Exhibit 2.2
RECAPITALIZATION
AGREEMENT
DATED AS OF APRIL 21, 2003
BY AND AMONG
MEDVEST HOLDINGS CORPORATION,
OEP MEDVEST LLC
AND
THE OTHER PERSONS SET FORTH ON
THE SCHEDULE OF STOCKHOLDERS
TABLE OF CONTENTS
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ARTICLE I DEFINITIONS......................................................... 1
ARTICLE II RECAPITALIZATION AND STOCK PURCHASE................................ 7
Section 2.1. Recapitalization.................................................7
Section 2.2. Stock Purchase...................................................9
Section 2.3. Reverse Stock Split and Dividend................................10
Section 2.4. Final Capitalization Schedule...................................10
Section 2.5. Contribution to Medex...........................................10
Section 2.6. New Debt Financings.............................................10
Section 2.7. Use of Proceeds.................................................11
ARTICLE III CLOSING; CLOSING DELIVERIES.......................................11
Section 3.1. Closing.........................................................11
Section 3.2. Closing Deliveries by the Company...............................11
Section 3.3. Closing Deliveries by the Stockholders..........................13
Section 3.4. Closing Deliveries by the Buyer.................................14
ARTICLE IV CLOSING CONDITIONS.................................................15
Section 4.1. Conditions Applicable to the Company and Stockholders...........15
Section 4.2. Conditions Applicable to the Buyer..............................16
ARTICLE V REPRESENTATIONS AND WARRANTIES REGARDING THE STOCKHOLDERS...........18
Section 5.1. Ownership of Stock..............................................18
Section 5.2. Authority of Stockholders.......................................18
Section 5.3. No Violation....................................................19
Section 5.4. Consents and Approvals..........................................19
Section 5.5. Brokers, Finders' Fees, etc.....................................19
ARTICLE VI REPRESENTATIONS AND WARRANTIES REGARDING THE COMPANY...............19
Section 6.1. Organization, Good Standing and Authority.......................20
Section 6.2. Capitalization; Subsidiaries....................................20
Section 6.3. Title to Property...............................................21
Section 6.4. Assets Necessary to Conduct the Business........................22
Section 6.5. Real Property...................................................22
Section 6.6. Financial Statements............................................22
Section 6.7. Absence of Undisclosed Liabilities..............................23
Section 6.8. Consents and Approvals; Absence of Violation or Conflicts.......23
Section 6.9. Related Party Transactions......................................24
Section 6.10. Compliance with Laws; Licenses and Permits.....................24
Section 6.11. Material Contracts.............................................25
Section 6.12. Intellectual Property Rights...................................26
Section 6.13. Legal Proceedings, etc.........................................27
Section 6.14. Labor and Employee Matters.....................................27
Section 6.15. Employee Plans.................................................28
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Section 6.16. Environmental Conditions.......................................30
Section 6.17. Taxes..........................................................31
Section 6.18. Absence of Certain Developments................................33
Section 6.19. Product and Service Warranties.................................34
Section 6.20. Brokerage Fees.................................................34
ARTICLE VII REPRESENTATIONS AND WARRANTIES FROM BUYER.........................34
Section 7.1. Organization....................................................34
Section 7.2. Authority.......................................................34
Section 7.3. No Violation....................................................35
Section 7.4. Consents and Approvals..........................................35
Section 7.5. Investment Representations......................................35
Section 7.6. Brokerage Fees..................................................35
ARTICLE VIII COVENANTS........................................................35
Section 8.1. Conduct of Business.............................................35
Section 8.2. Negative Covenants..............................................36
Section 8.3. No Solicitation of Offers.......................................37
Section 8.4. Support for Due Diligence.......................................37
Section 8.5. Terminated Plans................................................37
Section 8.6. Terms of Preferred Stock........................................38
ARTICLE IX TERMINATION........................................................39
Section 9.1. Termination Events..............................................39
Section 9.2. Effect of Termination...........................................40
ARTICLE X SURVIVAL AND INDEMNIFICATION........................................40
Section 10.1. Survival of Representations and Warranties.....................40
Section 10.2. Indemnification by Stockholders................................40
Section 10.3. Indemnification by the Buyer...................................41
Section 10.4. Scope of Stockholders Liability................................41
Section 10.5. Claims.........................................................42
Section 10.6. Defense of Actions.............................................42
Section 10.7. Limitation, Exclusivity........................................43
Section 10.8. Additional Limitations.........................................43
ARTICLE XI MISCELLANEOUS......................................................43
Section 11.1. Amendment, Modification and Supplements........................43
Section 11.2. Waiver.........................................................44
Section 11.3. Notices........................................................44
Section 11.4. Binding Nature; Assignment.....................................45
Section 11.5. Agency.........................................................45
Section 11.6. Entire Agreement...............................................46
Section 11.7. Severability...................................................46
Section 11.8. No Strict Construction.........................................47
Section 11.9. Expenses.......................................................47
Section 11.10. Press Release and Announcements...............................47
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Section 11.11. Governing Law................................................47
Section 11.12. Mutual Waiver of Jury Trial..................................47
Section 11.13. Counterparts.................................................47
Section 11.14. Headings.....................................................47
Section 11.15. U.S. Dollars.................................................47
Section 11.16. No Reliance by Buyer; Own Due Diligence......................47
Section 11.17. Forward Looking Statements...................................47
Section 11.18. Definition of Knowledge......................................47
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TABLE OF CONTENTS
EXHIBITS:
Exhibit A: Form of Registration Rights Agreement
Exhibit B: Form of Severance and Non-Competition Agreement
Exhibit C: Form of Stockholders Agreement
Exhibit D: Form of Amendment to Articles of Incorporation
SCHEDULES*
Schedule of Stockholders
Final Capitalization Schedule
Schedule 2.2(b) Purchased Executive Stockholder Stock
Schedule 2.2(c) Purchased Selling Stockholder Stock
Schedule 2.7 Existing Indebtedness
Schedule 5.1 Ownership of Stock
Schedule 5.5 Brokerage Fees
Schedule 6.2 Capitalization
Schedule 6.3 Title to Real Property
Schedule 6.5 Real Property
Schedule 6.7 Undisclosed Liabilities
Schedule 6.8 Consents and Approvals
Schedule 6.11 Material Contracts
Schedule 6.12 Intellectual Property Rights
Schedule 6.13 Legal Proceedings, Etc.
Schedule 6.14 Labor and Employee Matters
Schedule 6.15 Employee Plans
Schedule 6.16 Environmental Conditions
Schedule 6.17 Taxes
Schedule 6.18 Absence of Certain Developments
Schedule 6.19 Product and Service Warranties
Schedule 6.20 Company/Stockholders Brokerage Fees
Schedule 7.6 Buyer Brokerage Fees
Schedule 8.2 Negative Covenants
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* The Registrant will furnish supplementally a copy of any schedule to the
Commission upon request.
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RECAPITALIZATION AGREEMENT
THIS
RECAPITALIZATION AGREEMENT (this "AGREEMENT"), is made and
entered into as of April 21, 2003, by and among
MedVest Holdings Corporation, an
Ohio corporation (the "COMPANY"), OEP MedVest LLC, a Delaware limited liability
company (the "BUYER"), and the Persons listed on the SCHEDULE OF STOCKHOLDERS
attached hereto (collectively, the "STOCKHOLDERS" and each individually, a
"STOCKHOLDER").
WHEREAS, the Company's wholly-owned subsidiary, Medex, Inc., an
Ohio corporation ("MEDEX"), intends to enter into a Purchase Agreement (as from
time to time revised, modified or amended, the "PURCHASE AGREEMENT"), with
Ethicon Endo-Surgery, Inc., an
Ohio corporation, pursuant to which Medex will
acquire certain worldwide assets relating to the research, development,
manufacture, marketing, distribution and sale of Jelco(R) Protectiv(R) I.V.
Catheters, which assets include the capital stock of ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ Medical
de Monterrey, S.A. de C.V. (the "ACQUISITION");
WHEREAS, the parties hereto desire to enter into this Agreement to
reorganize and recapitalize the Company in accordance with the provisions set
forth herein and to issue certain shares of the Company's capital stock to the
Buyer and to redeem certain shares of the Company's capital stock from certain
Stockholders, subject to the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the mutual covenants,
agreements, representations and warranties contained herein and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
The following terms when used in this Agreement shall have the
meanings set forth below:
"501(k)s" shall have the meaning set forth in SECTION 6.10(b).
"ACQUISITION" shall have the meaning set forth in the Preamble to
this Agreement.
"ACQUISITION TRANSACTIONS" shall have the meaning set forth in
SECTION 8.3.
"AGREEMENT" shall have the meaning set forth in the Preamble to
this Agreement.
"ANTI-TRUST FILINGS" shall mean all applicable notifications or
filings with an anti-trust or competition authority in the United States or any
other jurisdiction required to consummate the transactions contemplated herein.
"AS MEDICAL" shall have the meaning set forth in SECTION 6.2(b).
"BENEFIT ARRANGEMENTS" shall have the meaning set forth in SECTION
6.15(g).
"BUSINESS" shall have the meaning set forth in SECTION 6.1.
"BUSINESS TOP CUSTOMERS" shall have the meaning set forth in
SECTION 6.11(e).
"BUSINESS TOP SUPPLIERS" shall have the meaning set forth in
SECTION 6.11(e).
"BUYER" shall have the meaning set forth in the Preamble to this
Agreement.
"BUYER INDEMNITEES" shall have the meaning set forth in SECTION
10.2.
"CLAIM" shall have the meaning set forth in SECTION 10.5.
"CLOSING" shall have the meaning set forth in SECTION 3.1.
"CLOSING DATE" shall have the meaning set forth in SECTION 3.1.
"CODE" shall mean the Internal Revenue Code of 1986, as amended.
"COMPANY" shall have the meaning set forth in the Preamble to this
Agreement.
"COMPANY COMMON STOCK" shall mean the common shares of the Company,
without par value.
"COMPANY PREFERRED STOCK" shall mean the preferred shares of the
Company, without par value.
"DAMAGES" shall mean with respect to any party all liabilities,
demands, claims, actions, causes of action, costs, expenses, damages (but
specifically excluding any incidental, derivative, consequential or loss of
profit damages), Taxes, losses, penalties, fines, judgments or amounts paid in
settlement, including reasonable attorneys' and accountants' fees incurred by
such party. In determining the amount of Damages to an individual party arising
from Damages caused to the Company, such amount shall be allocated based on the
ownership of the Company Common Stock by such individual divided by the
aggregate number of outstanding shares of Company Common Stock. Notwithstanding
the foregoing, Damages shall not include any amount of any liability for income
Taxes which results, or but for the use of net operating losses of the Company
in existence as of the Closing Date to offset operating profits of the Company
for any periods subsequent to the Closing Date would have resulted, in the
non-cash reduction of net operating losses of the Company.
"DEFECT" shall mean a defect or impurity of any kind, whether in
design, manufacture, processing, or otherwise, including any dangerous
propensity associated with any reasonably foreseeable use of a product in the
absence of a failure to warn, or the failure to warn of the existence of any
defect, impurity, or dangerous propensity.
"EMPLOYEE BENEFIT PROGRAMS" shall have the meaning set forth in
SECTION 6.15(a).
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"EMPLOYEE PENSION BENEFIT PLANS" shall have the meaning set forth
in SECTION 6.15(a).
"EMPLOYEE WELFARE BENEFIT PLANS" shall have the meaning set forth
in SECTION 6.15(a).
"EMPLOYEES" shall mean, collectively, the employees employed by the
Company or any of its Subsidiaries.
"ENVIRONMENTAL CLAIM" shall mean any claim, action, cause of
action, investigation or notice (written or oral) alleging potential liability
(including, without limitation, potential liability for investigatory costs,
cleanup costs, governmental response costs, natural resources damages, property
damages, personal injuries, or fines or penalties) arising out of, based on or
resulting from (a) the actual or alleged presence, Release or threatened Release
of any Hazardous Materials at or from any Real Property any time prior to the
Closing, or (b) any circumstances occurring or arising prior to the Closing and
forming the basis of any violation, or alleged violation, of any Environmental
Law.
"ENVIRONMENTAL LAW" shall mean any applicable federal, state, local
or foreign law, regulation, rule, permit or other requirement having the force
and effect of law, in force or effect prior to the Closing Date, relating to the
pollution or protection of human health or the environment or Release or
threatened Release of Hazardous Materials or otherwise relating to the use,
storage, handling, production, disposal, discharge, control or clean-up of any
hazardous substances, materials or wastes and all laws and regulations with
regard to the record keeping, notification, disclosure and reporting
requirements respecting Hazardous Materials.
"ERISA AFFILIATE" shall have the meaning set forth in SECTION
6.15(a).
"EXCLUDED REPRESENTATIONS AND WARRANTIES" shall have the meaning
set forth in SECTION 10.1.
"EXECUTIVE STOCKHOLDERS" shall mean ▇▇▇▇▇▇▇▇ Arena, ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇., ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇.
"FINANCIAL STATEMENTS" mean the audited consolidated financial
statements of the Company and its Subsidiaries as of December 31, 2002, December
31, 2001 and January 29, 2000, and the fiscal years then ended.
"FORWARD-LOOKING STATEMENTS" shall have the meaning set forth in
SECTION 11.17.
"GAAP" shall mean generally accepted accounting principles in the
United States, consistently applied.
"GOVERNMENTAL AUTHORITY" shall mean the government of the United
States or any other country or any state province, municipality or other
political subdivision of any of the foregoing, or any court, tribunal, agency
department, board or commission (including regulatory and administrative bodies)
of any of the foregoing.
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"HAZARDOUS MATERIALS" shall mean (i) all substances defined as
Hazardous Substances, Oils, Pollutants or Contaminants in the National Oil and
Hazardous Substances Pollution Contingency Plan, 40 C.F.R. Section 300.5, (ii)
all substances defined as such by, or regulated as such under, any Environmental
Law, (iii) asbestos, natural gas, synthetic gas and mixtures thereof and (iv)
any other substance exposure to which or the presence of which is prohibited,
limited or regulated by any Governmental Authority.
"HSR ACT" shall mean the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements
Act of 1976, as amended, and the rules and regulations promulgated thereunder.
"INDEMNIFIED PARTY" shall have the meaning set forth in SECTION
10.5.
"INDEMNIFYING PARTY" shall have the meaning set forth in SECTION
10.5.
"INTELLECTUAL PROPERTY RIGHTS" of a Person shall mean the
following, in any and all countries: (a) patents and patent applications, patent
disclosures, utility models and industrial designs, and all applications and
registrations therefor, together with all reissuances, continuations,
continuations-in-part, divisions, revisions, extensions, and reexaminations, and
all rights of priority and all counterparts thereof, owned, licensed, used or
held for use by such Person or any of its Subsidiaries (collectively,
"PATENTS"), (b) trademarks, servicemarks, trade dress, logos, slogans,
tradenames, service names, corporate and business names, and all applications
and registrations therefor, and renewals thereof, together with all rights of
priority and counterparts thereof, owned, licensed, used or held for use by such
Person or any of its Subsidiaries (collectively, "TRADEMARKS"), (c) all
copyrights, applications and registrations and renewals therefor owned,
licensed, used or held for use, by such Person or any of its Subsidiaries
(collectively, "COPYRIGHTS"), (d) all domain names registered to such Person or
any of its Subsidiaries (collectively, the "DOMAIN NAMES"), (e) all trade
secrets and proprietary information, including but not limited to formulas,
methods, know-how, and processes, owned, licensed, used or held for use by such
Person or any of its Subsidiaries and (f) the right to ▇▇▇ and collect damages
for past infringement or dilution of all of the foregoing. "Company Intellectual
Property Rights" shall mean the Intellectual Property Rights of the Company,
including those of all of its Subsidiaries.
"LEASE" shall have the meaning set forth in SECTION 6.5(b).
"LEASED REAL PROPERTY" shall have the meaning set forth in SECTION
6.5(a).
"MATERIAL ADVERSE CHANGE" and "MATERIAL ADVERSE EFFECT" shall mean
any event or situation that has or would reasonably be expected to have a
material adverse change or effect on the business, operations, assets,
liabilities, results of operations, cash flows or financial condition of the
Company and its Subsidiaries, taken as a whole.
"MATERIAL CONTRACTS" shall have the meaning set forth in SECTION
6.11(b).
