EXHIBIT 2.1(a)
AGREEMENT TO PURCHASE SELECTED ASSETS
This AGREEMENT TO PURCHASE SELECTED ASSETS (this "Agreement") is
effective as of May 18, 1998 (the "Effective Date"), by and among ALARIS
Medical Systems, Inc., a Delaware corporation ("Buyer"), Invacare Corporation,
an Ohio corporation ("Parent") and Patient Solutions Inc., d/b/a Invacare
Infusion Systems, a Delaware corporation and a wholly-owned subsidiary of
Parent ("Seller"), with reference to the following facts:
WHEREAS, Buyer desires to purchase from Seller and Seller desires to
sell to Buyer, on the terms and subject to the conditions of this Agreement,
certain selected assets of Seller.
NOW, THEREFORE, in consideration of the foregoing premise and the
representations, warranties, covenants and agreements contained below, the
parties agree as follows:
ARTICLE 1
PURCHASE AND SALE OF SELECTED ASSETS
1.1 PURCHASE AND SALE. On the Closing Date (as defined in Section 2
below), Seller agrees to sell, transfer, assign and deliver to Buyer and Buyer
agrees to purchase, accept and acquire from Seller, all of Seller's right,
title and interest in and to the assets (the "Assets") of Seller described in
the Xxxx of Sale and the Patent Assignment Agreement and the 510(k) Assignment
Agreement attached as EXHIBITS A, B and C (collectively, the "Conveyance
Documents"). On the Closing Date, Seller shall deliver executed Conveyance
Documents to Buyer and shall simultaneously take all additional steps and
execute all additional documents and instruments as may be necessary to put
Buyer in possession and complete operating control of the Assets and to
transfer all Seller's right, title and interest in and to the Assets to Buyer.
Seller agrees that Buyer shall also have the right to contact and retain
certain employees, contractors and consultants of Seller including those
persons whose names are set forth on EXHIBIT D, attached hereto.
1.2 PURCHASE PRICE. Upon the terms and subject to the conditions
contained herein, the purchase price to be paid by Buyer to Seller for the
sale, transfer, assignment and delivery of the Assets (the "Purchase Price")
shall be as follows:
(a) $4,750,000 in cash at the Closing, subject to Section 1.3.
(b) the cancellation of that certain Promissory Note for $375,000
dated March 31, 1998 issued pursuant to that certain No-Shop Agreement dated
March 31, 1998 (the "No-Shop Agreement") at the Closing.
(c) $125,000 in cash previously paid to Seller on March 31, 1998
pursuant to the No-Shop Agreement.
1.3 CLOSING BALANCE SHEET ADJUSTMENT.
(a) Within thirty (30) days after the Closing Date, Seller
shall cause to be prepared and shall deliver to Buyer a balance sheet of Seller
as of the close of business on the Closing Date, which balance sheet shall
reflect, among other things, total Current Assets, total Current Liabilities
and Net Plant and Equipment ("Closing Date Balance Sheet"). The Closing Date
Balance Sheet shall be prepared in accordance with GAAP applied in a manner
consistent with that utilized in preparing the Financial Statements (as defined
in Section 3.6).
(b) If Buyer does not dispute the amounts set forth in the
Closing Date Balance Sheet, the Closing Date Balance Sheet shall be conclusive.
If Buyer disputes any amount set forth in the Closing Date Balance Sheet,
Buyer shall so notify Seller in writing (specifying his objections and the
reasons therefor in reasonable detail) within thirty (30) days following
receipt thereof and the parties will use all reasonable efforts to resolve any
such disputes. If any such dispute cannot promptly be resolved (but in any
event within thirty (30) days after submission of the written objections of
Buyer, the parties agree that they will submit the matter to the office of
JAMS/ENdispute located in San Diego, California (or, if none, then the office
of JAMS/Endispute located closest to San Diego, California) to be arbitrated by
a single arbitrator to be mutually selected by the parties. The resolution of
the dispute by JAMS/Endispute will be conclusive and binding upon the parties.
The fees and expenses of JAMS/ENdispute will be paid one-half by Seller and
one-half by Buyer. The Closing Date Balance Sheet and the information set
forth thereon, as finally determined pursuant to this Section 1.3(b), is
hereinafter referred to as the "Final Closing Balance Sheet."
(c) In the event the Current Assets and Net Plant and
Equipment less Current Liabilities set forth in the Final Closing Balance Sheet
is less than the Current Assets and Net Plant and Equipment less Current
Liabilities set forth in the December 31, 1997 Balance Sheet contained in
Schedule 3.6 (the "Assets Shortfall"), then the Seller and Parent, jointly and
severally, shall be liable to pay over to Buyer an amount in cash equal to the
Assets Shortfall.
(d) Any payment required to be made under Section 1.3(c) shall
be made within five (5) business days after the determination thereof ("Due
Date"), without setoff for any other matter, by wire transfer to an account
designated by Buyer and shall, in addition to such amount, include interest on
the amount required to be paid calculated from the Closing Date through the Due
Date at a rate of twelve percent (12%) per annum. Any payment to be made
pursuant to Section 1.3(c) which is not made on the Due Date shall bear
interest at the rate of fifteen percent (15%) per annum from the Due Date until
the date paid; provided that no interest shall accrue on any payment due under
Section 1.3(c) for so long as a dispute exists under Section 1.3(b) unless the
final determination of such dispute requires a payment by the Seller or Parent
under Section 1.3(c) of more than $50,000.
1.4 ASSUMED LIABILITIES. Upon the terms and subject to the
conditions contained herein, Buyer shall assume all of the current obligations
and liabilities of Seller set forth on attached EXHIBIT E (the "Assumed
Liabilities"), which shall set forth the obligations and liabilities being
assumed as of April 30, 1998. Buyer shall also assume the liabilities of
Seller incurred in the ordinary course of Seller's business between April 30,
1998 and the Closing Date; provided, however, that no liabilities or
obligations relating to obsolete inventory, or unrecorded or unwritten
commitments to customers or distributors shall be assumed by Buyer. Buyer
shall not assume and shall under no circumstances be responsible for, and
Seller shall retain and be responsible for, any liabilities or obligations of
Seller related to the Assets of Seller or Parent whatsoever, regardless of
amount, character or description, or whether accrued, contingent, determined,
undetermined, known or unknown or otherwise, including (without limitation) any
obligation or liability whatsoever arising from the conduct of Seller's
business or Parent's business at or prior to the Closing Date other than the
Assumed Liabilities. Furthermore, and without limiting in any way the
foregoing, Buyer shall not assume and shall under no circumstances be
responsible for, and Seller shall retain and be responsible for, any
liabilities or obligations of Seller related to the employees, consultants and
contractors of Seller or Parent whatsoever, regardless of amount, character or
description, or whether accrued, contingent, determined, undetermined, known or
unknown or otherwise, including (without limitation) any obligation or
liability whatsoever arising from any employment event or from any employment,
consulting or contracting agreement related to the periods or entered into
prior to the Closing. Without limiting the breadth of the foregoing
provisions, Seller shall retain and be responsible for, any liabilities or
obligations of Seller arising from any representation by Seller or Parent
concerning payment of any salary continuation, any representation by Seller or
Parent concerning extension of any termination date, any representation by
Seller or Parent concerning payment of any termination allowance, any
representation by Seller or Parent concerning payment of any retention
allowance, any representation by Seller or Parent concerning payment of any
accrued benefit and any representation by Seller or Parent concerning any
continuation of any fringe benefit.
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1.5 GUARANTY OF PAYMENT OF ACCOUNTS RECEIVABLE AND INTERCOMPANY
RECEIVABLES. As a material inducement to Buyer's execution of this Agreement,
and payment of the consideration hereunder, each of Seller and Parent guarantee
that the accounts receivable as set forth on the 1997 Balance Sheet in Schedule
3.6 and the Closing Date Balance Sheet (the "Accounts Receivable") will be
fully and completely paid and discharged as of the date which is seventy-five
(75) calendar days after the Closing Date (the Receivable Date"). The unpaid
balance of all Accounts Receivable as of Receivable Date shall be paid by
Seller, in the form of a certified or cashier's check, on or before the date
which is ten (10) business days after the Receivable Date. Payments received
from customers by Buyer after the Closing Date shall be applied to such
customer's Account Receivable on a first in, first out basis (that is, to the
oldest unpaid invoice), unless customer indicates payment is to be applied
otherwise. Following such payment by Seller, Buyer shall assign all unpaid
Accounts Receivable to Seller. Any amounts received as payments on the
Accounts Receivable by Buyer on or after the Receivable Date shall be held by
Buyer as custodian for Seller and, further, shall be paid by Buyer to Seller
within ten (10) business days of the end of each calendar month, commencing
with the first calendar month ending after the Receivable Date. Buyer shall
make a reasonable effort to collect the Accounts Receivable and shall
cooperate, at Seller's request and expense, in collecting Receivables assigned
to Seller.
1.6 ALLOCATION OF PURCHASE PRICE. The Purchase Price to be paid by
Buyer to Seller hereunder shall be allocated among the Assets in a manner to be
mutually agreed upon by the parties. The parties hereto agree to report this
transaction for federal and state tax purposes in accordance with such
allocation of Purchase Price.
ARTICLE 2
CLOSING
The closing (the "Closing") shall be consummated at the offices of
ALARIS Medical Systems, Inc., 00000 Xxxxxxxxx Xxxxxx, Xxx Xxxxx, XX 00000-0000,
at 10:00 a.m. (Pacific Standard Time) on May 18, 1998. The date of such
Closing is herein referred to as the "Closing Date." At the Closing, the
parties to this Agreement will exchange funds, documents, agreements,
certificates, opinions and other instruments and documents (including without
limitation the Conveyance Documents) so as to cause the terms and conditions of
this Agreement to be satisfied. All documents and instruments delivered at the
Closing pursuant to this Article 2 shall be dated and effective for all
purposes as of the Closing Date.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES
OF SELLER AND PARENT
Except as set forth in the disclosure schedule attached hereto as
EXHIBIT F and referencing the specific section of this Article 3 (the
"Disclosure Schedule"), the Seller and Parent, jointly and severally, hereby
represent and warrant to Buyer as follows:
3.1 CORPORATE ORGANIZATION AND CAPITALIZATION. Seller and Parent are
corporations duly organized, validly existing and in good standing under the
laws of the State of Ohio, and have full power and authority to carry on their
respective businesses as now being conducted. The authorized capital stock of
the Seller consists solely of 15,000,000 shares of Common Stock, $.001 par
value per share, of which 3,284,102 shares of Common Stock are issued and
outstanding. There are no outstanding options, warrants, rights, contracts,
agreements, commitments, understandings or arrangements by which Seller is or
may be bound or obligated to issue any additional shares of its respective
capital stock or any security convertible thereto or exchangeable therefor or
to repurchase any of the foregoing.
