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EXHIBIT 2(d)
ASSET SALE AGREEMENT
BY AND BETWEEN
LUMEX, INC.,
MUL ACQUISITION CORP. I,
MUL ACQUISITION CORP. II
AND
▇▇▇▇▇ ENTERPRISES, INC.
Dated as of March 13, 1996
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Table of Contents
Page
ARTICLE I.
ASSETS TO BE ACQUIRED . . . . . . . . . . . 2
1.1. Acquisition and Transfer of Assets . . . . . . . . . . . 2
1.2. Excluded Assets . . . . . . . . . . . . . . . . . . . . . 4
1.3. Assumed Liabilities . . . . . . . . . . . . . . . . . . . 5
1.4. Excluded Liabilities . . . . . . . . . . . . . . . . . . 6
ARTICLE II.
PURCHASE PRICE . . . . . . . . . . . . . 8
2.1. Purchase Price and Payment . . . . . . . . . . . . . . . 8
2.2. Post-Closing Purchase Price Adjustment . . . . . . . . . 8
2.3. Allocation of Purchase Price . . . . . . . . . . . . . . 10
ARTICLE III.
THE CLOSING . . . . . . . . . . . . . . 11
3.1. Closing Date . . . . . . . . . . . . . . . . . . . . . . 11
3.2. Proceedings at Closing . . . . . . . . . . . . . . . . . 11
3.3. Deliveries by the Seller to the Purchasers . . . . . . . 11
3.4. Deliveries by the Purchasers to the Seller . . . . . . . 12
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES OF THE SELLER . . . . . . . . . . . 13
4.1. Organization and Good Standing . . . . . . . . . . . . . 13
4.2. Authorization of Agreement . . . . . . . . . . . . . . . 13
4.3. Title to Assets other than Real Property . . . . . . . . 14
4.4. Title to Real Property . . . . . . . . . . . . . . . . . 15
4.5. Consents . . . . . . . . . . . . . . . . . . . . . . . . 16
4.6. Financial Statements . . . . . . . . . . . . . . . . . . 16
4.7. Absence of Certain Developments . . . . . . . . . . . . . 16
4.8. Contracts . . . . . . . . . . . . . . . . . . . . . . . . 18
4.9. Intangible Assets . . . . . . . . . . . . . . . . . . . . 19
4.10. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . 21
4.11. Employees and Employee Benefits . . . . . . . . . . . . . 21
(i)
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Page
4.12. Litigation . . . . . . . . . . . . . . . . . . . . . . . 24
4.13. Compliance with Law . . . . . . . . . . . . . . . . . . . 24
4.14. Assets Necessary to Conduct Business . . . . . . . . . . 24
4.15. Environmental Matters . . . . . . . . . . . . . . . . . . 25
4.16. Brokers . . . . . . . . . . . . . . . . . . . . . . . . . 27
4.17. Products Liability of the Business . . . . . . . . . . . 27
4.18. Safe Medical Devices Act . . . . . . . . . . . . . . . . 27
4.19. Absence of Questionable Payments . . . . . . . . . . . . 28
4.20. Disclosure . . . . . . . . . . . . . . . . . . . . . . . 28
4.21. Compliance with the Immigration Reform and Control Act . 28
4.22. Corporate Expenses . . . . . . . . . . . . . . . . . . . 29
ARTICLE V.
REPRESENTATIONS AND WARRANTIES OF THE
PURCHASERS AND PARENT . . . . . . . . . . . . 29
5.1. Organization and Good Standing . . . . . . . . . . . . . 29
5.2. Authorization of Agreement . . . . . . . . . . . . . . . 29
5.3. Consents . . . . . . . . . . . . . . . . . . . . . . . . 30
5.4. Availability of Funds . . . . . . . . . . . . . . . . . . 30
5.5. Litigation . . . . . . . . . . . . . . . . . . . . . . . 31
5.6. Brokers . . . . . . . . . . . . . . . . . . . . . . . . . 31
ARTICLE VI.
COVENANTS OF THE SELLER . . . . . . . . . . . 31
6.1. Cooperation . . . . . . . . . . . . . . . . . . . . . . . 31
6.2. Access to Documents; Opportunity to Ask Questions . . . . 31
6.3. Conduct of Business . . . . . . . . . . . . . . . . . . . 32
6.4. Consents and Conditions; Assignment of Assets . . . . . . 34
6.5. HSR Act Filings . . . . . . . . . . . . . . . . . . . . . 34
6.6. Additional Reports . . . . . . . . . . . . . . . . . . . 34
6.7. Air Bed Contract . . . . . . . . . . . . . . . . . . . . 34
6.8. Other Transactions . . . . . . . . . . . . . . . . . . . 34
ARTICLE VII.
COVENANTS OF THE PURCHASERS . . . . . . . . . . 35
7.1. Cooperation . . . . . . . . . . . . . . . . . . . . . . . 35
7.2. Confidentiality 35
7.3. Consents and Conditions . . . . . . . . . . . . . . . . . 35
(ii)
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Page
7.4. HSR Act Filings; Compliance with Antitrust and
Competition Laws . . . . . . . . . . . . . . . . . . . . 35
7.5. Permits, Bonds and Guarantees . . . . . . . . . . . . . . 36
ARTICLE VIII.
COVENANTS RELATING TO EMPLOYMENT AND
EMPLOYEE MATTERS . . . . . . . . . . . . . 36
8.1. Offer of Employment . . . . . . . . . . . . . . . . . . . 36
8.2. Collective Bargaining and Other Agreements . . . . . . . 37
8.3. Employee Benefit Plans . . . . . . . . . . . . . . . . . 37
8.4. Termination Obligations . . . . . . . . . . . . . . . . . 37
8.5. Indemnification . . . . . . . . . . . . . . . . . . . . . 37
8.6 COBRA Coverage . . . . . . . . . . . . . . . . . . . . . 38
ARTICLE IX.
CONDITIONS PRECEDENT TO THE PURCHASERS' OBLIGATIONS . . . . . . . . 38
9.1. Representations, Warranties and Covenants . . . . . . . . 39
9.2. HSR Act . . . . . . . . . . . . . . . . . . . . . . . . . 39
9.3. No Prohibition . . . . . . . . . . . . . . . . . . . . . 39
9.4. Opinion of the Seller's Counsel . . . . . . . . . . . . . 39
9.5. Delivery of Documents . . . . . . . . . . . . . . . . . . 39
9.6. Consents; Permits . . . . . . . . . . . . . . . . . . . . 40
ARTICLE X.
CONDITIONS PRECEDENT TO THE SELLER'S OBLIGATIONS . . . . . . . . . 40
10.1. Representations, Warranties and Covenants . . . . . . . . 40
10.2. HSR Act . . . . . . . . . . . . . . . . . . . . . . . . . 41
10.3. No Prohibition . . . . . . . . . . . . . . . . . . . . . 41
10.4. Opinion of the Purchasers' Counsel . . . . . . . . . . . 41
10.5. Delivery of Documents . . . . . . . . . . . . . . . . . . 41
10.6. Consents; Permits . . . . . . . . . . . . . . . . . . . . 41
ARTICLE XI.
ADDITIONAL POST-CLOSING COVENANTS . . . . . . . . 41
11.1. Further Assurances . . . . . . . . . . . . . . . . . . . 41
11.2. Public Announcements . . . . . . . . . . . . . . . . . . 43
(iii)
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Page
11.3. Joint Post-Closing Covenant of the Seller and the
Purchasers . . . . . . . . . . . . . . . . . . . . . . . 43
11.4. Books and Records; Personnel . . . . . . . . . . . . . . 43
11.5. Solicitation of Employees . . . . . . . . . . . . . . . . 44
11.6. Corporate Name . . . . . . . . . . . . . . . . . . . . . 44
11.7. Maintenance of Insurance . . . . . . . . . . . . . . . . 45
ARTICLE XII.
GOVERNMENT CONTRACTS . . . . . . . . . . . . 45
12.1. Government Contracts . . . . . . . . . . . . . . . . . . 45
12.2. Performance Under Nonassigned Contracts . . . . . . . . . 45
12.3. Assignment After Closing . . . . . . . . . . . . . . . . 46
ARTICLE XIII.
INDEMNIFICATION AND RELATED MATTERS . . . . . . . . 46
13.1. Indemnification by the Seller . . . . . . . . . . . . . . 46
13.2. Indemnification by the Purchasers . . . . . . . . . . . . 47
13.3. Determination of Damages and Related Matters . . . . . . 48
13.4. Limitation on Indemnification Liabilities . . . . . . . . 48
13.5. Survival of Representations, Warranties and Covenants . . 49
13.6. Notice of Indemnification . . . . . . . . . . . . . . . . 49
13.7. Defense of Third Party Claims . . . . . . . . . . . . . . 49
13.8. Exclusive Remedy . . . . . . . . . . . . . . . . . . . . 50
ARTICLE XIV.
TERMINATION . . . . . . . . . . . . . . 51
14.1. Termination . . . . . . . . . . . . . . . . . . . . . . . 51
14.2. Liabilities After Termination . . . . . . . . . . . . . . 51
ARTICLE XV.
MISCELLANEOUS . . . . . . . . . . . . . 52
15.1. Definitions . . . . . . . . . . . . . . . . . . . . . . . 52
15.2. Knowledge 59
15.3. Prorations . . . . . . . . . . . . . . . . . . . . . . . 59
15.4. Waiver of Compliance with Bulk Transfer Laws . . . . . . 60
15.5. Entire Agreement . . . . . . . . . . . . . . . . . . . . 60
(iv)
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Page
15.6. Governing Law . . . . . . . . . . . . . . . . . . . . . . 60
15.7. Transfer Taxes . . . . . . . . . . . . . . . . . . . . . 60
15.8. Expenses . . . . . . . . . . . . . . . . . . . . . . . . 61
15.9. Table of Contents and Headings . . . . . . . . . . . . . 61
15.10. Notices . . . . . . . . . . . . . . . . . . . . . . . . . 61
15.11. Severability . . . . . . . . . . . . . . . . . . . . . . 62
15.12. Binding Effect; No Assignment . . . . . . . . . . . . . . 62
15.13. Amendments . . . . . . . . . . . . . . . . . . . . . . . 63
15.14. Guarantee . . . . . . . . . . . . . . . . . . . . . . . . 63
15.15. Counterparts . . . . . . . . . . . . . . . . . . . . . . 63
(v)
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Exhibits and Schedules
Schedule 1.1(d) --Real Property
Schedule 1.1(e) --Intellectual Property
Schedule 1.1(f) --Permits
Schedule 1.1(g) --Contracts
Schedule 1.2(d) --Excluded Contracts
Schedule 1.2(k) --Other Excluded Assets
Schedule 1.3(b) --Warranty Obligations
Schedule 2.3(a) --Exceptions to GAAP
Schedule 4.4(c) --Title to Real Property
Schedule 4.5 --Consents
Schedule 4.6 --Financial Statements
Schedule 4.7 -- Absence of Certain Business Developments
Schedule 4.8(a) --Breaches or Termination of Material
Contracts
Schedule 4.8(b) --Distributors
Schedule 4.9 --Intangible Property
Schedule 4.11(a) --Employee Plans
Schedule 4.11(f) -- Retiree Welfare Benefits
Schedule 4.11(h) --Employee Matters
Schedule 4.11(i) --Collective Bargaining Matters
Schedule 4.11(j) --Notice of Termination
Schedule 4.12 --Litigation
Schedule 4.13 --Compliance with Law
Schedule 4.14 --Assets Necessary to Conduct Business
Schedule 4.15 --Environmental Matters
Schedule 4.15(h) --Underground Tanks
Schedule 4.17 --Products Liability
Schedule 4.18 --Safe Medical Devices Act
Schedule 4.22 -- Corporate Expenses
Schedule 8.2 --Collective Bargaining and Other
Agreements
Schedule 9.6 --Consents; Permits
Schedule 10.6 --Consents; Permits
Schedule 15.1(a) -- Location
Schedule 15.1(b) -- Permitted Exceptions
Schedule 15.2 -- Knowledge
Exhibit A --Allocation of Purchase Price
Exhibit B -- Covenant Not to Compete
(vi)
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ASSET SALE AGREEMENT
ASSET SALE AGREEMENT (the "Agreement"), dated as of
March 13, 1996, by and between Lumex, Inc., a New York corporation
(the "Seller"), MUL Acquisition Corp. I, a Delaware corporation
("Purchaser I") and MUL Acquisition Corp. II, a Delaware
corporation ("Purchaser II") (Purchaser I and Purchaser II are
collectively referred to herein as the "Purchasers") and ▇▇▇▇▇
Enterprises, Inc., a Delaware corporation ("Parent").
W I T N E S S E T H :
WHEREAS, the Seller, through its Lumex division
(the "Division") and an affiliated leasing company, is and has been
engaged in the business of designing, manufacturing, marketing,
selling, leasing and distributing a wide variety of health care
products (the "Business"); and
WHEREAS, Purchaser I is a wholly owned subsidiary
of Parent and Purchaser II is a wholly owned subsidiary of
Purchaser I; and
WHEREAS, the Purchasers desire to purchase, and the
Seller desires to sell, all of the assets and properties of the
Division employed principally in the Business and, as part of such
purchase and sale, the Seller desires to assign, and Purchaser I
desires to assume, certain of the obligations and liabilities of
the Business, subject, in each case, to the exceptions, terms and
conditions set forth herein; and
WHEREAS, capitalized terms used herein are defined
in Section 15.1 hereof;
NOW, THEREFORE, in consideration of the premises
and the mutual representations, warranties, covenants and
agreements hereinafter set forth, and upon the terms and subject to
the conditions hereinafter set forth, the Purchasers and the Seller
hereby agree as follows:
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ARTICLE I.