"MAXIMUM AMOUNT" shall have the meaning set forth in SECTION
10.4(b).
"MEDEX" shall have the meaning set forth in the Preamble to this
Agreement.
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"MEDEX ESOP" shall mean the Medex Employee Stock Ownership Plan.
"MEDEX GERMANY" shall have the meaning set forth in SECTION 6.2(b).
"MEDEX MEDICAL" shall have the meaning set forth in SECTION 6.2(b).
"MEDEX UK" shall have the meaning set forth in SECTION 6.2(b).
"MULTI-EMPLOYER PLAN" shall have the meaning set forth in SECTION
6.15(a).
"NEW CREDIT AGREEMENT" shall mean the Credit Agreement by and among
Medex, the Company, the Subsidiaries of Medex party thereto, the financial
institutions party thereto, Wachovia Bank, National Association, as
administrative agent, together with all agreements, instruments and documents
executed or delivered pursuant thereto or in connection therewith (including,
without limitation, any promissory notes, guarantees and security documents).
"NEW DEBT FINANCINGS" shall have the meaning set forth in SECTION
2.6.
"NEW NOTE ISSUANCE" shall mean the issuance of up to $150,000,000
of senior subordinated notes by Medex.
"OWNED REAL PROPERTY" shall have the meaning set forth in SECTION
6.5(a).
"PERMITTED ENCUMBRANCES" shall mean (i) imperfections of title,
easements, encroachments, rights of way and other such restrictions of record
and such state of facts as an accurate survey will disclose; PROVIDED that such
matters, if any, do not individually or in the aggregate, (a) materially detract
from the value or interfere with the current use of the assets used in the
Business in a significant manner, (b) substantially interfere with or impair the
operation or value of the Business or the use or occupancy of the applicable
facility or (c) render title unmarketable; and (ii) zoning ordinances and other
governmental rules and regulations of applicable governmental boards or bureaus
having jurisdiction over the Real Property.
"PERMITTED LIENS" shall mean (i) all statutory liens for current
Taxes or assessments not yet due or delinquent, (ii) mechanics', materialmen's,
warehousemen's and similar liens attaching by operation of law, incurred in the
ordinary course of business and securing payments not delinquent or payments
which are being contested in good faith, (iii) such other liens incurred or
deposits made in the ordinary course of business in connection with worker's
compensation, unemployment insurance, social security and other like laws where
the underlying obligations are not yet delinquent or such other liens or
imperfections in title set forth in SCHEDULE 6.3, (iv) liens securing existing
indebtedness and other outstanding obligations or amounts owed to the Persons
listed on SCHEDULE 2.7 hereto, which liens have been previously disclosed to the
Buyer and which liens will be released on or prior to the Closing; and (v) liens
securing indebtedness and other obligations arising under the New Credit
Agreement.
"PERSON" means an individual, a partnership, a corporation, a
limited liability company, an association, a joint stock company, a trust, a
joint venture, an unincorporated organization and a governmental entity or any
department, agency or political subdivision thereof.
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"PRODUCTS" shall mean the products of Company or any of its
Subsidiaries.
"PURCHASE AGREEMENT" shall have the meaning set forth in the
Preamble to this Agreement.
"REAL PROPERTY" shall mean the Owned Real Property and the Leased
Real Property.
"REGISTRATION RIGHTS AGREEMENT" shall mean the registration rights
agreement between the Company, the Buyer and the other Persons party thereto
substantially in the form of EXHIBIT A attached hereto.
"RELEASE" shall mean any release, spill, emission, discharge,
leaking, pumping, injection, deposit, disposal, dispersal, leaching or migration
into the indoor or outdoor environment (including, without limitation, ambient
air, surface water, groundwater and surface or subsurface strata) or into or out
of any property, including the movement of Hazardous Materials through or in the
air, soil, surface water, groundwater or property.
"REPRESENTATIVES" shall have the meaning set forth in SECTION
11.5(a).
"RETURNS" shall have the meaning set forth in SECTION 6.17(a).
"SECURITIES" shall mean the Company Common Stock and the Company
Preferred Stock.
"SELLING STOCKHOLDERS" shall have the meaning set forth in SECTION
2.2(c).
"SEVERANCE AND NON-COMPETITION AGREEMENT" shall mean an agreement
between Medex and each Executive Stockholder substantially in the form of
EXHIBIT B attached hereto.
"STOCKHOLDER" shall have the meaning set forth in the Preamble to
this Agreement.
"STOCKHOLDER ACTIONS" shall have the meaning set forth in SECTION
11.5(a).
"STOCKHOLDER INDEMNITEES" shall have the meaning set forth in
SECTION 10.3.
"STOCKHOLDERS AGREEMENT" shall mean the stockholders agreement
between the Company, the Buyer and the other Persons party thereto substantially
in the form of EXHIBIT C attached hereto.
"SUBSIDIARY" shall mean with respect to any Person, any corporation
or other Person of which securities or other interests having the power to elect
a majority of that corporation's or other Person's board of directors or similar
governing body, or otherwise having the power to direct the business and
policies of that corporation or other Person (other than securities or other
interests having such power only upon the happening of a contingency that has
not occurred) are held by the owner or one or more of its subsidiaries; when
used without reference to a particular Person, "Subsidiary" mean a Subsidiary of
the Company.
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"STOCKHOLDERS' STOCK" shall mean the Common Stock held by the
Stockholders prior to the Closing Date.
"TAX" and "TAXES" shall mean all present or future taxes, charges,
fees, levies, duties or other assessments including, without limitation, income,
excise, property, value added, real estate, sales, payroll, transfer, social
security, employment and franchise taxes imposed by any federal, state, county,
or local government, or a subdivision or agency thereof. Such term shall include
any interest, penalties, or additions payable in connection with such taxes,
charges, fees, levies, duties, or other assessments.
"TERMINATED PLANS" means, collectively, the Medex ESOP, the Stock
Incentive Plan (UK) and Stock Appreciation Participation Rights Plan (Germany).
"TERMINATION AGREEMENT" shall have the meaning set forth in SECTION
3.2(d).
"THRESHOLD AMOUNT" shall have the meaning set forth in SECTION
10.4(a).
ARTICLE II
RECAPITALIZATION AND STOCK PURCHASE
Section 2.1. RECAPITALIZATION.
(a) ARTICLES OF INCORPORATION; CODE OF REGULATIONS. Immediately
prior to the Closing, Article IV to the Articles of Incorporation of the
Company shall be amended to read substantially as set forth in EXHIBIT D.
Immediately prior to the Closing, the Code of Regulations of the Company
and Medex shall be amended in form and substance reasonably acceptable to
the Buyer and the Representatives to reflect the agreements related to
management contained in the Stockholders Agreement.
(b) DIRECTORS. Immediately prior to the Closing, the directors
of the Company and its Subsidiaries shall resign and new directors of the
Company and its Subsidiaries shall be appointed in accordance with the
provisions of the Stockholders Agreement.
(c) STOCK OPTION PLANS. On the Closing Date after the events
described in SECTION 2.3, the Company shall amend its stock option plans
and the stock option agreements evidencing grants of options made prior to
the date hereof under such stock option plans to amend the number of shares
of Company Common Stock into which the options outstanding under such stock
option plans are exercisable to a corresponding number of Company Common
Stock and Company Preferred Stock and the exercise prices therefor based on
the valuation of the Company Common Stock and Company Preferred Stock on
the Closing Date as contemplated by this Agreement. Except as so amended,
the Company's stock option grants and the stock option agreements
evidencing grants of options made prior to the date hereof under such stock
option plans shall continue in effect from and after the Closing Date in
accordance with terms and conditions of the respective stock option plans
and related stock option agreements.
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(d) EMPLOYEE PLAN TERMINATIONS.
(i) Prior to the Closing, the Board of Directors of the
Company shall adopt the necessary resolutions authorizing the
Company and its Subsidiaries to terminate the Terminated Plans;
PROVIDED, HOWEVER such terminations shall be subject to the
conditions that: (A) the transactions contemplated by this
Agreement shall have been consummated on the Closing Date pursuant
to the terms of this Agreement, and (B) with respect to the Medex
ESOP, no more than 20 participants of the Medex ESOP shall have
elected to receive his or her vested benefit or rights thereunder
in the form of shares of Company Common Stock, which latter
condition may be waived by the Company with the prior consent of
the Buyer. Notwithstanding the foregoing, at any time prior to the
Closing, the Company may, but only with the consent of the Buyer,
rescind the termination of any of the Terminated Plans (provided
that such rescission does not violate the provisions of the Medex
ESOP or any applicable provisions of ERISA) in which event the
Company shall not be required to consummate the transactions
contemplated pursuant to this SECTION 2.1(d).
(ii) Subject to the terms and conditions set forth herein,
the Company shall promptly cause the Medex ESOP to deliver a notice
of the transactions contemplated pursuant to this Agreement, which
notice shall solicit the consent and approval of such participants
to the recapitalization transaction contemplated hereby and to
amendment of the Company's Articles of Incorporation contemplated
pursuant to SECTION 2.1(a). Furthermore, such notice shall inform
each participant of the conditional termination of the Medex ESOP
and shall provide each participant a thirty day (30) day period in
which to elect to receive such participant's vested benefit under
the Medex ESOP in the form of (x) a lump sum cash payment equal to
the number of units made up of one share of Company Common Stock
and nine shares of Company Preferred Stock to be vested in such
participant upon the termination of the Medex ESOP multiplied by
$6.27 or (y) shares of Company Common Stock and Company Preferred
Stock to be distributed to in such participant upon the termination
of the Medex ESOP.
(iii) Upon expiration of the election period set forth in
paragraph (ii) above, the Company shall make a lump sum cash
payment to the trustee of the Medex ESOP in an amount equal to the
aggregate cash payment to be paid to the participants in the Medex
ESOP as a result of the election of such participants pursuant to
paragraph (ii) above to receive a cash payment and the Company
shall cause the Trustee of the Medex ESOP to distribute such cash
to the participants in the Medex ESOP who shall have elected to
receive such cash payment pursuant to paragraph (ii) above and the
Company shall cause the trustee of the Medex ESOP to distribute
shares of Company Common Stock and Company Preferred Stock in an
aggregate amount equal to the shares to be distributed to the
participants in the Medex ESOP as a result of the election of such
participants pursuant to paragraph (ii) above to receive shares of
Company Common Stock and Company Preferred Stock.
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(iv) Upon expiration of the election period set forth in
paragraph (ii) above, (A) with respect to the Stock Incentive Plan
(UK) and Stock Appreciation Participation Rights Plan (Germany),
the Company shall make a lump sum cash payment to each beneficiary
of or participant in such plans in an amount equal to the aggregate
vested equity rights of such beneficiary under such plans
multiplied by $6.27 and (B) the Company will vest and purchase
certain options under the French shared distribution plan granted
in lieu of Medex ESOP participation to non-management employees.
(v) The cash payments to be made by the Company pursuant
to this SECTION 2.1(d) shall be paid in immediately available funds
to an account or accounts designated by the respective trustee or
administrator of the applicable Terminated Plans. Upon expiration
of the election period, the Buyer shall advance to the Company by
wire transfer of immediately available funds to an account or
accounts designated by the Company an amount sufficient to effect
the payments contemplated by this SECTION 2.1(d); PROVIDED,
HOWEVER, the maximum amount the Buyer shall be obligated to advance
under this SECTION 2.1(d) shall not exceed $7,523,517.21.
(vi) Upon expiration of the election period set forth in
paragraph (ii) above, but in no event prior to the Closing Date,
the Buyer shall purchase, and the Company shall issue to the Buyer,
up to 119,992.3 shares of Company Common Stock and 1,079,930.7
shares of Company Preferred Stock for a purchase price equal to
$6.27 for each unit of one (1) share of Company Common Stock and
nine (9) shares of Company Preferred Stock, which purchase price
will be paid through the cancellation of the outstanding advance
made by the Buyer to the Company pursuant to SECTION 2.1(d). The
actual number of shares purchased by the Buyer will depend on the
actual amount advanced by the Buyer to the Company pursuant to
SECTION 2.1(d)(V).
Section 2.2. STOCK PURCHASE.
(a) In consideration of the Company's agreement to issue Company
Common Stock to the Buyer in an amount necessary to provide the Buyer with
a controlling interest in the Company and in further consideration of the
Company's commitment to provide for the continued services of the Executive
Stockholders through the payment of certain retention and non-compete
payments, subject to the terms and conditions set forth herein, prior to
the reverse stock split and the issuance of the stock dividend described in
SECTION 2.3 and prior to the Closing of the transactions contemplated by
the Purchase Agreement, the Buyer shall purchase, and the Company shall
issue to the Buyer 15,151,515.2 shares of Company Common Stock for an
aggregate purchase price equal to $101,200,001.79 payable by wire transfer
of immediately available funds to an account or accounts designated by the
Company prior to the Closing.
(b) Subject to the terms and conditions set forth herein, prior
to the reverse stock split and the issuance of the stock dividend described
in SECTION 2.3 and prior to the Closing of the transactions contemplated by
the Purchase Agreement, the Buyer shall
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purchase from the Executive Stockholders, and the Executive Stockholders
shall sell to the Buyer 1,180,223.0 shares of Company Common Stock for a
cash purchase price equal to $6.27 per share for an aggregate cash purchase
price equal to $7,399,998.21, which purchase price shall be paid by wire
transfer of immediately available funds to an account or accounts
designated by the Representatives prior to the Closing. The number of
shares of Company Common Stock and Company Preferred Stock to be purchased
by the Buyer from each Executive Stockholder and the cash purchase price
therefor is set forth opposite such Executive Stockholder's name on
SCHEDULE 2.2(b) attached hereto.
(c) Subject to the terms and conditions set forth herein, prior
to the reverse stock split and the issuance of the stock dividend described
in SECTION 2.3 and prior to Closing of the transactions contemplated by the
Purchase Agreement, the Buyer shall purchase from the Stockholders (other
than the Executive Stockholders) identified on SCHEDULE 2.2(c) attached
hereto (collectively, the "SELLING STOCKHOLDERS"), and each Selling
Stockholder shall sell to the Buyer, the shares of Company Common Stock set
forth opposite such Selling Stockholder's name on SCHEDULE 2.2(c) for a
cash purchase price equal to $6.27 for each share of Company Common Stock,
which purchase price shall be paid by wire transfer of immediately
available funds to an account or accounts designated by the Representatives
prior to the Closing.
(d) The parties acknowledge and agree that the transactions
contemplated in this Agreement and the Purchase Agreement will take place
together and the parties further acknowledge and agree that if the
transactions contemplated by SECTION 2.3 or the Closing of the Acquisition
shall not occur on the Closing Date, then the stock purchases contemplated
pursuant to this SECTION 2.2 shall be automatically rescinded.
Section 2.3. REVERSE STOCK SPLIT AND DIVIDEND.
(a) On the Closing Date, but after giving effect to the
transactions described SECTION 2.1(a) and SECTION 2.2, the Company shall
consummate a 1-for-10 reverse stock split of the Company Common Stock.
(b) On the Closing Date, but after giving effect to SECTION
2.3(a), SECTION 2.1(a) and SECTION 2.2, the Company shall issue a stock
dividend in which each holder of Company Common Stock shall receive nine
(9) shares of Company Preferred Stock for each share of Company Common
Stock held by such holder.
Section 2.4. FINAL CAPITALIZATION SCHEDULE. After giving effect to the
stock purchases described in SECTION 2.2 and the reverse stock split and stock
dividend described in SECTION 2.3, the parties agree that the Securities shall
be held by the Persons in the amounts specified the FINAL CAPITALIZATION
SCHEDULE to be attached hereto at the Closing.
Section 2.5. CONTRIBUTION TO MEDEX. Immediately after the transactions
contemplated in SECTIONS 2.2 and 2.3, the Company shall contribute to the
capital of Medex cash in the amount of $101,200,001.79 to Medex.
Section 2.6. NEW DEBT FINANCINGS. Subject to the terms and conditions set
forth herein, immediately after the transactions described in SECTIONS 2.2 and
2.3 and immediately
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prior to the Closing of the transactions contemplated by the Purchase Agreement,
Medex shall enter into the New Credit Agreement and shall consummate the New
Note Issuance (collectively the "NEW DEBT FINANCINGS").
