EXHIBIT C
SETTLEMENT AGREEMENT AND RELEASE
This Settlement Agreement and Release (the "Agreement"), dated as of
June __, 2001, is between ▇▇▇▇▇ Partners III, L.P., a limited partnership
organized under the laws of the State of Delaware ("▇▇▇▇▇ Partners"); ▇▇▇▇▇
Partners International III, L.P., a limited partnership organized under the laws
of the State of Delaware ("▇▇▇▇▇ International"); ▇▇▇▇▇ Employee Fund III, L.P.;
a limited partnership organized under the laws of the State of Delaware ("▇▇▇▇▇
Employees"); Ivy Orthopedic Partners, LLC, a limited liability company organized
under the laws of the State of Delaware ("Ivy"); and Medica Holding AG, a
corporation organized and existing under the laws of the Swiss Confederation
("Medica").
WHEREAS Medica commenced an action against, inter ▇▇▇▇, ▇▇▇▇▇
Partners, ▇▇▇▇▇ International and ▇▇▇▇▇ Employees (collectively the "▇▇▇▇▇
Parties"), and Ivy, in the Court of Chancery of the State of Delaware, New
Castle County, on or about May 1, 2001, entitled Medica Holding AG v. ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇, et al., Civil Action No. 18852 NC (the "Action"); and
WHEREAS, the parties hereto, on behalf of themselves and their
respective predecessors, successors, parents, subsidiaries, affiliates,
divisions, officers, employees, agents, shareholders, representatives and/or
assigns, desire to settle and terminate all of their disputes with each other
that have been raised or that could have been raised in or in connection with
the Action; and
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WHEREAS, to resolve their disputes without the burden and expense of
further litigation, and without an admission of liability by any party hereto,
the parties have agreed upon a settlement in respect of any and all such claims;
NOW, THEREFORE, in consideration of the mutual promises, releases and
covenants contained herein and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged by the parties, the
parties hereto enter into this Agreement, intending to be legally bound, and it
is hereby agreed by them as follows:
1. At the closing of this Settlement (the "Closing"), one or more
of the ▇▇▇▇▇ Parties and Ivy (in such proportion as the ▇▇▇▇▇ Parties and Ivy,
in their sole discretion, shall elect), shall purchase from Medica 780,362
shares of the common stock of Encore Medical Corporation ("Encore"), at $1.875
per share, in lawful money of the United States, for a total of $1,463,178.75
(the "Payment"). The Payment shall be made by wire transfer to the following
account: Account No. 571609-01-2 at Credit Suisse, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇, ▇▇-▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇.
2. The Closing shall take place simultaneously with the closing of
the transaction contemplated by the Amended and Restated Series A Preferred
Stock Purchase Agreement, dated as of May 3, 2001, between and among, inter
alia, Encore, the ▇▇▇▇▇ Parties and Ivy (the "Preferred Stock Purchase
Agreement"). The ▇▇▇▇▇ Parties and Ivy agree not to close the transaction
described in the Preferred Stock Purchase Agreement, or any substantially
similar transaction, unless this Settlement is closed simultaneously therewith.
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3. It is a condition precedent to the purchase obligation of the
▇▇▇▇▇ Parties and Ivy set forth in Section 1 above that (a) all conditions to
closing under the Preferred Stock Purchase Agreement shall have been satisfied
or waived in writing, and (b) that the closing of the transaction contemplated
by the Preferred Stock Purchase Agreement, or any substantially similar
transaction, take place on or before July 30, 2001, or by such later date as
Encore and the ▇▇▇▇▇ Parties may agree upon pursuant to a signed writing
executed before July 30, 2001, time being of the essence with respect to this
paragraph 3(b).
4. At the Closing, Medica shall deliver to the ▇▇▇▇▇ Parties:
1. A certificate or certificates for the Shares registered in
the name of Medica or MVI AG (the "Certificates"); and
2. Stock transfer powers for the Shares, duly executed in blank,
with respect to each such certificate, in such number and amount
as the ▇▇▇▇▇ Parties and Ivy may direct (the "Stock Powers").
