EXHIBIT 2.1
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AMENDED AND RESTATED
ASSET PURCHASE AGREEMENT
BETWEEN
JOSTRA BENTLEY CORPORATION
JOSTRA BENTLEY INC.
AND
▇▇▇▇▇▇▇ LIFESCIENCES LLC
▇▇▇▇▇▇▇ LIFESCIENCES CORPORATION
Dated as of August 30, 2000
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TABLE OF CONTENTS
1. DEFINITIONS..................................................................................................1
2. BASIC TRANSACTION............................................................................................8
(a) PURCHASE AND SALE OF ASSETS.............................................................................8
(b) NON-ASSUMPTION OF LIABILITIES...........................................................................9
(c) PURCHASE PRICE..........................................................................................9
(d) ADJUSTMENTS TO FIXED ASSETS AND INVENTORY; INVENTORY PAYMENTS ADJUSTMENT...............................10
(e) THE CLOSING............................................................................................10
(f) DELIVERIES AT THE CLOSING..............................................................................10
(g) EFFECTIVE TIME.........................................................................................10
3. REPRESENTATIONS AND WARRANTIES OF THE SELLER................................................................11
(a) ORGANIZATION OF THE SELLER.............................................................................11
(b) AUTHORIZATION OF TRANSACTION...........................................................................11
(c) NONCONTRAVENTION.......................................................................................11
(d) BROKERS' FEES..........................................................................................12
(e) TITLE TO ASSETS; SUFFICIENCY OF ASSETS.................................................................12
(f) EVENTS SUBSEQUENT TO MOST RECENT FISCAL YEAR END.......................................................12
(g) LEGAL COMPLIANCE.......................................................................................13
(h) TAX MATTERS............................................................................................13
(i) [RESERVED].............................................................................................13
(j) INTELLECTUAL PROPERTY..................................................................................13
(k) TANGIBLE ASSETS........................................................................................15
(l) INVENTORY..............................................................................................15
(m) CONTRACTS..............................................................................................15
(n) [RESERVED].............................................................................................17
(o) INSURANCE..............................................................................................17
(p) LITIGATION.............................................................................................17
(q) PRODUCT WARRANTY.......................................................................................17
(r) PRODUCT LIABILITY......................................................................................17
(s) EMPLOYEES..............................................................................................17
(t) EMPLOYEE BENEFITS......................................................................................18
(u) [RESERVED].............................................................................................19
(v) ENVIRONMENTAL, HEALTH, AND SAFETY MATTERS..............................................................19
(w) YEAR 2000..............................................................................................19
(x) DISCLOSURE.............................................................................................20
4. REPRESENTATIONS AND WARRANTIES OF THE BUYER.................................................................20
(a) ORGANIZATION OF THE BUYER..............................................................................20
(b) AUTHORIZATION OF TRANSACTION...........................................................................20
(c) NONCONTRAVENTION.......................................................................................20
(d) BROKERS' FEES..........................................................................................20
(e) FUNDING................................................................................................20
(f) DISCLOSURE.............................................................................................20
5. PRE-CLOSING COVENANTS.......................................................................................21
(a) GENERAL................................................................................................21
(b) NOTICES AND CONSENTS...................................................................................21
(c) OPERATION OF THE BUSINESS..............................................................................21
(d) PRESERVATION OF BUSINESS...............................................................................21
(e) FULL ACCESS............................................................................................21
(f) NOTICE OF DEVELOPMENTS.................................................................................21
(g) EXCLUSIVITY............................................................................................21
(h) LEASED PROPERTY........................................................................................21
(i) LANDLORD CONSENTS......................................................................................22
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(j) STOCK-TAKING...........................................................................................22