Section 2.7. USE OF PROCEEDS. Medex shall use the proceeds from the
contribution described in SECTION 2.6 and the proceeds from the New Debt
Financings to (i) repay the full amount of existing indebtedness and other
outstanding obligations or amounts owed to the Persons listed on SCHEDULE 2.7
hereto, (ii) fund the aggregate consideration for the Acquisition under the
Purchase Agreement; (iii) finance the future working capital needs of Medex and
its Subsidiaries; and (iv) pay related fees and expenses incurred connection
with the Acquisition, the consummation of the transactions contemplated hereby
and consummation of the New Debt Financings.
ARTICLE III
CLOSING; CLOSING DELIVERIES
Section 3.1. CLOSING. Subject to the provisions of SECTION 9.1, the
closing (the "CLOSING") of the transactions provided for in this Agreement shall
take place at the offices of Winston & ▇▇▇▇▇▇, ▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, at 9:00 a.m. Chicago time as soon as practicable after the
satisfaction or waiver of the conditions to Closing set forth ARTICLE IV; or at
such other place, time or date as the parties hereto may mutually agree for the
Closing to take place (the date on which the Closing is to take place being
herein sometimes referred to as the "CLOSING DATE").
Section 3.2. CLOSING DELIVERIES BY THE COMPANY. At the Closing on the
Closing Date, the Company shall deliver to the Buyer and the Stockholders each
of the following:
(a) certified copies of (i) resolutions duly adopted by the
Company's board of directors and shareholders authorizing the execution,
delivery and performance of this Agreement and each other agreement or
document relating to the transactions contemplated hereby to which the
Company is a party, (ii) the Company's code of regulations, (iii) the
Company's articles of incorporation, (iv) a good standing certificate of
the Company, as of a recent date, from the appropriate Governmental
Authority of each jurisdiction in which the Company is qualified to do
business;
(b) certificates of incumbency for the officers of the Company;
(c) a certificate dated as of the Closing Date signed by a duly
authorized officer of the Company to the effect that (1) the
representations and warranties of the Company set forth in this Agreement
are true and correct in all material respects on and as of the Closing Date
with the same effect as though such representations and warranties had been
made on and as of such date except for representations and warranties that
speak as of a specific date or time prior to the Closing Date (which
representations and warranties are true and correct in all material
respects as of such date or time); PROVIDED, HOWEVER, that if any such
representation or warranty is already qualified as to materiality, such
representation or warranty is true in all respects and (2) the covenants
and
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agreements to be performed by the Company on or before the Closing Date in
accordance with this Agreement have been duly performed in all respects;
(d) an executed original copy of an agreement between the
Stockholders and the Company terminating any and all stockholders
agreements, registration rights agreement and any other agreement in effect
prior to the Closing Date with respect to the voting, registration under
any securities law, or sale or transfer (including, without limitation,
agreements relating to pre-emptive rights, rights of first refusal, co-sale
rights, drag-along rights or anti-dilutive rights) of any securities of the
Company (the "TERMINATION AGREEMENT");
(e) an executed original copy of an agreement between the
Executive Stockholders and the Company terminating any and all employment
or compensation agreements or any other agreements in effect prior to the
Closing Date with respect to the employment of such Executive Stockholders
by the Company or Medex;
(f) copies of all necessary governmental and third party
consents, approvals, releases and filings required in order for the Company
to effect the transactions contemplated by this Agreement;
(g) an executed original copy of the Stockholders Agreement;
(h) an executed original copy of the Registration Rights
Agreement;
(i) a certificate dated as of the Closing Date signed by a duly
authorized officer of the Company certifying that the Terminated Plans have
been terminated including certified resolutions duly adopted by the Board
of Directors of the Company authorizing the termination of the Terminated
Plans;
(j) a certificate dated as of the Closing Date signed by a duly
authorized officer of the Company certifying that as of the Closing Date
there is a minimum of 400,000 unissued and reserved shares available for
the future issuance of new options to purchase Company Common Stock and
Company Preferred Stock and that there is authorization under the Company's
stock option plans for the issuance of such options;
(k) certified resolutions by the Board of Directors of the
Company amending the existing stock option grants under the Company's stock
option plans to amend the number of shares of Company Common Stock into
which the options outstanding under such stock option plans are exercisable
to a corresponding number of Company Common Stock and Company Preferred
Stock and the exercise prices therefor based on the valuation of the
Company Common Stock and Company Preferred Stock on the Closing Date;
(l) executed original copies of Severance and Non-Competition
Agreements with each Executive Stockholder;
(m) certified copies of actions taken by the Medex ESOP and its
participants approving the transactions contemplated by this Agreement;
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(n) an acknowledgment of receipt of the consideration for the
Company Common Stock purchased by the Buyer from the Company pursuant to
SECTION 2.2(a);
(o) stock certificates in the name of the Buyer representing the
Company Common Stock purchased from the Company by the Buyer pursuant to
SECTION 2.2(a);
(p) stock certificates in the name of the Stockholders and the
Buyer representing the Company Preferred Stock issued to the Stockholders
as a result of the stock dividend contemplated pursuant to SECTION 2.3;
(q) an opinion of counsel to the Company in form and substance
reasonably satisfactory to the Buyer;
(r) an opinion of counsel to the Stockholders in form and
substance reasonably satisfactory to the Buyer;
(s) an opinion of counsel to the Medex ESOP in form and
substance reasonably satisfactory to the Buyer; and
(t) such other instruments, documents and certificates as the
Buyer or its counsel may reasonably request to implement the transactions
contemplated hereby.
Section 3.3. CLOSING DELIVERIES BY THE STOCKHOLDERS. At the Closing on
the Closing Date, each Stockholder shall deliver to the Buyer and the Company
each of the following:
(a) an executed original copy of the Termination Agreement;
(b) an original copy of the Registration Rights Agreement;
(c) if such Stockholder is an Executive Stockholder, an executed
original copy of the Severance and Non-Competition Agreements between the
Company and such Executive Stockholder;
(d) an acknowledgment from the Representatives of receipt of the
consideration for the Company Common Stock purchased by the Buyer from the
Executive Stockholders pursuant to SECTION 2.2(b);
(e) stock certificates in the name of the Buyer representing the
Company Common Stock purchased from the Executive Stockholders by the Buyer
pursuant to SECTION 2.2(b);
(f) an acknowledgment from the Representatives of receipt of the
consideration for the Company Common Stock purchased by the Buyer from the
Selling Stockholders pursuant to SECTION 2.2(c);
(g) stock certificates in the name of the Buyer representing the
Company Common Stock purchased from the Selling Stockholders by the Buyer
pursuant to SECTION 2.2(c);
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(h) an executed original copy of the Stockholders Agreement; and
(i) such other instruments, documents and certificates as the
Buyer or its counsel or the Company may reasonably request to implement the
transactions contemplated hereby.
Section 3.4. CLOSING DELIVERIES BY THE BUYER. At the Closing on the
Closing Date, the Buyer shall deliver to the Company or the Representatives, as
the case may be, each of the following:
(a) payment by wire transfer in immediately available funds to
an account specified by the Company of the consideration for the Company
Common Stock purchased by the Buyer from the Company pursuant to SECTION
2.2(a);
(b) payment by wire transfer in immediately available funds to
an account specified by the Representatives of the consideration for the
Company Common Stock purchased by the Buyer from the Executive Stockholders
pursuant to SECTION 2.2(b);
(c) payment by wire transfer in immediately available funds to
an account specified by the Representatives of the consideration for the
Company Common Stock purchased by the Buyer from the Selling Stockholders
pursuant to SECTION 2.2(c);
(d) certified copies of (i) resolutions duly adopted by the
Buyer's board of managers or members authorizing the execution, delivery
and performance of this Agreement and each other agreement or document
relating to the transactions contemplated hereby to which the Buyer is a
party, (ii) the Buyer's certificate of formation, (iii) the Buyer's limited
liability company agreement, (iv) a good standing certificate of the Buyer,
as of a recent date, from the appropriate Governmental Authority of each
jurisdiction in which the Buyer is qualified to do business;
(e) certificates of incumbency for the officers or managers of
the Buyer;
(f) a certificate dated as of the Closing Date signed by a duly
authorized officer of the Buyer to the effect that (1) the representations
and warranties of the Buyer set forth in this Agreement are true and
correct in all material respects on and as of the Closing Date with the
same effect as though such representations and warranties had been made on
and as of such date except for representations and warranties that speak as
of a specific date or time prior to the Closing Date (which representations
and warranties are true and correct in all material respects as of such
date or time); PROVIDED, HOWEVER, that if any such representation or
warranty is already qualified as to materiality, such representation or
warranty is true in all respects and (2) the covenants and agreements to be
performed by the Buyer on or before the Closing Date in accordance with
this Agreement have been duly performed in all respects;
(g) an executed original copy of the Stockholders Agreement and
the Registration Rights Agreement;
- 14 -
(h) copies of all necessary governmental and third party
consents, approvals, releases and filings required in order for the Buyer
to effect the transactions contemplated by this Agreement;
(i) an opinion of counsel to the Buyer in form and substance
reasonably satisfactory to the Representatives; and
(j) such other instruments, documents and certificates as the
Buyer or its counsel or the Company may reasonably request to implement the
transactions contemplated hereby.
ARTICLE IV
CLOSING CONDITIONS
Section 4.1. CONDITIONS APPLICABLE TO THE COMPANY AND STOCKHOLDERS. The
obligations of the Company and the Stockholders hereunder are subject to the
following conditions precedent:
(a) NO TERMINATION. This Agreement shall not have been
terminated pursuant to SECTION 9.1;
(b) REPRESENTATIONS, WARRANTIES AND COVENANTS. The
representations and warranties of the Buyer contained herein shall be true
and correct in all material respects on and as of the Closing Date with the
same effect as though such representations and warranties had been made on
and as of such date except for representations and warranties that speak as
of a specific date or time prior to the date hereof (which need only be
true and correct in all material respects as of such date or time);
PROVIDED, HOWEVER, that if such representation or warranty is already
qualified as to materiality, it shall be true in all respects. The
covenants and agreements to be performed by the Buyer on or before the
Closing Date in accordance with this Agreement shall have been duly
performed in all respects;
(c) FILINGS, CONSENTS; WAITING PERIODS. All registrations,
filings, applications, notices, consents, approvals, orders, qualifications
and waivers necessary to consummate the transactions contemplated hereby
shall have been filed, made or obtained. The waiting period (including
extensions thereof), if any, required by the HSR Act shall have expired or
been terminated;
(d) NO PROCEEDINGS.
(i) No investigation, action, suit, claim, arbitration or
proceeding by any Governmental Authority, and no action, suit or
proceeding by any other Person, shall be pending on the Closing
Date, which challenges, or might result in a challenge to, this
Agreement or any of the transactions contemplated hereby, or which
claims, or might give rise to a claim for, damages in a material
amount as a result of the consummation of the transactions
contemplated hereby; and
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(ii) No temporary restraining order, preliminary or
permanent injunction, or other order, decree or judgment of any
court, agency or other Governmental Authority or other legal
restraint or prohibition shall be in effect that would prohibit,
render unlawful or materially and adversely affect the ability of
any party hereto to consummate, the transactions contemplated by
this Agreement in accordance with its terms;
(e) CLOSING OF THE NEW NOTE ISSUANCE. All of the conditions to
the closing of the New Note Issuance (other than with respect to the
transactions contemplated by this Agreement) shall have been satisfied;
(f) CLOSING OF THE NEW CREDIT AGREEMENT. All of the conditions
to the closing of the New Credit Agreement (other than with respect to the
transactions contemplated by this Agreement) shall have been satisfied; (g)
SCHEDULES. Final Schedules shall have been prepared by the Company as
contemplated in SECTION 11.1 as reviewed by the Buyer;
(h) AMENDMENT OF ARTICLES OF INCORPORATION. The Stockholders
shall have approved the amendment of the Articles of Incorporation of the
Company in its entirety to read substantially as set forth in EXHIBIT D;
(i) MEDEX ESOP. Provided that the termination of the Medex ESOP
is not rescinded pursuant to SECTION 2.1(d), the trustee of the Medex ESOP
shall have received reasonably acceptable confirmation that: (i) the
consideration to be paid to the participants in the Medex ESOP electing to
receive their vested benefit in the form a cash payment as contemplated
pursuant to SECTION 2.1(d) is adequate as required by Section 408(e) of
ERISA and (ii) this Agreement and consummation of the transactions
contemplated hereby, as a whole, is fair to the participants in the Medex
ESOP. The trustee of the Medex ESOP shall have approved termination of the
Medex ESOP as of the Closing and shall have received an opinion of counsel
to the Medex ESOP in form and substance reasonably satisfactory to the
trustee of the Medex ESOP; and
(j) CLOSING DELIVERIES. The closing deliveries of the Buyer set
forth in SECTION 3.4 shall have been delivered.
Section 4.2. CONDITIONS APPLICABLE TO THE BUYER. The obligations of the
Buyer hereunder are subject to the following conditions precedent:
(a) NO TERMINATION. This Agreement shall not have been
terminated pursuant to SECTION 9.1;
(b) REPRESENTATIONS, WARRANTIES AND COVENANTS. The
representations and warranties of the Company and the Stockholders
contained herein shall be true and correct in all material respects on and
as of the Closing Date with the same effect as though such representations
and warranties had been made on and as of such date except for (i)
representations and warranties that speak as of a specific date or time
prior to the date hereof (which need only be true and correct in all
material respects as of such date or
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time); or (ii) breaches and inaccuracies that would not have a Material
Adverse Effect. The covenants and agreements to be performed by the Company
or the Stockholders on or before the Closing Date in accordance with this
Agreement shall have been duly performed in all respects except for
breaches or nonperformance that would not have a Material Adverse Effect;
(c) FILINGS, CONSENTS; WAITING PERIODS. All registrations,
filings, applications, notices, consents, approvals, orders, qualifications
and waivers necessary to consummate the transactions contemplated hereby
shall have been filed, made or obtained. The waiting period (including
extensions thereof), if any, required by the HSR Act shall have expired or
been terminated;
(d) NO PROCEEDINGS.
(i) No investigation, action, suit, claim, arbitration or
proceeding by any Governmental Authority, and no action, suit or
proceeding by any other Person, shall be pending on the Closing
Date, which challenges, or might result in a challenge to, this
Agreement or any of the transactions contemplated hereby, or which
claims, or might give rise to a claim for, damages in a material
amount as a result of the consummation of the transactions
contemplated hereby; and
(ii) No temporary restraining order, preliminary or
permanent injunction, or other order, decree or judgment of any
court, agency or other Governmental Authority or other legal
restraint or prohibition shall be in effect that would prohibit,
render unlawful or materially and adversely affect the ability of
any party hereto to consummate, the transactions contemplated by
this Agreement in accordance with its terms;
(e) CLOSING OF THE NEW NOTE ISSUANCE. All of the conditions to
the closing of the New Note Issuance (other than with respect to the
transactions contemplated by this Agreement) shall have been satisfied;
(f) CLOSING OF THE NEW CREDIT AGREEMENT. All of the conditions
to the closing of the New Credit Agreement (other than with respect to the
transactions contemplated by this Agreement) shall have been satisfied;
(g) CLOSING DELIVERIES. The closing deliveries of the Company
set forth in SECTION 3.2, the closing deliveries of the Stockholders set
forth in SECTION 3.3 shall have been delivered;
(h) VALUE OF SECURITIES SUBJECT TO INDEMNIFICATION CLAIM. The
value of the Securities (other than Securities issued after the Closing
Date) and the net cashless exercise value of any options to be held by the
Stockholders immediately after the Closing shall be no less than
$10,000,000;
(i) AMENDMENT OF ARTICLES OF INCORPORATION. The Stockholders
shall have approved the amendment of the Articles of Incorporation of the
Company in its entirety to read substantially as set forth in EXHIBIT D;
- 17 -
(j) MEDEX ESOP. Provided that the termination of the Medex ESOP
is not rescinded pursuant to SECTION 2.1(d), the trustee of the Medex ESOP
shall have received reasonably acceptable confirmation that: (i) the
consideration to be paid to the participants in the Medex ESOP electing to
receive their vested benefit in the form a cash payment as contemplated
pursuant to SECTION 2.1(d) is adequate as required by Section 408(e) of
ERISA and (ii) this Agreement and consummation of the transactions
contemplated hereby, as a whole, is fair to the participants in the Medex
ESOP. The trustee of the Medex ESOP shall have approved termination of the
Medex ESOP as of the Closing. The trustee of the Medex ESOP shall have
approved termination of the Medex ESOP as of the Closing and shall have
received an opinion of counsel to the Medex ESOP in form and substance
reasonably satisfactory to the trustee of the Medex ESOP; and
(k) REVIEW OF THE SCHEDULES. The Buyer and its representatives
shall have completed a review of the materials and information disclosed in
the Schedules to this Agreement, as may be amended, modified or
supplemented pursuant to this Agreement and such information shall be
satisfactory to the Buyer in its reasonable discretion.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
REGARDING THE STOCKHOLDERS
Each Stockholder, severally not jointly, hereby represents and
warrants, as to itself only, to the Company and the Buyer as follows:
Section 5.1. OWNERSHIP OF STOCK. Such Stockholder is the sole owner
beneficially and of record of the shares of Stockholders' Stock set forth
opposite such Stockholder's name in the column entitled "Stockholders' Stock" on
the SCHEDULE OF STOCKHOLDERS free and clear of any liens, pledges, encumbrances,
charges, agreements or claims of any kind whatsoever. Except for the agreements
identified on SCHEDULE 5.1, there are no agreements to which such Stockholder is
a party or by which any of them is bound with respect to the voting (including,
without limitation, voting trusts or proxies), registration under any securities
law, or sale or transfer (including, without limitation, agreements relating to
pre-emptive rights, rights of first refusal, co-sale rights, drag-along rights
or anti-dilutive rights) of any securities of the Company.
