii) as the remedy of specific performance and
injunctive and other forms of equitable relief may be subject to equitable
defenses and to the discretion of the court before which any proceeding therefor
may be brought.
3.2 REPRESENTATIONS AND WARRANTIES OF PURCHASER AND THE COMPANY.
Purchaser and the Company hereby jointly and severally represent and warrant to
Seller as follows:
(a) Each of Purchaser and the Company has the corporate power
and authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby.
(b) The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby has been duly and validly
authorized by the respective Boards of Directors of Purchaser and the
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Company, and no other corporate proceedings on the part of Purchaser or the
Company are necessary, as a matter of law or otherwise, to authorize this
Agreement and to consummate the transactions so contemplated.
(c) This Agreement has been duly and validly executed and
delivered by Purchaser and the Company and is a valid and binding agreement of
each of Purchaser and the Company, enforceable against each of them in
accordance with its terms, except (i) as such enforcement may be subject to
bankruptcy, insolvency or similar laws now or hereafter in effect relating to
creditors rights, and (ii) as the remedy of specific performance and injunctive
and other forms of equitable relief may be subject to equitable defenses and to
the discretion of the court before which any proceeding therefor may be brought.
(d) The Company Shares to be purchased by Purchaser pursuant to
this Agreement are being acquired by Purchaser solely for its own account, for
investment purposes only, and with no present intention of distributing, selling
or otherwise disposing of them. Purchaser has such knowledge and experience in
financial and business matters that it is capable of evaluating the risks and
merits of acquiring the Company Shares and engaging in the other transactions
contemplated hereby. Purchaser has fully analyzed the proposed business and
business plan of the Company, has been afforded access to all information
concerning the same as it has considered appropriate, and is proceeding with the
transaction contemplated by this Agreement on the basis of its own analysis and
evaluation of the merits and risks of the proposed business, and not on the
basis of any business plan, projections or other forward-looking information
furnished to it by or on behalf of Seller or the Company.
(e) Purchaser does not intend to implement a "plant closing" or
a "mass layoff," as those terms are defined in the Worker Adjustment and
Retraining Notification Act ("WARN Act"), 29 U.S.C. Section 2101 ET SEQ., in
respect of the Company within one hundred fifty (150) days of the Closing Date.
(f) Neither the Company nor any of its subsidiaries, if any, has
an "excess loss account" in the stock of any affiliate within the meaning of
Treasury Regulation section 1.1502-19 of the Internal Revenue Code of 1986, as
amended (the "Code").
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4. COVENANTS.
4.1 SOLICITATION.
(a) Seller and its subsidiaries and affiliates, including
without limitation the Company, may, directly or indirectly, initiate, solicit,
encourage, discuss, negotiate or participate in, or provide any information
concerning the Company's business, properties or assets pursuant to a
confidentiality agreement, to any corporation, partnership, person or other
entity or group ("Person") concerning, or take any action to facilitate the
making of, any offer or proposal which constitutes or is reasonably likely to
lead to any Acquisition Proposal (as defined below) of the Company.
(b) Seller shall promptly notify Purchaser and Baxter of any
Acquisition Proposals (including without limitation the terms and conditions
thereof and the identity of the Person making it), and shall keep Purchaser
and Baxter reasonably apprised of all developments with respect to any such
Acquisition Proposal. Seller shall give Purchaser written notice of any
Acquisition Proposal that Seller intends to accept in accordance with the terms
hereof at least two business days prior to accepting such offer or otherwise
entering into any agreement or understanding with respect thereto.
(c) As used in this Agreement, "Acquisition Proposal" shall mean
any offer involving the Company, any proposal for a merger, consolidation or
other business combination involving the Company or any subsidiary of the
Company, any proposal or offer to acquire in any manner a substantial equity
interest in, or a substantial portion of the business or assets of, the Company
or any subsidiary of the Company, any proposal or offer with respect to any
recapitalization or restructuring with respect to the Company or any subsidiary
of the Company or any proposal or offer with respect to any other transaction
similar to any of the foregoing with respect to the Company, or any subsidiary
of the Company.
4.2 ADDITIONAL ACTIONS. Subject to the terms and conditions of this
Agreement, each of the parties hereto agrees to use all reasonable efforts to
take, or cause to be taken, all action and to do, or cause to be done, all
things necessary, proper or advisable under applicable laws and regulations, or
to remove any injunctions or other impediments or delays, to consummate and make
effective the purchase of the Company Shares and the other transactions
contemplated by this Agreement. In case at any time after the Closing any
further action
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is necessary or desirable to carry out the purposes of this Agreement, the
proper officers and directors of each party to this Agreement shall take all
such necessary action.