ASSETS TO BE ACQUIRED
1.1. Acquisition and Transfer of Assets. For
the consideration hereinafter provided and upon the terms and
subject to the conditions hereinafter set forth, at the Closing the
Seller shall sell, assign, transfer, convey and deliver to the
Purchasers, and the Purchasers shall purchase, acquire and accept
from the Seller, all of the Seller's right, title and interest in
and to the Business, including, without limitation, in and to all
of the assets, properties, rights, contracts and claims, employed
principally in the Business (except as otherwise specifically set
forth in Section 1.2 hereof), wherever located, whether tangible or
intangible, as the same shall exist as of the Closing (such rights,
title and interest in and to all such assets, properties, rights,
contracts and claims, being collectively referred to herein as the
"Assets"), except that Purchaser II shall only acquire the
Intangible Assets (as hereinafter defined) and Purchaser I shall
acquire all of the other Assets. The Assets shall include, without
limitation, all of the Seller's rights, title and interest in and
to the assets, properties, rights, contracts and claims described
in the following paragraphs (a) through (j) but in each case, only
to the extent principally used in, held for principal use in or
principally related to the Business:
(a) Tangible Personal Property. All
furnishings, furniture, fixtures, office supplies, displays,
vehicles, spare parts, tools, dies, machinery and equipment
and other tangible personal property owned by the Seller or
located on or in any of the Real Property and any and all
assignable warranties of third parties with respect thereto;
(b) Inventories and Supplies. All items
of inventory, including, without limitation, raw materials,
work-in- process, finished goods, supplies and samples owned
or held by the Seller or located on or in any of the Real
Property and any and all assignable warranties of third
parties with respect thereto ("Inventory");
(c) Accounts Receivable. All accounts
and lease receivables and all notes receivable (whether
short-term or long-term) from third parties and all
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deposits with third parties, together with any unpaid
interest accrued thereon from the respective obligors and any
security or collateral therefor, including recoverable
deposits (collectively, the "Accounts Receivable");
(d) Real Property. All of the Seller's
right, title and interest in the Owned Real Property and the
Leased Real Property, each set forth on Schedule 1.1(d)
hereto (collectively, the "Real Property"), including all
buildings located thereon, any of the fixtures attached
thereto and any Permits relating thereto and any assignable
warranties of third parties with respect thereto;
(e) Intellectual Property and Other
Intangible Property Rights. (i) All patents, copyrights,
tradenames, trademarks, service marks and names (registered
and unregistered), and registrations thereof and applications
therefor including, without limitation, those listed on
Schedule 1.1(e) hereto, (ii) trade secrets, know-how, and
manufacturing, engineering and other technical information,
and (iii) all computer programs, software and databases, in
each case, owned by the Seller or licensed (to the extent
assignable) to the Seller by third parties; provided, that
the Seller retains the right to use "Lumex" in its corporate
name until the time such name is changed in accordance with
Section 11.6 hereof (collectively, the "Intangible Assets");
(f) Permits. All Permits listed on
Schedule 1.1(f) hereto held by the Seller (to the extent
permitted by applicable Law to be transferred);
(g) Contracts. All rights and interests
of the Seller in, to and under the Contracts listed on
Schedule 1.1(g) hereto;
(h) Books and Records. Except as set
forth in Section 1.2(f) hereof, all books, records, mailing,
vendor or customer lists and all files, documents, ledgers,
correspondence and other data relating to the Seller's
operation of the Business;
(i) Therapeutic Support Systems Leases.
All leases and revenue sharing agreements and interest
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currently due and to become due thereon with respect to the
Therapeutic Support Systems product lines; and
(j) Goodwill. All goodwill relating to
the foregoing Assets and the Business.
1.2. Excluded Assets. Notwithstanding anything
to the contrary contained in Section 1.1 hereof, the Seller and the
Purchasers expressly understand and agree that the Seller is not
hereunder selling, assigning, transferring, conveying or delivering
to the Purchasers the following assets, properties, rights,
contracts and claims (collectively, the "Excluded Assets"):
(a) cash, bank accounts, certificates of
deposits, treasury bills, treasury notes and marketable
securities;
(b) any policy of insurance;
(c) except as set forth in Section
1.1(e) hereto, and to the extent not related to the Assets or
used in the Business, any of the Seller's right, title or
interest in or to any name, ▇▇▇▇, trade name or trademark,
either alone or in combination, and any and all goodwill
represented thereby and pertaining thereto;
(d) all Contracts set forth on Schedule
1.2(d) hereto and all Contracts that relate solely to the
Excluded Assets or the Excluded Liabilities;
(e) all prepaid charges, sums and fees
pertaining to any of the Excluded Assets or the Excluded
Liabilities;
(f) any books, records or other data
relating to the Seller's ownership or operation of the
Business (i) not regularly located on the premises of the
Business in the ordinary course of the operation thereof, or
(ii) required by applicable Law to be retained by the Seller;
(g) any of the Seller's right, title and
interest under any Contracts, agreements, licenses, Permits,
exemptions, franchises, variances, waivers, consents,
approvals or other authorizations or
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arrangements that are not transferrable without consent
(unless such consent has been obtained);
(h) any claims for refunds or rebates of
any previously paid taxes, levies or duties, including,
without limitation, customs duties;
(i) all deferred income tax assets;
(j) any assets, properties, rights,
contracts or claims relating to, arising out of or in
connection with the Seller's involvement with the operation
of the Seller's Cybex division; and
(k) the other assets listed on Schedule
1.2(k) hereto.
1.3. Assumed Liabilities. Subject to Section
1.4 hereof, as of the Closing, Purchaser I shall assume
responsibility for the performance and satisfaction of the
following, and only the following, liabilities of the Seller
relating to the Business (collectively, the "Assumed Liabilities"
and individually, an "Assumed Liability"):
(a) trade accounts payable (excluding
those accounts that have been paid by the Seller pursuant to
issued checks that remain outstanding) as of the Closing
Date;
(b) warranty obligations and normal
customer returns, adjustments or repairs relating to products
or services sold, performed or provided by the Seller in the
Business, including, without limitation, the warranty matters
that are described in Schedule 1.3(b) hereto;
(c) all product liability obligations to
the extent not Covered by the Seller's Insurance Policies
with respect to products or services sold, performed or
provided prior to Closing;
(d) all accrued but unpaid wages,
commissions, and vacation, holiday and sick pay obligations
(and any payroll taxes thereon) with respect to Employees;
(e) accrued liabilities that are in any
of the categories to be included on the Closing Balance
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Sheet under the heading "Accounts Payable & Accrued
Liabilities" (other than the liabilities described in clauses
(b) through (d) of this Section 1.3);
(f) all lease obligations for Real
Property arising on or after the Closing Date (except as
accrued on the Initial Balance Sheet) (as both landlord and
tenant) and the obligations associated with any warranties or
permits with respect to the Assets that are not Excluded
Assets;
(g) all of the Purchasers' liabilities
with respect to Employees and Transferred Employees as
described under Article VIII hereof;
(h) any and all current or future
Environmental Costs and Liabilities arising out of, related
to or in any way attributable to the current, historic or
future presence of Hazardous Substance contamination at, on,
under or in the facility at the Location, whether known or
unknown as of the Closing Date, including without limitation
any cleanup, response, removal or remedial action
obligations; and
(i) all debts, claims, liabilities,
obligations, damages and expenses (collectively, the
"Liabilities") of every kind and nature, whether known,
unknown, contingent, absolute, determined, indeterminable or
otherwise on the Closing Date, to the extent relating to or
arising from the operation of the Business in the ordinary
course.
1.4. Excluded Liabilities. The Purchasers
shall not assume or become liable for any debts, obligations,
commitments, or liabilities of the Seller, whether known or
unknown, absolute, contingent, or otherwise, whether accrued or
unaccrued and whether or not related to the Assets, except for the
Assumed Liabilities (the obligations and liabilities of the Seller
not assumed by the Purchasers are hereinafter referred to as the
"Excluded Liabilities") including without limitation, the
following:
(a) Any losses, costs, expenses,
damages, claims, demands and judgments of every kind and
nature (including the defense thereof and reasonable
attorneys' and other professional fees) related to, arising
out of, or in connection with the Seller's
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involvement with the operation of the Seller's Cybex
division;
(b) Any losses, costs, expenses, damages
claims, demands and judgments of every kind and nature
(including the defense thereof and reasonable attorneys' and
other professional fees) related to, arising out of, or in
connection with the Seller's failure to comply with the Bulk
Transfer Act or any similar statute as enacted in any
jurisdiction, domestic or foreign in which any of the Assets
are located;
(c) Any liabilities or obligations of
the Seller relating to the Excluded Assets;
(d) Any and all Taxes payable, whether
currently payable or a deferred payable obligation, by the
Seller with respect to the ownership of the Assets or the
operation of the Business on or prior to the Closing Date;
(e) Any and all current and future
Environmental Costs and Liabilities arising out of, related
to or in any way attributable to the ownership or operation
of facilities, premises or properties formerly, but no longer
as of the Closing Date, owned or operated by the Seller or
any affiliated company;
(f) Any of the Seller's obligations,
liabilities, costs or expenses described in Section 15.8
hereof and the matters referred to in paragraphs I and III of
Schedule 4.12;
(g) All events occurring prior to the
Closing Date that are Covered by the Seller's Insurance
Policies (including, without limitation, workers compensation
obligations with respect to occurrences prior to the Closing
Date and product liability obligations with respect to
products or services sold, performed or provided prior to the
Closing Date);
(h) Any indebtedness of the Seller for
borrowed money under a bank credit agreement or industrial
revenue bonds;
(i) Any liabilities or obligations of the
Seller with respect to (i) each of the agreements
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listed in Section 4.7(a)(viii) of Schedule 4.7, and (ii) the
change of control agreements between the Seller and each of
▇▇▇▇ ▇. ▇▇▇▇▇, dated as of January 20, 1992, and ▇▇▇▇ ▇▇▇▇,
dated as of June 1, 1992;
(j) Any and all liabilities and costs
related to or resulting from the compliance review of the
Seller to be conducted by the Office of Federal Contract
Compliance Programs, notification of which was received by
the Seller in a letter dated May 1, 1995;
(k) Any and all Liabilities with respect
to the Seller's obligations under Article VIII hereof; and
(l) Any and all liabilities, costs and
expenses associated with the removal, remediation, clean up
or other corrective action related to the asbestos in the tar
on the roof of the facility at the Location.
ARTICLE II.
PURCHASE PRICE
2.1. Purchase Price and Payment. The aggregate
purchase price to be paid by the Purchasers to the Seller for the
Assets and the Assumed Liabilities shall be $40,750,000 (the
"Purchase Price"), subject to adjustment as provided in Section 2.2
hereof. The portion of the Purchase Price allocable to the
Intangible Assets pursuant to Section 2.3 hereof shall be paid by
Purchaser II. The balance of the Purchase Price shall be paid by
Purchaser I. Payment of the Purchase Price shall be in U.S.
dollars, and shall be made no later than 11:30 a.m. (New York City
time) on the Closing Date by wire transfer of immediately available
funds to the account or accounts designated by the Seller.
2.2. Post-Closing Purchase Price Adjustment.
(a) As soon as practicable (but in no
event later than 60 days) following the Closing Date, the
Seller shall prepare and deliver to the Purchasers a
statement of net assets to be sold for the Business as of the
Closing Date (the "Closing Balance Sheet"), which shall
include a computation of the Preliminary Net Assets
Adjustment (as defined below). The Closing Balance Sheet
shall be prepared by the Seller in accordance with GAAP
except as set forth in Schedule
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2.3(a) and on a basis consistent with the Initial Balance
Sheet.
(b) The "Preliminary Net Assets
Adjustment" shall equal the amount of Net Assets reflected on
the Initial Balance Sheet minus the amount of Net Assets
reflected on the Closing Balance Sheet. As used herein, "Net
Assets" shall mean the total assets (excluding (i) any assets
that are Excluded Assets and (ii) with respect to the Closing
Balance Sheet only, the Excess Lancaster Inventory) of the
Business less the notes and accounts payable and accrued
liabilities (excluding any accrued liabilities that are
Excluded Liabilities), as reflected on the Initial Balance
Sheet or the Closing Balance Sheet, as the case may be.
(c) Following the Closing Date, the
Purchasers shall afford the Seller and its representatives
access to all books and records relating to the Business and
make available the assistance of any employees of the
Purchasers related to the Business, in each case as is
necessary to enable the Seller to prepare the Closing Balance
Sheet and to calculate the Preliminary Net Assets Adjustment.
(d) The Purchasers and its
representatives shall have a period of 20 days to review the
Closing Balance Sheet and the calculation of the Preliminary
Net Assets Adjustment following delivery of the Closing
Balance Sheet by the Seller. During such period, the Seller
shall afford the Purchasers and its representatives access to
any of its books, records and work papers necessary to enable
the Purchasers and its representatives to review the Closing
Balance Sheet and the calculation of the Preliminary Net
Assets Adjustment. The Purchasers may dispute any amounts
reflected in the Preliminary Net Assets Adjustment by giving
notice in writing to the Seller specifying each of the
disputed items and setting forth in reasonable detail the
basis for such dispute; provided, however, that the
Purchasers may only dispute the calculation of the
Preliminary Net Assets Adjustment to the extent that the
aggregate of all items in dispute would reduce the
Preliminary Net Assets Adjustment by more than $75,000 (in
which case the dispute shall be for all amounts). Failure by
the Purchasers to dispute the amounts reflected in the
Preliminary Net Assets Adjustment within 20 days of delivery
of the Closing Balance Sheet by the
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Seller shall be deemed an acquiescence therein by the
Purchasers. If within 30 days after delivery by the
Purchasers to the Seller of any notice of dispute, the
Purchasers and the Seller are unable to resolve all of such
disputed items, then any remaining items in dispute shall be
submitted to Coopers & ▇▇▇▇▇▇▇, or if Coopers & ▇▇▇▇▇▇▇ is
not available, then an independent nationally recognized
accounting firm other than Ernst & Young LLP (the
"Arbitrator"). The Arbitrator shall determine the remaining
disputed items and report to the Seller and the Purchasers
upon such items. The Arbitrator's decision shall be final,
conclusive and binding on all parties. The fees and
disbursements of the Arbitrator shall be borne equally by the
Purchasers and the Seller. The Preliminary Net Assets
Adjustment if undisputed or deemed undisputed or as
determined in accordance with the procedure outlined above
shall be the "Final Net Assets Adjustment."
(e) If the amount of the Final Net
Assets Adjustment is positive then the Purchase Price shall
be decreased by an amount equal to the Final Net Assets
Adjustment and the Seller shall promptly pay to the
appropriate Purchasers an amount equal to the Final Net
Assets Adjustment in cash.
(f) If the amount of the Final Net
Assets Adjustment is negative then the Purchase Price shall
be increased by such amount and the appropriate Purchasers
shall promptly pay to the Seller an amount equal to the Final
Net Assets Adjustment in cash.
2.3. Allocation of Purchase Price. The
Purchasers and the Seller hereby agree that the Purchase Price
shall be allocated among the Assets in accordance with Section 1060
of the Code in the manner set forth on Exhibit A hereto. Subject
to the requirements of any applicable Tax law, all Tax Returns and
reports filed by the Purchasers and the Seller shall be prepared
consistently with such allocation. In the event of any purchase
price adjustment hereunder, the Purchasers and the Seller agree to
adjust such allocation to reflect such purchase price adjustment
and to file consistently any tax returns and reports required as a
result of such purchase price adjustment.
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ARTICLE III.
THE CLOSING
3.1. Closing Date. The Closing shall take
place at the offices of Weil, Gotshal & ▇▇▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ at 10:00 A.M., on the fifth business day
after the conditions set forth in Articles IX and X hereof have
been satisfied or waived, or at such other place and at such other
time and date as may be mutually agreed upon by the Purchasers and
the Seller; provided that the Closing shall not take place prior to
April 1, 1996 without the consent of the Purchasers. The date of
the Closing is referred to in this Agreement as the "Closing Date."