Section 5.2. AUTHORITY OF STOCKHOLDERS. Such Stockholder has the legal
right, power and authority to enter into this Agreement and to consummate the
transactions contemplated on his, her or its part thereby, including to
transfer, assign and deliver the shares of Stockholders' Stock owned by such
Stockholder as provided in this Agreement, and such delivery will convey to
Company good and marketable title to the shares of Stockholders' Stock free and
clear of any and all liens, pledges, encumbrances, charges, agreements or claims
of any kind whatsoever. This Agreement has been duly executed and delivered by
such Stockholder and is the legal, valid and binding obligation of such
Stockholder enforceable against such Stockholder in accordance with its terms.
- 18 -
Section 5.3. NO VIOLATION. Neither the execution and delivery of this
Agreement, nor the consummation of the transactions contemplated hereby will
violate, be in conflict with, allow the termination of, constitute a breach or
default under, cause the acceleration of the maturity of or create any lien,
pledge, encumbrance, charge or claim of any kind pursuant to any written or oral
contract, agreement, commitment, lease, indenture, mortgage, instrument, plan
(excluding the Medex ESOP, the Stock Incentive Plan (UK) and Stock Appreciation
Participation Rights Plan (Germany) or stock option plan of the Company) or
other arrangement to which such Stockholder is a party or by which such
Stockholder is bound, or violate any statute or law or any judgment, decree,
order, regulation or rule of any court or Governmental Authority to which such
Stockholder is subject.
Section 5.4. CONSENTS AND APPROVALS. Except for consents, approvals or
authorizations that have been obtained, no consent, approval or authorization
of, or declaration, filing or registration with, any Governmental Authority or
third party is required to be made or obtained by such Stockholder in connection
with the execution, delivery and performance of this Agreement and the
transactions contemplated hereby.
Section 5.5. BROKERS, FINDERS' FEES, ETC. Except as set forth in SCHEDULE
5.5, neither the Company nor the Buyer shall have any liability or obligation to
pay any brokerage commissions, finders' fees or similar compensation in
connection with the transactions contemplated by this Agreement based on any
arrangement or agreement made by or on behalf of such Stockholder.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
REGARDING THE COMPANY
The Buyer acknowledges and agrees that it is purchasing the Company
Common Stock based on its own inspection, examination and determination with
respect to all matters, and without reliance upon any express or implied
representations or warranties of any nature made by, on behalf of or imputed to
the Company or the Stockholders, except as expressly set forth in this
Agreement. Without limiting the generality of the foregoing, the Buyer
acknowledges that the Company and the Stockholders make no representation or
warranty with respect to (i) any forecasts, projections, estimates or budgets
delivered or made available to the Buyer of future revenues, future results of
operations (or any component thereof), future cash flows or future financial
condition (or any component thereof) of the Company and/or its Subsidiaries or
(ii) any other information or documents made available to the Buyer or its
counsel, accountants or advisors with respect to the Company and/or its
Subsidiaries, except as expressly set forth in this Agreement or the Schedules
or Exhibits hereto. THE BUYER AGREES THAT THE REPRESENTATIONS AND WARRANTIES
GIVEN HEREIN BY THE COMPANY OR THE STOCKHOLDERS ARE IN LIEU OF, AND THE BUYER
HEREBY EXPRESSLY WAIVES ALL RIGHTS TO, ANY IMPLIED WARRANTIES WHICH MAY
OTHERWISE BE APPLICABLE BECAUSE OF THE PROVISIONS OF THE UNIFORM COMMERCIAL CODE
OR ANY OTHER STATUTE, INCLUDING, WITHOUT LIMITATION, THE WARRANTIES OF
MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.
- 19 -
Subject to the foregoing and except as set forth in the Schedules
and Exhibits hereto, the Stockholders, jointly but not severally, but subject to
the limitations set forth in ARTICLE X below, represent and warrant to the Buyer
as follows:
Section 6.1. ORGANIZATION, GOOD STANDING AND AUTHORITY. The Company is a
legal entity duly organized, validly existing and in good standing under the
laws of the state of its incorporation, and has all requisite corporate power
and authority to own or lease and operate its properties relating to its
business and to carry on the business as now being operated and conducted by it
and its Subsidiaries (the "BUSINESS"). The Company has full corporate power and
authority to execute and deliver this Agreement, and to carry out, or cause to
be carried out, the transactions contemplated hereby, and to perform, or cause
to be performed, its obligations hereunder. The execution and delivery of the
Agreement and the consummation of the transactions contemplated hereby by the
Company have been duly authorized by all necessary corporate action on the part
of the Company, and the Agreement has been duly executed and delivered by the
Company and constitutes the valid and legally binding obligation of the Company
in accordance with its terms.
Section 6.2. CAPITALIZATION; SUBSIDIARIES.
(a) The authorized capital stock of the Company consists of
20,000,000 common shares, without par value. The Company has issued and
outstanding 4,290,144 common shares, all of which have been duly authorized
and validly issued and are fully paid and non-assessable and none of which
have been issued in violation of any preemptive or other right. All such
issued and outstanding shares are owned by Stockholders, the Medex ESOP and
such other individuals as set forth in the SCHEDULE OF STOCKHOLDERS
attached hereto. The Company does not hold any shares in its treasury.
Except as set forth in SCHEDULE 6.2, the Company is not a party to or bound
by any contract, agreement or arrangement to issue, sell or otherwise
dispose of or redeem, purchase or otherwise acquire any capital stock or
any other security of the Company or any other security exercisable or
exchangeable for or convertible into any capital stock or any other
security of the Company, and except as set forth in SCHEDULE 6.2, the
Company is not party to any outstanding option, warrant or other right to
subscribe for or purchase, or contract, agreement or arrangement with
respect to, any capital stock or any other security of the Company or any
other security exercisable or convertible into any capital stock or any
other security of the Company.
(b) The Company or any of its Subsidiaries is not a partner or
joint venturer nor does it hold a proprietary or voting interest in any
business entity, organization, enterprise or other Person except as
follows:
(i) The Company owns 100% of the issued and outstanding
shares of Medex a corporation duly organized, validly existing and
in good standing under the laws of the State of
Ohio;
(ii) Medex owns 100% of the issued and outstanding shares
of Medex Medical France S.A.R.L., a corporation duly organized,
validly existing and in good standing under the laws of France;
- 20 -
(iii) Medex owns 100% of the issued and outstanding shares
of Medex Medical Holding GmbH ("MEDEX GERMANY"), a corporation duly
organized, validly existing and in good standing under the laws of
Germany;
(iv) Medex owns 100% of the issued and outstanding shares
of Medex Medical, Inc. ("MEDEX MEDICAL"), a corporation duly
organized, validly existing and in good standing under the laws of
Ohio;
(v) Medex owns 100% of the issued and outstanding shares
of Medex Cardio-Pulmonary Inc., a corporation duly organized,
validly existing and in good standing under the laws of
Ohio;
(vi) Medex owns 100% of the issued and outstanding shares
of Medex de Costa Rica Limitada, a limited liability company duly
organized, validly existing and in good standing under the laws of
Costa Rica;
(vii) Medex Germany owns 100% of the issued and outstanding
shares of AS Medical GmbH ("AS MEDICAL"), a corporation duly
organized, validly existing and in good standing under the laws of
Germany;
(viii) Medex Germany and AS Medical, collectively own 100%
of the issued and outstanding shares of Medex Medical GmbH & Co.,
KG, a partnership duly organized, validly existing and in good
standing under the laws of Germany;
(ix) Medex Medical owns 100% of the issued and outstanding
shares of Medex Medical, Ltd. ("MEDEX UK"), a corporation duly
organized, validly existing and in good standing under the laws of
the United Kingdom; and
(x) Medex UK owns 100% of the issued and outstanding
shares of Ashfield Medical Systems Limited, a corporation duly
organized, validly existing and in good standing under the laws of
the United Kingdom.
(c) Each Subsidiary has the corporate power and authority to own
its properties and carry on its business as now being conducted. All of the
shares of the Company's direct and indirect Subsidiaries are owned free and
clear of all liens, pledges, encumbrances, changes, agreements and claims
with any kind, except for Permitted Liens. Each Subsidiary is qualified to
do business in each state or country where such qualification is required
to carry on its business as now being conducted, except where the failure
to be so qualified would not have a Material Adverse Effect. Each
Subsidiary is in compliance with its articles or certificate of
incorporation (or foreign law equivalent thereof) and its code of
regulations or by-laws (or foreign law equivalent thereof).
Section 6.3. TITLE TO PROPERTY. Except as otherwise set forth in SCHEDULE
6.3, each of the Company and its Subsidiaries has good and marketable title to,
or the right to transfer (or cause to be transferred), all of its assets, free
and clear of any liens, restrictions, mortgages, pledges, security interests,
encumbrances or claims of any nature except for (i) Permitted Liens and (ii)
Permitted Encumbrances.
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Section 6.4. ASSETS NECESSARY TO CONDUCT THE BUSINESS. Following the
Closing, the Company will own, directly or indirectly, all of the assets,
properties, interests in properties and rights (real, personal and mixed,
tangible and intangible) necessary to conduct the Business in substantially the
same manner as the Company conducted its Business during the year prior to, and
at, the Closing Date.
Section 6.5. REAL PROPERTY.
(a) SCHEDULE 6.5 contains a true and correct list of the Real
Property owned by the Company or a Subsidiary (the "OWNED REAL PROPERTY")
and a true and correct list of each parcel of Real Property leased by the
Company or its Subsidiaries (the "LEASED REAL PROPERTY").
(b) The Company or its Subsidiaries has good and marketable fee
simple title to each parcel of Owned Real Property, free and clear of any
lien or encumbrance, other than Permitted Encumbrances and Permitted Liens.
Each lease relating to the Leased Real Property (each a "LEASE" and
collectively the "LEASES") is, and immediately following the Closing, will
continue to be the legal, valid, binding, enforceable and in full force and
effect against the Company, and to the Company's knowledge, the other
parties thereto. None of the Company or any Subsidiary has received written
notice of default, violation or breach under any agreement governing any
such Lease, nor has any event occurred that constitutes or, with notice or
the passage of time or both, would constitute a default, violation or
breach under any such Lease, nor is Company or any Subsidiary involved in
any dispute with any third party thereunder. The Real Property constitutes
all of the real property owned or leased by the Company and its
Subsidiaries.
(c) Except as set forth on SCHEDULE 6.5, (i) all improvements
located on the Real Property have received all necessary material approvals
of Governmental Authorities (including licenses and permits) required in
connection with the use thereof currently being made; (ii) the Real
Property, and the improvements thereon, comply in all material respects
with all laws, rules and regulations; (iii) there are no material judicial
or administrative actions or proceedings pending or, to the Company's
knowledge, threatened under any condemnation, environmental, zoning,
land-use or other law, rule or regulation applicable to the Real Property;
(iv) there are no leases, subleases, licenses, concessions or other
agreements, written or oral, granting to any party or parties the right of
use or occupancy of any portion of the Real Property; (v) there are no
material outstanding unpaid assessment notices against any of the Real
Property; and (vi) neither the Company no any Subsidiary is a "United
States real property holding company" within the meaning of the Foreign
Investment in Real Property Tax Act, Section 897 of the Code, and the
Income Tax Regulations thereunder.
Section 6.6. FINANCIAL STATEMENTS. Prior to the date hereof, the Company
has delivered to the Buyer complete and correct copies of the Financial
Statements. Each of the Financial Statements has been prepared from the
information contained in the books and records (which, in turn, are accurate and
complete in all material respects) of the Business and presents fairly in all
material respects the financial position of the Company and its Subsidiaries as
of the dates indicated and the results of its operations for the periods then
ended in conformity with GAAP.
- 22 -
For purposes of this Agreement, the Financial Statements include any notes and
schedules thereto.
Section 6.7. ABSENCE OF UNDISCLOSED LIABILITIES. To the Company's
knowledge, neither the Company nor any of its Subsidiaries has any liabilities,
whether primary or secondary, direct or indirect, currently due, accrued,
absolute, contingent, unliquidated or otherwise, whether or not known, whether
due or to become due and regardless of when asserted, other than the following:
(a) liabilities fully and adequately reflected or reserved
against in the latest Financial Statements or otherwise specifically
disclosed on SCHEDULE 6.7;
(b) liabilities incurred in the ordinary course of business
consistent with past custom and practice since the date of the latest
Financial Statements;
(c) liabilities incurred in the ordinary course of business and
not required to be included in the Financial Statements in accordance with
GAAP;
(d) liabilities incurred in connection with the transactions
contemplated by this Agreement and the Purchase Agreement, including the
ancillary transactions agreements related thereto; and
(e) liabilities otherwise disclosed in this Agreement or the
Schedules hereto.
Section 6.8. CONSENTS AND APPROVALS; ABSENCE OF VIOLATION OR CONFLICTS.
(a) Except as set forth in SCHEDULE 6.8, neither the execution
and delivery of this Agreement by the Company, nor the consummation by the
Company of the transactions contemplated hereby, nor compliance by the
Company with any of the provisions hereof shall: (i) conflict with or
result in any breach of any provisions of the articles of incorporation,
code of regulations, by-laws or other organizational documents of the
Company or its Subsidiaries or of the Medex ESOP; (ii) require any consent,
approval, authorization or permit of, or filing with or notification to,
any Governmental Authority, except (a) in connection with the Anti-Trust
Filings, (b) any consent, approval, authorization or permit required to be
obtained by the Company or filing or notification required to be made by
the Company in order to operate the Business, which consent, approval,
authorization or permit is standard in transactions of the type
contemplated hereunder, or (c) where the failure to obtain any such
consent, approval, authorization or permit, or to make such filing or
notification, would not have a Material Adverse Effect on the Business
taken as a whole or would not adversely affect, in any material respect,
the ability of the Company to consummate the transactions contemplated
hereby; (iii) violate in any material respect any order, writ, injunction,
decree, statute, rule or regulation applicable to the Company or its
Subsidiaries; or (iv) except for any Permitted Liens or Permitted
Encumbrances, result in the creation of any lien or encumbrance upon any
assets used in connection with the Business, or result in a material
default (with or without notice or lapse of time, or both) under any of the
terms, conditions or provisions of any Material Contract.
- 23 -
(b) No Person has any option, right of first refusal, right of
first offer or similar right to purchase or otherwise acquire the Business,
any substantial portion of the assets used in the conduct of the Business,
the Company or any Subsidiary and neither the Company nor any Subsidiary of
the Company has entered into any letter of intent, commitment or agreement
(whether oral or written) regarding any such purchase or acquisition.