5. Medica warrants that, both as of the date of this Agreement and
immediately prior to the Closing, (a) it is the sole owner of the Shares,
including, without limitation, those Shares registered in the name of MVI AG;
(b) it has valid title to the Shares, (c) it is fully able to sell, transfer and
deliver the Shares, free and clear of any lien, security interest, claim or any
other encumbrance, and that the Shares are not subject to any lien, security
interest, claim or other encumbrance; (d) that no consent by, filing with,
notification to or waiver by any third party or governmental officer or agency
is required in order for Medica to deliver the Shares and Stock Powers to the
▇▇▇▇▇ Parties; (e) the Shares are duly registered pursuant to the Securities Act
of 1933, as amended; (f) the Shares are not subject to any restriction or
limitation on transfer by Medica to the ▇▇▇▇▇ Parties and Ivy pursuant to any
federal, state or foreign
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securities law; and (g) the Certificates do not bear any restrictive legend or
language restricting transfer.
6. (a) Upon execution of this Agreement, Medica's attorneys
shall execute and deliver to the attorneys for the ▇▇▇▇▇ Parties and Ivy for
filing with the Court a stipulation of dismissal without prejudice as against
the ▇▇▇▇▇ Parties and Ivy of the Action, in the form annexed hereto as Exhibit
A.
(b) At the Closing, Medica's attorneys shall execute and
deliver to the attorneys for the ▇▇▇▇▇ Parties and Ivy for filing with the Court
a stipulation of dismissal with prejudice as against the ▇▇▇▇▇ Parties and Ivy
of the Action, in the form annexed hereto as Exhibit B. Medica and its attorneys
shall take any other steps necessary to discontinue the Action, as against the
▇▇▇▇▇ Parties and Ivy, with prejudice and without costs to any such party as
against any other.
(c) The ▇▇▇▇▇ Parties and Ivy agree not to oppose or to
cause Encore to oppose an application by Medica for attorneys' fees and expenses
not to exceed $300,000.
7. (a) Effective at the Closing, for the mutual promises and
other consideration set forth in this Agreement, and for other good and valuable
consideration, the adequacy and receipt of which is hereby acknowledged, Medica,
for itself and for its past and present officers, directors, employees, agents,
attorneys, representatives, parents, subsidiaries, partners, members,
affiliates, shareholders, successors and assigns (collectively, the "Medica
Releasors"), irrevocably and unconditionally releases and discharges each of the
▇▇▇▇▇ Parties and Ivy, together with their past and present officers, directors,
employees, agents, attorneys,
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representatives, parents, subsidiaries, affiliates, shareholders, successors and
assigns, (collectively, the "▇▇▇▇▇ Releasees"), jointly and individually, from
any and all claims, demands, rights, liabilities, debts, liens, damages,
punitive damages, costs, losses, expenses and/or compensation, covenants,
contracts, controversies, agreements, promises, actions and causes of action, of
every kind and nature whatsoever, at law or in equity, under statute, rule,
regulation, at common law or otherwise, known or unknown, suspected and
unsuspected, disclosed and undisclosed, which against the ▇▇▇▇▇ Releasees the
Medica Releasors ever had, now have or hereafter can, shall or may have for,
upon, or by reason of any act, omission, matter, cause or thing whatsoever, from
the beginning of time to the date of the Closing, but in every case only to the
extent arising out of or relating to (a) the matters and transactions described
in the complaint and amended complaint filed in the Action, or (b) the Preferred
Stock Purchase Agreement or the transactions contemplated thereby.
(b) Nothing in this paragraph 7 is intended to or constitutes
a release or waiver of any obligations that any party may have under this
Agreement.