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3.2 AUTHORIZATION. The execution, delivery and performance by Seller
and Parent of this Agreement, and all documents and instruments contemplated
hereby, referenced herein or executed in connection herewith (collectively, the
"Related Documents"), and the consummation by Seller and Parent of the
transactions contemplated hereby and therein, have been duly authorized and
approved by all necessary corporate proceedings of Seller and Parent. This
Agreement and each of the Related Documents have been duly executed and
delivered by Seller and Parent and each constitutes a legal, valid and binding
agreement of Seller and Parent, enforceable against Seller and Parent in
accordance with their respective terms, except as limited by bankruptcy,
insolvency or other laws of general application relating to the enforcement of
creditors' rights.
3.3 TITLE; CONDITION OF ASSETS. Except as set forth on the
Disclosure Schedule, Seller has good, marketable and insurable title to all of
the Assets, free and clear of all mortgages, liens (tax or otherwise), pledges,
charges, leases, encumbrances, claims or restrictions of any kind or character.
The Assets are in good operating condition with no known defects, excepting
normal wear and tear, and conform with all applicable laws, regulations,
ordinances and the like. The Assets constitute all of the material rights and
properties, tangible or intangible, real or personal, which are used in the
conduct of the business of Seller, as such business is presently being
conducted. No other material properties or rights, whether or not owned by
Seller, are required for the operation of such business as presently being
operated. Seller is in possession and operating control of all of its assets,
properties and rights related to the conduct of its business. The Assets are
not subject to any liability or obligation of whatever nature, whether known or
unknown, absolute, accrued, contingent or otherwise.
3.4 NO VIOLATION. The execution, delivery and performance of this
Agreement and the Related Documents by Seller and Parent will not (with notice
and/or the lapse of time) result in a breach or violation of, or constitute a
material default under, their respective Articles of Incorporation, Code of
Regulations or any agreement to which Seller or Parent is a party or by which
Seller or Parent is bound, and will not be in violation of any constitution,
statute, judgment, order, rule, regulation or other restriction in effect at
the Closing Date of any court or federal, state or other Governmental Authority
having jurisdiction over Seller, Parent or the Assets. Neither Seller or
Parent is a party to, subject to or bound by any agreement or judgment, order,
writ, injunction or decree of any court or federal, state or other Governmental
Authority that prevents or impairs the consummation of the transactions
contemplated by this Agreement or the Related Documents or the rights of the
Buyer hereunder and thereunder.
3.5 GOVERNMENTAL AUTHORITIES. Except as set forth in the Disclosure
Schedule, neither Seller nor Parent is required to submit any notice, report or
other filing to any Governmental Authority nor is any consent, approval or
authorization of any Governmental Authority required to be obtained in
connection with the consummation of the transactions contemplated hereby or in
the Related Documents.
3.6 FINANCIAL STATEMENTS. The Disclosure Schedule contains an
unaudited Balance Sheet of Seller ("Balance Sheet") as at December 31, 1997 and
at April 30, 1998 (the "Balance Sheet Date"), and a Statement of Income and
Expense of Seller for the four-month period then ended (the "Income
Statement"), collectively referred to herein as the "Financial Statements."
The Balance Sheet fairly and accurately represents the financial position of
Seller as of the Balance Sheet Date and the Income Statement accurately
represents the results of the operations of Seller for such periods, each of
which has been prepared in accordance with GAAP. Neither Seller, Seller's
officers, employees or agents or Parent, Parent's officers, employees or agents
have employed any broker or finder or incurred any liability for any brokerage
fees, commissions or finders' fees in connection with the transactions
contemplated hereby or the Related Documents.
3.7 INVENTORY. All inventory of Seller reflected on the Balance
Sheet is (except to the extent of reserves reflected thereon) of a quality and
quantity usable and salable in the ordinary course of Seller's business as of
the Balance Sheet Date, and all such inventory is reflected on the Balance
Sheet with adequate provisions or adjustments for damaged, defective or excess
inventory, slow-moving inventory and inventory obsolescence and shrinkage at
the lower of cost or realizable market value using the first-in, first-out
(FIFO) method of valuation in accordance with GAAP consistently applied.
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3.8 LITIGATION. Except as set forth in the Disclosure Schedule,
there are no claims, actions, litigation, suits, proceedings or investigations
pending or threatened against or affecting any of the Assets or the
consummation of the transactions contemplated hereby or the Related Documents,
at law or in equity or before or by any governmental or regulatory authority,
agency or instrumentality or before any arbitrator of any kind, and there is no
valid basis for any such claim, action, litigation, suit, proceeding or
investigation. The Disclosure Schedule contains a list and brief description of
all claims, actions, litigation, suits, hearings, proceedings or investigations
relating to the Assets which resulted in a judgment, settlement, compromise,
release, payment or award of any nature and which arose within three years
prior to the Closing Date. No governmental or regulatory authority, agency or
instrumentality has at any time challenged or questioned the legal right of
Seller to sell any of its products or to provide any of its services in the
present manner or as contemplated in the conduct of the Seller's business.
3.9 CONTRACTS. Seller is not (and, to the best knowledge of Seller
and Parent no other party is) in breach or default under (with notice and/or
the lapse of time), and there is no valid basis for a claim of breach or
default under, any material agreement, instrument, commitment, contract or
other obligation of any type to which Seller is a party or is bound, or to
which the Assets are subject, and no event has occurred which constitutes or,
with the lapse of time and/or the giving of notice, will constitute such a
breach or default. The Assets are not subject to any agreement, contract,
commitment or instrument maintained by Seller or Parent, or other obligation,
whether written or oral and of whatever nature. A true copy of each agreement,
contract, commitment or instrument of the type set forth above has been
provided to Buyer's counsel prior to Closing and an accurate listing of same
has been set forth in the Disclosure Schedule ("Scheduled Contracts"). All
Scheduled Contracts are in full force and effect and are valid, binding and
enforceable in accordance with their respective terms; all parties to such
Scheduled Contracts have complied with the provisions thereof; no such party is
in default under any of the terms thereof and no event has occurred that (with
the passage of time and/or the giving of notice) would constitute a default by
any party under any provision thereof. Seller will continue to be entitled to
the full benefits thereof after the Closing without the consent of or notice to
any third party and the transactions contemplated hereby and in the Related
Documents will not create any termination rights in favor of any third party or
otherwise change the material rights and obligations of the parties thereunder.
3.10 COMPLIANCE WITH LAW. Seller is, in the conduct of the Seller's
business and ownership and use of the Assets, in compliance with all applicable
foreign, federal, state or local laws, statutes, rules, regulations,
ordinances, codes, orders, licenses, franchises, permits, authorizations and
concessions (collectively, "Regulations"), as such apply to the Assets,
including without limitation, any applicable intellectual property law or other
Regulations in respect of any of Seller's operations related to its business,
except where its non-compliance could not reasonably be expected to have a
material adverse effect on the Assets or the transactions contemplated by this
Agreement.
3.11 LICENSES, PERMITS AND AUTHORIZATIONS. The Disclosure Schedule
contains a list of all approvals, authorizations, consents, licenses,
franchises, orders and other permits of, and filings with, any governmental
authority, whether foreign, federal, state or local ("Permits"), which are
required for or benefit the Assets or the conduct of Seller's business. All
Permits are in full force and effect.
3.12 ENVIRONMENTAL MATTERS.
(a) The operations of Seller are currently and have at all
times been in compliance in all material respects with all applicable
Environmental Laws.
(b) There are not currently nor have there even been any
underground storage tanks on any real property owned, operated or leased by
Seller. No Hazardous Material has been stored, generated, treated, discharged
or released in or upon any real property owned, operated or leased by Seller
during the period of such ownership or before the period of Seller's or a
predecessor of Seller's ownership, lease or operation in violation of, or in a
quantity reportable under, any Environmental Law or that is reasonably likely
to result in any material Environmental Costs and Liabilities.
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(c) Seller is not subject to any Environmental Costs and
Liabilities, and, to Seller's and Parent's knowledge, no facts or circumstances
exist which could give rise to any Environmental Costs and Liabilities.
(d) The Disclosure Schedule lists all Environmental Permits
maintained by Seller. Such Environmental Permits are all Environmental Permits
necessary for Seller's operations and (i) Seller is in compliance in all
respects with such Environmental Permits, (ii) there are no Legal Proceedings
pending nor, to Seller's and Parent's knowledge, threatened to revoke such
Environmental Permits, (iii) Seller and Parent have not received any notice
from any Governmental Authority to the effect that there is lacking any
Environmental Permit required for the current use or operation of any property
owned, operated or leased by Seller or any of its Affiliates and (iv) the
consummation of the transactions contemplated hereby will not constitute a
transfer or assignment of any such Environmental Permits nor will such
consummation require any filing or registration with or notice to any
governmental authority and all such Environmental Permits shall remain in full
force after the Closing Date.
(e) Neither Seller nor any of its Affiliates nor, to Seller's
and Parent's knowledge, any predecessor of Seller or such Affiliates, are
subject to any outstanding written Order of any Governmental Authority or other
Person, or, to the knowledge of Seller or Parent, any federal, state, local or
foreign investigation respecting (i) actual or alleged violations of
Environmental Laws, (ii) any Remedial Action or (iii) any Environmental costs
and liabilities. Neither Seller nor any of its Affiliates, nor to Seller's and
Parent's knowledge, any predecessor of Seller or its Affiliates have received
any written notice from any Governmental Authority respecting any violation of
Environmental Laws.