Section 6.9. RELATED PARTY TRANSACTIONS. No Stockholder, officer or
director of the Company or any Subsidiary or any Person who would be an heir or
descendant of such Stockholder, officer or director if he were not now living,
and, to the best of the Company's knowledge, no employee of the Company (a) has
any direct or indirect interest in (i) any Person (other than a public company
of which any such stockholder, officer, director, employee or other such person
owns less than 5% of the outstanding capital stock) that transacts business with
the Company or any Subsidiary; or (ii) any property, asset or right which is
used by the Company or any Subsidiary in the conduct of its business; or (b) has
any contractual relationship with the Company or any Subsidiary other than such
relationship as attaches to being an employee, stockholder, officer or director.
All transactions, if any, between the Company and any officer, director,
stockholder, employee or affiliate thereof within the three (3) year period
immediately preceding the date hereof have been made on the basis of an
arms-length transaction.
Section 6.10. COMPLIANCE WITH LAWS; LICENSES AND PERMITS.
(a) The conduct of the Business, use of the assets, and
ownership of the Real Property by the Company and its Subsidiaries have not
been and are not in violation, in any material respect, of any applicable
material laws, rules, regulations or ordinances of any Governmental
Authority. The Company and its Subsidiaries possess all material
governmental authorizations, permits, licenses, certifications and
registrations required for the conduct of the Business as currently
conducted, and for the regular use of the Assets as currently used, and all
such authorizations, permits, licenses, certifications and registrations
are in full force and effect. No loss, expiration or material modification
of any of such material authorizations, permits, licenses, certifications
or registrations is pending or, to the knowledge of the Company, threatened
or reasonably foreseeable other than expiration in accordance with the
terms thereof.
(b) Neither the Company nor any of its Subsidiaries has received
notice of, nor to the knowledge of the Company, is currently the subject
of, any adverse inspection, finding of deficiency, finding of
noncompliance, compelled or voluntary recall, investigation, penalty, fine,
sanction, assessment, request for corrective or remedial action, audit, or
other compliance or enforcement action, relating to any Product, by any
Governmental Authority which would have a Material Adverse Effect. The
Company and its Subsidiaries have obtained all necessary approvals,
registrations and authorizations from, have made all necessary applications
and other submissions to, and have prepared and maintained all records,
studies and other documentation needed to satisfy material compliance with
the requirements of the Governmental Authorities for the Company and its
Subsidiaries' current and past business activities relating to the
Products, including, but not limited to, any necessary Pre-Market
Notifications
- 24 -
("510(k)s") and line extension letters relating individual Products to
existing 510(k)s, except as would not have a Material Adverse Effect.
Section 6.11. MATERIAL CONTRACTS.
(a) The Material Contracts constitute all of the material
agreements, written or oral, primarily used in or necessary to conduct the
Business in the same manner as conducted as at the date hereof.
(b) "MATERIAL CONTRACTS" shall mean each written or oral
contract, agreement or commitment of the Company or any of its Subsidiaries
currently in effect which is related to the operation of the Business and
which (i) has an unexpired term greater than twelve (12) months or (ii)
requires aggregate future payments in excess of $250,000 by the Company,
any of its Subsidiaries or the other party thereto or (iii) is a lease or
occupancy agreement in effect with respect to any portion of the Real
Property or (iv) is a license agreement in effect with respect to any
portion of the Company Intellectual Property Rights that is material to the
Business or (v) is a long-term supply agreement for raw materials or
services or (vi) limits or restricts the ability of the Business to engage
in specified business activities or contains other non-competition
provisions or (vii) is an indenture, mortgage, note, agreement or other
instrument relating to the borrowing of money (other than intercompany
accounts), except for purchase or sales orders for the purchase or sale of
goods or services entered into in the ordinary course of the Business.
(c) SCHEDULE 6.11 sets forth a true, correct and complete list
of the Material Contracts. Except as set forth in SCHEDULE 6.11, neither
the Company nor any of its Subsidiaries is in material default under any
Material Contract. To the knowledge of the Company, none of the other
parties to any such Material Contract is in material default thereunder.
All Material Contracts are in full force and effect and are valid, binding
and enforceable against the Company, and to the Company's knowledge,
against the other parties thereto, in accordance with their respective
terms.
(d) The Company has made available to the Buyer true and correct
copies of all written Material Contracts, in each case together with all
amendments, waivers or other changes thereto. There are no oral Material
Contracts.
(e) SCHEDULE 6.11(e) accurately sets forth a list of the top ten
(10) customers (the "BUSINESS TOP CUSTOMERS") and suppliers (the "BUSINESS
TOP SUPPLIERS") of the Company and its Subsidiaries in respect of the
Business by dollar volume of sales and purchases, respectively, for the
calendar year 2002. Neither the Company nor any of its Subsidiaries has
received any written notice from any Business Top Supplier to the effect
that, such suppliers will stop, materially decrease the rate of, or change
the material terms in any material respect (whether related to payment,
price or otherwise) with respect to, supplying materials, products or
services to the Business (whether as a result of the consummation of the
transactions contemplated hereby or otherwise). Except as set forth on
SCHEDULE 6.11(e), neither the Company nor any of its Subsidiaries has
received any written notice from any Business Top Customer to the effect
that such customer will stop, or materially decrease the rate of,
purchasing services and/or products of the Business
- 25 -
(whether as a result of the consummation of the transactions contemplated
hereby or otherwise).
Section 6.12. INTELLECTUAL PROPERTY RIGHTS.
(a) All of the Company Intellectual Property Rights are
identified on SCHEDULE 6.12(a). Except as set forth in SCHEDULE 6.12(a),
the Company or its Subsidiaries are the sole and exclusive owner of the
Intellectual Property Rights.
(b) There are no copyrights or mask works which are the subject
of registrations or applications that are owned by the Company or its
Subsidiaries. SCHEDULE 6.12(b) lists all agreements pursuant to which the
Company and its Subsidiaries obtained the right to use or practice rights
under third party Intellectual Property Rights or by which the Company or
its Subsidiaries granted or waived any rights to use any Company
Intellectual Property Rights including, without limitation, license
agreements (other than agreements pertaining to the use of mass market
software that is available in consumer retail stores or otherwise
commercially available and subject to "shrink-wrap", "click-through" or
other standard form license agreements), settlement agreements, and
covenants not to ▇▇▇, and all material inventions for which patents have
not yet been applied.
(c) The Company and its Subsidiaries have taken reasonable
measures to protect, and will continue to take reasonable measures to
protect prior to Closing, the confidentiality of their respective trade
secrets included in the Intellectual Property Rights.
(d) The Patents, Trademarks and Domain Names included in the
Intellectual Property Rights have been duly registered and maintained in
the United States and all counterparts thereof in any country.
(e) Except as set forth on SCHEDULE 6.12(e), there are no
adverse third party actions or claims pending against the Company or any of
its Subsidiaries in any court, arbitration or by or before any Governmental
Authority or, to the knowledge of the Company, any written adverse third
party allegations with respect to any Company Intellectual Property Rights.
Except as set forth on SCHEDULE 6.12(e), to the knowledge of the Company,
neither the Company nor any of its Subsidiaries solely in connection with
the Business has infringed or misappropriated any intellectual property
owned by another Person or is aware of any facts that indicate a likelihood
of the foregoing.
(f) There are no claims pending or, to the knowledge of the
Company, threatened by the Company or its Subsidiaries, nor has the Company
or any of its Subsidiaries sent any written notice to any Person, regarding
any actual or potential infringement, dilution, misappropriation, or other
unauthorized use of Company Intellectual Property Rights and, to the
knowledge of the Company, there are no such infringements, dilutions,
misappropriations or other unauthorized uses of the Company Intellectual
Property Rights by any Person that are material.
- 26 -
Section 6.13. LEGAL PROCEEDINGS, ETC.
(a) Except as set forth on SCHEDULE 6.13, there are no legal,
administrative, arbitration or other proceedings or governmental
investigations pending or, to the knowledge of the Company, threatened
against the Company or any of its Subsidiaries which, if determined
adversely, would have a Material Adverse Effect. None of the proceedings
set forth on SCHEDULE 6.13 affects the validity of this Agreement or could
prevent or delay the transactions contemplated hereunder.
(b) Except as set forth on SCHEDULE 6.13, there are not
presently pending, or, to the knowledge of the Company, threatened, any
civil, criminal or administrative actions, suits, demands, claims,
hearings, notices of violation, investigations, proceedings or demand
letters relating to any alleged hazard or alleged Defect in design,
manufacture, materials or workmanship, including any failure to warn or
alleged breach of express or implied warranty or representation, relating
to any product manufactured, distributed or sold by or on behalf of the
Company or any of its Subsidiaries which would have a Material Adverse
Effect.
Section 6.14. LABOR AND EMPLOYEE MATTERS.
(a) SCHEDULE 6.14(a) sets forth the number of Employees by
location and such Employees the wages and salaries as at the date hereof.
(b) The Employees have been regularly remunerated for all
services carried out in the course of their employment relationships with
the Company and its Subsidiaries, in material accordance with all
applicable provisions of law and contract. With respect to remuneration
paid to the Employees, all payments due in relation to obligatory
insurance, severance pay and withholding taxes required by law have been
regularly effected.
(c) SCHEDULE 6.14(c) lists the existing collective bargaining
agreements with the Company and any of its Subsidiaries which cover any of
the Employees. Except as and to the extent set forth on SCHEDULE 6.14(c),
(i) there is no trade union, works council or similar body recognized by
the Company or any of its Subsidiaries in relation to any Employees; (ii)
there is no labor strike, dispute, slowdown, stoppage or lockout actually
pending (for which notice has been provided), or to the knowledge of the
Company, threatened against or affecting the Company or any of its
Subsidiaries; (iii) there is no unfair labor practice charge or complaint
against the Company or any of its Subsidiaries pending (for which notice
has been provided) or, to the knowledge of the Company, threatened before
the National Labor Relations Board or any similar foreign agency; and (iv)
neither the Company nor any of its Subsidiaries has received notice of the
intent of any Governmental Authority responsible for the enforcement of
labor or employment laws to conduct an investigation with respect to or
relating to the Business and no such investigation is in progress; other
than, with respect to clauses (ii), (iii) and (iv), such occurrences,
failures to comply, charges, complaints or investigations which, either
individually or in the aggregate, would not have a Material Adverse Effect.
- 27 -
Section 6.15. EMPLOYEE PLANS.
(a) SCHEDULE 6.15 contains a true and complete list of all
"employee pension benefit plans," as defined in Section 3(2) of ERISA (the
"EMPLOYEE PENSION BENEFIT PLANS"), and all "employee welfare benefit plans,
" as defined in Section 3(1) of ERISA (the "EMPLOYEE WELFARE BENEFIT
PLANS"), which are established, maintained or contributed to by the Company
or any Subsidiary, or any ERISA Affiliate and that covers any employee or
former employee of the Company or any Subsidiary or under which the Company
or any Subsidiary has any liability (collectively, the "EMPLOYEE BENEFIT
PROGRAMS"). For purposes of this SECTION 6.15, "ERISA AFFILIATE" means any
person which, together with the Company or any Subsidiary, is treated as a
single employer for any purpose under Section 414(b) or (c) of the Code or
Section 4001(b)(1) of ERISA. Each Employee Benefit Program which is (i) an
Employee Pension Benefit Plan; (ii) a multi-employer plan as defined in
Section 3(37) of ERISA (a "MULTI-EMPLOYER PLAN"); (iii) a plan maintained
in connection with any trust described in Section 501(c)(9) of the Code; or
(iv) subject to Title IV of ERISA, is so identified in the SCHEDULE 6.15.
The Company, any Subsidiary or any ERISA Affiliate has not caused to be
terminated in whole or in part or merged any Employee Benefit Program
during the five-year period ending on the Closing Date, except as
contemplated by this Agreement.
(b) With respect to each Employee Benefit Program, to the extent
applicable to such program, the Company or a Subsidiary has delivered or
made available to Buyer true and complete copies of: (i) the most recent
IRS determination letter; (ii) the most recent Annual Report (Form 5500
Series) and accompanying schedules, as filed pursuant to applicable law;
(iii) the Summary Plan Description (as currently in effect) distributed to
employees; (iv) the most recent trustee reports, financial statements,
actuarial reports and audit reports prepared in connection therewith; (v)
any material written communications distributed to employees that modify
the Summary Plan Description; (vi) any written interpretation of such
Employee Benefit Programs prepared by or at the request of the Company or
any Subsidiary and (vii) the most recent documents (including the plan,
related trust and insurance contracts and any amendments thereto) governing
the Employee Benefit Programs.
(c) Each Employee Pension Benefit Plan and Employee Welfare Plan
substantially complies currently, and has substantially complied in the
past both as to form and operation, with the terms of such plans and with
the applicable provisions of ERISA, the Code and other applicable federal
law. All necessary governmental approvals for the Employee Benefit Programs
have been obtained and a favorable determination as to the qualification
under Section 401(a) of the Code, of each of the Employee Pension Benefit
Plans and each amendment thereto has been made by the IRS or an application
for such a favorable determination will be made during the applicable
remedial amendment period, and a recognition of exemption from federal
income taxation under Section 501(a) of the Code of each of the funded
Employee Welfare Benefit Plans has been made by the IRS, and to the
knowledge of the Company, nothing has occurred since the date of such
determination or recognition letter that would adversely affect such
qualification or exemption.
- 28 -
(d) With respect to any Employee Benefit Program: (i) there are
no actions, suits or claims (other than routine, non-contested claims for
benefits) pending or, to the knowledge of the Company, which could
reasonably be expected to be asserted against the Company, any Subsidiary
or an ERISA Affiliate in connection therewith or against any administrator
or fiduciary thereof; (ii) to the knowledge of the Company, no "prohibited
transaction" (within the meaning of Section 406 of ERISA or Section 4975 of
the Code) has occurred; and (iii) nothing done or omitted to be done and no
transaction or holding of any asset under or in connection therewith has or
will make the Company, any Subsidiary or an ERISA Affiliate or any officer
or director of the Company, any Subsidiary or an ERISA Affiliate subject to
any liability under Title I of ERISA or liable for any tax pursuant to
Section 4972, Sections 4975 through 4980, inclusive, or Section 4980B of
the Code which will result in Material Adverse Effect.
(e) With respect to an Employee Pension Benefit Plan: (i) no
"accumulated funding deficiency" (as defined in Section 412 or the Code)
exists, whether or not waived; (ii) no "reportable event" (as defined in
Section 4043(b) of ERISA) has occurred or is continuing to occur with
respect thereto; (iii) no notice of intent to terminate has been filed nor
has any such Plan been terminated pursuant to the provisions of Section
4041 of ERISA; (iv) the Pension Benefit Guaranty Corporation (the "PBGC")
has not instituted proceedings to terminate (or appoint a trustee to
administer) any such plan and no event has occurred or condition exists
which might constitute grounds under the provisions of Section 4042 of
ERISA for the termination of (or the appointment of a trustee to
administer) any such plan' and (v) the amount for which the Company, any
Subsidiary or an ERISA Affiliate would be liable pursuant to the provisions
of Sections 4062, 4063, or 4064 of ERISA would be zero if such plans had
terminated as of the date of this Agreement.
(f) The Company, any Subsidiary or any ERISA Affiliate has not
(i) ceased operations of a facility so as to become subject to the
provisions of Section 4062(e) of ERISA; (ii) withdrawn as a substantial
employer so as to become subject to the provisions of Section 4063 of
ERISA; (iii) ceased making contributions on or before the date of this
Agreement to any Employee Pension Benefit Plan subject to the provisions of
Section 4064(a) of ERISA to which such entity made (or was obligated to
make) contributions during any of the five years prior to the date of this
Agreement; (iv) incurred or caused to occur a complete withdrawal (within
the meaning of Section 4203 of ERISA) or a partial withdrawal (within the
meaning of Section 4205 of ERISA) from a Multi-Employer Plan so as to incur
withdrawal liability under Section 4201 of ERISA (without regard to
subsequent reduction or waiver of such liability under Section 4207 or 4208
of ERISA); or (v) been a party to any transaction or agreement with respect
to which the provisions of Section 4204 of ERISA were applicable.