3.2. Proceedings at Closing. All proceedings
to be taken and all documents to be executed and delivered by the
Seller in connection with the consummation of the transactions
contemplated hereby shall be reasonably satisfactory in form and
substance to the Purchasers and its counsel. All proceedings to be
taken and all documents to be executed and delivered by the
Purchasers in connection with the consummation of the transactions
contemplated hereby shall be reasonably satisfactory in form and
substance to the Seller and its counsel. All proceedings to be
taken and all documents to be executed and delivered by all parties
at the Closing shall be deemed to have been taken, executed and
delivered simultaneously, and no proceedings shall be deemed taken
nor any documents executed or delivered until all have been taken,
executed and delivered.
3.3. Deliveries by the Seller to the
Purchasers. At the Closing, the Seller shall deliver, or shall
cause to be delivered, to the Purchasers the following:
(a) executed assignments, patent
assignments, trademark assignments, bills of sale and/or
certificates of title and any other documents, dated the
Closing Date, transferring to the Purchasers all of the
Assets;
(b) an executed assignment and assumption
agreement, in form reasonably acceptable to the Seller and
the Purchasers (the "Assignment and Assumption Agreement");
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(c) an executed Covenant Not to Compete,
substantially in the form of Exhibit B hereto (the "Covenant
Not to Compete");
(d) the certificate referred to in
Section 9.1(c) hereof signed by a duly authorized officer of
the Seller;
(e) the opinion of counsel for the
Seller referred to in Section 9.4 hereof;
(f) a certificate, in a form
reasonably satisfactory to the Purchasers, of the Seller
stating under penalties of perjury the Seller's United States
taxpayer identification number and that the Seller is not a
foreign person within the meaning of Section 1445(b)(2) of
the Code;
(g) a receipt for the Purchase Price;
(h) copies of the consents and waivers
described in Section 9.6 hereof;
(i) copies of good standing certificates
from the appropriate governmental authorities in the
Commonwealth of Pennsylvania and the States of New York,
Tennessee and California;
(j) a bargain and sale deed (the "Deed")
for each Owned Real Property (or the statutory equivalent
thereof in the jurisdiction in which the Owned Real Property
is located);
(k) an Assignment and Assumption of
Leases (the "Lease Assignment") for the Leased Real Property
in form reasonably satisfactory to the Seller and Purchasers;
and
(l) an Assignment and Assumption of
Warranties and Permits (the "W&P Assignment") in form
reasonably satisfactory to the Seller and the Purchasers.
3.4. Deliveries by the Purchasers to the
Seller. At the Closing, the Purchasers shall deliver to the Seller
the following:
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(a) immediately available funds in the
amount of the Purchase Price by wire transfer as provided in
Section 2.1 hereof;
(b) the certificate referred to in
Section 10.1(c) hereof signed by a duly authorized officer of
the Purchasers;
(c) the opinion of counsel for the
Purchasers referred to in Section 10.4 hereof;
(d) the Assignment and Assumption
Agreement duly executed by an authorized officer of the
Purchasers;
(e) executed Lease Assignments and W&P
Assignments; and
(f) any and all transfer affidavits or
certificates required by applicable law in order to
effectuate the recording of the Deeds and the assignment of
the Leased Real Property.
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES OF THE SELLER
The Seller hereby represents and warrants to the
Purchasers and Parent as follows:
4.1. Organization and Good Standing. The
Seller is a corporation duly organized, validly existing and in
good standing under the laws of the State of New York and has all
requisite corporate power and authority to carry on its business as
it is now being conducted, and to execute, deliver and perform this
Agreement and to consummate the transactions contemplated hereby.
The Seller is duly qualified and is in good standing as a foreign
corporation in each of the jurisdictions where it owns or leases
property in connection with the Business, or employs employees with
respect to the Business except where the failure to be so qualified
would not have a Material Adverse Effect.
4.2. Authorization of Agreement. The Seller
has full corporate power and authority to execute and deliver this
Agreement and each other agreement, document, instru-
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ment or certificate contemplated by this Agreement or to be
executed by the Seller in connection with the consummation of the
transactions contemplated by this Agreement (all such other
agreements, documents, instruments and certificates required to be
executed by the Seller being hereinafter referred to, collectively,
as the "Seller Documents"), and to perform fully its obligations
hereunder and thereunder. The execution, delivery and performance
by the Seller of this Agreement and each of the Seller Documents
has been duly authorized by all necessary corporate action on the
part of the Seller. This Agreement has been, and each of the
Seller Documents will be at or prior to the Closing, duly executed
and delivered by the Seller, and (assuming the due authorization,
execution and delivery by the other parties hereto and thereto)
this Agreement constitutes, and the Seller Documents when so
executed and delivered will constitute, legal, valid and binding
obligations of the Seller, enforceable against the Seller in
accordance with their respective terms, subject to applicable
bankruptcy, insolvency, reorganization, moratorium and similar laws
affecting creditors' rights and remedies generally and subject, as
to enforceability, to general principles of equity (regardless of
whether enforcement is sought in a proceeding at law or in equity).
None of the execution and delivery by the Seller of this Agreement
and the Seller Documents, or the consummation of the transactions
contemplated hereby or thereby, or compliance by the Seller with
any of the provisions hereof or thereof will (i) conflict with, or
result in the breach of, any provision of the certificate of
incorporation or by-laws of the Seller, (ii) conflict with,
violate, result in the breach or termination of, or constitute a
default under any Contract or Order relating to the Business to
which the Seller is a party or by which it or any of the Assets is
bound or subject, (iii) constitute a violation of any Law
applicable to the Seller, or (iv) result in the creation of any
Lien (other than any Lien in favor of the Purchasers) upon any of
the Assets, except, in each case, for violations, conflicts,
breaches or defaults which in the aggregate would not materially
hinder or impair the transactions contemplated hereby or have a
Material Adverse Effect.
4.3. Title to Assets other than Real Property.
(a) The Seller has good and valid title
to or, in the case of leased properties, a valid leasehold
interest in, all the Assets other than the Real Property,
including all of such Assets reflected on the
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Initial Balance Sheet (except Inventory disposed of in the
ordinary course of business after December 31, 1995), free
and clear of all Liens other than Permitted Exceptions. The
Seller owns, has valid leasehold interests in or valid
contractual rights to use, all of the Assets, tangible and
intangible, used by, or necessary for the conduct of the
Business.
(b) The machinery, tools, equipment and
other tangible physical assets included in the Assets are in
good working order, normal wear and tear excepted, are being
used or are useful in the Business at its present level of
activity and are in an operating condition sufficient to
conduct the Business as now being conducted.
4.4. Title to Real Property.
(a) The Seller owns title in fee simple
to the Owned Real Property free and clear of all Liens other
than Permitted Exceptions and, to the Seller's knowledge,
such title to the Owned Real Property is good and marketable,
other than with respect to the facility at the Location as it
relates to the Known Environmental Condition. The Owned Real
Property and the Leased Real Property identified on Schedule
1.1(d) constitute all real property or real property
interests principally used by the Seller in the conduct of
the Business.
(b) The Seller has received no notice of
any default from the landlord or lessor of any of the Leased
Real Property. The Seller has a valid leasehold interest in
all of the Leased Real Property subject to the terms and
conditions of the applicable leases relating thereto, free
and clear of all Liens other than Permitted Exceptions.
(c) Except as set forth on Schedule
4.4(c) hereto, to the Seller's knowledge, with respect to any
of the buildings, structures, improvements and fixtures used
in the Business, owned or leased by the Seller, except for
normal wear and tear, there are no material defects with
respect thereto which would impair the day-to-day use of any
such buildings, structures, improvements or fixtures as
currently used.
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(d) The Seller has in full force and
effect all Permits necessary to use or occupy the Real
Property.
4.5. Consents. No consent, waiver, approval,
or authorization of, or declaration or filing with, or notification
to, any Person or Governmental Body is required on the part of the
Seller in connection with the execution and delivery by the Seller
of this Agreement or the Seller Documents, or the compliance by the
Seller with any of the provisions hereof or thereof, except (i) as
set forth on Schedule 4.5 hereto, (ii) for compliance with the
applicable requirements of the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust
Improvements Act of 1976 and the rules and regulations promulgated
thereunder (the "HSR Act"), (iii) consents, waivers, approvals,
Orders or Permits, if any, which the Purchasers are required to
obtain and (iv) consents, waivers, approvals, Orders or Permits
whose failure to obtain would not in the aggregate have a Material
Adverse Effect.
4.6. Financial Statements. The Initial Balance
Sheet and the statement of sales and direct operating expenses of
the Business for the fiscal year ended December 31, 1995, copies of
which are attached hereto as Schedule 4.6 (collectively, the
"Financial Statements"), have been prepared in accordance with GAAP
except as set forth in the notes thereto and present fairly the
financial position and results of operations of the Business at the
date and for the period indicated. Accounts Receivable created
since December 31, 1995 have been accrued on the books of the
Business in the ordinary course of business consistent with past
practice and in accordance with GAAP. Since December 31, 1995, the
Inventory has been accrued on the books of the Business in the
ordinary course of business consistent with past practice and in
accordance with GAAP.
4.7. Absence of Certain Developments. (a)
Except as set forth on Schedule 4.7 hereto or as contemplated by
this Agreement, since January 1, 1995, the Seller has conducted the
Business only in the ordinary course and has not with respect to
the Business:
(i) mortgaged, pledged or subjected to lien,
restriction or any other Lien any of the property, businesses
or assets, tangible or intangible, of the Business, except
for Permitted Exceptions;
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(ii) with the exception of the business related
to Therapeutic Support Systems, sold, transferred, leased or
loaned to others or otherwise disposed of any of its assets
(or committed to do any of the foregoing), including the
payment of any loans owed to any affiliate, except for
inventory sold to customers in the ordinary course of
business and consistent with prior practice, or canceled,
waived, released or otherwise compromised any debt or claim,
or any right of significant value, except in the ordinary
course of the Business and consistent with prior practice;
(iii) suffered any damage or destruction
(whether or not covered by insurance) which has had or is
reasonably likely to have a Material Adverse Effect;
(iv) made or committed to make any capital
expenditures or capital additions or betterments with respect
to the Assets or the Business in excess of an aggregate of
$1,000,000;
(v) encountered any labor union organizing
activity with respect to non-union workers, had any actual
or, to the Seller's knowledge, threatened employee strikes,
or, to the Seller's knowledge, any material work stoppages,
slow-downs or lock-outs related to any labor union organizing
activity or any actual or, to the Seller's knowledge,
threatened employee strikes;
(vi) instituted any litigation, action or
proceeding before any court, governmental body or arbitration
tribunal relating to it or its property, except for
litigation, actions or proceedings instituted in the ordinary
course of the Business and consistent with prior practice;
(vii) acquired, or agreed to acquire, by merging
or consolidating with, or by purchasing a substantial equity
interest in or a substantial portion of the assets of, or by
any other manner, any business or any corporation,
partnership, association or other business organization or
division thereof; or
(viii) increased, or agreed or promised to
increase, the compensation of any officer, employee or agent
of the Seller in the Business, directly or
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indirectly, including by means of any bonus, pension plan,
profit sharing, deferred compensation, savings, insurance,
retirement, or any other employee benefit plan, except in the
ordinary course of the Business and consistent with prior
practice.
(b) Except as set forth on Schedule 4.7 hereto or
as contemplated by this Agreement, since January 1, 1996, the
Seller has conducted the Business only in the ordinary course and
has not with respect to the Business:
(i) incurred any obligation or liability,
absolute, accrued, contingent or otherwise, whether due or to
become due, except liabilities or obligations incurred in the
ordinary course of business and consistent with prior
practice;
(ii) acquired, or agreed to acquire, any assets
which are material, individually or in the aggregate to the
Business; or
(iii) increased promotional or advertising
expenditures except in the ordinary course of the Business
and consistent with prior practice or otherwise changed its
policies or practices with respect thereto in any material
respects.
4.8. Contracts.
(a) Except as set forth on Schedule
4.8(a) hereto, each of the Contracts included in the Assets
is in full force and effect, and, to the knowledge of the
Seller, there exists no breach of, violation of or default
under any of such Contracts by the Seller or any other party
to any of such Contracts or any event which, with notice or
lapse of time, or both, will create a breach or violation
thereof or default thereunder by the Seller or any other
party to any of such Contracts, except for any breaches,
violations or defaults which in the aggregate would not have
a Material Adverse Effect. Except as set forth in Schedule
4.8(a) hereto, there exists no actual or, to the knowledge of
the Seller, threatened termination, cancellation or
limitation of, or any amendment, modification or change to,
any Contract that was not made in the ordinary course of the
Business and that has had or is reasonably likely to have,
individually
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or in the aggregate with similar arrangements, a Material
Adverse Effect.
(b) Schedule 4.8(b) hereto contains a
true and correct list of all persons that are currently
directly authorized to distribute, sell or resell products of
the Business anywhere in the world. As to each distributor
so listed, Schedule 4.8(b) indicates the territory in which
such distributor is directly authorized by the Seller to
distribute such products within such territory or any part
thereof.
4.9. Intangible Assets.
(a) Attached Schedule 4.9 hereto sets
forth a complete and correct list of all patent, copyright
and trademark registrations and applications for any of them
included in the Intangible Assets, together with a complete
list of all written agreements containing licenses granted by
or to the Seller with respect to any of the Intangible
Assets. All such Intangible Assets reflected on Schedule 4.9
as owned by the Seller are owned by the Seller free and clear
of all liens and security interests, except as set forth on
Schedule 4.9. All such Intangible Assets reflected on
Schedule 4.9 used (but not owned) by the Seller under
license, lease or otherwise are used by the Seller pursuant
to terms of binding agreements. Except as set forth on
Schedule 4.9, the transactions contemplated by this Agreement
will not cause a breach or default under any license or
similar agreement relating to the Intangible Assets. The
Seller, with respect to the Business, is not currently in
receipt of any notice of violation of the rights of others in
any trademark, trade name, service ▇▇▇▇, copyright, patent,
trade secret, know-how or other intangible asset. To the
Seller's knowledge, the Seller has not disclosed any trade
secrets, know-how, inventions, or other confidential
technical information material to the operation of the
Business to any other party within the last two years except
in the ordinary course of business or in accordance with any
license, lease or similar agreement containing
confidentiality and non-disclosure provisions requiring such
other parties to keep the disclosed information confidential.
To the knowledge of the Seller, no party to whom the Seller
has disclosed such information has breached such obligation
of confidentiality.
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(b) Schedule 4.9 hereto contains a
complete and accurate list of the material computer software
and databases that are owned by the Seller and used in the
Business (the "Owned Software"). Except as set forth on
Schedule 4.9, the Seller has exclusive rights and title to
the Owned Software (including any intellectual property
rights therein), free and clear of all Liens.