4.3 SERVICES AGREEMENT. At or prior to the Closing, Seller and
Purchaser shall in good faith negotiate the terms of a Services Agreement in
substantially the form set forth in Exhibit 4.3 attached hereto providing for
the delivery by Seller of such administrative and warehousing services as the
Company may reasonably request that Seller can reasonably provide, at Seller's
cost of providing any such services, and upon such other terms and subject to
such other conditions as are provided therein.
4.4 PUBLIC DISCLOSURE. Nothing contained in this Agreement shall
prohibit Seller or its Board of Directors from making such disclosure to
Seller's shareholders which, in the opinion of the Board of Directors of Seller,
after consultation with its legal counsel to the Company, may be required under
applicable law.
4.5 WARN ACT. For purposes of the WARN Act, Purchaser acknowledges
and agrees that (a) the Closing is and shall be the same as the "effective date"
within the meaning of the WARN Act; (b) the transaction contemplated by this
Agreement is and shall be a sale of part of Seller's business; (c) any person
who is an employee of the Seller which is part of the Company's business as of
the Closing shall be considered to be an employee of Purchaser immediately after
the Closing; and (d) any "employment loss" within the meaning of the WARN Act
suffered by any employee of the Company immediately upon or after the Closing
shall have been caused by Purchaser's separate and distinct decision not to
continue the employment of such employee, and not by the sale of the Company.
Purchaser further agrees to assume responsibility for giving any and all notices
required by the WARN Act or any similar state law or regulation, to assume
liability for any alleged failure to give such notice, and to indemnify and hold
harmless Seller for any and all claims asserted by any employees of the Company,
or any representatives of such employees, under the WARN Act or any similar
state law or regulation, because of a "plant closing" or "mass layoff" affecting
the Company occurring at any time including without limitation those claims
occurring prior to the Closing.
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4.6 COOPERATION WITH RESPECT TO TAX MATTERS.
(a) Seller and Purchaser recognize that the Company has joined
with Seller and certain of its subsidiaries and affiliates in filing unitary,
consolidated, or combined Tax Returns (as defined below). After the Closing
Date (i) Seller shall include (to the extent required or permitted by law) the
taxable income or loss, and all other items, of the Company for periods ending
before or on the Closing Date, in its unitary, consolidated or combined Tax
Returns, and (ii) with respect to any other Tax Returns for any taxable period
that includes but does not end on the Closing Date (the "Straddle Tax Returns"),
Seller shall prepare a schedule (the "Apportionment Schedule") apportioning, on
a basis consistent with the preparation of Seller's consolidated Federal income
tax return for the taxable period ending on the Closing Date, the taxable income
or loss, and all other items, of the Company allocable to the period up to and
including the Closing Date (the "Pre-Closing Period") and the period after the
Closing Date (the "Post-Closing Period") by an interim closing of the books as
of the end of the day on the Closing Date.
(b) After the Closing Date, each of Purchaser and the Company on
the one hand, and Baxter and Seller on the other, shall (i) provide, or cause to
be provided, to each other's respective subsidiaries, officers, employees,
representatives and affiliates, such assistance as may reasonably be requested
by any of them in connection with the preparation of any Tax Return or any Audit
(as defined below) of the Company in respect of which Purchaser or the Company,
on the one hand, or Baxter or Seller on the other, as the case may be, are
responsible pursuant to Section 4.6(c)-(d) hereof and (ii) retain, or cause to
be retained, for so long as any such Taxable Years or Audits shall remain open
for adjustments, any records or information which may be relevant to any such
Tax Returns or Audits. The assistance provided for in this Section 4.6 shall
include without limitation each of Purchaser and the Company on the one hand,
and Baxter and Seller on the other, (x) making their agents and employees and
the agents and employees of their respective subsidiaries and affiliates
available to each other on a mutually convenient basis to provide such
assistance as might reasonably be expected to be of use in connection with any
such Tax Returns or Audits and (y) providing, or causing to be provided, such
information as might reasonably be expected to be of use in connection with any
such Tax Returns or Audits, including without limitation records, returns,
schedules, documents, work papers, opinions, letters or memoranda, or other
relevant materials relating thereto.