(k) NEW GRANT OF TAX EXEMPTION.............................................................................22
(l) DELIVERY OF CONTRACTS..................................................................................22
(m) IRVINE LEASE...........................................................................................22
(n) ECO CONTRACT...........................................................................................22
(o) [INTENTIONALLY OMITTED]................................................................................22
(p) EVERGREEN AGREEMENT....................................................................................23
(q) TERRITORIES............................................................................................23
(r) BAXTER CONSENT AGREEMENT...............................................................................23
(s) PRICING DILIGENCE......................................................................................23
6. POST-CLOSING COVENANTS......................................................................................23
(a) GENERAL................................................................................................23
(b) LITIGATION SUPPORT.....................................................................................23
(c) TRANSITION.............................................................................................23
(d) CONFIDENTIALITY........................................................................................24
(e) COVENANT NOT TO COMPETE................................................................................24
(f) MACCHI BUSINESS........................................................................................24
(g) BENTLEY................................................................................................25
(h) NEW PUERTO RICO LEASE AND NEW GRANT OF TAX EXEMPTION...................................................25
(i) [RESERVED].............................................................................................25
(j) NON-SOLICITATION OF EMPLOYEES..........................................................................25
(k) METAPLUS AGREEMENT.....................................................................................25
(l) ECO CONTRACT...........................................................................................25
(m) IRVINE LEASE...........................................................................................25
(n) BAXTER CONSENT AGREEMENT...............................................................................25
(o) TENDER CONTRACTS.......................................................................................25
7. ADDITIONAL AGREEMENTS.......................................................................................25
(a) EMPLOYEE MATTERS.......................................................................................25
(b) RELOCATION OF ACQUIRED ASSETS..........................................................................28
(c) NEGOTIATION OF PLEXUS AND MEMBRANA AGREEMENTS..........................................................28
(d) WARN...................................................................................................28
(e) MISTAKE................................................................................................29
(f) GERMAN OPERATIONS......................................................................................29
(g) SHARED AGREEMENTS......................................................................................29
(h) TITLE TO INTELLECTUAL PROPERTY.........................................................................29
(i) SALES OF CANNULAE......................................................................................30
(j) LICENSE-BACK TO THE SELLER OF THE SHARED INTELLECTUAL PROPERTY.........................................30
(k) REMOVAL OF INVENTORY...................................................................................30
8. Conditions to Obligation to Close...........................................................................31
(a) CONDITIONS TO OBLIGATION OF THE BUYER..................................................................31
(b) CONDITIONS TO OBLIGATION OF THE SELLER.................................................................32
9. REMEDIES FOR BREACHES OF THIS AGREEMENT.....................................................................33
(a) SURVIVAL OF REPRESENTATIONS AND WARRANTIES.............................................................33
(b) INDEMNIFICATION........................................................................................33
(c) INDEMNIFICATION PROCEDURE..............................................................................35
(d) PAYMENT................................................................................................36
(e) DETERMINATION OF LOSSES................................................................................36
(f) EXCLUSIVE REMEDY.......................................................................................36
10. TERMINATION.................................................................................................37
(a) TERMINATION OF AGREEMENT...............................................................................37
(b) EFFECT OF TERMINATION..................................................................................37
(c) DEPOSIT................................................................................................37
11. MISCELLANEOUS...............................................................................................37
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(a) PRESS RELEASES AND PUBLIC ANNOUNCEMENTS................................................................37
(b) NO THIRD-PARTY BENEFICIARIES...........................................................................38
(c) ENTIRE AGREEMENT.......................................................................................38