(c) Schedule 4.9 hereto contains a
complete and accurate list of all material computer software,
databases and other intellectual property that is used by the
Seller under license in the operation of the Business (other
than commercially available over-the- counter "shrinkwrap"
software) (the "Licensed Software"). Schedule 4.9 also sets
forth a list of all license agreements pursuant to which the
Seller has obtained the right to use the Licensed Software.
Except as described on Schedule 4.9, the Seller has the right
and license to use, sublicense, modify and copy the Licensed
Software in accordance with the terms of its licenses. The
Seller is in full compliance with all material provisions of
any license, lease or other similar agreement pursuant to
which the Seller has rights to use any material Licensed
Software.
(d) The Owned Software and the Licensed
Software constitute all material software used principally in
relation to the Business (the "Company Software"). Schedule
4.9 hereto sets forth a list of all contract programmers,
independent contractors, nonemployee agents and persons or
other entities (other than employees of the Seller) who have
performed material computer programming services for the
Seller in connection with any of the Company Software. To
the knowledge of the Seller, no other person or entity is
infringing any intellectual property rights of the Seller
with respect to the Company Software.
(e) The Seller has ownership of, or
adequate licenses or other valid rights to use, all of the
Intangible Assets not described in subsections (a) through
(e) of this Section 4.9. The Seller's use of such Intangible
Assets does not conflict with, infringe upon, violate or
interfere with any intellectual property rights of any other
Person except for any conflicts, infringements, violations or
interferences which in the aggregate would not have a
Material Adverse Effect.
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4.10. Taxes.
(a) None of the Assets is tax-exempt use
property within the meaning of Section 168(h) of the Code.
None of the Assets is property that is or will be required to
be treated as being owned by another person pursuant to the
provisions of Section 168(f)(8) of the Internal Revenue Code
of 1954, as amended and in effect immediately prior to the
enactment of the Tax Reform Act of 1986.
(b) The Seller is not a foreign person
within the meaning of Section 1445(b)(2) of the Code.
(c) The Seller has not failed to file a
Tax Return with respect to Taxes or to pay any Taxes shown on
a Tax Return filed, the effect of which would result in the
Purchasers, as the purchasers of the Assets, to become liable
for such Taxes.
4.11. Employees and Employee Benefits.
(a) Identification of plans. Schedule
4.11(a) hereto contains a true and complete list of all the
following arrangements, agreements or plans which are
presently in effect and which cover any Employees, directors,
independent contractors or retired or terminated employees of
the Seller employed or engaged by the Seller in the Business
(collectively, the "Plan Employees"), or any spouses,
dependents, beneficiaries of any Plan Employees
("Beneficiaries"):
(i) Any employee benefit plan as
defined in Section 3(3) of the Employee Retirement Income
Security Act of 1974 ("ERISA") maintained by the Seller or
under which the Seller has any obligation;
(ii) Any other pension, profit sharing,
retirement, deferred compensation, stock purchase, stock
option, compensation, incentive, bonus, vacation, severance,
disability, hospitalization, medical, life insurance, or
other employee benefit plan, program or policy maintained by
the Seller or under which the Seller has any obligation; and
(iii) Any employment or severance
contract providing for insurance coverage, severance,
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termination or similar coverage and all written compensation
policies and practices maintained by the Seller.
The plans, programs, policies, or
arrangements described in subparagraph (i), (ii) or (iii) are
hereinafter collectively referred to as the "Employee Benefit
Plans."
(b) For each Employee Benefit Plan, the
Seller has furnished true and complete copies of the
following to the Purchasers: (i) the plan document or other
operative agreement; (ii) all determination letters (or
application for determination if such a letter has not been
received), rulings, opinion letters, information letters, or
advisory opinions issued by the Internal Revenue Service, the
Department of Labor or the Pension Benefit Guaranty
Corporation after December 31, 1989; (iii) Form 5500 annual
reports (including schedules thereto) prepared for any
Employee Benefit Plan with respect to the two most recent
plan years; and (iv) the most recent summary plan
descriptions (and any material modifications thereto) that
have been prepared for any Employee Benefit Plans.
(c) The Employee Benefit Plans and their
related trusts intended to qualify under Sections 401(a) and
501(a) of the Code, respectively, are so qualified and
administered in compliance therewith.
(d) No oral or written representation or
communication with respect to any aspect of the Employee
Benefit Plans has been made to Employees prior to the date
hereof which is not in accordance with the written or
otherwise preexisting terms and provisions of such plans.
(e) All contributions, premiums and
payments required to be made under the terms of any Employee
Benefit Plan (other than those relating to liabilities
assumed by the Purchasers pursuant to Article VIII) have been
made.
(f) Except as disclosed in Schedule
4.11(f) hereto, the Seller has neither maintained in the past
nor currently maintains an Employee Benefit Plan providing
welfare benefits (as defined in Section 3(1) of ERISA) to
Employees after retirement or other separation from service
except to the extent required
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under Part 6 of Title I of ERISA or Code Section 4980B. No
tax under Code Sections 4980B or 5000 has been incurred with
respect to any Employee Benefit Plan and no circumstance
exists which could give rise to such taxes.
(g) All Plan Employees are common law
employees.
(h) Employee matters. Schedule 4.11(h)
hereto contains a correct and complete list of (i) all Plan
Employees whose direct annual compensation exceeds $50,000
and (ii) a list of all other Plan Employees in each job
classification employed by the Seller in the Business.
Except as disclosed in Schedule 4.11(h), the employment of
all Plan Employees is terminable at will by the Seller
without any penalty or severance obligation of any kind on
the part of the Seller.
(i) Collective bargaining matters.
Except as and to the extent set forth in Schedule 4.11(i)
hereto within the last three years: (i) to the knowledge of
the Seller, no attempt to organize any group or all of the
Plan Employees has been made, proposed or threatened; (ii)
the Seller is not a party to any union agreement or
collective bargaining agreement with any labor organization
or employee association applicable to any of the Plan
Employees; (iii) the Seller has not been notified of any
pending or threatened investigations by the U.S. Department
of Labor, Wage and Hour Division, with respect to the Plan
Employees; (iv) the Seller has not been notified of any
pending or threatened labor strike, dispute, slowdown,
stoppage or lockout; (v) to the Seller's knowledge, no union
claims to represent any of the Plan Employees have been made;
and (vi) there is no material grievance against the Seller
with respect to the Business arising out of any collective
bargaining agreement or other grievance procedure.
(j) Notice concerning termination of
employment. Except as set forth in Schedule 4.11(j) hereto,
the Seller has not received any notice prior to the date of
this Agreement hereof that any of the officers or other
senior level personnel of the Seller in respect of the
Business, will terminate or contemplates terminating his or
her employment currently or at any time before or within 60
days after
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the Closing Date or will otherwise not be available to the
Purchasers, or not agree to employment by the Purchasers, on
the same terms and conditions as his or her current
employment by the Seller on the date hereof.
(k) WARN and layoff issues. Within the
twelve months prior to the Closing Date, the Seller has not
with respect to the Business effectuated (i) a "plant
closing," as defined in the Worker Adjustment and Retraining
Notification Act (the "WARN Act"); or (ii) a "mass layoff"
(as defined in the WARN Act); and the Seller has not engaged
in layoffs or employment terminations sufficient in number to
trigger application of any similar state or local Law.
4.12. Litigation. Except as set forth on
Schedule 4.12 hereto, there is no (i) outstanding Order against or
involving the Assets, the Business or the Seller with respect to
the Business, (ii) Legal Proceeding pending, or to the knowledge of
the Seller, threatened against or involving the Assets, the
Business or the Seller with respect to the Business, or (iii) to
the Seller's knowledge, investigation or audit pending or
threatened against or relating to the Assets, the Business or the
Seller with respect to the Business (collectively, "Proceedings"),
which are, individually or in the aggregate, reasonably likely to
have a Material Adverse Effect or would restrict, prohibit, prevent
or seek damages in connection with the consummation of the
transactions contemplated hereby.
4.13. Compliance with Law. Except as set forth
on Schedule 4.13 hereto, the Business is currently operating in
compliance with all applicable Laws, Orders and recorded
restrictive covenants other than non- compliances which in the
aggregate would not have a Material Adverse Effect. Except as set
forth on Schedule 4.13 hereto, the Seller has neither received, nor
knows of the issuance of, any notice of any such violation or
alleged violation.
4.14. Assets Necessary to Conduct Business.
Except as set forth on Schedule 4.14 hereto, the Assets include all
rights, properties, interests in properties and assets reasonably
necessary to permit the Purchasers to carry on the Business
substantially as presently conducted by the Seller (including,
without limitation, the business related to Therapeutic Support
Systems). No affiliate of the Seller holds any assets used in the
Business.
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4.15. Environmental Matters. To the Seller's
knowledge and except as set forth on Schedule 4.15 hereto and
except for the Known Environmental Condition:
(a) There is no Environmental Litigation
(or any Proceeding against any Person whose liability, or any
portion thereof, under any Environmental Laws has or may have
been retained or assumed contractually or by operation of law
by the Seller with respect to the Business) pending or
threatened against the Seller with respect to (i) the
ownership, use, condition or operation of the Business, the
Real Property or any other Asset, or (ii) any violation or
alleged violation of or liability or alleged liability under
any Environmental Law or any Order related to Environmental
Laws with respect to the Business, which could reasonably be
expected to result in the Business incurring material
Environmental Costs and Liabilities.
(b) With respect to the Business, the
operations of the Seller are in material compliance with (i)
Environmental Laws, or (ii) any Order related to
Environmental Laws, with respect to the ownership, use,
condition or operation of the Business, the Real Property or
any other Asset, except for instances of non-compliance which
could not reasonably be expected to result in the Business
incurring material Environmental Costs and Liabilities.
(c) There are no past or present actions,
activities, circumstances, conditions, events or incidents
that could reasonably be expected to form the basis for (i)
any Environmental Litigation against the Seller with respect
to the Business, the Real Property or any other Asset which
could reasonably be expected to result in the Business
incurring material Environmental Costs and Liabilities, or
(ii) any Proceeding against any Person whose liability (or
any portion thereof) under any Environmental Laws has or may
have been retained or assumed contractually or by operation
of law by the Seller with respect to the Business which could
reasonably be expected to result in the Business incurring
material Environmental Costs and Liabilities.
(d) Neither the Seller nor any of its
predecessors, current or former Subsidiaries or anyone
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known to the Seller has used any assets or premises of the
Businesses for the handling, treatment, storage (in excess of
90 days), or disposal of any Hazardous Substances, except in
material compliance with Environmental Laws.
(e) No release, discharge, spillage or
disposal of any Hazardous Substances has occurred or is
occurring at any of the Real Property (excluding the
Location) which could reasonably be expected to have a
Material Adverse Effect.
(f) No soil or water in or under any of
the Real Property (excluding the Location) is contaminated by
any Hazardous Substance which could reasonably be expected to
have a Material Adverse Effect.
(g) All waste containing any Hazardous
Substances generated, used, handled, stored, treated or
disposed of (directly or indirectly) in the operation of the
Business by the Seller, has been disposed of in compliance
with all applicable reporting requirements under any
Environmental Laws, except for instances of noncompliance
which could not reasonably be expected to result in the
Business incurring material Environmental Costs and
Liabilities.
(h) Schedule 4.15(h) lists all
underground tanks presently located at any of the Real
Property.
(i) No building or other improvement
included in the Assets contains any friable
asbestos-containing materials, the presence of which could
reasonably be expected to have a Material Adverse Effect.
(j) No polychlorinated biphenyls (PCB's)
are used or stored on or in any of the Real Property the
presence of which could reasonably be expected to have a
Material Adverse Effect.
(k) The Seller has made available to the
Purchasers all material environmental site assessments and
other environmental studies relating to the investigation of
the possibility of the presence or existence of contamination
from Hazardous Substances
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that are in the Seller's possession, custody or control with
respect to Business, the Assets or any of the Real Property.
4.16. Brokers. Other than ▇▇▇▇▇ ▇▇▇▇▇▇ Inc.
("▇▇▇▇▇ ▇▇▇▇▇▇"), no person has acted directly or indirectly as a
broker, finder or financial advisor for the Seller in connection
with the negotiations relating to or the transactions contemplated
by this Agreement and no Person other than ▇▇▇▇▇ ▇▇▇▇▇▇ is entitled
to any fee, commission or like payment in respect thereof based in
any way on any agreement, arrangement or understanding made by or
on behalf of the Seller. The Seller acknowledges that it is
responsible for the payment of the fees of ▇▇▇▇▇ ▇▇▇▇▇▇ in
connection with the transactions contemplated by this Agreement.
4.17. Products Liability of the Business. Except
as set forth on Schedule 4.17, the Seller has received no written
claim, and, to the knowledge of the Seller, no claim has been
threatened or alleged, that any line or category of products of the
Business manufactured, designed, sold or delivered by the Business
contains any general defect in manufacture or design or that any
product of the Business has failed in any manner that has resulted
in any personal injury (including death) or property damage, in
each case or in the aggregate, which would have a Material Adverse
Effect.
4.18. Safe Medical Devices Act. No products
manufactured, assembled, sold or distributed by the Business are
"medical devices" for the purposes of the United States Safe
Medical Devices Act (the "SMDA") or the Medical Device Amendments
of 1976. Except as set forth on Schedule 4.18, since January 1,
1992, the Seller has received no written notice of any report filed
under the SMDA or any similar state law from any purchaser or end
user of any product of the Business. Except as set forth on
Schedule 4.18, to the knowledge of the Seller, neither the United
States Food and Drug Administration (the "FDA") nor any similar
state agency (i) has commenced or is considering any investigation
or inquiry concerning any product of the Business or (ii) is
considering any rulemaking or other proceeding that would subject
any product of the Business to the SMDA or any similar state law or
to any requirement that the FDA or any state agency approve any
product of the Business as a condition of its sale in the manner
that such product is currently sold in the ordinary course of the
Business. Except as set forth on Schedule 4.18, to the knowledge
of
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the Seller, the products of the Business currently sold by the
Seller substantially conform to all applicable codes and standards
imposed by any United States federal or state governmental agency
and to accepted codes and standards relating to the manufacture,
distribution and sale of medical products in the United States
other than non-compliance which in the aggregate would not have a
Material Adverse Effect.
4.19. Absence of Questionable Payments. Neither
the Seller with respect to the Business nor any director, officer,
agent, employee or other Person acting on behalf of the Seller with
respect to the Business, has used, or authorized the use of, any
corporate or other funds for unlawful contributions, payments,
gifts, or entertainment, or made any unlawful expenditures relating
to political activity to government offices or others or
established or maintained any unlawful or unrecorded funds in
violation of any applicable laws, rules or regulations relating to
foreign trade practices. Neither the Seller with respect to the
Business nor any current director, officer, agent, employee or
other Person acting on behalf of the Seller with respect to the
Business, has accepted or received any unlawful contributions,
payments, gifts, or expenditures.