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(c) Seller shall be responsible for, and shall have ultimate
discretion with respect to, (i) all Tax Returns required or permitted by
applicable law to be filed by the Company (or by Seller on its behalf) with
respect to periods that end no earlier than October 1, 1994 and no later than
the Closing Date, (ii) any Tax Return in which the Company has joined with
Seller in the filing of such return on a unitary, consolidated, or combined
basis, (iii) any elections related to such Tax Returns referred to in (i) and
(ii) immediately above, and (iv) any Audit (including the execution of any
waiver of limitation with respect to any Audit) relating to any such Tax
Returns; FURTHER, Purchaser and the Company shall cooperate with Baxter and
Seller for the purpose of making any election under applicable law including, an
election to permit the Company to file any short period Tax Return for the
taxable period ending on the Closing Date and an election under Treasury
Regulation Section 1.1504-20(g) of the Code. Purchaser shall be responsible
for, and shall have ultimate discretion with respect to, any Audit of the
Company for any taxable period ending on or prior to September 30, 1994, other
than an Audit of any Tax Return in which the Company has joined with Seller in
the filing of such returns on a unitary, consolidated, or combined basis. In
the event that any Audit for which the Seller or Purchaser is responsible
pursuant to this Section 4.2(c) could reasonably be expected to result in a
material increase in Tax liability for which the other party would be liable,
the party responsible for such Audit agrees to consult in good faith with the
other party in respect of the specific issues that could give rise to such
increased Tax liability.
(d) Purchaser and the Company shall be responsible for, and
shall have ultimate discretion with respect to, (i) all Tax Returns required to
be filed by the Company with respect to periods that begin after the Closing
Date and (ii) the Straddle Tax Returns, if any, and (iii) any Audit (including
the execution of any waiver of limitation with respect to any Audit) relating to
any such Tax Returns. In the case of any Straddle Tax Return, the filing of
which could be reasonably expected to give rise to, or result in, a material
increase in the Tax liability for which Baxter or Seller would be liable,
Purchaser and the Company agree to consult in good faith with Baxter and Seller
in respect of the specific matters that could give rise to such increased Tax
liability.
(e) Each of Purchaser and the Company, on the one hand, and
Baxter and Seller, on the other shall promptly inform, keep regularly apprised
of the progress with respect to, and notify the other party in writing not later
than (i) five business days after the receipt of any notice of any Audit or (ii)
ten business days prior to the settlement or final determination of any Audit
for
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which it was responsible pursuant to Section 4.6(c)-(d) hereof which could
affect the Tax liability of such other party for any taxable year.
(f) To the extent that Seller and the Company file unitary,
consolidated, or combined Tax Returns for any taxable period commencing on or
after October 1, 1995, and ending on or before the Closing Date, the Company
shall be liable to Seller, and shall make timely payments to Seller in respect
thereof, for Taxes in amounts equal to the amount of Taxes that the Company
would have paid to the relevant Tax authority had the Company filed Tax Returns
for such period on a stand-alone basis (the "Stand Alone Tax Liability"). Upon
the filing of any such Tax Returns with the relevant Tax authority, the Company
shall promptly make a final payment to Seller (or Seller shall promptly refund
to Company) an amount equal to the difference between (i) the Stand Alone Tax
Liability of the Company, as reasonably calculated by Seller, and (ii) the
aggregate amount of payments previously made by the Company to Seller in respect
thereof (the "True-up Amount"). Interest shall accrue at the annual rate of 8%
in respect of any True-up Amount that remains unpaid (A) in the case of an
amount due from Purchaser, 15 days after the presentation of written notice to
Purchaser of such True-up Amount and (B) in the case of Seller, 15 days after
the filing of the Tax Return giving rise to such True-up Amount.
(g) As used in this Agreement:
(i) the term "Tax" or "Taxes" shall include all Federal,
state, local and foreign taxes, assessments, and governmental charges (whether
imposed directly or through withholdings), including any interest, penalties and
additions to Taxes applicable thereto;
(ii) the term "Tax Returns" shall include any Federal,
state, local and foreign tax returns, declarations, elections, statements,
reports, schedules and information returns or the refiling of any such Tax
Returns previously filed; and
(iii) the term "Audit" shall include any audit,
assessment of Taxes, reassessment of Taxes, or other examination by any taxing
authority or any judicial or administrative proceedings or appeal of such
proceedings.
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4.7 SECTION 338(h)(10) ELECTION.