(d) SUCCESSION AND ASSIGNMENT..............................................................................38
(e) COUNTERPARTS; FACSIMILE SIGNATURES.....................................................................38
(f) HEADINGS...............................................................................................38
(g) NOTICES................................................................................................38
(h) GOVERNING LAW..........................................................................................39
(i) AMENDMENTS AND WAIVERS.................................................................................39
(j) SEVERABILITY...........................................................................................39
(k) EXPENSES...............................................................................................39
(l) CONSTRUCTION...........................................................................................39
(m) INCORPORATION OF EXHIBITS AND SCHEDULES................................................................39
(n) SPECIFIC PERFORMANCE...................................................................................39
(o) ARBITRATION............................................................................................40
(p) BULK TRANSFER LAWS.....................................................................................41
(q) ATTORNEYS' FEES........................................................................................41
Exhibits
Exhibit 1--Form of Agency Agreement for Tender Contracts
Exhibit 2__Form of Bentley License Agreement
Exhibit 3--Form of CPP Supply and Distribution Agreement
Exhibit 4--Form of ▇▇▇▇▇▇▇ Supply Agreement
Exhibit 5--Form of Intellectual Property Assignment Agreement
Exhibit 6--Form of Non-Exclusive License and Supply Agreement
Exhibit 7--Form of Perfusion Supply Agreement
Exhibit 8--Form of Promissory Note
Exhibit 9--Form of Software License Agreement
Exhibit 10--Form of Transition Services Agreement
Exhibit 11--Form of ▇▇▇▇ of Sale
Exhibit 12--Form of Opinion of Counsel to the Seller
Exhibit 13--Form of Opinion of Counsel to the Buyer
Exhibit 14--Form of Opinion of Counsel re Employee Benefit Matters
Exhibit 15--Form of Agency Agreement for Cannulae Sales
Exhibit 16--Form of Agency Agreement for CPP Sales
Exhibit 17--Form of Agency Agreement for European Sales
Exhibit 18--Form of Agency Agreement for Shared Agreement
Exhibit 19--Form of Research Medical, Inc. Trademark License
Exhibit 20--Form of Belgian VAT Agreement
Disclosure Schedule--Exceptions to Representations and Warranties
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AMENDED AND RESTATED ASSET PURCHASE AGREEMENT
This Amended and Restated Asset Purchase Agreement entered into as of
August 30, 2000, by and between Jostra Bentley Corporation, a Delaware
corporation ("JOSTRA U.S."), and Jostra Bentley Inc., a Puerto Rico corporation
("JOSTRA PR," and collectively with Jostra U.S., the "BUYER"), and ▇▇▇▇▇▇▇
Lifesciences LLC, a Delaware limited liability company ("▇▇▇▇▇▇▇ LLC"), and
▇▇▇▇▇▇▇ Lifesciences Corporation, a Delaware corporation ("▇▇▇▇▇▇▇ CORP.," and
collectively with ▇▇▇▇▇▇▇ LLC, the "SELLER"). The Buyer and the Seller are
referred to collectively herein as the "PARTIES."
WHEREAS, the Parties and certain of their affiliates previously entered
into an Asset Purchase Agreement dated as of July 15, 2000, which contemplated a
transaction in which the Buyer will purchase certain of the assets of the Seller
relating to its cardiopulmonary products business in return for cash.
WHEREAS, the Parties desire to amend and restate the original Asset
Purchase Agreement and intend to have this Agreement supersede the original
Asset Purchase Agreement in its entirety.
Now, therefore, in consideration of the premises and the mutual
promises herein made, and in consideration of the representations, warranties,
and covenants herein contained, the Parties, intending to be legally bound,
agree as follows.
1. DEFINITIONS.
"1998 TAX ACT" means the Puerto Rico Tax Incentive Act of 1998.
"AAA" has the meaning set forth in Section 11(o)(iii) below.
"ACQUIRED ASSETS" means all of the assets owned or used by the Seller
which are related to the Business and used or held for use primarily in the
conduct of the Business, including all of the (a) real property, leaseholds and
subleaseholds therein, improvements (including Leasehold Improvements),
fixtures, and fittings thereon, and easements, rights-of-way, and other
appurtenants thereto (such as appurtenant rights in and to public streets), (b)
tangible personal property (such as machinery, equipment, inventories of raw
materials and supplies, manufactured and purchased parts, goods in process and
finished goods, furniture, automobiles, trucks, tractors, trailers, tools, jigs,
and dies), (c) Bentley Intellectual Property and Shared Intellectual Property,
goodwill associated therewith, licenses and sublicenses granted and obtained
with respect thereto, and rights and obligations thereunder, remedies against
infringements thereof, and rights to protection of interests therein under the
laws of all jurisdictions, (d) leases, subleases, and rights thereunder, (e)
agreements, contracts, other similar arrangements, and rights thereunder, (f)
franchises, approvals, permits, licenses, orders, registrations, certificates,
variances, and similar rights obtained from governments and governmental
agencies, (g) books, records, ledgers, files, documents, correspondence, lists,
plats, architectural plans, drawings, and specifications, creative materials,
advertising and promotional materials, studies, reports, and other printed or
written materials, (h) the Inventory, subject to the limits set forth in Section
2(c)(i) and (i) without limiting the generality of the foregoing, the assets
specifically identified in Section 2(a)(iii) of the Disclosure Schedule;
provided, HOWEVER, that the Acquired Assets shall not include the Excluded
Assets.
"ACTION" has the meaning set forth in Section 11(q) below.