4.20. Disclosure. The Seller has made available
or caused to be made available to the Purchasers complete and
correct copies of all agreements, instruments and documents set
forth in the Schedules hereto or underlying a disclosure set forth
in the Schedules hereto.
4.21. Compliance with the Immigration Reform and
Control Act. The Seller with respect to the Business is in
compliance with and has not violated the terms and provisions of
the Immigration Reform and Control Act of 1986, or any related laws
promulgated thereunder (the "Immigration Laws") in any material
respects. With respect to each employee (as defined in Section
274a.1(f) of Title 8, Code of Federal Regulations) of the Business
for whom compliance with the Immigration Laws by an employer (as
defined in Section 274a.1(g) of Title 8, Code of Federal
Regulations) is required, the Seller shall supply upon the
Purchasers' request prior to the Closing Date, to the Purchasers
such employee's Form I-9 (Employment Eligibility Verification Form)
and all other records, documents or other papers required to be
retained with the Form I-9 by the employer pursuant to the
Immigration Laws. To the Seller's knowledge, the Seller with
respect to the Business has never been
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the subject of any inspection or investigation relating to its
compliance with or violation of the Immigration Laws, and it has
not been fined or otherwise penalized by reason of any failure to
comply with the Immigration Laws, and there is not any such
proceeding pending or, to the knowledge of the Seller, threatened.
4.22. Corporate Expenses. The expenses under
the heading "Lumex Division Related" in Schedule 4.22 represent all
of the corporate expenses of the Seller that were incremental and
necessary to operate the Business during the year ended December
31, 1995. Corporate expenses, such as officers' salaries,
independent audit fees and expenses relating to maintaining a
public company status are examples of the type of expenses that are
corporate overhead and not necessary to operate the Business.
ARTICLE V.
REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS AND PARENT
Each of the Purchasers and Parent hereby represents
and warrants to the Seller that:
5.1. Organization and Good Standing. Each of
the Purchasers and Parent is a corporation duly organized, validly
existing and in good standing under the laws of the State of
Delaware and has all requisite corporate power and authority to
carry on its business as it is now being conducted, and to execute,
deliver and perform this Agreement and to consummate the
transactions contemplated hereby.
5.2. Authorization of Agreement. Each of the
Purchasers and Parent has full corporate power and authority to
execute and deliver this Agreement and each other agreement,
document, instrument or certificate contemplated by this Agreement
or to be executed by the Purchasers or Parent in connection with
the consummation of the transactions contemplated by this Agreement
(all such other agreements, documents, instruments and certificates
required to be executed by the Purchasers or Parent being
hereinafter referred to, collectively, as the "Purchasers'
Documents") and to perform fully its obligations hereunder and
thereunder. The execution, delivery and performance by the
Purchasers or Parent of this Agreement and each Purchasers'
Document has been duly authorized by all necessary action on the
part of the Purchasers and/or Parent, as the case may
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be. This Agreement has been, and each of the Purchasers' Documents
will be at or prior to the Closing, duly executed and delivered by
the Purchasers and/or Parent and (assuming the due authorization,
execution and delivery by the other parties hereto and thereto)
this Agreement constitutes, and the Purchasers' Documents when so
executed and delivered will constitute, legal, valid and binding
obligations of the Purchasers and/or Parent, as the case may be,
enforceable against the Purchasers and/or Parent in accordance with
their respective terms, subject to applicable bankruptcy,
insolvency, reorganization, moratorium and similar laws affecting
creditors' rights and remedies generally and subject, as to
enforceability, to general principles of equity (regardless of
whether enforcement is sought in a proceeding at law or in equity).
None of the execution and delivery by the Purchasers or Parent of
this Agreement and the Purchasers' Documents, or the consummation
of the transactions contemplated hereby or thereby, or compliance
by the Purchasers or Parent with any of the provisions hereof or
thereof, will (i) conflict with, or result in the breach of, any
provision of the certificate of incorporation or by-laws of the
Purchasers or Parent, (ii) conflict with, violate, result in the
breach or termination of, or constitute a default under any
Contract or Order to which either of the Purchasers or Parent is a
party or by which it or any of its properties or assets is bound or
subject, or (iii) constitute a violation of any Law applicable to
the Purchasers or Parent, except, in each case, for violations,
conflicts, breaches or defaults which individually or in the
aggregate would not materially hinder or impair the transactions
contemplated hereby.
5.3. Consents. No consent, waiver, approval,
Order, Permit or authorization of, or declaration or filing with,
or notification to, any Person or Governmental Body is required on
the part of the Purchasers or Parent in connection with the
execution and delivery of this Agreement or the Purchasers'
Documents or the compliance by the Purchasers or Parent with any of
the provisions hereof or thereof, except (i) for compliance with
the HSR Act, (ii) consents, waivers, approvals, Orders or Permits,
if any, which the Seller is required to obtain pursuant to Section
4.5 hereof and (iii) any novations required in connection with the
Government Contracts.
5.4. Availability of Funds.The Purchasers have
available sufficient funds to enable them to consummate the
transactions contemplated by this Agreement.
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5.5. Litigation. There is no Legal Proceeding
pending or, to the knowledge of the Purchasers or Parent,
threatened, that seeks to enjoin or obtain damages in respect of
the consummation of the transactions contemplated by this Agreement
or that questions the validity of this Agreement, the Purchasers'
Documents or any action taken or to be taken by the Purchasers or
Parent in connection with the consummation of the transactions
contemplated hereby or thereby.
5.6. Brokers. No Person has acted directly or
indirectly as a broker, finder or financial advisor for the
Purchasers or Parent in connection with the negotiations relating
to or the transactions contemplated by this Agreement and no Person
is entitled to any fee or commission or like payment in respect
thereof based in any way on agreements, arrangements or
understandings made by or on behalf of the Purchasers or Parent.
ARTICLE VI.
COVENANTS OF THE SELLER
From and after the date hereof and until the
Closing, the Seller hereby covenants and agrees with the Purchasers
that:
6.1. Cooperation. The Seller shall use its
best efforts to cause the consummation of the transactions
contemplated hereby in accordance with the terms and conditions
hereof and shall take all commercially reasonable steps that are
within its powers to cause to be satisfied those of the conditions
precedent of the obligations of the Purchasers to consummate the
transactions contemplated by this Agreement that are dependent on
any act of the Seller.
6.2. Access to Documents; Opportunity to Ask
Questions. The Seller shall provide the Purchasers with such
information as the Purchasers from time to time reasonably may
request with respect to the Business, and shall permit the
Purchasers and any of the directors, officers, employees, counsel,
representatives, accountants and auditors (collectively, the
"Purchasers' Representatives") reasonable access, during normal
business hours and upon reasonable prior notice, to the properties,
corporate records and books of accounts of the Business, as the
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Purchasers from time to time reasonably may request; provided,
however, that the Seller shall not be obligated to provide the
Purchasers with any information the provision of which may be
prohibited by law or contractual obligation. No disclosure by the
Seller whatsoever during any investigation by the Purchasers shall
constitute an enlargement of or additional warranty or
representation of the Seller beyond those expressly set forth in
this Agreement. All information and access obtained by the
Purchasers in connection with the transactions contemplated by this
Agreement shall be subject to the terms and conditions of the
letter agreement relating to confidentiality, dated as of November
7, 1995, between the Seller and the Parent (the "Confidentiality
Agreement") which Confidentiality Agreement shall terminate on the
Closing Date.
6.3. Conduct of Business.
(a) Except as otherwise may be
contemplated by this Agreement or as the Purchasers otherwise
may consent to in writing (which consent shall not be
unreasonably withheld), the Seller shall cause the Business
to be operated in the ordinary course consistent with past
practice and use reasonable efforts consistent with past
practice to (i) preserve the present business operations,
organization and goodwill of the Business, (ii) keep
available the services of the present employees of the
Business, (iii) preserve the present relationships with
persons having business dealings with the Business, (iv)
maintain all of the assets and properties of the Business in
their current condition, normal wear and tear excepted, and
(v) maintain insurance in such amounts and of such kinds as
is comparable to that in effect on the date hereof (with
insurers of substantially the same or better financial
condition).
(b) Except as otherwise may be
contemplated by this Agreement, required by any of the
documents listed in the Schedules hereto or as the Purchasers
otherwise may consent to in writing (which consent shall not
be unreasonably withheld), the Seller shall not do any of the
following:
(i) (A) increase the rate of
compensation payable or to become payable to any of the
employees or agents of the Business other than in the
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ordinary course of business, (B) amend in any material
respect any bonus, stock option, stock purchase,
profit-sharing, deferred compensation, pension, retirement or
other similar plan or arrangement to or in respect of any
such employee or agent, other than in the ordinary course of
business and as may be required to maintain compliance with
ERISA and/or the Code or (C) enter into any new, or amend in
any material respect any existing, employment, severance or
consulting agreement, sales agency, or other Contract with
respect to the performance of personal services for the
Business, other than in the ordinary course of business and
as may be required to maintain compliance with ERISA and/or
the Code; provided, however, that the Seller may adopt a
severance or salary continuation plan in lieu of the Seller's
severance policy set forth in the Seller's Personnel Policies
and Procedures last revised October 1994, provided that such
plan does not (1) adversely affect the Seller's or the
Purchasers' obligations under Article VIII hereof prior to
such adoption or (2) provide benefits in excess of or expand
eligibility for benefits provided under any severance policy,
plan or arrangement existing on the date of this Agreement
providing similar benefits.
(ii) (A) incur or become subject to,
or agree to incur or become subject to, any material
obligation or liability (contingent or otherwise) relating to
the Business, except (x) normal trade or business obligations
(including Contracts) incurred in the ordinary course of
business and consistent with past practice and (y)
obligations under Contracts listed on any Schedule to this
Agreement, (B) sell, assign, transfer, convey, lease or
otherwise dispose of any of the Assets, other than inventory
of the Business, in the ordinary course of business, (C)
cancel or compromise any material debt or claim or waive or
release any material right relating to the Business or the
Assets, except for adjustments or settlements made in the
ordinary course of business consistent with past practice, or
(D) acquire any material assets relating to the Business
other than in the ordinary course of business.
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6.4. Consents and Conditions; Assignment of
Assets. Subject to Article XII hereof, the Seller shall use its
best efforts to obtain all approvals, consents or waivers from
Persons necessary to assign to the Purchasers all of the Seller's
interest in the Assets or any claim, right or benefit arising
thereunder or resulting therefrom (each, an "Interest") as soon as
practicable; provided, however, that in no event shall the Seller
be obligated to pay any consideration therefor to any third party
from whom such approval, consent or waiver is requested or release
any right, benefit or claim in order to obtain such approval,
consent or waiver.
6.5. HSR Act Filings. As promptly as
practicable after the execution of this Agreement (to the extent a
filing has not already been made), the Seller shall file any
reports or notifications that may be required to be filed under the
HSR Act and shall cooperate with the Purchasers in connection with
such filings or responses to requests for additional information.
6.6. Additional Reports. From the date hereof
through the Closing Date, the Seller will make available to the
Purchasers true and correct copies of all the internal management
and control reports (including aging of accounts receivables,
listings of accounts payable, and inventory control reports) and
financial statements related to the Business and furnished to
management of the Seller.
6.7. Air Bed Contract. The Seller agrees to
consult with the Purchasers with respect to negotiations of the
amendment to the First Amended and Restated Asset Purchase
Agreement, dated as of February 22, 1995, between Airbed
Corporation and Lumex, Inc., and shall not execute an amendment to
such contract without the prior written consent of the Purchasers,
which consent shall not be unreasonably withheld or delayed.
6.8. Other Transactions. Provided that the
Purchasers are not in default under this Agreement, the Seller will
not, and will direct its officers, directors, financial advisors,
accountants, agents, and counsel not to (i) solicit submissions of
proposals or offers from any Person other than the Purchasers
relating to the acquisition of all or any material part of the
Assets (an "Acquisition Proposal"), (ii) participate in any
discussions or negotiations or furnish any non-public information
regarding the Business to any Person other than the Purchasers or
the
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Purchasers' Representatives for the purpose of selling the Assets
other than in the ordinary course of business or encouraging or
facilitating an Acquisition Proposal by any Person other than the
Purchasers, or (iii) enter into any agreement or understanding,
that would have the effect of preventing the consummation of the
transactions contemplated by this Agreement.
ARTICLE VII.
COVENANTS OF THE PURCHASERS
From and after the date hereof, and until the
Closing Date, each of the Purchasers and Parent hereby covenants
and agrees with the Seller that:
7.1. Cooperation. Each of the Purchasers and
Parent shall use its best efforts to cause the consummation of the
transactions contemplated hereby in accordance with the terms and
conditions hereof and shall take all commercially reasonable steps
that are within its powers to cause to be satisfied those of the
conditions precedent to the obligations of the Seller to consummate
the transactions contemplated by this Agreement that are dependent
on any act of the Purchasers or Parent.
7.2. Confidentiality. The Purchasers and
Parent shall comply with the terms of the Confidentiality
Agreement.
7.3. Consents and Conditions. Subject to
Article XII hereof, the Purchasers and Parent shall use their best
efforts to obtain all approvals, consents or waivers from Persons
necessary to assign to the Purchasers all of the Seller's interest
in the Assets or any claim, right or benefit arising thereunder or
resulting therefrom as soon as practicable; provided, however, that
in no event shall the Purchasers or Parent be obligated to pay any
consideration therefor to the third party from whom such approval,
consent or waiver is requested or release any right, benefit or
claim in order to obtain such approval, consent or waiver.
7.4. HSR Act Filings; Compliance with Antitrust
and Competition Laws. As promptly as practicable after the
execution of this Agreement (to the extent a filing has not already
been made), the Purchasers and Parent shall file all reports and
notifications that may be required to be filed
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under the HSR Act and shall cooperate with the Seller in connection
with such filings or responses to requests for additional
information. The Purchasers and Parent shall use their best
efforts to resolve such objections, if any, as the Antitrust
Division of the Department of Justice, the Federal Trade
Commission, state antitrust enforcement authorities or competition
authorities of any other jurisdiction may assert under the
antitrust or competition laws with respect to the transaction
contemplated hereby; provided, however, that Purchasers shall not
be required to commit to and/or effect the sale or other
disposition of such of their assets owned already or acquired by
them pursuant hereto.
7.5. Permits, Bonds and Guarantees. The
Purchasers shall obtain as of the Closing all Permits required by
any Governmental Body to be obtained prior to the Closing with
respect to the operation of the Business or the ownership or
operation of the Assets without any guaranty or liability of the
Seller with respect thereto; provided, however, that, as provided
in Section 1.1 hereof, the Seller shall assign, transfer or convey
to the Purchasers at the Closing those Permits described in one or
more Schedules hereto that are held by the Seller principally in
connection with the Business and that can be assigned without
having to obtain the consent of any Governmental Body with respect
thereto or as to which any required consent has been obtained.