(a) At the request of Baxter and in its sole discretion,
Purchaser shall make a joint election with Seller under section 338(h)(10) of
the Code, and/or comparable state income tax provisions, with respect to the
purchase of the Company Shares. Seller represents that its sale of Company
Shares is eligible for, and Purchaser represents that it is qualified to make,
such election. If the election is made, Purchaser and Seller shall on the
Closing Date exchange completed and executed copies of Internal Revenue Service
Form 8023, required schedules related thereto, and comparable state forms. If
any changes are required to be made to these forms as a result of information
that is first available after the Closing Date, the parties shall promptly agree
on such changes. If such election is made, Purchaser and Seller shall negotiate
in good faith, and agree to, an allocation of the purchase price of the Company
Shares among the assets of the Company that are deemed to have been acquired
pursuant to section 338(h)(10) of the Code, the Treasury regulations promulgated
thereunder, and comparable state income tax provisions (the "Section 338 Asset
Allocation"). Purchaser and Seller shall use the Section 338 Asset Allocation
for purposes of all reports and returns with respect to Taxes, including
Internal Revenue Service Form 8594 and comparable state forms.
(b) In the event that Baxter elects to make a section 338(h)(10)
election pursuant to this Section 4.7, (i) the auditors of Purchaser shall, from
year to year, reasonably determine the Tax benefit that is derived from such
election by Purchaser or the Company during the Post-Closing Period (the
"Section 338 Tax Benefit Amount") until such tax benefit has been fully realized
by Purchaser or the Company, and (ii) Purchaser shall, within 30 days after the
filing of the Tax Return for the taxable year in respect of which such benefit
is computed, make a payment to Seller in an amount equal to the Section 338 Tax
Benefit Amount. The parties hereto agree that, as long as the Note remains
outstanding, 50% of any such payment made pursuant to this Section 4.7(b) shall
be deemed to be a payment of principal on the Note.
(c) Seller, Purchaser, and the Company shall make available to
Baxter, as requested, all records, information and documents, and shall take or
cause its proper officers and directors to take any and all actions requested by
the other in order to comply with this Section 4.7 and in order for Baxter to
determine whether to request that Purchaser and Seller make the section
338(h)(10) election pursuant to Section 4.7(a) hereof.
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4.8 EMPLOYEE BENEFIT PLANS.
(a) As of the Closing, the Company shall cease to be a
participating employer under any Seller Benefit Plan (as defined below), and the
Company and Seller shall take all such action necessary to effectuate such
cessation of participation. As of the Closing, Seller shall take all such
action necessary to assume or retain all liabilities under those Seller Benefit
Plans set forth on Schedule 3.11(a) of the Merger Agreement (the "Disclosed
Seller Benefit Plans"), including benefits accrued by employees and former
employees of the Company under the Disclosed Seller Benefit Plans prior to the
Closing, except for any Company Benefit Plan Liabilities (as defined below). As
of the Closing, the Company shall take all such action necessary to assume or
retain the Company Benefit Plan Liabilities. Except as required by law, or as
otherwise provided below in Section 4.8(b), Seller shall have no responsibility
for benefits accrued by employees of the Company from and after the Closing
under any Seller Benefit Plan or Company Benefit Plan (as defined below).
(b) Except with respect to any Company Benefit Plan
Liabilities, Seller shall honor or cause its insurance carriers to honor all
claims for benefits by each employee of the Company participating in any
Disclosed Seller Benefit Plan that is an employee welfare benefit plan (as
such term is defined in section 3(1) of the Employee Retirement Income
Security Act of 1974, as amended, and the rules and regulations promulgated
thereunder) (i) with respect to claims incurred prior to the Closing in
accordance with the terms of each such plan and (ii) with respect to claims
incurred on or after the Closing only as required by applicable law. To the
extent that (x) any employees of the Company have, prior to the Closing or,
as of the Closing, but subject to the provisions and limitations elsewhere
set forth in this Section 4.8 (including without limitation with regard to
(A) the Company's ceasing to be a participating employer under any Seller
Benefit Plan as of the Closing, (B) Seller's (as distinguished from "Seller's
Benefit Plans") lack of responsibility with respect to benefits accrued by
employees of the Company from and after the Closing and (c) the Company's
obligations under Section 4.8(c)), accrued benefits or claims which are or
will become payable or reimbursable under a Disclosed Seller Benefit Plan and
(y) the Company's premium payments, contributions or liabilities under such
Disclosed Seller Benefit Plan have been properly paid or accrued as of the
Closing, Seller shall cause such benefits or claims to be recognized and paid
under the Seller Benefit Plans in accordance with the terms of the Seller
Benefit Plans.