"AFFILIATE" has the meaning set forth in Rule 12b-2 of the regulations
promulgated under the Securities Exchange Act.
"AGENCY AGREEMENT FOR CANNULAE SALES" means the Agency Agreement for
Cannulae Sales dated as of the Closing Date between Jostra U.S. and ▇▇▇▇▇▇▇ LLC
in the form of EXHIBIT 15 hereto.
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"AGENCY AGREEMENT FOR CPP SALES" means the Agency Agreement for CPP
Sales dated as of the Closing Date between Jostra U.S. and ▇▇▇▇▇▇▇ LLC in the
form of EXHIBIT 16 hereto.
"AGENCY AGREEMENT FOR SHARED AGREEMENTS" means the Agency Agreement for
Shared Agreements dated as of the Closing Date between Jostra U.S. and ▇▇▇▇▇▇▇
LLC in the form of EXHIBIT 18 hereto.
"AGENCY AGREEMENT FOR SPAIN SALES" means the Agency Agreement for
European Sales dated as of the Closing Date between Jostra AG and ▇▇▇▇▇▇▇ ▇▇ in
the form of EXHIBIT 17 hereto.
"AGENCY AGREEMENT FOR TENDER CONTRACTS" means the Agency Agreement for
Tender Contracts dated as of the Closing Date between Jostra AG and ▇▇▇▇▇▇▇ ▇▇
in the form of EXHIBIT 1 hereto.
"APPLICABLE RATE" means 8% per annum.
"BANK GUARANTY" means a guaranty from Credit Suisse, Zurich,
Switzerland in favor of ▇▇▇▇▇▇▇ LLC in the initial aggregate amount of
$15,000,000, subject to reduction pursuant to Section 2(d)(vi) below.
"BANKRUPTCY EXCEPTIONS" has the meaning set forth in Section 3(b)
below.
"BAXTER CONSENT AGREEMENT" means the Baxter Consent Agreement to be
dated on or prior to the Closing Date, which shall grant the Buyer a world-wide,
non-exclusive, royalty-free license to use the Baxter registered trademark for
the purposes of marketing, selling and distributing the Inventory.
"▇▇▇▇▇▇ INTERNATIONAL" means ▇▇▇▇▇▇ International Inc.
"BELGIAN VAT AGREEMENT" means the Agreement Re Belgian VAT dated as of
the Closing Date between ▇▇▇▇▇▇▇ ▇▇ and Jostra AG in the form of EXHIBIT 20
hereto.
"BENTLEY INTELLECTUAL PROPERTY" means the Intellectual Property owned
by the Seller as of the Closing Date, subject to any pre-existing licenses
thereto, and necessary to conduct the Business, but not including the Shared
Intellectual Property. Bentley Intellectual Property includes, but is not
limited to, the Intellectual Property identified in Section 3(j)(iii) of the
Disclosure Schedule.
"BENTLEY LICENSE AGREEMENT" means the Bentley License Agreement dated
as of the Closing Date between Jostra U.S. and ▇▇▇▇▇▇▇ LLC in the form of
EXHIBIT 2 hereto.
"BUSINESS" means the Seller's business of manufacturing, having
manufactured, packaging, selling and distributing the Products.
"BUSINESS FACILITIES" has the meaning set forth in Section 3(v)(ii)
below.
"BUYER'S DOMESTIC PLAN" has the meaning set forth in Section 7(a)(vi)
below.
"BUYER'S PUERTO RICO PLAN" has the meaning set forth in Section
7(a)(vii) below.
"CLAIM" has the meaning set forth in Section 9(c)(i) below.
"CLOSING" has the meaning set forth in Section 2(e) below.
"CLOSING DATE" has the meaning set forth in Section 2(e) below.
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"COBRA" means the requirements of Part 6 of Subtitle B of Title I of
ERISA and Code Section 4980B and of any similar state law.
"CODE" means the Internal Revenue Code of 1986, as amended.
"COMPETING PRODUCT" has the meaning set forth in Section Section 6(e)
below.
"CONFIDENTIAL INFORMATION" means any information concerning the
businesses and affairs of the Business that is not generally available to the
public, except for information (i) required to be disclosed by court order or
decree or applicable law, (ii) that was or becomes generally available to the
public, (iii) that is received by any Party or any of their respective
Affiliates on a non-confidential basis from a third party or (iv) that may be
disclosed for use by employees, agents and representatives of any Party and any
of their respective Affiliates who need to know such information for purposes of
this Agreement or to carry out any obligations of such Party with respect
hereto.