(f) There are no Legal Proceedings pending or, to the Seller's
and Parent's knowledge, threatened against Seller or any of its Affiliates,
alleging the violation of any Environmental Law or Environmental Permit.
(g) Neither Seller nor any of its Affiliates nor, to the
Seller's and Parent's knowledge, any predecessor of Seller or any of its
Affiliates, has filed any notice under federal, state or local law indicating
past or present treatment, storage or disposal of or reporting a Release of any
Hazardous Material.
(h) None of the operations of Seller nor any of its Affiliates
or, to Seller's and Parent's knowledge, of any predecessor of Seller; or any of
its Affiliates involves or previously involved the generation, transportation,
treatment, storage or disposal of Hazardous Waste, as defined under 40 C.F.R.
Parts 260-270 or any state, local or foreign equivalent.
(i) Seller and Parent have not received notice of liability or
potential liability at, nor are there any pending or threatened legal
proceedings with respect to, any facility at which Seller or its Affiliates, or
to Seller's and Parent's knowledge, any predecessor of Seller or such
Affiliates, has transported, disposed of, or arranged for the transportation at
or disposal of any Hazardous Material. There has been no environmental
investigation, study, audit, test, review or other analysis conducted in
relation to the current or prior business of the Seller or any of its
Affiliates, nor to Seller's and Parent's knowledge, any predecessor of Seller
or its Affiliates or any property or facility now or previously owned or leased
by any Principal Shareholder, Seller or any of their respective Affiliates,
other than those listed on the Disclosure Schedule, copies of which have been
delivered to Buyer.
(j) There is no asbestos, asbestos-containing building
materials, polychlorinated biphenyls, or urea formaldehyde presently in use or
otherwise located at any real property currently owned, operated or leased by
Seller.
3.13 TAX MATTERS. Except as set forth on the Disclosure Schedule:
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(a) All Tax Returns that were or will be required to be filed
by, or with respect to, Seller on or before the Closing Date have been or will
be filed on a timely basis in accordance with the laws, regulations and
administrative requirements of the appropriate Taxing Authority in all
jurisdictions in which such Tax Returns were or will be required to be filed.
All such Tax Returns that have been filed were, when filed, and continue to be,
true, correct and complete.
(b) All Taxes due and payable on or before the Closing Date
that are either (i) required to be shown on any Tax Return filed by, or with
respect to, Seller or (ii) which were not required to be shown on any Tax
Return but which were or will be required to be paid by or with respect to
Seller, have been or will be timely paid on or before the Closing Date. All
Taxes that Seller was or will be required by law to withhold or collect have
been (in the case of those that were already required to be withheld or
collected) or will be duly withheld or collected and, to the extent required,
have been (in the case of those that were already required to be paid) or will
be paid to the appropriate Taxing Authority. There are no Tax Liens, and will
be no Tax Liens on the Closing Date, with respect to Taxes upon any of the
properties or assets, real or personal, tangible or intangible, of Seller. Any
liability of Seller for Taxes not yet due and payable has adequately been
provided for by Seller on its Financial Statements (whether or not required to
be disclosed under GAAP).
(c) There is no action, dispute, suit, proceeding,
investigation, assessment, audit or claim now pending against, or with respect
to, Seller in respect of any Tax nor is any action, dispute, suit, procedure,
investigation, assessment, audit or claim for additional Tax expected by Seller
to be asserted by any Taxing Authority. No Taxing Authority has proposed any
adjustment with respect to any action, dispute, suit, proceeding,
investigation, assessment, audit or claim against or with respect to Seller.
All deficiencies proposed (plus any interest, penalties and additions to Tax
that were or are proposed to be assessed thereon, if any) with respect to
Seller have been paid. There are no outstanding waiver or extensions of any
statute of limitations relating to either the filing of any Tax Return or the
payment of any Tax for which Seller may be labile and no Taxing Authority has
either formally or informally requested such a waiver or extension.
(d) No claim has ever been made by any Taxing Authority in any
jurisdiction in which no Tax Return is filed by, or with respect to, Seller
that Seller may be subject to taxation by that jurisdiction.
(e) Seller has never been included in a consolidated, combined
or unitary Tax Return nor has Seller ever been a party to any tax sharing or
similar agreement or arrangement.
(f) Seller does not have any liability (whether contingent or
otherwise) for Taxes of any other Person (i) under Treasury Regulations Section
1.1502-6 (or any successor provision thereto or any similar provision under
state, local or foreign law); (ii) as a successor or transferee or (iii) by
contract (whether written or unwritten).
(g) No consent to the application of Section 341(f)(2) of the
Code has been filed with respect to any property or assets held or acquired (or
to be acquired) by Seller.
(h) No property owned by Seller is property that Buyer or
Seller will be required to treat as being owned by another person pursuant to
the provisions of Section 168(f)(8) of the Internal Revenue Code of 1954, as
amended and in effect immediately before the enactment of the Tax Reform Act of
1986, or is "tax-exempt use property" within the meaning of Section 168(h)(1)
of the Code.
(i) Seller is neither subject to an adjustment under Section
481 of the Code nor has been required by, nor has requested or received the
permission of, any Taxing Authority to change its methods of accounting.
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(j) Seller is not a foreign person within the meaning of
Section 1445 of the Code and Seller is not and has not been a United States
real property holding corporation within the meaning of Section 897(c)(2) of
the Code during the applicable period specified in Section 897(c)(1)(A)(ii) of
the Code.
(k) Seller does not have in effect any tax elections for
Federal income tax purposes under Sections 108, 168, 338, 441, 471, 1017, 1033
or 4977 of the Code.
(l) There is no contract, agreement, plan or arrangement
covering any Person that, individually or collectively, could give rise to the
payment of any amount that would not be deductible by Buyer or Seller by reason
of Sections 162(m) or 280G of the Code or as excessive or unreasonable
compensation.
(m) Seller is not a party (other than as an investor) to any
industrial development bond.
(n) Since May 25, 1995, Seller has never engaged in any
exchange under which the gain realized on such exchange was not recognized due
to Section 1031 of the Code.
3.14 INTANGIBLE PROPERTY RIGHTS. The Disclosure Schedule lists all
patents, patent applications, inventions, licenses, trade names, trademarks,
service marks, brandmarks, copyrights or registrations or applications
therefor, franchises and other assets of like kind (such assets and rights
herein called "Rights"), used in Seller's business, which are registered in the
name of Seller or which affect the Assets in any manner whatsoever (including
any such rights held by Parent), the ownership of all the foregoing being
separately stated. The expiration dates, if any, of each of the Rights are set
forth in the Disclosure Schedule by product. Seller or Parent owns and
possesses all Rights used in the conduct of Seller's business; such Rights are
adequate for the conduct of Seller's business and the ownership and development
of the Assets, and will not be adversely affected by the transactions
contemplated hereby and in the Related Documents; and are not being infringed
or violated by any other person or entity. All Rights are, and upon the
consummation of the transactions contemplated by this Agreement and the Related
Documents will be, vested in Buyer free of any equities, claims, liens,
encumbrances or restrictions of whatever nature and Seller has not granted any
license or right thereto to others. No products sold or services provided by
Seller infringe the rights of others. All licenses granted to Seller by others
with respect to the business of Seller are set forth in the Disclosure
Schedule, and all such licenses are freely assignable. No director, officer,
employee, agent or affiliate of Seller or Parent owns, directly or indirectly,
in whole or in part, any Rights which the business of Seller has used, or the
use of which is necessary for or in furtherance of the business of Seller as
now conducted or which affect the Assets in any manner whatsoever. All
technology, data, processes, formulas, trade secrets and the like used in the
operation of Seller's business (herein called "Know-How") are owned exclusively
by Seller, free of any equities, claims, liens, encumbrances or restrictions of
whatever nature and Seller has not granted any license or right thereto to
others. Upon consummation of the transactions contemplated by this Agreement
and the Related Documents, Buyer shall have all rights and interest in and to
such Know-How and Seller shall maintain such in strict confidence, which
obligation of confidentiality shall survive the Closing hereunder.
3.15 INSURANCE. The Disclosure Schedule contains a list and brief
description of each insurance policy to which Seller or Parent has been a
party, a named insured or otherwise the beneficiary of coverage at any time in
the past three years in connection with the Assets or Seller's business and of
individual claims in excess of $50,000, and similar claims in excess, in the
aggregate, of $200,000 during any 12-month period, made by Seller or Parent
within three years prior to the date hereof, under any insurance policies.
Such insurance is adequate in kind and amount to cover known insurable risks of
Seller and is, and will continue to be, in full force and effect for the
benefit of the Buyer and the Assets.
3.16 EMPLOYEE RELATIONS. Seller is in material compliance with all
applicable laws respecting employment and employment practices, terms and
conditions of employment, and wages and hours, and there are no arrears in the
payment of wages or social security taxes. Seller has no continuing obligation
for health, life, medical insurance or other similar fringe benefits to any
former employee of the Seller. Seller has no accrued or unfunded liabilities
with respect to employees who have been terminated or given notice of
termination prior to the Closing Date. Seller has provided to Buyer a true,
correct and complete list of the payroll of Seller as at the Closing
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Date, including the job descriptions and salary or wage rates of, and bonuses
payable to, each of its employees. The Disclosure Schedule sets forth a list
of all employment or compensation agreements with each officer and employee of
Seller (including all severance, "stay-put" and similar agreements and all
agreements which result in the creation or occurrence of any right, duty or
obligation based upon, or as a result of, any change of control of Seller or
its assets. To Seller's knowledge, no executive, key employee or group of
employees has any plans to terminate employment with Seller.