(c) The Company agrees to be responsible for all liabilities and
obligations whatsoever in connection with or attributable to claims made by or
on behalf of persons who were employed by the Company at, prior to or following
the Closing in respect of (i) severance pay, salary continuation, group health
care continuation coverage and similar obligations relating to the termination
or alleged termination of any such person's employment with the Company by
reason of, in connection with or following the consummation of the
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transactions contemplated by this Agreement or the Merger Agreement, (ii) any
Seller Benefit Plan other than a Disclosed Seller Benefit Plan, and (iii) any
Company Benefit Plan Liabilities.
(d) Effective as of the Closing, the Company shall establish a
tax-qualified defined contribution plan (the "Company 401(k) Plan"), which shall
qualify as a cash or deferred plan under Section 401(k) of the Code and shall
provide benefits to employees of the Company with respect to service after the
Closing. As soon as practicable after the Company has received a favorable
determination letter from the Internal Revenue Service with respect to the tax-
qualified status of the Company 401(k) Plan (or an opinion of counsel
satisfactory to Seller that the Company 401(k) Plan is so qualified), Seller and
the Company shall cooperate to effect a trustee-to-trustee transfer to the
Company 401(k) Plan, in cash or in kind (as determined by Seller), of the fair
market value of the assets, determined as of the date immediately prior to the
date of such transfer, of the 401(k) plan and the employee stock ownership plan
currently maintained by Seller (the "Seller Tax-Qualified Plans") attributable
to participants therein who are then employees of the Company. From and after
the date of such transfer, neither Seller nor either of the Seller Tax-Qualified
Plans shall have any liability under either such plan with respect to any such
employee.
(e) If the Closing (i) shall occur on or before January 1, 1996,
Seller shall cause the Company to, and (ii) shall not have occurred on or
before January 1, 1996, Seller shall cause the Company, effective as of
January 1, 1996, to establish a plan qualifying under Section 125 of
the Code providing for flexible spending accounts providing benefits no less
favorable than those provided under Seller's Section 125 plan as of the date
hereof.
(f) The term "Seller Benefit Plan" shall mean any employee
benefit plan, program, policy, arrangement, practice or contract, including
without limitation any such plan, program, policy, arrangement, practice or
contract actually set forth or required to be set forth on Schedule 3.11(a) to
the Merger Agreement, that is sponsored, maintained or contributed to by Seller,
or to which Seller is a party. The term "Company Benefit Plan" shall mean any
employee benefit plan, program, policy, arrangement, practice or contract,
including without limitation any such plan, program, policy, arrangement,
practice or contract of a type described in Section 3.11(a) of the Merger
Agreement, that is sponsored, maintained or contributed to by the Company or to
which the Company is a party. The term "Company Benefit Plan Liabilities" shall
mean any benefits accrued or claims incurred by employees and former
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employees of the Company under (i) any Seller Benefit Plan that is not a
Disclosed Seller Benefit Plan, (ii) any Disclosed Seller Benefit Plan that is an
employee welfare benefit plan that is a self-insured plan, and (iii) any
Disclosed Seller Benefit Plan to the extent such liabilities otherwise were or
should have been accrued as liabilities of the Company (such as, for example,
with respect to any bonus plan or pool as to which liabilities were or should
have been accrued as liabilities of the Company). The term "Company Benefit
Plan Liabilities" shall also include the amount by which any applicable premiums
under any Disclosed Seller Benefit Plan attributable to employees and former
employees of the Company have not been properly paid or accrued as liabilities
of the Company.
4.9 BROKERS OR FINDERS. Each of Purchaser and the Company (a)
represents, as to itself, its subsidiaries and its affiliates, that no agent,
broker, investment banker, financial advisor or other firm or person is or will
be entitled to any brokers' or finders' fee or any other commission or similar
fee in connection with any of the transactions contemplated by this Agreement,
and (b) agrees to indemnify and hold Seller, Baxter, their respective affiliates
and the other indemnified parties referred to in Section 6.1 hereof harmless
from and against any and all claims, liabilities or obligations with respect to
any other fees, commissions or expenses asserted by any person on the basis of
any act or statement alleged to have been made by such parties or their
respective affiliates.