8. (a) Effective at the Closing, for the mutual promises and
other consideration set forth in this Agreement, and for other good and valuable
consideration, the adequacy and receipt of which is hereby acknowledged, the
▇▇▇▇▇ Parties and Ivy, for themselves and for their past and present officers,
directors, employees, agents, attorneys, representatives, parents, subsidiaries,
partners, members, affiliates, shareholders, successors and assigns
(collectively, the "▇▇▇▇▇ Releasors"), irrevocably and unconditionally release
and discharge Medica, together with its past and present officers, directors,
employees, agents, attorneys,
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representatives, parents, subsidiaries, partners, members, affiliates,
shareholders, successors and assigns (collectively, the "Medica Releasees"),
jointly and individually, from any and all claims, demands, rights, liabilities,
debts, liens, damages, punitive damages, costs, losses, expenses and/or
compensation, covenants, contracts, controversies, agreements, promises, actions
and causes of action, of every kind and nature whatsoever, at law or in equity,
under statute, rule, regulation, at common law or otherwise, known or unknown,
suspected and unsuspected, disclosed and undisclosed, which against the Medica
Releasees the ▇▇▇▇▇ Releasors ever had, now have or hereafter can, shall or may
have for, upon, or by reason of any act, omission, matter, cause or thing
whatsoever, from the beginning of time to the date of the Closing, but in every
case only to the extent arising out of or relating to (a) the matters and
transactions described in the complaint and amended complaint filed in the
Action, or (b) the Preferred Stock Purchase Agreement or the transactions
contemplated thereby.
(b) Nothing in this paragraph 8 is intended to or
constitutes a release or waiver of any obligations that any party may have under
this Agreement.
9. Simultaneously with the execution of this Agreement, Medica
shall deliver to ▇▇▇▇▇ Partners an irrevocable proxy coupled with an interest
for all of the Shares, in the form annexed hereto as Exhibit C, for all issues
that may come before the Stockholders' Meeting now scheduled to take place on
June 12, 2001, or on such other date to which it may be continued or adjourned.
10. Medica represents and warrants: (a) that it has not filed any
actions, charges or claims, other than those that were or are now pending in the
Action with respect to the
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claims and other matters released pursuant to paragraph 7 hereof; (b) that it
has made no transfer, assignment, conveyance, hypothecation or other disposition
to any other person or entity of any claims against or any interest in claims
against the parties released pursuant to the release in paragraph 7 above; (c)
that no other person or entity has an interest in any of such claims so as to
impede its ability to give his full and complete release of all such claims; and
(d) that it is duly authorized to execute the release set forth in paragraph 7
above on behalf of each Releasor identified therein.
11. The ▇▇▇▇▇ Parties and Ivy represent and warrant: (a) that they
have not filed any actions, charges or claims against Medica with respect to the
claims and other matters released pursuant to paragraph 8 hereof; (b) that they
have made no transfer, assignment, conveyance, hypothecation or other
disposition to any other person or entity of any claims against or any interest
in claims against the parties released pursuant to the release in Paragraph 8
above; and (c) that no other person or entity has an interest in any of such
claims so as to impede its ability to give its full and complete release of all
such claims; and that they are duly authorized to execute the release set forth
in paragraph 8 hereof on behalf of each Releasor identified therein.
12. This Agreement is without prejudice to any application to the
Court by Medica for an award of attorneys' fees and expenses from Encore in the
Action.
13. The parties to this Agreement represent and warrant to each
other: (a) that they have read and understood its terms; (b) that they have been
represented by counsel with respect to this Agreement and all matters covered by
and relating to it; (c) that they have been fully advised by counsel with
respect to their rights and with respect to the execution of this
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Agreement; (d) that each party has entered into this Agreement upon its own
judgment, and not in reliance upon the statements or representations of any
other party hereto except as set forth in this Agreement; (e) that all
corporate, company or partnership actions necessary to authorize the execution
and delivery of this Agreement have been taken; and (f) that this Agreement and
the documents executed pursuant thereto constitute their respective legal, valid
and binding obligations, enforceable in accordance with the terms thereof.