3.17 LABOR MATTERS. Seller has not experienced any labor disputes or
any work stoppages due to labor disagreements and there is no such dispute or
work stoppage threatened against Seller. No employee of Seller is represented
by any union or collective bargaining agent and to the knowledge of Parent and
Seller, there has been no union organizational effort in respect of any
employees of Seller since December 31, 1996. There are no pending or, to the
knowledge of Parent and Seller, threatened Legal Proceedings by any Person or
Governmental Authority against Seller with respect to any violation or alleged
violation of any applicable federal, state or local laws, rules or regulations
(a) prohibiting discrimination on any basis, including, without limitation, on
the basis of race, color, religion, sex, disability, national origin or age or
(b) relating to employment or labor, including, without limitation, those
related to immigration, wages, hours or plant closing.
3.18 BENEFIT PLANS.
(a) The Disclosure Schedule sets forth a complete and correct
list of all "employee benefit plans," as defined in Section 3(3) of ERISA, and
all plans, programs, policies, arrangements or agreement with respect to
employment, termination, severance pay, vacation pay, company awards, salary
continuation, disability, sick leave, retirement, deferred compensation, bonus
or other incentive compensation, stock purchase, stock option or other
equity-based compensation, hospitalization, medical insurance, life insurance,
educational assistance, arrangements or other employee benefit arrangements
(whether written or oral) covering employees or former employees of Seller, or
with respect to which Seller has any obligation or liability ("Benefit Plans").
(b) True, correct and complete copies of the following
documents, with respect to each of the Benefit Plans, have been delivered to
Buyer: (i) any plans and related trust documents, including all amendments
thereto, (ii) the three most recent annual reports (Forms 5500) and schedules
thereto, (iii) the most recent financial statements and actuarial valuations if
any, (iv) the most recent IRS determination letter, (v) the most recent summary
plan descriptions, and (vi) the premium expenses and claims experience for each
Benefit Plan which is a welfare benefit plan for the period from January 1,
1996 to the last day of the month preceding the date hereof.
(c) Each of the Benefit Plans intended to quality under
Section 401 of the Code has been so qualified since its inception and has
received a favorable determination letter from the IRS as to such qualified
status, and nothing has occurred with respect to the operation of any such plan
which could cause the loss of such qualification or the imposition of any
material liability, penalty or tax under ERISA or the Code.
(d) Each of the Benefit Plans has been administered in
accordance with its terms and has been maintained in compliance, in form and
operation, with all applicable laws, including, without limitation, ERISA and
the Code. Neither the Seller nor any "party in interest" or "disqualified
person" with respect to the Benefit Plans has engage in a non-exempt prohibited
transaction within the meaning of Section 4975 of the Code or Section 406 of
ERISA.
(e) All contributions and premiums required to be made by law
or by the terms of any Benefit Plan or any agreement related thereto have been
timely made, and no accumulated funding deficiency (as defined in Section 412
of the Code) exists with respect to any of the Benefit Plans subject to Section
412 of the Code. With respect to the Benefit Plans, individually and in the
aggregate, there are no funded benefit obligations for which contributions are
due and have not been made or for which contributions are due and have not been
made or for which contributions have not been properly accrued as required by
GAAP and there are no unfunded benefit
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obligations which have not been (i) accounted for by reserves (if required by
GAAP) or (ii) if required (and to the extent required, if any), properly
disclosed in accordance with GAAP, in the Balance Sheet.
(f) Seller does not currently maintain, sponsor or contribute
to (nor is it required to contribute to) any "defined benefit plan" as defined
in Section 3(35) of ERISA, any "multiemployer plan" as defined in Section 3(37)
of ERISA or any "multiple employer plan" within the meaning of Sections 4063 or
4064 of ERISA. With respect to any "employee benefit plan" (as defined in
Section 3(3) of ERISA), or any similar plan maintained outside of the United
States, whether or not terminated currently or formerly maintained or
contributed by Seller or any entity which was at any time treated as a single
employer, determined under Section 414(b), (c), (m) or (o) of the Code, with
Seller, no liability currently exists and no event has occurred and no
condition exists, which could subject Seller, Parent or Buyer directly or
indirectly (through an indemnification agreement or otherwise) to any
liability, including without limitation, any liability under Title IV of ERISA,
including without limitation Sections 4064, 4069 or 4204 of ERISA, or Section
412, 4971, 4975 or 4980B of the Code. Seller has not engaged in, or is a
successor or parent corporation to an entity that has engaged in, a transaction
described in Section 4069 of ERISA.
(g) There have been no Legal Proceedings instituted or claims
asserted against any of the Benefit Plans, the assets of any such plans or
Seller, or the plan administrator or any fiduciary of the Benefit Plans with
respect to the operation of such plans (other than routine benefit claims), and
there are no facts or circumstances which are reasonably likely to form the
basis for any such Legal Proceeding or claims.
(h) Neither the execution and delivery of this Agreement nor
the consummation of the transactions contemplated hereby will (i) result in any
payment becoming due to or increase any compensation of any current or former
director, officer or employee of Seller, (ii) increase any benefits otherwise
payable under any Benefit Plan, or (iii) result in the acceleration of the time
of payment or vesting of any such compensation or benefits.
(i) Seller does not provide, and is not obligated to provide,
medical, hospital, dental, life or other similar benefits to any current or
former employee after his or her termination of employment with Seller, except
as may be required under Section 4980B of the Code and Part 6 of Subtitle B of
Title I of ERISA.
(j) Except as set forth on the Disclosure Schedule, there is
no contract, agreement, plan or arrangement, covering any employee of Seller
that, individually or collectively, could give rise to the payment of any
amount that would not be deductible by virtue of Section 280G of the Code.
3.19 BANKS. The Disclosure Schedule sets forth: (i) the name of
every bank in which Seller has an account or safe deposit box; (ii) the
identifying numbers of all such accounts and safe deposit boxes and (iii) the
names of all persons having power to borrow, discount debt obligations, cash or
draw checks or otherwise act on behalf of Seller in any dealings with such
banks.
3.20 CAPITAL EXPENDITURES. The Disclosure Schedule sets forth a list
of each of Seller's approved capital expenditure projects (including without
limitation, each construction project) involving in excess of $50,000
including: (i) projects which have been commenced but are not yet completed;
(ii) projects which have not been commenced and (iii) projects which have been
completed in respect of which payment has been made, within the past twelve
(12) months.
3.21 PRODUCTS LIABILITY AND PERSONAL INJURY CLAIMS. The Disclosure
Schedule sets forth a list of all claims for products liability or personal
injury due to, resulting from or associated with, any product manufactured or
supplied by Seller now pending against Seller or which have been pending
against Seller at any time during the past three years.
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3.22 POWERS OF ATTORNEY. The Disclosure Schedule sets forth a list of
the names of all persons holding powers of attorney from Seller or authorized
to act as agents for Seller.
3.23 PRODUCT WARRANTIES. The Disclosure Schedule sets forth the forms
of Seller's product warranties that are currently applicable to products sold
by Seller or in respect of which Seller is obligated.
3.24 ABSENCE OF CERTAIN CHANGES. Except as set forth in the
Disclosure Schedule, since the Balance Sheet Date, Seller has operated its
business in the ordinary and usual course and in a manner consistent with past
practice, and without limiting the generality of the foregoing, there has not
been:
(a) any change or any event, occurrence, development or fact
that alone or in the aggregate has had, or would reasonably be expected to
have, a Material Adverse Effect with respect to Seller;
(b) any amendment to Seller's articles of incorporation or
bylaws;
(c) any employment contract or collective bargaining
agreement, written or oral, entered into or materially modified by Seller, any
increase in or agreement to increase the base compensation payable to (except
such increases which are in the ordinary course of Seller's business,
consistent with past practice, or as otherwise disclosed herein) or any other
material change in employment or compensation or benefits with respect to any
director, officer or employee, or adoption, repeal, amendment or modification
of any bonus, profit-sharing, retirement deferred compensation, incentive,
severance or other Benefit Plan, contract or commitment by Seller;
(d) any incurrence or assumption by Seller of any material
Indebtedness;
(e) the imposition of any material Encumbrance upon any of the
assets, tangible or intangible, of Seller;
(f) any material damage, destruction or loss with respect to
the properties or assets of Seller, whether or not covered by insurance;
(g) any payment, loan or advance of any amount to, or sale,
transfer or lease of any of Seller's assets to, or any agreement or arrangement
with, any shareholder of Seller or any of their respective Affiliates;
(h) any change in the Tax or accounting principles, methods,
practices or procedures followed by Seller or any change in the depreciation or
amortization policies or rates theretofore adopted by Seller, except as
required by GAAP and disclosed to Buyer;
(i) any change or revocation by Seller of any Tax election or
any agreement or settlement with any Taxing Authority;
(j) any acquisition by Seller by merging or consolidating
with, or by purchasing a substantial portion of the assets of, or by any other
manner, any business or corporation, partnership, association or other business
organization or division thereof;
(k) any sale, lease or other transfer or disposition by Seller
of a material amount of its assets, tangible or intangible, other than for fair
consideration in the ordinary course of business in a manner consistent with
past practice;
(l) any contract (or series of related contracts) entered into
by Seller either involving more than $25,000 individually (or $50,000 in the
aggregate) or outside the ordinary course of business;
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(m) any acceleration, termination, material modification or
cancellation of any contract involving more than $25,000 individually (or
$50,000 in the aggregate) to which Seller is a party or by which it or its
properties is bound;
(n) any capital expenditure (or series of related capital
expenditures) by Seller either involving more than $25,000 individually (or
$50,000 in the aggregate) or outside the ordinary course of business;
(o) any capital investment in, any loan to or any acquisition
of the securities or assets of, any other person;
(p) any material delay or postponement of payment of accounts
payable or other liabilities of Seller outside the ordinary course of business
consistent with past practice;
(q) any cancellation, compromise, waiver or release of any
material right or claim of Seller outside the ordinary course of business;
(r) any license or sublicense of any rights of Seller under or
with respect to its intellectual property Rights; or
(s) any agreement, undertaking or legal obligation, whether in
writing or otherwise, by Seller to do any of the foregoing.