4.10 INDEMNIFICATION AGREEMENT. Seller acknowledges that there are in
effect between it and Xxxxxxx X. Xxxxxxx, President of Purchaser, and between
it and Xxxxx X. Xxxxxxx, those Indemnification Agreements dated as of August
7, 1995 (the "Indemnification Agreements"), and that the Indemnification
Agreements will continue to be the obligation of Seller, subject to the terms
and conditions thereof, after the Closing hereunder. Seller further
specifically acknowledges that under the Indemnification Agreements, and subject
to the terms and conditions thereof, it is obligated to indemnify and hold
harmless each of Mr. and Xxx. Xxxxxxx in connection with any Proceeding (as that
term is defined in the Indemnification Agreements), arising out of any claims
against each of Mr. and Xxx. Xxxxxxx by any third party or parties, or
derivatively on behalf of Seller, based on allegations of self-dealing or breach
of fiduciary duty by each of Mr. and Xxx. Xxxxxxx in the context of the
transactions contemplated by this Agreement. Each of Mr. and Xxx. Xxxxxxx shall
be third party beneficiaries of this Section 4.10.
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5. CONDITIONS OF PURCHASE AND SALE.
5.1 CONDITIONS TO EACH PARTY'S OBLIGATIONS. The respective
obligations of the parties to consummate the Closing shall be subject to the
satisfaction or waiver, on or prior to the Closing Date, of the following
conditions:
(a) LEGAL ACTION. No temporary restraining order, preliminary
injunction or permanent injunction or other order precluding, restraining,
enjoining, preventing or prohibiting the consummation of the Agreement shall
have been issued by any Federal, state or foreign court or other governmental or
regulatory authority and remain in effect.
(b) STATUTES. No Federal, state, local or foreign statute, rule
or regulation shall have been enacted which prohibits the consummation of the
Agreement or would make the consummation of the Agreement illegal.
(c) CONSENTS. All material authorizations, consents or
approvals required to be obtained on or prior to the Closing Date in connection
with the consummation of the transaction contemplated by this Agreement shall
have been obtained.
5.2 ADDITIONAL CONDITION TO OBLIGATIONS OF SELLER. The obligations
of Seller to consummate the Closing shall be subject to the satisfaction or
waiver, on or prior to the Closing Date, of the additional condition that Seller
shall have received an opinion of its financial advisor (or such other evidence
satisfactory to it) to the effect that the consideration to be received by
Seller under Section 1 hereof for the transactions contemplated hereby is fair
to Seller and its shareholders from a financial point of view.
6. INDEMNIFICATION; REMEDIES.
6.1 INDEMNIFICATION AND REIMBURSEMENT BY PURCHASER AND THE COMPANY.
Purchaser and the Company, jointly and severally, covenant and agree to defend,
indemnify and hold harmless Seller and its officers, directors, employees,
agents, advisers, representatives and affiliates (including without limitation
Xxxxxx and Xxxxxx Sub) (each an "indemnified party") from and against any and
all costs, losses, damages, liabilities, obligations, lawsuits, deficiencies,
claims, demands and expenses (whether or not arising out of third party claims),
including without limitation interest, penalties, taxes and reasonable
attorneys'
15
fees and expenses in connection therewith and all amounts paid in investigation,
defense or settlement of the foregoing (collectively, "Damages") that are
incurred in connection with, arise out of or result from:
(a) any inaccuracy in any representation or warranty by
Purchaser or the Company made or contained in this Agreement;
(b) any failure of Purchaser or the Company to perform any
covenant or agreement made or contained in this Agreement;
(c) any and all liabilities and obligations of the Company,
whether primary or secondary, direct or indirect or fixed, absolute, inchoate or
contingent, and whether reflected on the financial statements of the Company or
Seller including without limitation those listed in Schedule 1(a) hereto;
(d) the operation of the Company's business or Purchaser's
ownership, operation or use of the Company's assets;
(e) the matters contemplated by Sections 4.5, 4.8 and 4.9
hereof; and
(f) the matters contemplated by Section 6.2 hereof.
The indemnification agreement in this Section 6 shall not be deemed to
preclude or otherwise limit in any way the exercise of any remedies or other
rights (including without limitation rights of contribution) which an
indemnified party may have under statute or common law.
6.2 TAX INDEMNITY. Purchaser and the Company shall be liable for,
pay to the appropriate taxing authorities when due, and hold Baxter and Seller
harmless against, all Taxes which relate to (a) the taxable periods ending
before or on September 30, 1994, but only to the extent that such Taxes exceed
the Tax liabilities reserved for on the Closing Balance Sheet; and (b)(i) the
taxable periods that begin on or after the Closing Date, (ii) the Post-Closing
Period, and (iii) any Straddle Tax Return.