ARTICLE VIII.
COVENANTS RELATING TO EMPLOYMENT AND EMPLOYEE MATTERS
8.1. Offer of Employment.
(a) The Purchasers may offer employment
as of the Closing Date to some or all of the Employees and
upon such terms and conditions as the Purchasers shall
determine in their sole discretion (subject to the assumption
of agreements under Section 8.2 hereof). The Purchasers
shall be solely responsible for all compensation accruing or
to be paid on or after the Closing Date with respect to
Transferred Employees and for any compensation with respect
to which there are accruals on the Closing Balance Sheet.
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(b) The Seller shall provide to the
Purchasers a statement of all accrued entitlements for
Employees as of the Closing Date, including but not limited
to vacation days, wages and other compensation consistent
with the Benefit Arrangements.
8.2. Collective Bargaining and Other
Agreements. Except as set forth in Section 1.4(i), the Purchasers
agree to assume all of the rights and obligations of the Seller
under all collective bargaining agreements, employment agreements
or consulting agreements listed on Schedule 8.2 and which are
applicable to the Employees and in effect on the business day
immediately preceding the Closing Date.
8.3. Employee Benefit Plans.
(a) The Purchasers shall be liable for all claims
incurred on or after the Closing Date by any Transferred
Employee under any "employee welfare benefit plan" within the
meaning of Section 3(1) of ERISA (a "Welfare Plan").
(b) The Seller shall be liable for all claims under
any other Employee Benefits Plan that are not the liability
of the Purchasers under Sections 8.2, 8.3(a) or 8.4.
8.4. Termination Obligations. Except as set
forth in Section 1.4(i), the Purchasers shall be liable for all
payments that may be required to be made on or after the Closing
Date to any Employee who is not a Transferred Employee employed by
the Purchasers on substantially the same terms and conditions of
employment as with the Seller under any termination, severance or
similar plan, policy or arrangement of the Seller as a result of
the transactions contemplated herein or any other event involving
such Employees occurring on or after the Closing Date. The Seller
shall be liable for all payments required to be made to any
Transferred Employee on or before the Closing Date under any
termination, severance or similar plan, policy or arrangement of
the Seller.
8.5. Indemnification.
(a) Except as set forth in Section
1.4(i), the Purchasers shall indemnify the Seller from any
liability, loss, damage or expense the Seller may incur
(including reasonable attorneys' fees) with respect to
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any claims of Employees or Transferred Employees (i) arising
out of their employment with the Purchasers, (ii) under any
Law relating to the termination of such Employee's or
Transferred Employee's employment arising as a result of the
actions of the Purchasers on or after the Closing Date and
(iii) in connection with Liabilities assumed by the
Purchasers under this Article VIII.
(b) The Seller shall indemnify the
Purchasers from any liability, loss, damage or expense the
Purchasers may incur (including reasonable attorneys' fees)
with respect to any claims made or incurred prior to the
Closing Date under a Welfare Plan or based upon events,
actions or omissions occurring prior to the Closing Date.
(c) The Seller shall indemnify the
Purchasers from any liability, loss, damage or expense the
Purchasers may incur (including reasonable attorneys' fees)
as a result of claims (or any liens imposed as a result of
such claims) arising out of, resulting from or related to any
Employee Benefit Plan which is not the Purchasers' obligation
under Sections 8.2, 8.3(a) and 8.4, or any similar plan or
arrangement maintained or contributed to by the Seller (or
any entity or person aggregated with the Seller under
Sections 414(b),(c),(m) or (o) of the Code), whether or not
previously disclosed.
8.6 COBRA Coverage. The Purchasers shall be
responsible for complying with the requirements of Code Section
4980B and Part 6 of Title I of ERISA for Transferred Employees and
their beneficiaries having a "qualifying event" (as defined in Code
Section 4980B) on or after the Closing Date, and the Seller shall
be responsible for complying with such requirements for all other
Employees.
ARTICLE IX.
CONDITIONS PRECEDENT TO THE PURCHASERS' OBLIGATIONS
The obligation of the Purchasers to consummate the
purchase of the Assets and the assumption of the Assumed
Liabilities on the Closing Date is, at the option of the
Purchasers, subject to the satisfaction of the following
conditions:
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9.1. Representations, Warranties and Covenants.
(a) Each of the representations and
warranties of the Seller contained herein shall be true and
correct in all respects on and as of the Closing Date with
the same force and effect as though the same had been made on
and as of the Closing Date, it being understood that to the
extent that such representations and warranties were made as
of a specified date the same shall continue on the Closing
Date to be true and correct in all respects as of the
specified date (except, in each case, representations and
warranties that are not qualified by materiality shall be
true in all material respects).
(b) The Seller shall have performed and
complied in all respects with the covenants and provisions of
this Agreement required to be performed or complied with by
it at or prior to the Closing Date (except covenants that are
not qualified by materiality shall have been performed or
complied with in all material respects).
(c) The Purchasers shall have received a
certificate of the Seller, dated as of the Closing Date and
signed by an officer of the Seller, certifying as to the
fulfillment of the conditions set forth in this Section 9.1.
9.2. HSR Act. All applicable waiting periods
in respect of the transactions contemplated by this Agreement under
the HSR Act shall have expired.
9.3. No Prohibition. No Law or Order of any
court or administrative agency shall be in effect which prohibits
the Purchasers from consummating the transactions contemplated
hereby.
9.4. Opinion of the Seller's Counsel. The
Purchasers shall have received an opinion or opinions of counsel
for the Seller, dated the Closing Date in a form reasonably
acceptable to the Purchasers.
9.5. Delivery of Documents. The Seller shall
have executed and delivered to the Purchasers at the Closing bills
of sale, certificates of title, an assignment agreement, patent
assignments, trademark assignments and any
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other documents required to be delivered pursuant to Section 3.3
hereof.
9.6. Consents; Permits. The Seller shall have
obtained all third party or governmental consents, waivers,
approvals and authorizations listed on Schedule 9.6 hereto and the
Seller shall have delivered copies thereof to the Purchasers.
ARTICLE X.
CONDITIONS PRECEDENT TO THE SELLER'S OBLIGATIONS
The obligation of the Seller to consummate the
sale, transfer and assignment to the Purchasers of the Assets and
the assignment of the Assumed Liabilities on the Closing Date is,
at the option of the Seller, subject to the satisfaction of the
following conditions.
10.1. Representations, Warranties and Covenants.
(a) Each of the representations and
warranties of the Purchasers and Parent contained herein
shall be true and correct in all respects as of the Closing
Date with the same force and effect as though the same had
been made on and as of the Closing Date, it being understood
that to the extent that such representations and warranties
were made as of a specified date the same shall continue on
the Closing Date to be true and correct in all respects as of
the specified date (except, in each case, representations and
warranties that are not qualified by materiality shall be
true in all material respects).
(b) The Purchasers and Parent shall have
performed and complied in all respects with the covenants and
provisions in this Agreement required herein to be performed
or complied with by it at or prior to the Closing Date
(except covenants that are not qualified by materiality shall
have been performed or complied with in all material
respects).
(c) The Seller shall have received a
certificate of the Purchasers, dated as of the Closing Date
and signed by an officer of the Purchasers, certifying
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as to the fulfillment of the conditions set forth in this
Section 10.1.
10.2. HSR Act. All applicable waiting periods
in respect of the transactions contemplated by this Agreement under
the HSR Act shall have expired.
10.3. No Prohibition. No Law or Order of any
court or administrative agency shall be in effect which prohibits
the Seller from consummating the transactions contemplated hereby.
10.4. Opinion of the Purchasers' Counsel. The
Seller shall have received an opinion or opinions of counsel for
the Purchasers, dated the Closing Date in a form reasonably
acceptable to the Seller.
10.5. Delivery of Documents. The Purchasers
shall have executed and delivered to the Seller, at the Closing an
assumption agreement, and any other documents required to be
delivered pursuant to Section 3.4 hereof.
10.6. Consents; Permits. The Seller shall have
obtained all consents, waivers, approvals and authorizations listed
on Schedule 10.6 hereto.
ARTICLE XI.
ADDITIONAL POST-CLOSING COVENANTS
11.1. Further Assurances.
(a) From time to time after the Closing
Date, each of the Seller and the Purchasers shall, at its
sole cost and expense, at the reasonable request of the
Purchasers, execute and deliver such other and further
instruments of sale, assignment, assumption, transfer and
conveyance and take such other and further action as the
Purchasers may reasonably request in order to vest in the
Purchasers and put the Purchasers in possession of the Assets
and to transfer to the Purchasers any Contracts and rights of
the Seller relating to the Assets and assure to the
Purchasers the benefits thereof, and, at the reasonable
request of the Seller, to give effect to the Purchasers'
assumption of the Assumed Liabilities.
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(b) If, on the Closing Date, (i) the
Seller has not obtained any authorization, approval or
consent (a "Consent") required to transfer, assign or novate
(a "Transfer") any of the Seller's Interest in or to any of
the Assets after having used its best efforts to obtain such
Consent or an attempted Transfer of any of the Assets would
be ineffective or the failure to have such Consent would
adversely affect the Seller's ability to convey any such
Asset, and (ii) the conditions precedent to the Closing set
forth in Article X nevertheless have been satisfied, then
such Assets shall constitute "Deferred Acquired Assets" and
shall not be transferred to the Purchasers at the Closing.
After the Closing, (a) the Seller will (I) continue to use
commercially reasonable efforts to obtain the Consent and/or
to remove any other impediments to the Transfer of each
Deferred Acquired Asset and will Transfer each Deferred
Acquired Asset to the Purchasers within five business days
after the receipt of such Consent and/or removal of such
impediment and (II) until the Transfer with respect to any
Deferred Acquired Asset is accomplished, cooperate with the
Purchasers in any lawful arrangement that is not unduly
economically burdensome (including performance by the Seller
as agent) to provide that the Purchasers shall receive the
benefits of such Deferred Acquired Asset to the same extent
as if it were transferred to the Purchasers at Closing, (III)
until the Transfer with respect to any Deferred Acquired
Asset is accomplished, enforce, at the request and for the
account of the Purchasers, any of the Seller's rights thereto
or interests therein against any other parties thereto
(including the right to terminate any such Deferred Acquired
Asset in accordance with its terms, provided that the
Purchasers pay any cancellation or other fee due upon such
termination) and (b) if and only to the extent that the
Purchasers receive the benefits of a Deferred Acquired Asset,
the Purchasers shall perform the obligations of the Seller
arising with respect to such Deferred Acquired Asset to the
extent that, by reason of consummation of the transactions
contemplated by this Agreement, the Purchasers have control
over the resources necessary to perform such obligations or
reimburse the Seller for the reasonable cost of such
performance. To the extent the Purchasers perform the
obligations of the Seller with respect to any Deferred
Acquired Asset, any account receivable created on account of
such
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performance shall be deemed when created to be an Asset
conveyed hereunder. The Purchasers will act with reasonable
diligence and use commercially reasonable efforts to assist,
and cooperate with, the Seller in obtaining such Consents and
removing any such impediments to the transfer of the Deferred
Acquired Assets.
11.2. Public Announcements. Neither the Seller
(nor any of its affiliates) nor the Purchasers (nor any of their
affiliates) shall make any public statement, including, without
limitation, any press release, with respect to this Agreement and
the transactions contemplated hereby, without the prior written
consent of the other party (which consent may not be unreasonably
withheld or delayed), except as may be required by Law, and except
that following the issuance of press releases by the parties hereto
with respect to the transactions contemplated hereby the parties
may continue routine communications (including discussions
regarding the transactions contemplated hereby) with investors and
analysts.
11.3. Joint Post-Closing Covenant of the Seller
and the Purchasers. The Seller and the Purchasers jointly covenant
and agree that, from and after the Closing Date, the Seller and the
Purchasers will cooperate with each other in defending or
prosecuting any action, suit, proceeding, investigation or audit of
the other relating to (a) the preparation and audit of the Seller's
and the Purchasers' tax returns for all periods up to and including
the Closing Date, and (b) any audit of the Purchasers and/or the
Seller with respect to the sales, transfer and similar taxes
imposed by the laws of any state, relating to the transactions
contemplated by this Agreement. In furtherance hereof, the
Purchasers and the Seller further covenant and agree to respond to
all reasonable inquiries related to such matters and to provide, to
the extent possible, substantiation of transactions and to make
available and furnish appropriate documents and personnel in
connection therewith.
11.4. Books and Records; Personnel. For a
period of seven years after the Closing Date (or such longer period
as may be required by any Governmental Body or ongoing Legal
Proceeding):
(a) Neither the Seller nor the
Purchasers shall dispose of or destroy any of the business
records and files of the Business. If either the Seller or
the
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Purchasers wishes to dispose of or destroy such records and
files after that time, it shall first give 30 days' prior
written notice (the "Notice") to the other party who shall
have the right, at its option and expense, upon prior written
notice to the disposing party within such 30 day period, to
take possession of the records and files within 60 days after
the date of the Notice.
(b) Each party to this Agreement shall
allow the other party and its representatives access to all
business records and files of the Business, during regular
business hours and upon reasonable notice at such other
party's principal place of business or at any location where
such records are stored, and the parties shall have the
right, each at its own expense, to make copies of any such
records and files; provided, however, that any such access or
copying shall be had or done in such a manner so as not to
unreasonably interfere with the normal conduct of the other
party's business or operations (including, without
limitation, matters relating to the confidentiality of such
records and files).
(c) The Purchasers shall make available
to the Seller, upon written request and at the Seller's
expense (i) the Purchasers' personnel to assist the Seller in
locating and obtaining records and files maintained by the
Purchasers and (ii) any of the Purchasers' personnel
previously in the Seller's employ whose assistance or
participation is reasonably required by the Seller in
anticipation of, or preparation for, existing or future
litigation, arbitration, administrative proceeding, tax
return preparation or other matters in which the Seller or
any of its affiliates is involved and which is related to the
Business.
11.5. Solicitation of Employees. For a period
of one year after the date of this Agreement, the Seller shall not,
and shall cause its affiliates not to, cause, induce or encourage
any Transferred Employee to leave the employment of the Purchasers.
11.6. Corporate Name. The Seller consents to
the Purchasers using the name "Lumex" and the Seller will not use
the tradename "Lumex", but will only use the name "Lumex" for
corporate purposes until such time as it shall change its name.
The Seller shall propose at the next annual meeting of its
shareholders that the shareholders
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approve an amendment to the Seller's Certificate of Incorporation
to change its name from "Lumex, Inc." and shall take all necessary
steps within a reasonable time thereafter to effectuate such
change.
11.7. Maintenance of Insurance. For a period of
two years after the Closing Date, the Seller shall maintain
substantially the same workers compensation insurance policy as
exists on the date of this Agreement.