3.25 TITLE TO PROPERTY; LEASES; ENCUMBRANCES.
(a) Except as set forth on the Disclosure Schedule, Seller has
good and valid title to all assets (other than real property or interests in
real property) reflected on the Balance Sheet or thereafter acquired, except
for those since sold or otherwise transferred or disposed of in the ordinary
course of business consistent with past practice, in each cash free and clear
of Encumbrances except Permitted Liens.
(b) Seller does not own and has never owned any fee interest
in any real property. The Disclosure Schedule sets forth a complete list of
all real property and interests in real property leased by Seller ("Leased Real
Property"). Seller has a good and valid and binding leasehold interest in the
Leased Real Property, free and clear of all Encumbrances except Permitted
Liens. Seller has no obligations to perform any capital improvements and all
capital improvements required to be made by Seller under the leases are fully
paid for.
(c) The plants, buildings, structures and equipment of Seller
are substantially free of defects, are in good operating condition and repair
and have been reasonably maintained consistent with standards generally
followed in the industry (giving due account to the age and length of use of
same, ordinary wear and tear excepted), are substantially suitable for their
present uses and, in the case of plants, buildings and other structures
(including, without limitation, the roofs thereof), are structurally sound.
3.26 PRODUCTS. Set forth on the Disclosure Schedule is a list of all of
Seller's products. Each of the products sold by Seller: (a) is, and at all
times up to and including the sale thereof has been, in compliance in all
material respects with all applicable federal, state,local and foreign laws and
regulations and (b) is, and at all relevant times has been, fit for the ordinary
purposes for which it is intended to be used and conforms in all material
respects to any promises or affirmations of fact made in all regulatory filings
pertaining thereto and made on the container or label for such product or in
connection with its sale. There is no design or manufacturing defect with
respect to any of such products. Seller has not received written notice of any
product warranty claims other than such claims as do not exceed, in the
aggregate, the applicable reserve therefor reflected on the Balance Sheet.
Warranty reserves are established and reflected on the Financial Statements to
insure that the estimated costs of
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providing warranty services or upgrades, improvements and extended service
pursuant to contractual obligations are recognized in the period in which the
sale of products is recorded prior to and as of the Closing Date.
3.27 FDC/FDA COMPLIANCE. Seller warrants that it is in compliance
with the provisions of the Federal Food, Drug and Cosmetic Act ("FDC Act")
relating to medical devices. Specifically, Seller warrants and represents that
each device that it manufactures or distributes is the subject of a 510(k)
premarket notification which resulted in a finding of substantial equivalence
by the FDA. Seller warrants that none of the devices found substantially
equivalent by FDA have been modified in such a manner as to require the
submission of a new 510(k) premarket notification, and that none of the devices
have been labeled or promoted in such a manner as to require the submission of
a new 510(k) notification. Seller warrants that all the devices that it
distributes are listed with the FDA, and that Seller has registered with FDA.
Seller warrants that all devices are manufactured in accordance with the
current Good Manufacturing Practices regulations. 21 C.F.R. Part 820. Seller
warrants that it has submitted all reports necessary to be submitted in
accordance with the Medical Device Reporting regulations. 21 C.F.R. Part 803.
Seller warrants that it has labeled and promoted its devices in accordance with
the provisions of the FDC Act and FDA's implementing regulations. Seller
further represents and warrants that its devices are not misbranded,
adulterated, or otherwise in violation of the FDC Act or FDA's regulations.
3.28 GUARANTIES. Seller is not a guarantor or otherwise is liable for
any liability or obligation (including indebtedness) of any other Person.
3.29 NOTES AND ACCOUNTS RECEIVABLE. All notes and accounts receivable
of Seller are reflected properly on their books and records, are valid
receivables subject (to Seller's knowledge after due inquiry) to no setoff or
counterclaims, are current and collectible, and will be collected in accordance
with their terms at their recorded amounts, subject only to the reserve for bad
debts set forth on the Balance Sheet as adjusted for the passage of time
through the Closing Date in accordance with the past custom and practice of
Seller.
3.30 PAYMENTS. Neither Seller, nor any of its officers, directors,
employees or, to the best knowledge of Seller, agents, has, directly or
indirectly, within three years prior to the date hereof, given or made or
agreed to give or make any material political contribution or any material
questionable, improper or illegal commission, payment, gratuity, gift, or
similar benefit to any customer, supplier, governmental employee or other
person (foreign or domestic) who is or may be in a position to help or hinder
Seller's business (or assist Seller in connection with any actual or proposed
transaction). Seller, has not participated, during such period, directly or
indirectly, in any boycotts or similar practices in connection with the Assets.
3.31 CUSTOMERS AND SUPPLIERS. The Disclosure Schedule hereto contains
a list of Seller's ten largest customers and suppliers (measured by dollar
volume in each case) during the calendar year 1997 and during the first three
months of 1998, showing with respect to each, the name and address, dollar
volume and nature of the relationship (including the principal categories of
products bought or sold). Seller is not required to provide any bonding or
other financial security arrangements in connection with any of the
transactions with any of its customers or suppliers in the ordinary course of
Seller's business. Seller has not received any direct communication (whether
oral or written) of any intention of any customer identified on the Disclosure
Schedule to discontinue its relationship as a customer of, or materially reduce
its purchases from Seller (or, post-Closing, from Buyer).
3.32 NO MISSTATEMENTS. Neither this Agreement or the Related
Documents, nor any other document, certificate or written statement prepared or
furnished by Seller, Parent or their respective representatives and furnished
to Buyer or Buyer's representatives in connection herewith or therewith,
contain any untrue statement of material fact or omits to state a material fact
necessary in order to make the statements contained herein and therein not
misleading as of the date hereof or thereof. There is no fact known to Seller
or Parent that adversely affects the value of the Assets or the Seller's
business, prospects, financial condition or operations which has not been set
forth in this Agreement or the Disclosure Schedule.
ARTICLE 4
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REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer hereby represents and warrants to the Seller as follows:
4.1 ORGANIZATION; AUTHORITY. Buyer is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware,
and has all requisite power and authority to enter into this Agreement and
perform its obligations hereunder.
4.2 AUTHORITY RELATIVE TO AGREEMENT. The execution, delivery and
performance of this Agreement and the Related Agreements by Buyer and the
consummation of the transactions contemplated hereby and therein, have been
duly and validly authorized by all necessary corporate action of Buyer. This
Agreement and the Related Agreements have been duly executed and delivered and
constitute the legal, valid and binding obligations of Buyer, each enforceable
in accordance with their respective terms, except as limited by bankruptcy,
insolvency, or other laws of general application relating to the enforcement of
creditor's rights.
4.3 NO CONFLICT WITH OTHER INSTRUMENTS OR AGREEMENTS. The execution,
delivery and performance of this Agreement or the Related Agreements by Buyer
will not result in a material breach or violation of, or constitute a material
default under, Buyer's Articles of Incorporation, Bylaws or any agreement to
which Buyer is a party or by which Buyer is bound or to which any of Buyer's
property is subject and, to the best of Buyer's knowledge, will not be in
violation of any statute, judgment, order, rule or regulation in effect at the
date hereof of any court or federal, state or other regulatory authority or
governmental body having jurisdiction over Buyer.
ARTICLE 5
CONDITIONS PRECEDENT TO THE OBLIGATIONS OF BUYER
Each and every obligation of Buyer under this Agreement to be performed
on or before the Closing Date shall be subject to the satisfaction, on or
before the Closing Date, of the following conditions precedent, except to the
extent that Buyer shall have waived such satisfaction in writing:
5.1 PERFORMANCE. Each of Seller and Parent shall have performed and
complied with all agreements, covenants and conditions required by this
Agreement to be performed and complied with by Seller and/or Parent on or
before the Closing Date. Buyer shall have received a certificate of each of
the President or Chief Financial Officer of the Seller and Parent dated as of
the Closing Date and certifying to the fulfillment of the foregoing conditions
and the absence of any material adverse change, in a form reasonably acceptable
to Buyer and its counsel.
5.2 NON-COMPETITION AGREEMENTS. Parent and Buyer shall have each
entered into a Non-Competition Agreement ("Non-Competition Agreement") in
substantially the same form as attached EXHIBIT G.
5.3 CERTAIN AGREEMENTS. Seller and Buyer shall have entered into the
Xxxx of Sale, Patent Assignment Agreement, 510(k) Assignment Agreement and the
Assignment of Lease Agreement attached hereto as EXHIBITS A, B, C and H.
5.4 OPINION OF SELLER'S COUNSEL. Buyer shall receive an opinion of
the Seller's counsel, dated the Closing Date, in form and substance reasonably
satisfactory to Buyer and its counsel.
5.5 RELEASE OF CLAIMS. Seller shall deliver a release ("Release") to
Buyer of all claims or rights of Seller with respect to the Assets or against
Buyer in connection with the transactions contemplated by this Agreement and
the Related Documents, in substantially the same form as attached EXHIBIT I.
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5.6 APPROVAL. This Agreement and the Related Documents and the
transactions contemplated hereby and thereby shall have been approved by
Seller's Board of Directors and by Buyer's Board of Directors.
5.7 GOVERNMENTAL APPROVALS. As of the Closing, all authorizations,
approvals or permits of or filings with any governmental authority that were
required by law prior to and in connection with the transfer of the Assets or
the transactions contemplated by this Agreement or the Related Documents shall
have been duly obtained or made and shall be effective as of the Closing.
5.8 BULK SALES COMPLIANCE. Seller shall have complied with any
applicable bulk sales laws and regulations, or provided its indemnity for any
Claims and Losses (as defined in Section 7.1) resulting from failure to so
comply in lieu thereof
5.9 DUE DILIGENCE. Buyer shall have completed financial, business
and legal due diligence reviews satisfactory to Buyer and its agents and
representatives, including: (i) review of financial statements and accounting
and legal records; (ii) completion of an operational review and evaluation,
including review for compliance with Regulatory Requirements; and (iii)
completion of satisfactory physical inspections with respect to certain
equipment and other tangible assets.