6.3 PAYMENTS IN RESPECT OF CERTAIN TAX CLAIMS. To the extent that a
claim may be made relating to that certain Stock Purchase Agreement dated as of
July 19, 1994 among Seller, the Company and certain other parties named therein
in respect of Taxes that results in an actual benefit to Purchaser, the
16
Company or any of their respective affiliates, Purchaser or the Company shall
pay promptly to Baxter or Seller (at the direction of Baxter) an amount equal to
the lesser of (a) the actual benefit realized by Purchaser, the Company any of
their respective affiliates or (b) the actual detriment realized by Baxter or
Seller, in each case in connection with or related to such claim.
6.4 PROCEDURE FOR INDEMNIFICATION.
(a) If an indemnified party receives notice of any claim,
assertion or the commencement of any action or proceeding or becomes aware of
any matter with respect to which Purchaser and the Company, as indemnifying
parties (the "Indemnitors"), are obligated to provide indemnification pursuant
to this Section 6 (an "Indemnifiable Claim"), the indemnified party shall
promptly give written notice thereof to the Indemnitors (a "Notice of Claim").
The failure of any indemnified party to give timely notice hereunder shall not
affect such party's rights to indemnification hereunder, except to the extent
that the Indemnitor demonstrates that the defense of such action is prejudiced
by the indemnified party's failure to give such notice.
(b) The Indemnitors shall have the right if they so elect by
written notice delivered to the indemnified party to assume the defense with
respect to any Indemnifiable Claim with counsel reasonably satisfactory to the
indemnified party. Any indemnified party shall have the right to employ
separate counsel reasonably satisfactory to Indemnitors in any such action and
to participate in the defense thereof at the expense of such indemnified party
except as otherwise provided herein; provided, however that the Indemnitors
shall be entitled to primary control of the defense thereof subject to the terms
and conditions hereof. The Indemnitors shall not settle or compromise any
Indemnifiable Claim without the prior written consent of the indemnified
parties. If the Indemnitors do not notify the indemnified party within five
days after receipt of the Notice of Claim (or within such shorter response
period as is required to avoid prejudice to the ability to defend against such
Indemnifiable Claim) that Indemnitors intend to assume the defense with respect
to such Indemnifiable Claim, then the indemnified parties may assume the defense
with respect to such Indemnifiable Claim at the Indemnitor's sole cost and
expense.
(c) The Indemnitors and the indemnified parties shall make
available to each other all books, records, documents and other information
within their control that are reasonably necessary or appropriate for such
defense. The Indemnitors shall keep the indemnified parties promptly and fully
apprised of
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the progress of the defense of the Indemnifiable Claim all other developments
with respect to such Indemnifiable Claim.
(d) The Indemnitors shall be liable for any settlement of any
action effected pursuant to and in accordance with this Section 6 and for any
final judgment (subject to any right of appeal), and the Indemnitors agree to
indemnify and hold harmless an indemnified party from and against any Damages by
reason of such settlement or judgment.
7. TERMINATION.
7.1 TERMINATION. Anything herein or elsewhere to the contrary
notwithstanding, this Agreement may be terminated and the transactions
contemplated hereby may be abandoned at any time prior to the Closing:
(a) By the mutual written consent of the parties hereto;
(b) By any party hereto if the Merger Agreement is terminated
in accordance with its terms; or
(c) By Seller if it accepts an Acquisition Proposal under
Section 4.1 of this Agreement in accordance with the provisions of Section 6.13
of the Merger Agreement.
7.2 EFFECT OF TERMINATION. In the event of a termination of this
Agreement as provided in Section 7.1 above, written notice thereof shall
forthwith be given to the other party or parties specifying the provision hereof
pursuant to which such termination is made, and this Agreement shall forthwith
become null and void and there shall be no liability or obligation on the part
of Seller, Purchaser and the Company, or any of them, or their respective
officers, directors, employees or affiliates, except (a) for fraud or for
material breach of this Agreement and (b) as set forth in this Section 7.2 and
Section 8.1 hereof.
8. GENERAL PROVISIONS.
8.1 FEES AND EXPENSES. Except as otherwise specifically contemplated
by this Agreement, all costs and expenses incurred in connection with this
Agreement and the consummation of the transactions contemplated hereby shall be
paid as contemplated by Section 5 of the Put Option Agreement.
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8.2 AMENDMENT AND MODIFICATION. Subject to applicable law, this
Agreement may be amended, modified and supplemented in any and all respects by
written agreement of the parties hereto.
8.3 NONSURVIVAL OF REPRESENTATIONS AND WARRANTIES. None of the
representations and warranties in this Agreement shall survive the Closing,
except to the extent survival is specifically contemplated by this Agreement.