(g) SCHEDULE 6.15 lists each employment, severance or other
similar contract, arrangement or policy and each plan or arrangement
(written or oral) providing for insurance coverage (including any
self-insured arrangements), workers' compensation, disability benefits,
supplemental unemployment benefits, vacation benefits, retirement benefits
or deferred compensation, profit-sharing, bonuses, stock options, stock
appreciation or other forms of incentive compensation or post-retirement
insurance,
- 29 -
compensation or benefits which (i) is not an Employee Benefit Program, a
Multi-Employer Plan or a benefit described in a collective bargaining
agreement a copy of which has been furnished to the Buyer; (ii) is
established, maintained or contributed to by the Company, a Subsidiary or
an ERISA Affiliate; (iii) covers any employee or former employee of the
Company, a Subsidiary or an ERISA Affiliate or under which the Company, a
Subsidiary or an ERISA Affiliate has any liability (the "BENEFIT
ARRANGEMENTS"). Each Benefit Arrangement has been maintained in substantial
compliance with its terms and with the requirements prescribed by any and
all statutes, rulings and regulations which are applicable to such Benefit
Arrangement.
(h) Except as described in the SCHEDULE 6.15: (i) no Employee
Benefit Program or Benefit Arrangement provides post-retirement health,
medical or death benefits for retired employees of the Company, any
Subsidiary or an ERISA Affiliate; (ii) no action has been taken by the
Company or any Subsidiary that would prevent the Company from amending or
terminating any Employee Benefit Program or Benefit Arrangement with
respect to any active employees of the Company, any Subsidiary or an ERISA
Affiliate other than any limitations imposed under the terms of a
collective bargaining agreement; (iii) there is no accrued liability under
any Employee Benefit Program or Benefit Arrangement which has not been
fully provided for by contributions to such programs or arrangements or
which has not been provided for on the Financial Statements; and (iv) there
has been no amendment thereto, written interpretation or announcement
(whether or not written) by the Company, any Subsidiary or any ERISA
Affiliate, or change in employee participation or coverage under any
Employee Benefit Program or Benefit Arrangement which would increase
materially the expense of maintaining such Employee Benefit Program or
Benefit Arrangement above the level of expense incurred in respect thereof
for the fiscal year ending on December 31, 2002.
(i) Except as described in SCHEDULE 6.15, the execution and
performance of the transactions contemplated by this Agreement will not
constitute a stated triggering event under any Employee Benefit Program or
Benefit Arrangement that will result in any payment (whether of severance
pay or otherwise) become due from the Company or any Subsidiary to any
employee.
Section 6.16. ENVIRONMENTAL CONDITIONS. Except as set forth on SCHEDULE
6.16, the Company and its Subsidiaries, (i) are and have been in compliance in
all material respects with all applicable Environmental Laws, (ii) as of the
Closing Date, do not maintain underground storage tanks used by the Business and
no asbestos containing material exists at the facilities (except as
encapsulated, properly maintained and in compliance with Environmental Laws);
(iii) at no time prior to the Closing have disposed of, transported, stored or
Released any Hazardous Materials or any other waste covered by Environmental
Laws to, in or at any off-site location or facility in violation of or in a
manner which could give rise to liability under any Environmental Law; (iv) have
not received in the last three (3) years any written communication from a
governmental authority regarding any Environmental Claim, liabilities or
potential liabilities, including any investigatory, remedial or corrective
obligations, arising under any Environmental Law; (v) have obtained all
environmental approvals and permits required under Environmental Laws and no
transfers, additional permits or other governmental authorizations under
Environmental Laws will be required to permit the Company to conduct the
Business in material
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compliance with all applicable Environmental Laws following the Closing Date as
conducted by the Company during the year prior to the Closing Date; (vi) are in
compliance in all material respects with all terms and conditions of such
environmental approvals and permits; (vii) are not subject to any Environmental
Claim, outstanding order, decree or judgment from any governmental authority
with respect to the generation, treatment, storage, presence, disposal,
transportation or Release of any Hazardous Material in, on or under any of the
Real Property, (viii) there is no Environmental Claim pending or, to the
knowledge of the Company, threatened against the Company or any of its
Subsidiaries, or, to the knowledge of the Company, against any Person relating
to the Business whose liability for any Environmental Claim the Company has or
may have retained or assumed either contractually or by operation of law; or
(ix) there are no past or present actions, activities, circumstances,
conditions, events or incidents, including, without limitation, the Release,
threatened Release or presence of any Hazardous Material which could form the
basis of any Environmental Claim against the Company or any of its Subsidiaries
relating to the Business, or, to the knowledge of the Company, against any
Person relating to the Business whose liability for any Environmental Claim the
Company or any of its Subsidiaries has or may have retained or assumed either
contractually or by operation of law; (x) have not, and, to the knowledge of the
Company, no other Person has placed, stored, deposited, discharged, buried,
dumped or disposed of Hazardous Materials produced by, or resulting from, any
business, commercial or industrial activities, operations or processes, on,
beneath or adjacent to any property currently or formerly owned, operated or
leased by the Company or any of its Subsidiaries, except for such substances
used or generated, in the ordinary course of business of the Company and its
Subsidiaries (which substances, were and are stored or disposed of in accordance
with applicable Environmental Laws and in a manner such that there has been no
Release or threatened Release of any such substances in material violation of
applicable Environmental Laws, except as would not have a Material Adverse
Effect).
Section 6.17. TAXES. Except as disclosed on SCHEDULE 6.17,
(a) All Tax returns, statements, reports and forms (including
estimated tax and information returns and reports) required by any
Governmental Authority to be filed by the Company and all of its
Subsidiaries (collectively, the "RETURNS") have been or will be filed when
due in accordance with all applicable laws.
(b) The Returns were true, correct and complete in all material
respects and correctly reflected the facts regarding the income, business
assets, operations, activities and status of the Company or its
Subsidiaries and any other information required to be shown therein in all
material respects.
(c) All Taxes due and payable by the Company or its Subsidiaries
on or prior to the Closing Date have been or will be duly and timely paid
prior to Closing.
(d) The Company's reserve for current taxes (not including any
amounts that are included to reflect the timing difference for tax and
accounting) on its December 29, 2002 balance sheet included with the
Financial Statements is sufficient to cover all Taxes of the Company and
each of its Subsidiaries that have accrued, but are not yet due and
payable, as of the Closing Date.
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(e) All Taxes that are, or were, required to be withheld by the
Company or its Subsidiaries have been duly withheld or collected and, to
the extent required, have been timely paid to the appropriate Governmental
Authority.
(f) There is no claim, audit, action, suit, or proceeding with
respect to Taxes in process or now pending against or with respect to the
Company or a Subsidiary.
(g) Neither the Company nor any of its Subsidiaries is a party
to a tax sharing agreement or under any contractual or other obligation to
pay any amounts of the type described in the definition of "Tax".
(h) Neither the Company nor any of its Subsidiaries has received
any claim from a Governmental Authority to the effect that the Company or
its Subsidiaries has a nexus for Tax purposes in a jurisdiction in which
the Company or any of its Subsidiaries has not paid or withheld Taxes on
the ground that it does not have such a nexus.
(i) Neither the Company nor any Subsidiary is liable for Taxes
of any other person as a result of joint and several liability, successor
liability, transferee liability, under a contract, or otherwise.
(j) There is no contract, plan, or arrangement covering an
employee or former employee of the Company or the Subsidiary (including,
without limitation, a payment pursuant to any transaction contemplated by
this Agreement) that, individually or in the aggregate, could give rise to
a payment which is not deductible pursuant to Section 280G of the Code.
(k) Neither the Company or any Subsidiary has entered into any
agreement with any taxing authority that could affect the Tax liability of
the Company or the Subsidiary for any period ending after the Closing Date.
(l) Neither the Company nor any Subsidiary is required to make
(or has requested to make) an adjustment as a result of a change in method
of accounting that could affect the Tax liability of the Company or the
Subsidiary for any period ending after the Closing Date.
(m) Neither the Company nor any Subsidiary has participated in a
transaction that is a "reportable transaction" under Treasury Regulation
section 1.6011-4 (irrespective of the date of the transaction) or the
"significant purpose of which is the avoidance or evasion of federal income
tax" within the meaning of Code section 6662(d)(2)(C).
(n) The Company (without regard to the transactions contemplated
by this Agreement) constitutes a "small business corporation" within the
meaning of Code Section 1361(b) (without regard to paragraph (1)(C) of such
Code section).
(o) The Company's net operating losses (without regard to the
transactions contemplated by this Agreement) are not, prior to the Closing
and without giving effect
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to the transactions contemplated herein, subject to any limitations on use
pursuant to Code section 269 or Code section 382 or any other provision of
the Code.
Section 6.18. ABSENCE OF CERTAIN DEVELOPMENTS. Except as set forth on
SCHEDULE 6.18, since December 30, 2002, the Business has been carried on in the
ordinary course and consistent with past practice (except for such changes or
effects resulting from or arising in connection with changes or conditions
affecting similarly situated companies in the critical care medical device
industry and changes in economic, regulatory or political conditions generally)
and neither the Company nor any of its Subsidiaries have, with respect to the
Business:
(a) borrowed any amount or incurred or become subject to any
obligations or liabilities (whether absolute or contingent), or given any
guarantee or indemnity outside the ordinary course of business, except
liabilities incurred in the ordinary course of business;
(b) mortgaged, pledged or subjected to any lien, charge or any
other encumbrance, any portion of its properties or assets used in the
Business, except Permitted Liens and Permitted Encumbrances;
(c) sold, leased, assigned or transferred (including, without
limitation, transfers to any Employees or Subsidiaries of the Company) any
of the tangible or intangible assets used in the Business (except for
inventory sold in the ordinary course of business consistent with past
custom and practice) having a value in excess of $500,000 or canceled
without fair consideration any debts or claims owing to or held by it in
excess of $500,000;
(d) suffered any theft, damage, destruction or casualty loss to
the tangible assets used in the Business, whether or not covered by
insurance, having a value in excess of $500,000;
(e) entered into, amended or terminated any material lease,
license agreement, contract, agreement, permit or commitment in connection
with the Business other than in the ordinary course of business and in
accordance with past custom and practice;
(f) entered into any substantial transaction with any officer,
director or Employee thereof or an entity in which any such Person has a
substantial interest;
(g) consistent with past practices, entered into any employment
contract or collective bargaining agreement, written or oral, or changed in
any other material respect employment terms for any Employee or made or
granted any bonus or any wage, salary or compensation increase to any
director, officer, Employee or sales representative, group of Employees or
consultant (except for annual salary and wage increases and bonuses paid in
the ordinary course of business);
(h) incurred intercompany charges or conducted its cash
management customs and practices (including the collection of receivables,
inventory control and payment of payables) other than in the usual and
ordinary course of business in accordance with past custom and practice;
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(i) made any non-budgeted capital expenditures (or commitments
therefor), other than capital expenditures which are reasonably necessary
to allow the Business to operate in accordance with past custom and
practice, that aggregate in excess of $250,000;
(j) entered into any lease of capital equipment or real estate
involving rental in excess of $500,000 per annum with a term exceeding two
years;
(k) performed any acts punishable under the Foreign Corrupt
Practices Act or under the OECD Convention on Combating Bribery of Foreign
Public Officials in International Business Transactions; or
(l) agreed to do any of the foregoing.
Section 6.19. PRODUCT AND SERVICE WARRANTIES. Except as disclosed on
SCHEDULE 6.19, to the knowledge of the Company, each product sold or delivered
and each service rendered by the Company or any of its Subsidiaries has been in
conformity in all material respects with all applicable contractual commitments,
all express and implied warranties, and all laws, and neither the Company nor
any of its Subsidiaries has any material liabilities or obligations for
replacement or repair thereof or other damages in connection therewith. Except
as disclosed on SCHEDULE 6.19, no product sold or delivered or service rendered
by the Company or any of its Subsidiaries is subject to any guaranty, warranty
or other indemnity beyond the applicable standard terms and conditions with
respect thereto. Prior to the date hereof, the Company has made available to the
Buyer copies of the standard terms and conditions of sale for products delivered
and services rendered by the Company and its Subsidiaries (containing all
applicable guaranty, warranty, return and indemnity provisions).
Section 6.20. BROKERAGE FEES. Except as disclosed on SCHEDULE 6.20, there
are no claims for brokerage commissions, finder's fees or similar compensation
in connection with the transactions contemplated by this Agreement based on any
arrangement or agreement made by or on behalf of the Company or any of its
Subsidiaries.
ARTICLE VII
REPRESENTATIONS AND WARRANTIES
FROM BUYER
The Buyer hereby represents and warrants to each Stockholder and
the Company as follows:
Section 7.1. ORGANIZATION. The Buyer is duly organized, validly existing
and in good standing under the laws of the state in which it is organized.
Section 7.2. AUTHORITY. The Buyer has full power and authority to enter
into this Agreement and to consummate the transactions contemplated on its part
hereby. The board of managers, members or other governing body, as applicable,
of the Buyer have taken all action required to authorize the execution and
delivery of this Agreement, the performance of the Buyer's obligations hereunder
and the consummation of the transactions contemplated hereby.
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This Agreement has been duly executed and delivered by the Buyer and is
the legal, valid and binding obligation of the Buyer enforceable against the
Buyer in accordance with its terms.
Section 7.3. NO VIOLATION. Neither the execution and delivery of this
Agreement, nor the consummation of the transactions contemplated hereby will
violate, be in conflict with any provisions of the organization or governing
documents of the Buyer or violate, by in conflict with, or allow the termination
of, constitute a breach or default under, cause the acceleration of the maturity
of or create any lien, pledge, encumbrance, charge or claim of any kind pursuant
to any written or oral contract, agreement, commitment, lease, indenture,
mortgage, instrument or other arrangement to which the Buyer is a party or by
which Buyer is bound, or violate any statute or law or any judgment, decree,
order, regulation or rule of any court or Governmental Authority to which the
Buyer is subject.
Section 7.4. CONSENTS AND APPROVALS. Except for consents, approvals or
authorizations that have been obtained, no consent, approval or authorization
of, or declaration, filing or registration with, any Governmental Authority or
third party is required to be made or obtained by the Buyer in connection with
the execution, delivery and performance of this Agreement and the transactions
contemplated hereby.
Section 7.5. INVESTMENT REPRESENTATIONS. The Buyer is a sophisticated
investor, represented by independent legal counsel and investment counsel with
experience in the acquisition and valuation of ongoing businesses, and
acknowledges that it has received or has had access to all information which it
considers necessary or advisable to enable it to make an informed business
decision concerning its purchase of Securities hereunder. The Buyer is acquiring
the Securities for investment purposes only, and not with a view to or for any
public resale or other distribution thereof. The Buyer is an "accredited
investor" as such term is defined in the regulations promulgated under the
Securities Act of 1933, as amended.
Section 7.6. BROKERAGE FEES. Except as disclosed on SCHEDULE 7.6, there
are no claims for brokerage commissions, finder's fees or similar compensation
in connection with the transactions contemplated by this Agreement based on any
arrangement or agreement made by or on behalf of the Buyer.
ARTICLE VIII
COVENANTS
Section 8.1. CONDUCT OF BUSINESS. From the date hereof until the Closing,
except as consented to by the Buyer in writing, the Stockholders will, and will
cause the Company to:
(a) continue to maintain the Company and its Subsidiaries at all
times as corporations duly organized, validly existing and in good standing
under the laws of their respective jurisdictions of incorporation;
(b) carry on the operations of the Business substantially in the
manner carried on as of the date hereof and not engage in any activity or
transaction or make any commitment to purchase or spend in connection with
the Business other than in the ordinary course of business as heretofore
conducted; PROVIDED, HOWEVER, without the
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written consent of the Buyer, the Company will not make any commitment to
purchase or spend in connection with the Business involving $1,000,000 or
more;
(c) use commercially reasonable efforts to continue to carry all
of the existing insurance of the Business;
(d) maintain the facilities, machinery and equipment of the
Business consistent with past practices, subject only to ordinary wear and
tear;
(e) use commercially reasonable efforts to (i) preserve the
organization of the Business intact, (ii) to keep available to the Buyer
the services of the Employees and independent contractors of the Business
and (iii) to preserve for Buyer the Company's relationships with suppliers,
licensees, distributors and customers and others having business
relationships with them in connection with the Business, except in such
case as would not have a Material Adverse Effect; and
(f) continue to maintain and keep accurate books and records
reflecting the assets and liabilities of the Business.