5.10 THIRD PARTY ARRANGEMENTS AND APPROVALS. Seller shall have
confirmed to Buyer's satisfaction the continuation of all Seller's key
employees and the receipt of any required third party approvals to the
transactions contemplated herein such that all material contract rights of
Seller remain in full force and effect after the Closing.
5.11 HIRING OF CERTAIN EMPLOYEES. As of the Closing, Buyer shall have
had the opportunity to hire the employees and retain the contractors and
consultants of Seller designated on attached EXHIBIT D, and Seller shall not
have prevented or impeded such hiring or retention. Any such employees,
contractors or consultants actually hired or retained by Buyer shall have
executed the Proprietary Information and Inventions Agreement in the form
provided by Buyer and its counsel.
ARTICLE 6
CONDITIONS PRECEDENT TO THE
OBLIGATIONS OF SELLER AND PARENT
Each and every obligation of Seller and/or Parent under this Agreement
to be performed on or before the Closing Date shall be subject to the
satisfaction, on or before the Closing Date, of each of the following
conditions precedent, except to the extent that the Seller and/or Parent, as
appropriate, shall have waived in writing such satisfaction.
6.1 PERFORMANCE. Buyer shall have performed and complied with all
agreements, covenants and conditions required by this Agreement to be performed
and complied with by Buyer on or before the Closing Date. Seller shall have
received a certificate of the President or Chief Financial Officer of the Buyer
dated as of the Closing Date and certifying to the fulfillment of the
foregoing, in a form reasonably acceptable to Seller, Parent and their counsel.
6.2 APPROVAL. This Agreement and the Related Documents and the
transactions contemplated hereby and thereby shall have been approved by
Seller's Board of Directors and by Buyer's Board of Directors.
6.3 GOVERNMENTAL APPROVALS. As of the Closing, all authorizations,
approvals or permits of or filings with any governmental authority that were
required by law prior to and in connection with the transfer of the Assets or
the transactions contemplated by this Agreement or the Related Documents shall
have been duly obtained or made and shall be effective as of the Closing.
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6.4 RESALE CERTIFICATE. Buyer shall have delivered to Seller a valid
California Resale Certificate with respect to that portion of the Assets
consisting of inventory.
ARTICLE 7
INDEMNIFICATION
7.1 GRANT OF INDEMNITY.
(a) INDEMNIFICATION BY SELLER. As an inducement to Buyer to
enter into this Agreement and the Related Documents, and acknowledging that
Buyer is relying on the indemnification provided in this Section 7 in entering
into this Agreement and the Related Documents, Seller and Parent, jointly and
severally, agree, to indemnify, defend and hold harmless Buyer and its
affiliates, parent corporation and subsidiaries, and their respective
employees, officers, directors, representatives, agents, counsel, successors
and assigns (collectively, "Buyer Affiliates"), from and against any claims,
losses, liability, obligations, lawsuits, judgments, settlements, governmental
investigations, deficiencies, damages, costs or expenses of whatever nature,
whether known or unknown, accrued, absolute, contingent or otherwise including,
without limitation, interest, penalties, attorneys' fees, costs of
investigation and all amounts paid in defense or settlement of the foregoing,
reduced by and to the extent of any insurance proceeds received with respect to
any of the foregoing (collectively "Claims and Losses"), suffered or incurred
by Buyer or Buyer Affiliates as a result of or in connection with the
following: (i) any and all debts, liabilities and obligations of Seller or
related to the Assets (other than the Assumed Liabilities), whether known or
unknown, accrued, absolute, contingent or otherwise, arising out of or relating
to the business and operations of Seller or related to the Assets prior to or
on the Closing Date or which arise after the Closing Date but which are based
upon or arise out of any act, transaction, circumstance, state of facts or
other condition which occurred or existed on or before the Closing Date,
whether or not then known, accrued, due or payable; (ii) a breach of any
obligation, representation, warranty, covenant or agreement of Seller or Parent
in this Agreement or any Related Document, or because any representation or
warranty by Seller and Parent contained in this Agreement or any Related
Document, in any document furnished or required to be furnished pursuant to
this Agreement by Seller or Parent to Buyer or any of its representatives, or
any documents furnished to Buyer in connection with the Closing hereunder,
shall be false; (iii) any litigation arising out of or based upon events or
operative facts occurring prior to or on the Closing Date, in connection with
the Seller or the Assets, whether or not disclosed on the Disclosure Schedule,
including claims, without limitation, made by employees or former employees of
Seller or Parent; (iv) any and all claims, including legal, administrative or
creditor claims or actions, in connection with the Seller or the Assets or the
transfer of Assets hereunder, if any fact material to any such claim or cause
of action pleaded or stated there occurred prior to or on the Closing Date; and
(v) costs and expenses (including reasonable attorneys' fees) incurred by Buyer
in connection with any demand, action, suit, proceeding, demand, assessment or
judgment incident to any of the foregoing (collectively, "Buyer's Damages").
(b) INDEMNIFICATION BY BUYER. As an inducement to Seller to
enter into this Agreement and the Related Documents, and acknowledging that
Seller and Parent are relying on the indemnification provided in this Section 7
in entering into this Agreement and the Related Documents, Buyer agrees to
indemnify, defend and hold harmless Seller, Parent and their respective
affiliates, agents, successors and assigns (collectively, "Seller/Parent
Affiliates"), from and against any Claims and Losses suffered or incurred by
Seller or Parent as a result of or in connection with the following: (i) a
breach of any obligation, representation, warranty, covenant or agreement of
Buyer in this Agreement or any Related Document, or because any representation
or warranty by Buyer contained in this Agreement or any Related Document, in
any document furnished or required to be furnished pursuant to this Agreement
by Buyer to Seller and/or Parent, or any of their representatives, or any
documents furnished to Seller and/or Parent in connection with the Closing
hereunder, shall be false; (ii) any and all liabilities of Seller or Parent of
any nature arising solely out of the Assets after the Closing Date except for
matters which are the subject of indemnification pursuant to Section 7.1(a);
and (iii) costs and expenses (including reasonable attorneys' fees) incurred by
Seller or Parent in connection with any action, suit, proceeding, demand,
assessment or judgment incident to any of the foregoing (collectively,
"Seller/Parent Damages").
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(c) DEFENSE AND SETTLEMENT. Buyer shall have the right to
defend a claim of infringement or misappropriation asserted by a third party
with litigation counsel of its choice and shall instruct said counsel to
diligently and energetically defend. Buyer shall keep Seller apprised of the
developments in the action. Seller shall cooperate in the defense of each and
every claim. Without limitation, the cooperation shall include making available
documents and or witnesses as may be within the control of Seller, cooperating
in assisting Buyer to determine all particulars of operation of the accused
product or method, and in identifying and proving counterclaims against the
third party. Buyer shall retain control of the litigation and shall therefore,
have the right to make the final decision with respect to defenses,
counterclaims and strategy. Seller shall strictly observe all conduct and
communication rules that litigation counsel shall impose with respect to the
claim or litigation, including, but not limited to, issuance of press releases,
public statements and even to statements to individuals within the employ of
Seller who either do not have a strict need to know, or, to whom communication
would be restricted by reason of any protective order in effect. Buyer shall
be entitled to settle any third party claim in any manner which, in Buyer's
sole judgment, is appropriate, and Seller shall cooperate and comply with such
acts as shall be required to accomplish settlement.
7.2 REPRESENTATION, COOPERATION AND SETTLEMENT.
(a) Each party agrees to give prompt notice to the other, of
any claim against the other, which might give rise to a claim based on the
indemnity contained in Sections 7.1 and 7.2, stating the nature and basis of
the claim and the amount thereof.
(b) In the event any claims, action, suit or proceeding is
brought against a party (the "Indemnified Party") with respect to which the
other party (the "Indemnifying Party") may have liability under the indemnity
contained in Sections 7.1 and 7.2 hereof, the Indemnified Party shall permit
the Indemnifying Party to assume the defense of any such claim or any
litigation resulting from such claim, provided that Buyer shall not be required
to permit Seller or Parent to assume the defense of any third party claim which
if not first paid, discharged, or otherwise complied with would result in a
material interruption or cessation of the conduct of Buyer's business or any
material part thereof or materially impair the value of the Assets. Failure by
the Indemnifying Party to notify the Indemnified Party of its election to
defend any such claim or action by a third party within thirty (30) days after
notice thereof shall have been given by the Indemnified Party, shall be deemed
a waiver of any such election. If the Indemnifying Party assumes the defense of
such claim or litigation resulting therefrom, the obligations of the
Indemnifying Party hereunder as to such claim shall include taking all steps
reasonably necessary in the defense or settlement of such claim or litigation
resulting therefrom, including the retention of competent counsel satisfactory
to the Indemnified Party, and holding the Indemnified Party harmless from and
against any and all damage resulting from, arising out of, or incurred with
respect to any settlement approved by the Indemnifying Party or any judgment in
connection with such claim or litigation resulting therefrom. The Indemnifying
Party shall not, in the defense of such claim or litigation, consent to the
entry of any judgment (other than a judgment of dismissal on the merits without
costs) except with the written consent of the Indemnified Party nor enter into
any settlement (except with the written consent of the Indemnified Party) which
does not include as an unconditional term thereof the giving by the claimant or
the plaintiff to the Indemnified Party a release from all liability in respect
to such claim or litigation.
(c) If the Indemnifying Party shall not assume the defense of
any such claim by a third party or litigation resulting therefrom, the
Indemnified Party may defend against such claim or litigation in such manner as
it deems appropriate. The Indemnifying Party shall, in accordance with the
provisions hereof, promptly reimburse the Indemnified Party for the amount of
any settlement reasonably entered into by the Indemnified Party and for all
damage incurred by the Indemnified Party in connection with the defense against
or settlement of such claim or litigation.
7.3 INTEREST. In the case of payments to third parties (including
federal, state, local or other tax authorities) which are indemnifiable
hereunder, the amount of the indemnifying party's liability under this Article 7
with respect thereto shall include interest on the amount of such payment from
the effective date of the indemnified party's notice of such payment to the
indemnifying party or the date on which such payment is made (whichever is
later) through the date on which the indemnified party shall have been
indemnified therefor, at a simple rate of
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interest equal to eight percent (8%) per annum; provided, in no event shall
such rate exceed the maximum rate permitted by law.