ARTICLE XII.
GOVERNMENT CONTRACTS
12.1. Government Contracts. The parties
acknowledge that, in accordance with FAR (48 C.F.R.) Section
42.1204, the Seller and Purchaser I are required to enter into a
novation agreement or agreements with the United States of America
with respect to contracts numbers V79P-3768; and V797P-3253;
between the Seller and the United States of America (Department of
Veterans Affairs Marketing Center) and contract number GS-27F-3011D
between the Seller and the United States of America (General
Services Administration/FSS National Furniture Center)
(collectively, the "Government Contracts"). The Seller and
Purchaser I will cooperate fully and will use all reasonable
efforts to obtain consents to the assignment, or the novation, of
each of the Government Contracts, and the Seller hereby agrees
expeditiously to take all steps necessary to file requests for, and
to use all reasonable efforts to obtain, approvals of all required
novations or assignments with respect to the Government Contracts.
12.2. Performance Under Nonassigned Contracts.
With respect to any Government Contracts that cannot be assigned to
Purchaser I or novated for the benefit of Purchaser I on the
Closing Date, the performance obligations of the Seller thereunder
shall, to the fullest by applicable law and each such Government
Contract, be deemed to be subcontracted or delegated to Purchaser I
until any such Government Contract has effectively been assigned or
novated. Purchaser I, as a subcontractor or delegate, shall
perform such Government Contracts and the Seller shall, as soon as
practicable, pay over to Purchaser I in full any amounts received
by the Seller as a result of performance by Purchaser I of such
Government Contracts. Prior to the assignment or novation of such
Government Contracts to the Purchasers, the Seller, as the
contracting party, shall
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timely take such action as is reasonably necessary to allow
Purchaser I or any of its Subsidiaries to perform such Government
Contracts, to receive amounts due such Government Contracts and to
protect any rights that may exist or accrue under such Government
Contracts until they are assigned or novated.
12.3. Assignment After Closing. If, after the
Closing Date, the Seller and Purchaser I obtain the necessary
consent for the assignment or novation of a Government Contract for
which an assignment or novation is required, then such Government
Contract shall be deemed to be assigned and transferred to
Purchaser I promptly after the Seller and Purchaser I obtain such
consent or novation. Effective upon the assignment of a Government
Contract to Purchaser I, the Government Contract shall be deemed to
be assumed by Purchaser I provided that the Seller shall reimburse
Purchaser I for any monetary benefit received by the Seller (net of
any actual out-of-pocket costs of the Seller in connection with
such Government Contract) that would have accrued to Purchaser I
had the Government Contract been assigned or novated as of the
Closing Date. Any subcontract or other Government Contract which
the Seller and Purchaser I have theretofore entered into or agreed
upon in respect of such contract shall be terminated effective as
of the date of such assignment.
ARTICLE XIII.
INDEMNIFICATION AND RELATED MATTERS
13.1. Indemnification by the Seller. Subject to
the provisions of this Article XIII, the Seller agrees to indemnify
and hold the Purchasers harmless from and against all Damages
resulting from or arising out of:
(a) the failure of any of the
representations and warranties contained in Article IV of
this Agreement or in the Schedules related thereto to have
been true when made and as of the Closing Date, it being
understood that to the extent that any of such
representations and warranties were made as of a specified
date the same shall apply only to the failure of such
representations and warranties to be true as of such
specified date;
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(b) the failure of the Seller to comply
with any of the covenants contained in this Agreement which
are required to be performed by the Seller; and
(c) the Excluded Liabilities.
13.2. Indemnification by the Purchasers.
(a) Subject to the provisions of this
Article XIII, the Purchasers agree to indemnify and hold the
Seller harmless from and against all Damages resulting from
or arising out of:
(i) the failure of any of the
representations and warranties contained in Article V of this
Agreement to have been true when made and as of the Closing
Date, it being understood that to the extent that any of such
representations and warranties were made as of a specified
date the same shall apply only to the failure of such
representations and warranties to be true as of such
specified date;
(ii) the failure of the Purchasers to
comply with any of the covenants contained in this Agreement
which are required to be performed by the Purchasers;
(iii) the Assumed Liabilities; and
(iv) the operation of the Business or
ownership of the Assets on or after the Closing Date.
(b) The Purchasers shall indemnify,
defend and hold the Seller harmless from and against all
Damages and Environmental Costs and Liabilities arising out
of or relating to known or unknown Hazardous Substance
contamination at the facility at the Location, including, but
not limited to: (i) any cleanup, corrective removal or
remedial actions or property damage arising out of any
condition existing prior to or after the Closing, whether or
not disclosed to or known by the Purchasers or the Seller;
(ii) third party claims (including, not but not limited to,
claims by employees of the Seller) for personal injury
relating or attributable to exposure to Hazardous Substances;
(iii) fines or penalties on account of the presence or
suspected presence of Hazardous Substances contamination
prior to or after the Closing Date;
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(iv) any liability or obligation to modify, restore, change
or improve any of the Assets in order to effectuate
compliance with any applicable regulation or order in effect
as of the Closing Date relating to the presence or suspected
presence of Hazardous Substances contamination.
13.3. Determination of Damages and Related
Matters. In calculating any amount payable to the Purchasers
pursuant to Section 13.1 or payable to the Seller pursuant to
Section 13.2, the Seller or the Purchasers, as the case may be,
shall receive credit for (i) any tax benefit allowable as a result
of the facts giving rise to the claim for indemnification, and (ii)
any insurance recoveries, and no amount shall be included for the
Purchasers' or the Seller's, as the case may be, special,
consequential or punitive damages, unless special, consequential or
punitive damages have been asserted by any third party against the
party seeking indemnification. The Seller and the Purchasers agree
to treat any indemnity payment made pursuant to Section 13.1 or
Section 13.2 as an adjustment to the Purchase Price for federal,
state, local and foreign income tax purposes.
13.4. Limitation on Indemnification Liabilities.
(a) Except as set forth in subsection (b)
below, the indemnifications in favor of the Purchasers
contained in Sections 13.1 (a) and 13.1(b) (a) shall not be
effective until the aggregate dollar amount of all Damages
indemnified against under such Section (not including any
such Damages subject to Section 13.4(b) below) exceeds
$640,000 (the "Threshold Amount"), and then only to the
extent such aggregate amount exceeds the Threshold Amount and
(b) shall terminate once the dollar amount of all Damages
indemnified against under such Section aggregates the
Purchase Price provided that the Threshold Amount shall not
apply to Excluded Liabilities, the representation made in
Section 4.16 hereof or the covenants contained in Section
11.5 hereof and the Covenant Not to Compete.
(b) In the event of a breach of Section
4.22, the indemnifications in favor of the Purchasers
contained in Section 13.1(a) (i) shall not be effective until
the aggregate dollar amount of all Lumex Division Related
Expenses exceeds $250,000, and then only to the
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extent such aggregate amount exceeds such $250,000 and (ii)
shall terminate once the dollar amount of all Damages
indemnified under Sections 13.1(a) and (b) aggregates the
Purchase Price.
13.5. Survival of Representations, Warranties
and Covenants. The parties hereto agree that the representations
and warranties made in this Agreement and the covenants and
agreements contained herein and any indemnification with respect
thereto shall survive for one year after the Closing Date; provided
that (i) such limitation period shall not apply with respect to
claims properly made with reasonable specificity prior to the
expiration of such one year limitation period, (ii) any covenants
and agreements contained herein which by their terms may cover a
period in excess of one year after the Closing Date shall survive
for such specified period and (iii) the indemnification obligations
contained in Sections 13.1(c), 13.2(a)(iii), 13.2(a)(iv) and
13.2(b) shall survive indefinitely (the "Survival Period").
13.6. Notice of Indemnification. In the event
any legal proceeding shall be threatened or instituted or any claim
or demand shall be asserted by any person in respect of which
payment may be sought by one party hereto from the other party
under the provisions of this Article XIII or for breach of any of
the representations and warranties set forth herein, the party
seeking indemnification (the "Indemnitee") shall promptly cause
written notice of the assertion of any such claim of which it has
knowledge which is covered by this indemnity to be forwarded to the
other party (the "Indemnitor"), which notice must be received by
the Indemnitor prior to the expiration of the applicable Survival
Period. Any notice of a claim by reason of any of the
representations, warranties or covenants contained in this
Agreement shall state specifically the representation, warranty or
covenant with respect to which the claim is made, the facts giving
rise to an alleged basis for the claim, and the amount of the
liability asserted against the Indemnitor by reason of the claim.
The failure of the Indemnitee to notify the Indemnitor of a claim
shall not relieve the Indemnitor of any liability that it may have
with respect to such claim, except to the extent the Indemnitor is
prejudiced or adversely affected by such failure.
13.7. Defense of Third Party Claims. Should any
legal proceeding be instituted against the Indemnitee by
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a third party for which the Indemnitee is entitled to
indemnification under this Agreement (a "Third Party Claim"), the
obligations and liabilities of the parties hereunder with respect
to such Third Party Claim shall be subject to the following terms
and conditions:
(a) The Indemnitee shall give the Indemnitor
written notice of any such claim promptly after receipt by the
Indemnitee of notice thereof, and the Indemnitor may undertake the
defense thereof by representatives of its own choosing reasonably
acceptable to the Indemnitee. If the Indemnitee desires to
participate in, but not control, any such defense, it may do so at
its own cost and expense. If, however, the Indemnitor fails or
refuses to undertake the defense of such claim within ten (10) days
after written notice of such claim has been given to the Indemnitor
by the Indemnitee, the Indemnitee shall have the right to undertake
the defense, and, subject to Section 13.7(b) below, settlement of
such claim with counsel of its own choosing. In the circumstances
described in the preceding sentence, the Indemnitee shall, promptly
upon its assumption of the defense of such claim, provide notice as
specified in Section 13.6 which shall be deemed a claim for
indemnification that is not a Third Party Claim for the purposes of
the procedures set forth herein.
(b) No settlement of a Third Party Claim
involving the asserted liability of the Indemnitor under this
Article XIII shall be made without the prior written consent by or
on behalf of the Indemnitor, which consent shall not be
unreasonably withheld or delayed.
13.8. Exclusive Remedy. Except as otherwise
described in Section 14.2, the exclusive remedy available to a
party hereto in respect of the matters covered by Section 13.1 or
Section 13.2 hereof shall be to proceed in the manner and subject
to the limitations contained in this Article XIII.
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ARTICLE XIV.
TERMINATION
14.1. Termination. This Agreement may be
terminated:
(a) by the written agreement of the
Purchasers and the Seller;
(b) by either the Purchasers or the
Seller if there shall be in effect a non-appealable order of
a court of competent jurisdiction permanently prohibiting the
consummation of the transactions contemplated hereby;
(c) by either the Purchasers or the
Seller if the Closing shall not have occurred on or before
May 31, 1996; and
(d) by the Purchasers if any
condemnation, destruction or loss due to fire or other
casualty from the date hereof until the Closing Date is such
that the Business is materially interrupted or curtailed or
the Assets are materially affected; provided that if the
Purchasers nonetheless elect to close, the Seller shall remit
or assign the Seller's rights to all net condemnation
proceeds or third party insurance proceeds to the Purchasers,
and the Seller shall have no further liability or obligations
with respect to such condemnation, destruction or loss.
14.2. Liabilities After Termination. Upon any
termination of this Agreement pursuant to Section 14.1 above, no
party hereto shall thereafter have any further liability or
obligation hereunder other than the Purchasers' obligations
pursuant to Section 7.2 hereof, but no such termination shall
relieve either party hereto of any liability to the other party
hereto for any breach of this Agreement prior to the date of such
termination and each party hereto shall have all rights at law or
in equity, against the other based upon such breach, including,
without limitation, the right to seek specific performance.
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ARTICLE XV.
MISCELLANEOUS
15.1. Definitions. As used in this Agreement,
the following terms have the following meanings (such meanings to
be equally applicable to both the singular and plural forms of the
terms defined):
"Accounts Receivable" has the meaning set forth in
Section 1.1(c) hereof.
"Arbitrator" has the meaning set forth in Section
2.2(d) hereof.
"Assets" has the meaning set forth in Section 1.1
hereof.
"Assignment and Assumption Agreement" has the
meaning set forth in Section 3.3(b) hereof.
"Assumed Liabilities" has the meaning set forth in
Section 1.3 hereof.
"Beneficiaries" has the meaning set forth in
Section 4.11(a) hereof.
"Benefit Arrangement" means each employment or
severance contract or arrangement providing for insurance coverage,
severance, termination or similar coverage and all written
compensation policies and practices maintained by the Seller
covering any Employee or former Employee of the Business.
"Business" has the meaning set forth in the
recitals hereof.
"Closing" means the consummation of the
transactions contemplated by this Agreement.
"Closing Balance Sheet" has the meaning set forth
in Section 2.2(a) hereof.
"Closing Date" has the meaning set forth in Section
3.1 hereof.
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"Code" means the Internal Revenue Code of 1986, as
amended.
"Company Software" has the meaning set forth in
Section 4.9(d) hereof.
"Confidentiality Agreement" has the meaning set
forth in Section 6.2 hereof.
"Contract" means any contract, agreement,
indenture, note, bond, loan, instrument, lease, conditional sale
contract, mortgage, license, franchise, insurance policy,
commitment or other arrangement or agreement.
"Covered by the Seller's Insurance Policies" means
pursuant to the provisions of the Seller's insurance policies,
including deductibles, self-insured retentions and covered losses
in excess of policy limits.
"Damages" means any and all direct or indirect
demands, claims, payments, obligations, recoveries, deficiencies,
fines, penalties, interest, assessments, actions, causes of action,
suits, losses, liabilities, costs, expenses (including without
limitation, (i) interest, penalties and reasonable attorneys' fees
and expenses, (ii) reasonable attorneys' fees and expenses
necessary to enforce rights to indemnification hereunder, and (iii)
consultant's fees and other costs of defense or investigation), and
interest on any amount payable to a third party as a result of the
foregoing.
"Deed" has the meaning set forth in Section 3.3(j)
hereof.
"Division" has the meaning set forth in the
recitals hereof.
"Employee Benefit Plans" has the meaning set forth
in Section 4.11(a) hereof.
"Employees" means all persons employed in the
Business on the day immediately prior to the Closing Date,
including any persons on disability, sick leave, layoff or leave of
absence from the Business.
"Environmental Costs and Liabilities" shall mean
any Damages or Losses (including without limitation, fees,
disbursements, fees and expenses of legal counsel, experts,
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engineers or consultants and the costs of investigation and
feasibility studies, remedial or removal actions, cleanup
activities or other corrective action measures necessary to bring
the facilities into compliance with Laws) arising from, under or
pursuant to Environmental Laws or order or contract with any
Governmental Authority or Person, including without limitation, any
obligation to investigate, remediate or otherwise address Hazardous
Substance.