Section 8.2. NEGATIVE COVENANTS. From the date hereof until the Closing,
except (X) as set forth on SCHEDULE 8.2, (Y) contemplated in this Agreement or
(Z) as otherwise consented to by the Buyer in writing, other than in the
ordinary course of business, the Stockholders will not, and will not cause or
permit the Company to:
(a) authorize, issue, or enter into any agreement providing for
the issuance equity securities of the Company or any Subsidiary;
(b) declare any dividend for the Company in cash or securities;
(c) adopt or amend any employee or director incentive plan
providing for the issuance of equity securities of the Company or any
Subsidiary;
(d) amend, modify, renew or otherwise materially revise
(directly or indirectly) any borrowing, transaction or agreement with any
Employee, except for wage, salary or other compensation increases in the
ordinary course of business consistent with past practice;
(e) engage (directly or indirectly) in a new business activity
other than a business reasonably related to the Company's or any
Subsidiary's existing business;
(f) make any loans or advances to any third party, other than
(i) travel and entertainment advances to employees in the ordinary course
of business and (ii) advances and deposits made in the ordinary course of
business;
(g) create, incur, assume or guarantee any indebtedness in
respect of money borrowed (regardless of the time period for repayment of
such indebtedness);
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(h) amend, modify, renew or otherwise materially revise
(directly or indirectly) (x) the Purchase Agreement or other transaction
document related thereto or (y) any Material Contract other than in the
ordinary course of business;
(i) make or commit to making any capital expenditures other than
in the ordinary course of business; or
(j) settle or agree to settle any pending claim, suit or
proceeding other than in the ordinary course of business.
Section 8.3. NO SOLICITATION OF OFFERS. Between the date of this
Agreement and the Closing or earlier termination of this Agreement, the Company
shall, and shall cause its Employees and representatives to, deal exclusively
with the Buyer in connection with the transactions contemplated herein. Neither
the Company, the Stockholders nor any Employee or representative of Stockholders
or the Company shall directly or indirectly, without the Buyer's prior written
consent, solicit, encourage or initiate any offer or proposal from, or engage in
any discussions with, or provide any information to, any person other than the
Buyer and its affiliates, employees and representatives, concerning any
transaction involving the sale of any stock or assets of the Company (other than
sales of its products in the ordinary course of business), or a merger,
consolidation, liquidation, recapitalization or similar transaction involving
the Company (collectively, "ACQUISITION TRANSACTIONS"), nor shall Stockholders
or any Employee or representative of the Company accept any proposal with
respect to any Acquisition Transaction. Stockholders, the Company and their
representatives shall notify the Buyer promptly upon their receipt of any
proposal for an Acquisition Transaction.
Section 8.4. SUPPORT FOR DUE DILIGENCE. Between the date of this
Agreement and the thirty (30) days following the execution of this Agreement,
the Company shall, and shall cause its Employees and representatives to provide
to the Buyer and its representatives reasonable access to all of the Company's
books, records, contracts, premises and personnel of the Company and its
Subsidiaries, including without limitation, information relating to the
Business, and relevant financial, tax, legal and regulatory considerations
concerning the Company and its Subsidiaries.
Section 8.5. TERMINATED PLANS.
(a) Within one (1) day from the date hereof, subject to the
terms and conditions set forth herein, the Board of Directors of the
Company shall adopt the necessary resolutions to cause the Company and its
Subsidiaries to terminate the Terminated Plans as provided in SECTION
2.1(d).
(b) Within ten (10) days from the date hereof, subject to the
terms and conditions set forth herein, the Company shall cause the Medex
ESOP to deliver a notice of the transactions contemplated pursuant to this
Agreement, which notice shall solicit the consent and approval of such
participants to the recapitalization transaction contemplated hereby and to
amendment of the Company's Articles of Incorporation contemplated pursuant
to SECTION 2.1(a). Furthermore, such notice shall inform each participant
of the contingent termination of the Medex ESOP and shall provide each
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participant a thirty day (30) day period in which to elect to receive such
participant's vested benefit under the Medex ESOP in the form of (x) a lump
sum cash payment equal to the number of shares of Company Common Stock and
Company Preferred Stock to be vested in such participant upon the
termination of the Medex ESOP multiplied by $6.27 or (y) shares of Company
Common Stock and Company Preferred Stock to be vested in such participant
upon the termination of the Medex ESOP.
(c) Upon expiration of the election period set forth in
paragraph (b) above, the Company shall make a lump sum cash payment to the
trustee of the Medex ESOP in an amount equal to the aggregate cash payment
to be paid to the participants in the Medex ESOP as a result of the
election of such participants pursuant to paragraph (b) above to receive a
cash payment and the Company shall cause the Trustee of the Medex ESOP to
distribute such cash to the participants in the Medex ESOP who shall have
elected to receive such cash payment pursuant to paragraph (b) above and
the Company shall cause the trustee of the Medex ESOP to distribute shares
of Company Common Stock and Company Preferred Stock in an aggregate amount
equal to the shares to be distributed to the participants in the Medex ESOP
as a result of the election of such participants pursuant to paragraph (b)
above to receive shares of Company Common Stock and Company Preferred
Stock.
(d) Upon expiration of the election period set forth in
paragraph (b) above, with respect to the Stock Incentive Plan (UK) and
Stock Appreciation Participation Rights Plan (Germany), the Company shall
make a lump sum cash payment to each beneficiary of or participant in such
plans in an amount equal to the aggregate vested equity rights of such
beneficiary under such plans multiplied by $6.27.
(e) Notwithstanding the foregoing, the Company shall not be
obligated to deliver any such notices, payment or shares under SECTION
8.5(c) in the event that the Company shall have rescinded the termination
of the Medex ESOP in accordance with the terms and conditions of SECTION
2.1(d) or in the event that the Buyer shall not have advanced the amounts
contemplated pursuant to SECTION 2.1(d)(v).
(f) Upon the expiration of the election period set forth in
paragraph (b) above, but in no event prior to the Closing Date, the Buyer
shall purchase, and the Company shall issue to the Buyer, up to 119,992.3
shares of Company Common Stock and 1,079,930.7 shares of Company Preferred
Stock for a purchase price equal to $6.27 for each unit of one (1) share of
Company Common Stock and nine (9) shares of Company Preferred Stock, which
purchase price will be paid through the cancellation of the outstanding
advance made by the Buyer to the Company pursuant to SECTION 2.1(d)(v). The
actual number of shares purchased by the Buyer will depend on the actual
amount advanced by the Buyer to the Company pursuant to SECTION 2.1(d)(v).
Upon consummation of such purchase, the Company shall deliver to the Buyer
certificates evidencing the shares of Company Common Stock and Company
Preferred Stock purchased by the Buyer hereunder.
Section 8.6. TERMS OF PREFERRED STOCK. If prior to the date of the
Closing, the Company determines that the Company Preferred Stock may be
characterized as "section 306 Preferred
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Stock" under Code section 306, the Buyer and the Stockholders shall use their
best efforts to revise the terms of the Company Preferred Stock so as to avoid
such characterization. Any such revision shall preserve the relative economic
interests of all the Stockholders as contemplated by the terms of this Agreement
as of the date hereof.
ARTICLE IX
TERMINATION
Section 9.1. TERMINATION EVENTS. This Agreement shall be terminated at any
time prior to the Closing as follows, and in no other manner:
(a) by mutual consent of the Buyer, the Company and the
Representatives;
(b) if the Purchase Agreement has been terminated in accordance
with its provisions;
(c) if the transactions contemplated by this Agreement shall not
have occurred on or before July 31, 2003, or such later date as may have
been agreed upon in writing by the parties, PROVIDED, that any such failure
to close is not due to any failure to perform, default or breach by a party
hereto;
(d) by the Buyer upon a Material Adverse Change except any such
change or effect resulting from or arising in connection with (i) this
Agreement or the transactions contemplated hereby, (ii) changes or
conditions affecting the intravenous catheter industry or market for such
products generally, (iii) changes in economic, regulatory or political
conditions generally, (iv) fluctuations in foreign currency exchange rates,
or (v) changes or effects that are the direct result of actions taken by
the Buyer without the express authorization or consent of the
Representatives;
(e) by the Representatives, provided the Company or the
Stockholders are not in breach of any of their obligations hereunder, if
the Buyer fails to perform in any material respect any of its covenant in
this Agreement when performance thereof is due or the Buyer shall have
breached in any material respect any of its representations and warranties
contained in this Agreement which has a Material Adverse Effect and the
Buyer shall have had a reasonable opportunity to cure before Closing;
(f) by the Buyer, provided the Buyer is not in breach of any of
its obligations hereunder, if the Stockholders or the Company fail to
perform in any material respect any of their covenants in this Agreement
when performance thereof is due or the Stockholders shall have breached in
any material respect any of the Stockholders' representations and
warranties contained in this Agreement which has a Material Adverse Effect
and the Stockholders or the Company, as the case may be, shall have had a
reasonable opportunity to cure before Closing;
(g) by the Representatives or the Buyer, if the Schedules to
this Agreement (as delivered and reviewed pursuant to the terms of this
Agreement) are not finalized as
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contemplated by SECTION 11.1 within fourteen (14) days after the date of
this Agreement; or
(h) by the Buyer if, at anytime during the thirty (30) days
following the execution of this Agreement the due diligence investigation
conducted by the Buyer and its representatives of the Company and its
Subsidiaries, including without limitation, the Business, and relevant
financial, tax, legal, regulatory and other considerations fails to have
been completed in a manner reasonably satisfactory to the Buyer and its
representatives by reason of such investigation uncovering a condition or
event that has not been previously disclosed to the Buyer or its
representatives prior to the date of this Agreement which condition or
event could reasonably be expected to have a materially adverse effect as
determined by the Buyer in its reasonable discretion on the valuation of
the Company and its Subsidiaries, taken as a whole, as of the date of this
Agreement.
Section 9.2. EFFECT OF TERMINATION. In the event of termination of this
Agreement pursuant to SECTION 9.1, this Agreement shall terminate without
further action by the parties hereto and become void and have no effect, and the
transactions contemplated hereby shall be abandoned without further action by
the parties hereto. If this Agreement is terminated as provided herein, all
filings, applications and other submissions made pursuant to this Agreement
shall, to the extent practicable, be withdrawn from the Governmental Authority
or Person to which they were made.
ARTICLE X
SURVIVAL AND INDEMNIFICATION
Section 10.1. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All
representations and warranties herein shall survive the Closing until the date
twelve (12) months from the Closing Date, and shall then expire and be of no
force or effect; PROVIDED, HOWEVER, that (i) the representations and warranties
in ARTICLE V - Representations and Warranties Regarding the Stockholders,
SECTION 6.1 - Organization, Good Standing and Authority, SECTION 6.2 -
Capitalization and SECTION 6.3 - Title to Property shall survive forever after
the Closing Date; (ii) the representations and warranties in SECTION 6.16 -
Environmental Conditions shall survive until the date two (2) years from the
Closing Date; and (iii) the representations and warranties in SECTION 6.17 -
Taxes shall survive until the expiration of the applicable statute of
limitations plus sixty (60) days (the representations and warranties set forth
in clauses (i), (ii) and (iii) of this SECTION 10.1 are collectively referred to
herein as the "EXCLUDED REPRESENTATIONS AND WARRANTIES").
Section 10.2. INDEMNIFICATION BY STOCKHOLDERS. After the Closing Date:
(a) Each Stockholder severally (and not jointly and severally)
agrees to indemnify and hold harmless the Buyer and each of its respective
directors, officers, shareholders, employees, affiliates, controlling
persons, agents, representatives, successors and authorized assigns (the
"BUYER INDEMNITEES") against and from any and all Damages which any Buyer
Indemnitee may incur or suffer which arise out of or result from the breach
of any representation or warranty made by such Stockholder in ARTICLE V
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of this Agreement; PROVIDED that for purposes of this subsection (a), if
any such representation or warranty contained herein is qualified (either
directly or by the use of the defined term "Material Adverse Change" or
"Material Adverse Effect") by the word "material" (or by any word formed
from such word), then such representation and warranty will in all respects
be construed as if the word "material" (and such words formed therefrom)
were not included in such representation or warranty or included in the
definition of "Material Adverse Change" or "Material Adverse Effect".
(b) The Stockholders, jointly, but not jointly and severally, on
a pro-rata basis as provided in SECTION 10.4 below, agree to indemnify and
hold harmless the Buyer Indemnitees against and from any and all Damages
which any Buyer Indemnitee may incur or suffer which arise out of or result
from (i) the breach of any representation or warranty made by the
Stockholders in ARTICLE VI of this Agreement; PROVIDED that for purposes of
this clause (i), if any such representation or warranty contained herein is
qualified (either directly or by the use of the defined term "Material
Adverse Change" or "Material Adverse Effect") by the word "material" (or by
any word formed from such word), then such representation and warranty will
in all respects be construed as if the word "material" (and such words
formed therefrom) were not included in such representation or warranty or
included in the definition of "Material Adverse Change" or "Material
Adverse Effect", (ii) the breach or nonperformance of any covenant,
obligation or agreement made or incurred by the Stockholders in this
Agreement and (iii) Environmental Claims as are made within two (2) years
of the Closing Date. Notwithstanding that a claim for Damages falls into
multiple categories of this SECTION 10.2, the Stockholders shall only be
required to indemnify a Buyer Indemnitee one time only.
Section 10.3. INDEMNIFICATION BY THE BUYER. After the Closing Date, the
Buyer agrees to indemnify and hold harmless the Company, Stockholders and any of
its directors, officers, shareholders, employees, Affiliates, controlling
persons, agents, representatives, successors and authorized assigns (the
"STOCKHOLDER INDEMNITEES") against and from any and all Damages which any
Stockholder Indemnitee may incur or suffer which arise out of or result from (i)
the breach of any representation or warranty made by the Buyer in this Agreement
and (ii) the breach or nonperformance of any covenant, obligation or agreement
made or incurred by the Buyer in this Agreement. Notwithstanding that a claim
for Damages falls into multiple categories of this SECTION 10.3, the Buyer shall
only be required to indemnify a Stockholder Indemnitee one time only.
Section 10.4. SCOPE OF STOCKHOLDERS LIABILITY.
(a) Indemnification shall not be available to the Buyer
Indemnitees for Claims under SECTION 10.2(b)(i) until the aggregate amount
of Damages due to the Buyer Indemnitees under SECTION 10.2(b)(i) exceeds
$500,000 (the "THRESHOLD AMOUNT"), and then only for the amount in excess
of the Threshold Amount, except with respect to any Claim resulting from or
relating to any breach of the Excluded Representations and Warranties to
which the Threshold Amount shall not apply.
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(b) The Stockholders' maximum aggregate liability for Damages to
the Buyer Indemnitees for Claims under SECTION 10.2(b) shall not exceed,
under any circumstances, the lesser of (i) the then fair market value of
the Securities and options (other than Securities issued after the Closing
Date) held by the Stockholders immediately after the Closing and (ii)
$10,000,000 (the "MAXIMUM AMOUNT"); PROVIDED that each Stockholder's
maximum individual liability shall not exceed his, her or its PRO RATA
share (determined as a percentage, the numerator of which is the number of
shares of Company Common Stock held by such Stockholder immediately prior
to the Closing and the denominator of which is equal to the number of
shares of Company Common Stock held by all of the Stockholders immediately
prior to the Closing) of the Maximum Amount.
(c) The amount of any Claim of the Buyer Indemnitees that is
undisputed by the Stockholders or to which any Buyer Indemnitee is entitled
as determined by the final, non-appealable judgment of a court of competent
jurisdiction may, at the option of the Stockholders, first be satisfied by
delivery of shares of Securities by the Stockholders duly endorsed in blank
in favor of the Buyer Indemnitee with a fair market value in an amount
equal to the amount of such Claim and such Stockholder hereby authorizes
the Company to transfer such shares on the books of the Company from such
Stockholder to the Buyer. Each Stockholder holding options to purchase
shares of Securities agrees to exercise such options to the extent
necessary to satisfy such Stockholder's indemnification obligations
hereunder. For purposes of this SECTION 10.4, fair market value of the
Securities shall be determined in the same manner in which "Appraised
Value" is determined under the Stockholders Agreement. Notwithstanding
anything to the contrary contained herein, the amount of any Claim of the
Buyer Indemnitees with respect to any Environmental Claim involving
remediation shall be limited solely to the cost and expenses necessary or
appropriate to remediate the Real Property that is the subject of such
Environmental Claim into compliance with applicable Environmental Laws.