7.4 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All the
representations and warranties of the Seller and Parent contained in Article 3
and of the Buyer in Article 4 above shall survive the Closing hereunder and
shall continue in full force and effect after such Closing for a period of
thirty (30) months after the Closing Date; provided, however, that (i) the
representations and warranties in Sections 3.12, 3.13 and 3.18 shall continue
to survive after the Closing Date until the expiration of all applicable
statutes of limitations, and (ii) the representations and warranties in Section
3.14 shall continue to survive after the Closing Date for a period of five (5)
years.
7.5 LIMITATIONS ON INDEMNIFICATION.
7.5.1 Notwithstanding the other provisions of Section 7 hereof,
the Buyer agrees that with respect to demands by Buyer for indemnification for
Claims and Losses relating to breaches of representations or warranties by the
Seller:
(a) The Seller shall indemnify Buyer only for the amount
by which the aggregate of all Claims actually suffered exceeds Fifty Thousand
Dollars ($50,000.00) (this sum being referred to hereafter as the "Deductible").
(b) No demand for indemnification under Section 7 shall
be made with respect to any Claim that is not for an amount at least equal to
One Thousand Dollars ($1,000.00) (a "De minimis Claim"), and no De minimis
Claim shall be taken into account for the purpose of determining whether the
aggregate Claims exceed the Deductible.
(c) The maximum total liability for all Claims shall be
the total Purchase Price.
7.5.2 Notwithstanding the other provisions of Section 7 hereof,
the Buyer agrees that with respect to demands by Buyer for indemnification for
any Claims hereunder against the Seller:
(a) No demand for indemnification under Section 7 shall
be made with respect to any claim to the extent the Claim arises wholly as a
result of the passing or amending after the Closing Date of a statute, rule or
other government regulation with retroactive effect.
(b) The amount of any Claim subject to indemnification
shall be determined after taking into account the present value of any tax
benefits (net of tax detriments) accruing to Buyer (or any member of its
consolidated group) as a result of such Claim, but only to the extent that the
present value of the tax benefits can be estimated based upon assumptions
reasonable under the circumstances.
ARTICLE 8
TRANSACTIONS SUBSEQUENT TO THE CLOSING DATE
8.1 FURTHER ASSURANCES. From time to time after the Closing Date,
the parties shall execute, deliver and acknowledge all such further instruments
of transfer and conveyance and shall perform all such other acts as any other
party may reasonably request to more effectively transfer the Assets and to
otherwise carry out the transactions contemplated by this Agreement and the
Related Documents.
8.2 SALES AND USE TAXES. Any sales, use or other transfer tax which is
payable as the result of the transactions contemplated by this Agreement shall
be paid by Seller in full compliance with applicable law.
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8.3 CONTINUED COOPERATION. Each of the parties hereto shall continue
to cooperate after the Closing to effect the substance and intent of the
transactions described in this Agreement.
8.4 FULL ACCESS. Subsequent to the Closing, each of Seller and
Parent shall, upon request, provide Buyer and Buyer's representatives with any
information as Buyer may reasonably request in order to verify performance of
and compliance with the representations, warranties, covenants and conditions
applicable to Seller and Parent hereunder or the Related Documents.
ARTICLE 9
MISCELLANEOUS PROVISIONS
9.1 INVESTIGATIONS AND SURVIVAL. The respective representations,
warranties, covenants and agreements of Seller, Parent and Buyer herein and in
the Related Documents, or in any certificates or other documents delivered
prior to or at the Closing, shall not be deemed modified, waived or otherwise
affected by any investigation made by any party or its representatives hereto.
9.2 SUCCESSORS AND ASSIGNS. This Agreement may not be assigned by a
party without the prior written consent of the parties hereto which consent
shall not be unreasonably withheld or delayed; provided, however, this
Agreement may be assigned and the obligations hereunder delegated by the Buyer
to a purchaser or acquiror of all or substantially all of the business, stock
or assets of Buyer in whatever form of corporate transaction or to any other
corporation or entity that, directly or indirectly, through one or more
intermediaries, controls, is controlled by or under common control with Buyer
without the consent of Seller or Parent. Except as otherwise provided herein,
the terms and conditions of this Agreement shall inure to the benefit of and be
binding upon the respective successors, assigns, heirs, legatees, executors and
administrators of the parties.
9.3 GOVERNING LAW; JURISDICTION AND VENUE; SEVERABILITY. This
Agreement shall be governed by and construed in accordance with the laws of the
State of California, without regard to principles of conflicts of law. The
parties agree that any dispute regarding the interpretation or validity of this
Agreement shall be subject to the exclusive jurisdiction of the state and
federal courts in and for the County of San Diego, California, and each party
hereby agrees to submit to the personal and exclusive jurisdiction and venue of
such courts. If any term, covenant or condition of this Agreement is held to
be to any extent invalid, void, or otherwise unenforceable by any court or
arbitrator, the remainder of this Agreement shall not be affected thereby and
each term, covenant and condition of this Agreement shall be valid and
enforceable to the fullest extent permitted by law.
9.4 ENTIRE AGREEMENT; MODIFICATION AND WAIVER. This Agreement,
together with the agreements and documents referred to herein, constitute the
entire agreement between the parties hereto with respect to the subject matter
hereof and supersede all prior and contemporaneous agreements and
understandings. All Exhibits and Schedules attached hereto are incorporated
herein by this reference. This Agreement may be modified, amended or
supplemented only by a written instrument duly executed by all parties hereto.
No covenant, term or condition or the breach thereof shall be deemed waived,
unless it is waived in writing and signed by the party against whom the waiver
is claimed. Any waiver of breach of any covenant, term or condition shall not
be deemed to be a waiver of any preceding or succeeding breach of the same or
any other covenant, term or condition. The failure of any party to insist upon
strict performance of any covenant, term or condition hereunder shall not
constitute a waiver of such party's right to demand strict compliance therewith
in the future. Time is of the essence for purposes of each and every provision
of this Agreement.
9.5 NOTICES. All payments, notices, requests, demands and other
communications required or permitted hereunder shall be in writing and shall be
delivered personally (which shall include delivery by courier or overnight
delivery service) or sent by certified or registered mail postage prepaid,
certified or return receipt requested, or sent by facsimile transmission, to
the parties at their respective address set forth below or at such other
address as shall be given in writing by a party to the other party. Items
delivered personally or by facsimile
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transmission shall be deemed delivered on the date of actual delivery; items
sent by certified or regular mail shall be deemed delivered three (3) days
after mailing.
If to Buyer: ALARIS Medical Systems, Inc.
00000 Xxxxxxxxx Xxxxxx
Xxx Xxxxx, XX 00000-0000
Attn: Legal Department
Facsimile: (000) 000-0000
If to Parent: Invacare Corporation
Xxx Xxxxxxxx Xxx
Xxxxxx, Xxxx 00000-0000
Attn: Chief Financial Officer
Facsimile: ____________________
If to Seller: Invacare Infusion Systems
Xxx Xxxxxxxx Xxx
Xxxxxx, Xxxx 00000-0000
Attn: Chief Financial Officer
Facsimile: ____________________
9.6 PAYMENT OF FEES AND EXPENSES. Each party to this Agreement shall
be responsible for, and shall pay, all of its own legal, accounting and other
transactional fees and expenses incurred in the negotiation and preparation of
this Agreement and the Related Documents and the transactions contemplated
herein and therein.
9.7 DRAFTING PARTY. The provisions of this Agreement, and the
documents and instruments referred to herein, have been examined, negotiated,
drafted and revised by counsel for each party hereto and no implication shall
be drawn nor made against any party hereto by virtue of the drafting of this
Agreement.
9.8 COUNTERPARTS. This Agreement may be executed in multiple copies,
each of which shall be deemed an original and all of which shall constitute a
single agreement binding on all parties.
ARTICLE 10
CERTAIN DEFINITIONS
10.1 DEFINITIONS. The following terms as used in this Agreement shall
have the meaning indicated below:
"AFFILIATE" means, with respect to any Person, any other person
controlling, controlled by or under common control with, such Person.
"AFFILIATED GROUP" means any affiliated group within the meaning
of Section 1504 of the Code (or any similar group defined under a similar
provision of state, local or foreign law).
"APPROVALS" means, collectively, permits, approvals,
authorizations, consents, clearances, licenses, franchises, concessions,
orders, exemptions or other permits of all governmental or regulatory agencies,
whether federal, state, local or foreign.
"CERCLA" means the Comprehensive Environmental Response,
Compensation and Liability Act of 1980.
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"CODE" means the Internal Revenue Code of 1986, as amended.
"ENCUMBRANCES" means all mortgages, deeds of trust, claims,
security interests, liens, pledges, leases, subleases, charges, escrows,
options, proxies, rights of occupancy, rights of first refusal, preemptive
rights, covenants, conditional limitations, hypothecations, prior assignments,
easements, title retention agreements, indentures, security agreements or other
encumbrances of any kind.
"ENVIRONMENTAL COSTS AND LIABILITIES" means any and all
liabilities, obligations, damages, deficiencies, losses, fines, penalties,
judgments, assessments, costs and expenses (including, without limitation,
reasonable fees, costs and disbursements of legal counsel, experts, engineers
and consultants): (a) any violation by Seller of Environmental Laws; (b) any
Remedial Action with respect to any property currently or formerly owned by
Seller that is required under Environmental Laws or pursuant to the
requirements of any governmental agency charged with the enforcement of
Environmental Laws; (c) damages to property or natural resources resulting from
the Release by Seller of Hazardous Materials at any property currently or
formerly owned by Seller; (d) human exposure to Hazardous Materials in
connection with Seller's operations; and (e) the Release of Hazardous Materials
at any property at which any Hazardous Material generated by Seller was
disposed of.