"Environmental Laws" means any applicable code,
law, order, ordinance, regulation, rule or statute of any
Governmental Authority relating to pollution or protection of human
health or the environment (including, without limitation, ambient
air, surface water, ground water, land surface or subsurface
strata), including, without limitation, the Comprehensive
Environmental Response Compensation and Liability Act, as amended,
42 U.S.C. 9601 et seq. ("CERCLA"), the Resource Conservation and
Recovery Act, as amended, 42 U.S.C. 6901 et seq. ("RCRA"), and
other Laws relating to emissions, discharges, releases or
threatened releases of any Hazardous Substance, or otherwise
relating to the manufacture, processing, distribution, use,
treatment, storage, disposal, transport or handling of any
Hazardous Substance; but excluding any Laws relating to
occupational health and safety.
"Environmental Litigation" means any Proceeding
against the Seller with respect to the Business or the Assets
(including, without limitation, written notice or other written
communication by any Person alleging potential liability for
investigatory costs, cleanup costs, private or governmental
response or remedial costs, natural resources damages, property
damages, personal injuries, or penalties) arising out of, based
upon, or resulting from any circumstances or state of facts forming
the basis of any liability or alleged liability under, or violation
or alleged violation of, any Environmental Law.
"ERISA" means the Employee Retirement Income
Security Act of 1974, as amended.
"Excess Lancaster Inventory" means Inventory at the
Lancaster, Pennsylvania facility the carrying value of which is in
excess of $2,051,472.
"Excluded Assets" has the meaning set forth in
Section 1.2 hereof.
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"Excluded Liabilities" has the meaning set forth in
Section 1.4 hereof.
"FDA" has the meaning set forth in Section 4.18
hereof.
"Final Net Assets Adjustment" has the meaning set
forth in Section 2.2(d) hereof.
"Financial Statements" has the meaning set forth in
Section 4.6 hereof.
"GAAP" means generally accepted accounting
principles in the United States.
"Governmental Authority" means any federal, state,
county, local, foreign or other governmental or public agency,
instrumentality, commission, authority, grand jury, official, board
or body having jurisdiction over the Real Property or the
operations conducted thereon.
"Governmental Body" means any government or
governmental or regulatory body thereof, or political subdivision
thereof, whether federal, state, local or foreign, or any agency or
instrumentality thereof, or any court or arbitrator (public or
private).
"Government Contracts" has the meaning set forth in
Section 12.1 hereof.
"Hazardous Substance" means (i) any hazardous
substance, hazardous material, hazardous waste, regulated substance
or toxic substance (as those terms are defined by any applicable
Environmental Laws) and (ii) any chemicals, pollutants, or
contaminants regulated under or pursuant to Environmental Law or
(iii) petroleum, petroleum products, or oil.
"HSR Act" has the meaning set forth in Section 4.5
hereof.
"Indemnitee" has the meaning set forth in Section
13.6 hereof.
"Indemnitor" has the meaning set forth in Section
13.6 hereof.
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"Initial Balance Sheet" means the audited statement
of net assets to be sold of the Business at December 31, 1995 and
attached hereto as part of Schedule 4.6.
"Intangible Assets" has the meaning set forth in
Section 1.1(e) hereof.
"Interest" has the meaning set forth in Section 6.4
hereof.
"Inventory" has the meaning set forth in Section
1.1(b) hereof.
"Known Environmental Condition" means any
environmental condition related to or otherwise attributable to the
soil and ground water contamination at the Location, as disclosed
by the Seller in the environmental materials made available to the
Purchasers during the diligence process, including, without
limitation, the Site Investigation Work Plan, Site Investigation
Report and the Work Plan for Soil Remediation prepared for Suffolk
County Department of Health Services by Fanning, ▇▇▇▇▇▇▇▇ and
▇▇▇▇▇▇, as well as any Phase I or Phase II investigation undertaken
by or on behalf of the Purchasers.
"Law" means any federal, state, local or foreign
law (including common law), statute, code, ordinance, rule,
regulation or other requirement or guideline.
"Lease Assignment" has the meaning set forth in
Section 3.3(k) hereof.
"Leased Real Property" means all the Real Property
leased by the Seller and used exclusively in the Business and set
forth on Schedule 1.1(d).
"Legal Proceeding" means any judicial,
administrative or arbitral action, suit, proceeding (public or
private), claim or governmental proceeding.
"Liabilities" has the meaning set forth in Section
1.3(i) hereof.
"Licensed Software" has the meaning set forth in
Section 4.9(c) hereof.
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"Lien" means any lien, pledge, mortgage, deed of
trust, security interest, claim, lease, charge, option, right of
first refusal, easement, or other real estate declaration,
covenant, condition, restriction or servitude, transfer restriction
under any shareholder or similar agreement, encumbrance or any
other restriction or limitation whatsoever.
"Location" means the property described on Schedule
15.1(a) hereto.
"Material Adverse Effect" means any material
adverse effect on, or any effect that results in a material adverse
change in, the Assets as a whole or the business, financial
condition, results of operations or liabilities of the Business, as
a whole.
"Net Assets" has the meaning set forth in Section
2.2(b) hereof.
"Order" means any order, injunction, judgment,
decree, ruling, writ, assessment or arbitration award.
"Owned Real Property" means all the Real Property
owned in fee or otherwise by the Seller and used principally by the
Business and set forth on Schedule 1.1(d).
"Owned Software" has the meaning set forth in
Section 4.9(b) hereof.
"Parent" has the meaning set forth in the recitals
hereof.
"Permit" means any written approval, authorization,
consent, franchise, license, permit or certificate by any
Governmental Body.
"Permitted Exceptions" means (i) statutory Liens
for current taxes, assessments or other governmental charges not
yet delinquent or the amount or validity of which is being
contested in good faith by appropriate proceedings; (ii)
mechanics', carriers', workers', repairers' and similar Liens
arising or incurred in the ordinary course of business that are not
in the aggregate material to the Business or the Assets; (iii)
zoning, entitlement and other land use and environmental
regulations by Governmental Bodies, provided that such regulations
have not been violated; (iv) such other imperfections in title,
charges, easements, restric-
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tions and encumbrances which are immaterial to the conduct of the
Business; (vi) such exceptions described on Schedule 15.1(b)
hereto; and (vii) such state of facts as would be shown on an
accurate survey of each parcel of Real Property, provided that such
state of facts do not materially restrict, inhibit or limit the
present use of any such Real Property.
"Person" means any individual, corporation,
partnership, firm, joint venture, association, joint-stock company,
trust, unincorporated organization or Governmental Body.
"Plan Employees" has the meaning set forth in
Section 4.11(a) hereof.
"Preliminary Net Assets Adjustment" has the meaning
set forth in Section 2.2(b) hereof.
"Proceedings" has the meaning set forth in Section
4.12 hereof.
"Purchase Price" has the meaning set forth in
Section 2.1 hereof.
"Purchasers" has the meaning set forth in the
recitals hereof.
"Purchasers' Documents" has the meaning set forth
in Section 5.2 hereof.
"Purchasers' Representatives" has the meaning set
forth in Section 6.2 hereof.
"Real Property" has the meaning set forth in
Section 1.1(d) hereof.
"Seller" has the meaning set forth in the recitals
hereof.
"Seller Documents" has the meaning set forth in
Section 4.2 hereof.
"SMDA" has the meaning set forth in Section 4.18
hereof.
"▇▇▇▇▇ ▇▇▇▇▇▇" has the meaning set forth in Section
4.16 hereof.
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"Survival Period" has the meaning set forth in
Section 13.5 hereof.
"Taxes" or "Tax" means all taxes, fees, charges, or
other amounts, however denominated, including any interest or
penalties thereon or with respect thereto, imposed by any federal,
state, local or foreign government or agency or political
subdivision of any such government, including, without limitation,
income, payroll, withholding, unemployment insurance, social
security, sales and use, excise, franchise, gross receipts, real
and personal property transfer and other similar taxes and
obligations.
"Tax Return" means any return, declaration, report,
claim for refund, information return, statement or other similar
document relating to Taxes, including any schedule or attachment
thereto, and including any amendment thereof.
"Threshold Amount" has the meaning set forth in
Section 13.4 hereof.
"Transferred Employees" means all Employees who
receive and accept offers of employment from the Purchasers on or
after the Closing Date.
"WARN Act" has the meaning set forth in Section
4.11(k) hereof.
"W&P Assignment" has the meaning set forth in
Section 3.3(l) hereof.
"Welfare Plan" has the meaning set forth in Section
8.3(a) hereof.
15.2. Knowledge. As used in this Agreement, the
terms "to the Seller's knowledge" and "to the knowledge of the
Seller," or words to that effect, shall refer to matters of which
any person on Schedule 15.2 has actual knowledge.
15.3. Prorations. The Purchasers and the Seller
hereby agree as follows with regard to prorations applicable to the
consummation of the transactions contemplated hereby. The parties
agree that all operational expenses incurred directly in the
operation of the Business, including, without limitation, utility
bills, the expense of supplies, the expense of fuel, and the like,
shall be
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prorated between the parties as of the Closing Date, and as of such
date shall become the obligation and responsibility of the
Purchasers. Prorations which are to be effected on the Closing
Date shall be made on the Closing Date or, if such prorations
cannot reasonably be made as of the Closing Date, as soon
thereafter as possible and "as of" the Closing Date. In addition,
all pre- paid expenses shall be prorated between the parties as of
the Closing Date. The Purchasers, as of the Closing Date, shall
pay such amounts as may be required to replace all deposits held
with the suppliers of utilities to the Business, and to assist the
Seller as may be reasonably required in obtaining a return of such
deposits put in place by the Seller as of the Closing Date.
All personal and real property taxes and special
and general assessments relating to the Assets shall be prorated by
the parties as of the Closing Date, and all such taxes applicable
to periods of time prior to the Closing Date shall be the sole
obligation, responsibility and expense of the Seller, and shall be
paid by the Seller. All such assessments and taxes applicable to
periods following the Closing Date shall be the sole obligation,
responsibility and expense of the Purchasers.
15.4. Waiver of Compliance with Bulk Transfer
Laws. The Purchasers hereby waive compliance by the Seller with
the provisions of the bulk transfer laws of any jurisdiction in
connection with the transactions contemplated by this Agreement.
15.5. Entire Agreement. This Agreement (with
its Schedules and Exhibits) contains, and is intended as, a
complete statement of all of the terms and the arrangements between
the parties hereto with respect to the matters provided for herein,
and supersedes any and all previous agreements and understandings
between the parties hereto with respect to those matters.
15.6. Governing Law. This Agreement shall be
governed by and construed in accordance with the law of the State
of New York.
15.7. Transfer Taxes. The Seller shall pay (a)
all transfer and documentary taxes and fees imposed with respect to
instruments of conveyance in the transaction contemplated hereby
and (b) all sales, use, gains, excise and other transfer or similar
taxes on the transfer of the Assets contemplated hereunder. The
Purchasers and the
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Seller shall cooperate with one another in promptly making any
filings in connection with any such taxes. The Purchasers shall
pay all costs of any title insurance coverage or endorsements that
the Purchasers elects to obtain. The Purchasers or the Seller, as
the case may be, shall execute and deliver to the other at the
Closing any certificates or other documents as the other may
reasonably request to perfect any exemption from any such transfer,
documentary, sales, gains, excise or use tax.
15.8. Expenses. Each of the parties hereto
shall bear its own expenses (including, without limitation, fees
and disbursements of its counsel, accountants and other experts),
incurred by it in connection with the preparation, negotiation,
execution, delivery and performance of this Agreement, each of the
other documents and instruments executed in connection with or
contemplated by this Agreement and the consummation of the
transactions contemplated hereby and thereby.
15.9. Table of Contents and Headings. The table
of contents and section headings of this Agreement are for
reference purposes only and are to be given no effect in the
construction or interpretation of this Agreement.
15.10. Notices. All notices and other
communications under this Agreement shall be in writing and shall
be deemed given when delivered personally or four days after being
mailed by registered mail, return receipt requested, to a party at
the following address (or to such other address as such party may
have specified by notice given to the other party pursuant to this
provision):
If to the Seller, to:
Lumex, Inc.
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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with a copy to:
Weil, Gotshal & ▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
If to the Purchasers, to:
▇▇▇▇▇ Enterprises, Inc.
One Atlantic Center
Suite 5000
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇.
with a copy to:
▇▇▇▇▇▇ & Bird
One Atlantic Center
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
15.11. Severability. The invalidity or
unenforceability of any provision of this Agreement shall not
affect the validly or enforceability of any other provision of this
Agreement, each of which shall remain in full force and effect.
15.12. Binding Effect; No Assignment. This
Agreement shall be binding upon and inure to the benefit of the
parties and their respective successors and assigns. Nothing in
this Agreement shall create or be deemed to create any third party
beneficiary rights in any person or entity not party to this
Agreement. This Agreement shall not be assignable by any of the
parties hereto without the written consent of the other parties
hereto. Notwithstanding the foregoing, each of the Purchasers may,
without the consent of the other parties hereto, assign and
delegate its obligations and rights hereunder with respect to all
of the Assets and Business or any part thereof to (i) any
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affiliated company of either of the Purchasers, (ii) any successor
of all or substantially all of either of the Purchasers' or
Parent's business by way of merger, consolidation, liquidation,
purchase of assets of the Purchasers or Parent or other form of
acquisition or other form of reorganization, and (iii) any lender
of the Purchasers or Parent as collateral, but no such assignment
shall relieve the Purchasers or Parent of their obligations
hereunder.
15.13. Amendments. This Agreement may be
amended, supplemented or modified, and any provision hereof may be
waived, only pursuant to a written instrument making specific
reference to this Agreement signed by each of the parties hereto.
15.14. Guarantee. In order to induce the Seller
to enter into this Agreement, Parent hereby guarantees the
performance by the Purchasers of all of their obligations under
this Agreement, including any obligation to pay damages incurred by
the Seller as a consequence of breach of this Agreement by either
of the Purchasers.
15.15. Counterparts. This Agreement may be
executed in any number of counterparts, each of which shall be
deemed an original, but all of which together shall constitute one
and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have
executed this instrument as of the date and year first above
written.
LUMEX, INC.
By: /s/ J. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
------------------------------
Name: J. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: President & CEO
MUL ACQUISITION CORP. I
By: /s/ ▇. ▇. ▇▇▇▇▇▇
------------------------------
Name: ▇. ▇. ▇▇▇▇▇▇
Title: President
MUL ACQUISITION CORP. II
By: /s/ ▇. ▇. ▇▇▇▇▇▇
------------------------------
Name: ▇. ▇. ▇▇▇▇▇▇
Title: President
▇▇▇▇▇ ENTERPRISES, INC.
By: /s/ ▇. ▇. ▇▇▇▇▇▇
------------------------------
Name: ▇. ▇. ▇▇▇▇▇▇
Title: President & CEO
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