14. The parties acknowledge and agree that this Agreement is a
compromise and settlement, and that this Agreement and the documents executed
and delivered in connection therewith are not and shall not be deemed or
construed to be an admission of liability, or of the merit or lack of merit of
any claim or defense asserted on the part of any party hereto. The parties
further acknowledge and agree that this Agreement is being entered into for the
purpose of avoiding the further expense and the uncertainty of litigation, and
this Agreement shall not be offered into evidence in any action or proceeding
between the parties for any purpose whatsoever, except to enforce the terms
thereof.
15. Within ten days after the Closing, each party to the Action
shall return all materials obtained in discovery, and all copies thereof, to the
attorneys for the producing party, including all documents, interrogatory
responses, and transcripts of depositions, or shall certify in writing that all
such materials have been destroyed. This paragraph 15 applies to all materials
obtained in discovery, and is not limited to materials designated as
confidential or highly confidential.
16. (a) This Agreement contains and sets forth the entire
understanding between the parties with respect to its subject matter, and there
are no representations, promises, warranties, covenants or undertakings other
than those expressly set forth herein. Each party
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hereto expressly disclaims having entered into this Agreement by reason of any
representation, promise, warranty, covenant or undertaking other than those
expressly set forth herein.
(b) This Agreement supersedes any and all previous agreements and
understandings between the parties hereto with respect to its subject matter.
All previous agreements between the parties (if any), whether oral or written,
are merged into this Agreement.
(c) This Agreement may not be altered, amended, modified or
otherwise changed in any respect whatsoever, except by a writing duly executed
by the parties or their authorized representatives. The parties acknowledge and
agree that they will make no claim at any time or place that this Agreement has
been orally altered or modified in any respect whatsoever.
(d) This Agreement is not effective until it has been fully executed
and delivered by all parties hereto.
17. The parties hereto will execute and deliver such other and
further documents, and take such other and further actions, as reasonably
necessary to carry out the purpose of this Agreement.
18. This Agreement, and all disputes arising out of or related to
this Agreement, shall in all respects be construed, interpreted, enforced and
governed by the laws of the State of Delaware, without giving effect to any
choice of law principles thereof.
19. The parties hereto consent to the exclusive personal
jurisdiction of the state and federal courts located in the State of Delaware in
any action arising out of or relating to this Agreement, or for the breach or
alleged breach thereof. In any such action, (a) the prevailing party shall be
entitled to recover, in addition to all other costs allowed by law, its
reasonable
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attorneys' fees and disbursements, and (b) the parties waive, to the fullest
extent permitted by law, their rights (if any) to trial by jury.
20. This Agreement shall be binding upon and inure to the benefit of
the successors and assigns of each of the parties hereto.
21. This Agreement, and all documents executed in connection
herewith, may be executed in one or more counterparts, each of which shall
constitute a duplicate of the original, and which together shall constitute one
document.
IN WITNESS WHEREOF, this Agreement has been duly executed by the
parties hereto as of the day and year first above written.
MEDICA HOLDING AG
____________________ By: ______________________________
Date Name:
Title:
____________________ By: ______________________________
Date Name:
Title:
▇▇▇▇▇ PARTNERS III, L.P.
____________________ By: Claudius, L.L.C., its General Partner
Date
By: ______________________________
Name:
Title:
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▇▇▇▇▇ PARTNERS INTERNATIONAL III, L.P.
____________________ By: Claudius, L.L.C., its General Partner
Date
By: ______________________________
Name:
Title:
▇▇▇▇▇ EMPLOYEE FUND III, L.P.
____________________ By: Wesson Enterprises, Inc., its General Partner
Date
By: ______________________________
Name:
Title:
IVY ORTHOPEDIC PARTNERS, LLC
____________________ By: ______________________________
Date Name:
Title:
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