"ENVIRONMENTAL LAW" means any and all federal, state and local
statutes, ordinances, regulations and rules relating to environmental quality,
pollution control, natural resources, health, safety, the handling and disposal
of Hazardous Materials, contamination and clean-up, including, without
limitation, the Clean Air Act, 42 U.S.C. Section 7401 ET SEQ.; the Clean Water
Act, 33 U.S.C. Section 1251 ET SEQ., and the Water Quality Act of 1987; the
Federal Insecticide, Fungicide, and Rodenticide Act, 7 U.S.C. Section 136 ET
SEQ.; the Marine Protection, Research and Sanctuaries Act, 33 U.S.C. Section
1401 SET SEQ.; the National Environmental Policy Act, 42 U.S.C. Section 4321 ET
SEQ.; the Noise Control Act, 42 U.S.C. Section 4901 ET SEQ.; the Occupational
Safety and Health Act, 29 U.S.C. Section 651 ET SEQ.; the Resource Conservation
and Recovery Act, 42 U.S.C. Section 6901 ET SEQ., as amended by the Hazardous
and Solid Waste Amendments of 1984; the Safe Drinking Water Act, 42 U.S.C.
Section 300f ET SEQ.; the Comprehensive Environmental Response, Compensation
and Liability Act, 42 U.S.C. Section 9601 ET SEQ., as amended by the Superfund
Amendments and Reauthorization Act, the Emergency Planning and Community
Right-to-Know Act and the Radon Gas and Indoor Air Quality Research Act; the
Toxic Substances Control Act, 15 U.S.C. Section 2601 ET SEQ.; the Atomic Energy
Act, 42 U.S.C. Section 2011 ET SEQ., and the Nuclear Waste Policy Act of 1982,
42 U.S.C. Section 10101 ET SEQ.; and state and local environmental statutes and
ordinances with implementing regulations and rules.
"ENVIRONMENTAL PERMITS" means any permit, Approval,
authorization, license, variance, registration or permission required under any
applicable Environmental Law.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended, and the applicable regulations promulgated thereunder.
"FDA" means the United States Food and Drug Administration.
"FEDERAL TAX" means any tax imposed under the Code.
"GOVERNMENTAL AUTHORITY" means any foreign, United States,
Federal, State, municipal or other governmental or regulatory department,
commission, administration, board, bureau, agency or instrumentality.
"GAAP" means generally accepted accounting principles.
"HAZARDOUS MATERIAL" means any of the following, including
mixtures thereof: any substance, pollutant, contaminant, waste, by-product or
constituent regulated under the Comprehensive Environmental Response,
Compensation and Liability Act, 42 U.S.C. Section 9601 ET SEQ.; oil and
petroleum products and natural gas, natural gas liquids, liquified natural gas
and synthetic gas usable for fuel; pesticides regulated under the Federal
Insecticide, Fungicide, and Rodenticide Act, 7 U.S.C. Section 136 ET SEQ.;
asbestos and asbestos-containing materials, PCB's, urea formaldehyde foam
insulation and other substances regulated under the Toxic Substances
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Control Act, 15 U.S.C. Section 2601 ET SEQ.; source material, special nuclear
material, by-product material and any other radioactive materials or
radioactive wastes, however produced, regulated under the Atomic Energy Act or
the Nuclear Waste Policy Act of 1982; chemicals subject to the OSHA Hazard
Communication Standard, 29 C.F.R. Section 1910.1200 ET SEQ.; industrial
process and pollution control wastes, whether or not hazardous within the
meaning of the Resource Conservation and Recovery Act, 42 U.S.C. Section 6901
ET SEQ.; medical waste and special waste; and any other substance defined in or
regulated under Environmental Laws.
"INDEBTEDNESS" means, with respect to any Person, any
indebtedness, secured or unsecured, (a) in respect of borrowed money (whether
or not the recourse of the lender is to the whole of the assets of such Person
or only to a portion thereof), and evidenced by bonds, notes, debentures or
similar instruments or letters of credit, to the extent of the face value
thereof (or, in the case of evidence of indebtedness issued at a discount, the
current accredet value thereof) or (b) representing the balance deferred and
unpaid of the purchase price of property or services (other than accounts
payable (including trade payables) in the ordinary course of business) and
shall also include, to the extent not otherwise included, (i) any capitalized
lease obligations and (ii) the face value of guaranties of items of other
Persons which would be included within this definition for such other Persons
(whether or not such items would appear upon the balance sheet of the
guarantor).
"IRS" means the United States Internal Revenue Service.
"LEGAL PROCEEDING" means any judicial, administrative or arbitral
actions, suits, investigations, proceedings (public or private) or governmental
proceedings.
"MATERIAL ADVERSE EFFECT" means with respect to any Person, any
change or effect that has or that is reasonably likely to have a material
adverse effect on the condition (financial or otherwise), results of
operations, business, prospects or assets of such Person and its Subsidiaries
taken as a whole (other than as a result of changes in general economic or
political conditions generally or in general economic or political conditions
applicable to the health care industry generally).
"PERMITTED LIEN" means (i) any encumbrances disclosed on any
Financial Statement; (ii) Tax Liens which are not yet due and payable or which
are being contested in good faith and, with respect to which have adequately
been provided for on applicable financial statements (whether or not required
to be disclosed under GAAP); (iii) liens incurred in the ordinary course of
business in connection with workers compensation, unemployment insurance and
other types of social security benefits; (iv) mechanics', carriers', workmen's,
repairmen's or other like liens arising out of or incurred in the ordinary
course of business; (v) liens arising under original purchase price conditional
sales contracts and equipment leases with third parties entered into in the
ordinary course of business; (vi) liens created by or existing from any
litigation or legal proceeding that is being contested and (vii) with respect
to real property and interests therein) easements (including, without
limitation, reciprocal easement agreements and utility agreements), zoning
requirements, rights of way, covenants, consents, agreements, reservations,
encroachments, variances and other similar restrictions, charges or
encumbrances (whether or not recorded) that do not, individually or in the
aggregate, impair the continued use and operation of the assets to which they
relate the applicable business.
"PERSON" and "PERSON" means any natural person and any
corporation, trust, partnership, limited liability partnership, limited
liability company, limited liability corporation,venture or business entity.
"REGULATED ENVIRONMENTAL ACTIVITY" means any emission generation,
treatment, storage, recycling, discharge transportation or disposal of any
Hazardous Material.
"RELEASE" means any discharge, emission, spill, leakage, deposit,
injection, migration on or into the indoor or outdoor environment or into or
out of any property, including, but not limited to, a "Release" as defined in
CERCLA at 42 U.S.C. Section 9601(22).
"REMEDIAL ACTION" means all actions, including any capital
expenditures, required by any Governmental Authority or under any Environmental
Laws or which a reasonable Person would undertake
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voluntarily to (i) clean up, remove, treat, or in any other way address any
Hazardous Materials or other substance; (ii) prevent the Release or threat of
Release, or minimize the further Release of any Hazardous Materials; (iii)
perform pre-remedial studies and investigations or post-remedial monitoring,
operations, maintenance and care; or (iv) bring facilities on any property
owned, operated or leased by Seller and its Affiliates into compliance with all
Environmental Laws and Environmental Permits.
"SUBSIDIARY" means with respect to any Person, (a) each
corporation, partnership, joint venture or other legal entity of which such
Person owns, either directly or indirectly, more than 50% of the stock or other
equity interests the holders of which are generally entitled to vote for the
election of the board of directors or similar governing body of such
corporation, partnership, joint venture or other legal entity, (b) each
partnership in which such Person or another Subsidiary of such Person is the
general or managing partner and (c) each limited liability company in which
such Person or another Subsidiary of such Person is the managing member or
otherwise controls (by contract, through ownership of membership interests or
otherwise).
"TAX" or "TAXES" means all taxes, charges, fees, imposts, duties,
levies or other assessments by any Taxing Authority, including (without
limitation), all net income, alternative or add-on minimum, gross receipts,
capital, sales, use, ad valorem, value added, transfer, franchise, profits,
inventory, capital stock, license, withholding, payroll, employment, social
security, unemployment, excise, severance, stamp, occupation, property,
estimated, together with any interest and any penalties, fines, additions to
tax or additional amounts (whether disputed or not) imposed by any Taxing
Authority (domestic or foreign) and shall include any transferee liability in
respect of Taxes.
"TAX ASSET" means any net operating loss, net capital loss,
investment tax credit or tax attribute which could reduce Taxes (including,
without limitation, deductions and credits related to alternative minimum
Taxes).
"TAX AUTHORITY" means any governmental authority.
"TAX LIEN" or "TAX LIENS" means any Encumbrance relating to
Taxes, other than a lien of the type described in clause (ii) of the definition
of Permitted Liens.
"TAX RETURN" or "TAX RETURNS" means any United States Federal,
state, local and/or foreign return, declaration, report, claim for refund, or
information return or statement relating to Taxes, including all schedules and
attachments thereto, and including any amendment thereof.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
"Buyer" "Seller"
ALARIS MEDICAL SYSTEMS, INC., a PATIENT SOLUTIONS INC. D/B/A
Delaware corporation INVACARE INFUSION SYSTEMS, INC., a
Delaware corporation
By: By:
------------------------------ ----------------------------
Its: Its:
----------------------------- ---------------------------
"Parent"
INVACARE CORPORATION, an Ohio
corporation
By:
------------------------------
Its:
-----------------------------
[COUNTERPART SIGNATURE PAGE TO
AGREEMENT TO PURCHASE SELECTED ASSETS]
EXHIBIT A
XXXX OF SALE
EXHIBIT "B"
PATENT ASSIGNMENT AGREEMENT
EXHIBIT "C"
510(K) ASSIGNMENT AGREEMENT
EXHIBIT "D"
LIST OF ELIGIBLE EMPLOYEES
EXHIBIT "E"
LIST OF CURRENT OBLIGATIONS AND LIABILITIES
EXHIBIT "F"
DISCLOSURE SCHEDULE
EXHIBIT "G"
FORM OF NON-COMPETITION AGREEMENT
EXHIBIT "H"
ASSIGNMENT OF LEASE AGREEMENT
EXHIBIT "I"
RELEASE