Section 10.5. CLAIMS. Any Buyer Indemnitee or Stockholder Indemnitee
claiming it may be entitled to indemnification under this ARTICLE X (the
"INDEMNIFIED PARTY") shall give prompt notice to the other party (the
"INDEMNIFYING PARTY") of each matter, action, cause of action, claim, demand,
fact or other circumstances upon which a claim for indemnification (a "CLAIM")
under this ARTICLE X may be based. Such notice shall contain, with respect to
each Claim, such facts and information as are then reasonably available, and the
specific basis for indemnification hereunder. Failure to give prompt notice of a
Claim hereunder shall not affect the Indemnifying Party's obligations under this
ARTICLE X, except to the extent the Indemnifying Party is prejudiced by such
failure.
Section 10.6. DEFENSE OF ACTIONS. The Indemnified Party shall permit the
Indemnifying Party, at the Indemnifying Party's option and expense, to assume
the complete defense of any Claim based on any action, suit, proceeding, claim,
demand or assessment by any third party with full authority to conduct such
defense and to settle or otherwise dispose of the same, and the Indemnified
Party will fully cooperate in such defense; provided that the Indemnifying Party
will not, in defense of any such action, suit, proceeding, claim, demand or
assessment, except with the prior written consent of the Indemnified Party
(which consent will not be unreasonably withheld or delayed), consent to the
entry of any judgment or enter into any settlement which
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provides for any relief other than the payment of monetary Damages and which
does not include as an unconditional term thereof the giving by the claimant or
plaintiff to the Indemnified Party of a release from all liability in respect
thereof. After notice to the Indemnified Party of the Indemnifying Party's
election to assume the defense of such action, suit, proceeding, claim, demand
or assessment, to the extent that the Indemnifying Party requests the
Indemnified Party's assistance in connection with the defense of such action,
suit, proceeding, claim, demand or assessment, the Indemnifying Party shall be
liable to the Indemnified Party for such legal or other expenses subsequently
incurred by the Indemnified Party. As to those actions, suits, proceedings,
claims, demands or assessments with respect to which the Indemnifying Party does
not elect to assume control of the defense, the Indemnified Party will afford
the Indemnifying Party an opportunity to participate in such defense, at its
cost and expense, and will consult with the Indemnifying Party prior to settling
or otherwise disposing of any of the same. Notwithstanding anything to the
contrary herein, with respect to any Claim asserted by a governmental entity
relating to Taxes, the Indemnifying Party shall be entitled to participate in
the defense, but the Indemnified Party shall control such defense. The
Indemnified Party will not settle any such Claim without the prior consent of
the Indemnifying Party, such consent not to be unreasonably withheld or delayed.
Section 10.7. LIMITATION, EXCLUSIVITY. No Claim pursuant to SECTION
10.2(i), 10.2(ii) or 10.2(iii) shall be made or have any validity unless the
Buyer Indemnitee shall have given written notice of such Claim to the
Representatives prior to the expiration of the applicable survival period, if
any, set forth in SECTION 10.1 for such Claim. This ARTICLE X provides the
exclusive means by which an Indemnified Party may assert Claims or any other
cause of action arising out of the transactions contemplated hereby.
Section 10.8. ADDITIONAL LIMITATIONS. The amount which an Indemnifying
Party is required to pay in respect of any Claim shall be reduced (either at
time of payment or retroactively after payment) by the amount of net insurance
proceeds received by the Indemnified Party with respect to such Claim which
Indemnified Party has, in its sole discretion, elected to pursue. If an
Indemnified Party receives a payment from an Indemnifying Party in respect of a
Claim pursuant to this ARTICLE X and such Indemnified Party subsequently
receives insurance proceeds with respect to such Claim, such Indemnified Party
shall pay to such Indemnifying Party the amount equal to the net insurance
proceeds. No denial of coverage by any insurance carrier and no refusal or delay
by any insurance carrier to make payment (including, without limitation, the
pendency of the Indemnified Party's insurance claim in the ordinary course of
the insurer's business) shall excuse any Indemnifying Party from performing its
obligations under this ARTICLE X in a timely manner.
ARTICLE XI
MISCELLANEOUS
Section 11.1. AMENDMENT, MODIFICATION AND SUPPLEMENTS. The parties hereto
may amend, modify or supplement the provisions of this Agreement only by written
agreement the Buyer, the Company and a majority of the Stockholders; PROVIDED,
that no party may be adversely affected in any disproportionate manner by any
such amendment, modification or supplement without the written agreement of such
affected party. Notwithstanding the
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foregoing, the Buyer and the Representatives may amend, modify or supplement the
representations and warranties contained in ARTICLE VI from and after the date
hereof and prior to the Closing Date without the consent of a majority of the
Stockholders. Furthermore, the Company and the Stockholders shall have a period
of fourteen (14) days from the date hereof to amend, modify or supplement the
Schedules attached hereto, subject to the Buyer's review of such amendments,
modifications or supplements as contemplated by SECTION 4.2(l) hereof.
Section 11.2. WAIVER. Any failure on the part of any party to comply with
any of its obligations, agreements or conditions hereunder may be waived by any
other party to whom such compliance is owed. No waiver of any provision of this
Agreement shall be deemed, or shall constitute, a waiver of any other provision,
whether or not similar, nor shall any waiver constitute a continuing waiver.
Section 11.3. NOTICES. Any notice provided for in this Agreement shall be
in writing and shall be either personally delivered, or mailed first class mail
(postage prepaid) or sent by reputable overnight courier service (charges
prepaid) to the Company, the Representatives and Buyer at the addresses set
forth below. Notices shall be deemed to have been given hereunder when delivered
personally, five (5) days after deposit in the U.S. mail and one (1) day after
deposit with a reputable overnight courier service, transmitted by facsimile or
telecopy.
If to the Company:
MedVest Holdings Corporation.
▇▇▇▇ ▇▇▇▇▇-▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ Arena and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
If to the Representatives:
▇▇. ▇▇▇▇▇▇▇▇ Arena and ▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇-▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
With copies (which shall not constitute notice) to:
▇▇▇▇▇▇, Halter & ▇▇▇▇▇▇▇▇ LLP
1650 Fifth Third Center
▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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If to the Buyer:
OEP MedVest LLC
c/o One Equity Partners
▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
WITH COPIES (WHICH SHALL NOT CONSTITUTE NOTICE) TO:
Winston & ▇▇▇▇▇▇
▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Section 11.4. BINDING NATURE; ASSIGNMENT. This Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and permitted assigns, but neither this Agreement nor any of the
rights, interests or obligations of the parties hereunder may be assigned to any
Person without the prior written consent of the majority Stockholders and the
Buyer.
Section 11.5. AGENCY.
(a) Each of the Stockholders does hereby appoint by execution
and delivery of this Agreement, irrevocably and unconditionally, ▇▇.
▇▇▇▇▇▇▇▇ Arena and ▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, collectively, as their agent and
attorney-in-fact to take any and all action on such Stockholder's behalf in
connection with this Agreement and the transactions contemplated hereby,
which appointment is irrevocable and coupled with an interest, with full
power and authority (including the power of substitution), except as
otherwise provided in this Agreement, in the name of and for and on behalf
of such Stockholder, or in his, her or its own name as representative of
all such Stockholders (acting in such capacity, the "REPRESENTATIVES"), to
take all actions required or permitted to be taken by any Stockholder
pursuant to this Agreement (collectively, "STOCKHOLDER ACTIONS"),
including, but not limited to, executing, giving and receiving
certificates, accounting, reports, notices, consents and approvals. Each of
the Stockholders hereby agrees that service of any process, summons, notice
or document by U.S. registered mail to the Representatives shall be
effective service of process for any action, suit or proceeding with
respect to any Claim by the Buyer under SECTION 10.2. The authority
conferred under this SECTION 11.5 shall be an agency coupled with an
interest, and all authority conferred hereby is irrevocable and not subject
to termination by the Stockholders or any of them, or by operation of law,
whether by death or incapacity of any Stockholder, the termination of any
trust or estate or the occurrence of any other event; it being understood
and agreed that the Representatives, acting in such agency capacity, shall
be the only Persons who shall have authority to act on behalf of the
appointing Stockholder and no other Persons (including the appointing
Stockholder) shall have any right to take, consent to, approve or otherwise
participate in any Stockholder Action, without the consent of the
Representatives. If any appointing Stockholder should
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die or become incapacitated, if any trust or estate should terminate or if
any other such event should occur, any action taken by the Representatives
pursuant to this SECTION 11.5 shall be as valid as if such death or
incapacity, termination or other event had not occurred, regardless of
whether or not the Representatives, the Company, the Stockholders or the
Buyer shall have received notice of such death, incapacity, termination or
other event. Any notice given to the Representatives pursuant to this
Agreement or the other agreements referred to herein, shall constitute
effective notice to all Stockholders, and any other party to the respective
agreement or any other Person may rely on any notice, consent, approval,
election or other communication received from the Representatives as if
such notice, consent, approval, election or other communication had been
received from all Stockholders.
(b) The Stockholders represent and covenant (i) that the
Representatives have been appointed as their agent and attorney-in-fact to
take any and all action on their behalf in connection with this Agreement
and the transactions contemplated hereby, (ii) that the Representatives
have been appointed by the Stockholders as their agent for the purpose of
collecting, disbursing and otherwise dealing with the sums of cash and
other consideration payable to the Stockholders pursuant to this Agreement,
(c) that any decision of the Representatives (or any agent designated by
the Representatives) with respect to any matter on behalf of a Stockholder
shall be binding on such Stockholder (including, without limitation, the
determination of the fair market value of the Securities) and (d) any
payment of an amount or other delivery made by the Company to the
Representatives on behalf of the Stockholders shall for all purposes
satisfy such party's obligation to make such payment to such Stockholder.
With respect to all matters relating to the Stockholders arising hereunder,
the Buyer shall be required only to deal with the Representatives. The
Representatives will act by unanimous decision of the Representatives.
Section 11.6. ENTIRE AGREEMENT. Except as otherwise expressly set forth
herein, this Agreement embodies the complete agreement and understanding among
the parties hereto with respect to the subject matter hereof and supersedes and
preempts any prior understandings, agreements or representations by or among the
parties, written or oral, which may have related to the subject matter hereof in
any way. Furthermore, notwithstanding anything to the contrary contained herein
or in that certain letter agreement, dated April 2, 2003, by and between One
Equity Partners LLC and Medex, Inc., in the event that any provision of the
April 2, 2003 letter agreement conflicts with any term or provision contained
herein, the terms and provisions contained in this Agreement shall control and
prevail among the parties hereto.
Section 11.7. SEVERABILITY. Whenever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be invalid,
illegal or unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability shall not affect
the validity, legality or enforceability of any other provision of this
Agreement in such jurisdiction or affect the validity, legality or
enforceability of any provision in any other jurisdiction, but this Agreement
shall be reformed, construed and enforced in such jurisdiction as if such
invalid, illegal or unenforceable provision had never been contained herein.
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Section 11.8. NO STRICT CONSTRUCTION. The language used in this Agreement
shall be deemed to be the language chosen by the parties hereto to express their
mutual intent, and no rule of strict construction will be applied against any
party.
Section 11.9. EXPENSES. Fees and expenses incurred by the parties hereto
in connection with the negotiation of this Agreement, the performance of the
respective obligations hereunder and the consummation of the transactions
contemplated herein shall be paid by the Company; PROVIDED, HOWEVER, if the
Closing does not occur, the Buyer and the Company shall bear their own expenses
relating to the negotiation and due diligence relating to this Agreement and the
Buyer and the Company shall pay its respective portion of all fees and expenses,
including, without limitation, any regulatory filing fees (including any
Anti-Trust Filing Fees), relating to the negotiation of (x) the Purchase
Agreement and the other transaction documents related thereto and (y) the New
Debt Financings and the transaction documents related thereto, in each case as
determined by the Buyer's expected PRO RATA ownership of the Company Common
Stock as though the Closing contemplated hereby had occurred.
Section 11.10. PRESS RELEASE AND ANNOUNCEMENTS. No press release related to
this Agreement or the transactions contemplated therein, or other announcement
to the Employees, independent contractors, suppliers, customers or distributors
of the Company, will be issued without the joint approval of the Company and the
Buyer, except as required by law.
Section 11.11. GOVERNING LAW. All issues and questions concerning the
relative rights and obligations of the Company and its stockholders, or the
construction, validity, enforcement and interpretation of this Agreement and the
exhibits and schedules hereto, shall be governed by, and construed in accordance
with, the laws of the State of
Ohio, without giving effect to any choice of law
or conflict of law rules or provisions (whether of the State of
Ohio or any
other jurisdiction) that would cause the application of the laws of any
jurisdiction other than the State of
Ohio.
Section 11.12. MUTUAL WAIVER OF JURY TRIAL. Each of the parties hereto
hereby irrevocably waives all right to trial by jury in any action or
counterclaim arising out of or relating to this Agreement.
Section 11.13. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which,
together, shall constitute one and the same instrument.
Section 11.14. HEADINGS. The headings of the various Sections and Articles
of this Agreement have been inserted only for convenience and shall not be
deemed to modify, explain, enlarge or restrict any of the provisions of this
Agreement.
Section 11.15. U.S. DOLLARS. All amounts expressed in this Agreement and
all payments required by this Agreement are in United States dollars.
Section 11.16. NO RELIANCE BY BUYER; OWN DUE DILIGENCE. The Buyer is
relying on its own investigation and valuation of the Company and its
Subsidiaries in effecting the transactions covered by this Agreement.
- 47 -
Section 11.17. FORWARD LOOKING STATEMENTS. (a) In connection with the
Buyer's investigation of the Company and its Subsidiaries, the Buyer has
received from the Company various forward-looking statements regarding the
Company and its Subsidiaries (including the estimates, assumptions, projections,
forecasts and plans furnished to it) (the "FORWARD-LOOKING STATEMENTS"). The
Buyer acknowledges and agrees (i) there are inherent uncertainties inherent in
attempting to make the Forward-Looking Statements; (ii) the Buyer is familiar
with such uncertainties; (iii) the Buyer is taking full responsibility for
making its own investigation, examination and evaluation of the Company and its
Subsidiaries and has employed outside professionals to assist it with the
foregoing; (iv) the Buyer is taking full responsibility for making its own
evaluation of the adequacy and accuracy of all Forward-Looking Statements; (v)
it is not relying on any Forward-Looking Statement in any manner whatsoever, and
(vi) with respect to the foregoing, the Buyer shall have no claim against the
Company or the Stockholders with respect thereto.
(b) The Company and the Stockholders make no representation or
warranty with respect to the reasonableness of the assumptions underlying
any Forward-Looking Statement.
(c) The Company and the Stockholders make no representation or
warranty with respect to any Forward-Looking Statement made (a) in any due
diligence information provided to the Buyer, (b) in connection with the
Buyer's discussions with the Stockholders and the Company and its
Subsidiaries, (c) in negotiations leading to this Agreement, or (d) in any
other circumstance.
Section 11.18. DEFINITION OF KNOWLEDGE. "To the Company's knowledge", "to
the Stockholders' knowledge" or other references to the knowledge or awareness
of the Company or the Stockholders mean the actual knowledge of the Executive
Stockholders and ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ (with respect to ▇▇. ▇▇▇▇▇▇▇▇▇, actual
knowledge solely as it relates to FDA regulatory and quality assurance matters).
[signature page follows]
- 48 -
IN WITNESS WHEREOF, the Parties have executed this Agreement as of
the date and year first above written.
MEDVEST HOLDINGS CORPORATION
By: /s/ ▇▇▇▇▇▇▇▇ ▇. Arena
------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. Arena
Its: President
OEP MEDVEST LLC
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Its: Manager
/s/ ▇▇▇▇▇▇▇▇ ▇. Arena
---------------------------------
▇▇▇▇▇▇▇▇ ▇. Arena
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
---------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
/s/ ▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
---------------------------------
▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
---------------------------------
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
---------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇
---------------------------------
▇▇▇▇▇▇▇▇ ▇▇▇▇
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
---------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇▇
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/s/ ▇▇▇▇▇ ▇▇▇▇▇
---------------------------------
▇▇▇▇▇ ▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
---------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
/s/ ▇▇▇▇ ▇▇▇▇▇▇▇
---------------------------------
▇▇▇▇ ▇▇▇▇▇▇▇
/s/ A. ▇▇▇▇ ▇▇▇▇▇▇▇
---------------------------------
A. ▇▇▇▇ ▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
---------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
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