8.4 NOTICES. All notices and other communications hereunder shall be
in writing and shall be deemed given upon personal delivery, facsimile
transmission (which is confirmed), telex or delivery by an overnight express
courier service (delivery, postage or freight charges prepaid), or on the fourth
day following deposit in the United States mail (if sent by registered or
certified mail, return receipt requested, delivery, postage or freight charges
prepaid), addressed to the parties at the following addresses (or at such other
address for a party as shall be specified by like notice):
(a) if to Seller, to:
PSICOR, Inc.
00000 Xxx xxx Xxxxx Xxxxx
Xxx Xxxxx, Xxxxxxxxxx 00000
Telecopy No. (000) 000-0000
Attention: Xxxxxx X. Xxxxxxxxxx, Esq.
with a copy to:
Xxxxxx Xxxxxxx PLLC
000 Xxxxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Telecopy No. (000) 000-0000
Attention: Xxxxxxxxx X. Xxxxxx, Esq.
and a copy to:
Xxxxxx Healthcare Corporation
00000 Xxx Xxxx Xxxxxx
Xxxxxx, Xxxxxxxxxx 00000
Telecopy No. (000) 000-0000
Attention: Xxx X. Xxxxxxxx, Esq.
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Vice President, Law
(b) if to Purchaser, to:
Xxxxxxx Holdings, Inc.
00000 Xxxxxxx Xxx
Xxx Xxxxx, Xxxxxxxxxx 00000
Telecopy No. (619) ___________
Attention: Xxxxxxx X. Xxxxxxx
with a copy to:
Xxxxx & XxXxxxxx
000 Xxxx Xxxxxxxx
Xxx Xxxxx, Xxxxxxxxxx 00000
Telecopy No. (000) 000-0000
Attention: Xxxx X. Xxxxxxxx, Esq.
(c) if to the Company, to:
Psicor Office Laboratories, Inc.
0000 Xxxxxx Xxxxxx
Xxxxxx, Xxx Xxxxxx 00000
Telecopy No. ( ) ______
Attention:_______________
with a copy to:
__________________
__________________
Telecopy No. ( ) ______
Attention: _____________
8.5 DEFINITIONS; INTERPRETATION. As used in this Agreement, the
term, "affiliate(s)" shall have the meaning set forth in Rule 12b-2 of the
Securities Exchange Act of 1934, as amended. The words "include," "includes"
and "including" when used herein shall be deemed in each case to be followed by
the words "without limitation." The headings contained in this Agreement are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
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8.6 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be considered one and the same agreement and
shall become effective when two or more counterparts have been signed by each of
the parties and delivered to the other party, it being understood that all
parties need not sign the same counterpart.
8.7 ENTIRE AGREEMENT; THIRD-PARTY BENEFICIARIES. This Agreement (a)
constitutes the entire agreement and supersedes all prior agreements and
understandings, both written and oral, among the parties hereto with respect to
the subject matter hereof, and (b) is not intended to confer upon any person
other than the parties hereto any rights or remedies hereunder (except (i) with
respect to Section 4.10 hereof, as to which Xx. Xxxxxxx shall be a third party
beneficiary and (ii) for Baxter and its affiliates who shall be third party
beneficiaries of all of the terms and provisions hereof, including without
limitation, Sections 2.2, 4.1, 4.6, 4.7, 4.9 and 6 hereof and this Section 8.7).
8.8 SEVERABILITY. If any term, provision, covenant or restriction of
this Agreement is held by a court of competent jurisdiction or other authority
to be invalid, void, unenforceable or against its regulatory policy, the
remainder of the terms, provisions, covenants and restrictions of this Agreement
shall remain in full force and effect and shall in no way be affected, impaired
or invalidated.
8.9 GOVERNING LAW. This Agreement shall be governed and construed in
accordance with the laws of the State of California without giving effect to the
principles of conflicts of law thereof.
8.10 ASSIGNMENT. Neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned by any of the parties
hereto (whether by operation of law or otherwise) without the prior written
consent of the other parties. Subject to the preceding sentence, this Agreement
shall be binding upon, inure to the benefit of and be enforceable by, the
parties and their respective successors and assigns.
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IN WITNESS WHEREOF, the parties hereto have entered into this
Agreement as of the date first above written.
SELLER:
PSICOR, Inc.
By:___________________________
Name:
Title:
PURCHASER:
Xxxxxxx Holdings, Inc.
By:___________________________
Name: Xxxxxxx X. Xxxxxxx
Title: President
COMPANY:
Psicor Office Laboratories, Inc.
By:___________________________
Name:
Title:
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