"CPP SUPPLY AND DISTRIBUTION AGREEMENT" means the CPP Single Sterile
and Kitted Products Supply and Distribution Agreement dated as of the Closing
Date between Jostra PR and ▇▇▇▇▇▇▇ LLC in the form of EXHIBIT 3 hereto.
"DECISION" has the meaning set forth in Section 11(q) below.
"DEPOSIT" has the meaning set forth in Section 2(c)(i)(B) below.
"DISCLOSURE SCHEDULE" has the meaning set forth in Section 3 below.
"DIVESTITURE NOTICE" has the meaning set forth in Section 6(f) below.
"ECO CONTRACT" means that certain agreement which sets forth the terms
of the Seller's relationship with ECO to distribute Macchi products in Germany.
"▇▇▇▇▇▇▇ ▇▇" shall mean ▇▇▇▇▇▇▇ Lifesciences AG, a Swiss corporation.
"▇▇▇▇▇▇▇ ▇▇" shall mean ▇▇▇▇▇▇▇ Lifesciences Corporation of Puerto
Rico, a Delaware corporation.
"▇▇▇▇▇▇▇ SUPPLY AGREEMENT" means the ▇▇▇▇▇▇▇ Supply Agreement dated as
of the Closing Date between ▇▇▇▇▇▇▇ LLC, as supplier, and Jostra U.S., as
purchaser, in the form of EXHIBIT 4 hereto.
"EFFECTIVE TIME" means 11:59 p.m. New York City time on the Closing
Date.
"EMPLOYEE BENEFIT PLAN" means any "employee benefit plan" (as such term
is defined in ERISA Section 3(3)) and any other employee benefit plan, program
or arrangement of any kind.
"EMPLOYEE PENSION BENEFIT PLAN" has the meaning set forth in ERISA
Section 3(2).
"EMPLOYEE WELFARE BENEFIT PLAN" has the meaning set forth in ERISA
Section 3(1).
"ENVIRONMENTAL, HEALTH, AND SAFETY REQUIREMENTS" shall mean all
federal, state, local and foreign statutes, regulations, ordinances and other
provisions having the force or effect of law, all judicial and administrative
orders and determinations, all contractual obligations and all common law
concerning public health and safety, worker health and safety, and pollution or
protection of the environment,
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including without limitation all those relating to the presence, use,
production, generation, handling, transportation, treatment, storage, disposal,
distribution, labeling, testing, processing, discharge, release, threatened
release, control, or cleanup of any hazardous materials, substances or wastes,
chemical substances or mixtures, pesticides, pollutants, contaminants, toxic
chemicals, petroleum products or byproducts, asbestos, polychlorinated
biphenyls, noise or radiation, each as amended and as now or hereafter in
effect.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"ERISA AFFILIATE" means each entity which is treated as a single
employer with the Seller for purposes of Code Section 414.
"EXCLUDED ASSETS" means the assets listed in Section 2(a)(iv) of the
Disclosure Schedule.
"EXISTING GRANT OF TAX EXEMPTION" means the industrial tax exemption
granted to ▇▇▇▇▇▇▇ ▇▇ by PRIDCO pursuant to the 1998 Tax Act.
"EXISTING PUERTO RICO LEASE" means the Lease granted pursuant to that
certain Lease Contract dated as of July 15, 1999 between Puerto Rico Industrial
Development Company and ▇▇▇▇▇▇ Healthcare Corp. of Puerto Rico (▇▇▇▇▇▇▇
division), as amended July 28, 1999, regarding project numbers S-1212-77,
S1212-A-82, and S-1212-B-85.
"EVERGREEN AGREEMENT" means the Research Agreement dated as of November
29, 1999 between ▇▇▇▇▇▇ Healthcare Corporation and Evergreen Research, Inc.
"FIDUCIARY" has the meaning set forth in ERISA Section 3(21).
"FINAL SCHEDULE" has the meaning set forth in Section 2(d)(ii) below.
"FULL MANUFACTURING COSTS" means standard cost plus manufacturing
variances and excluding intercompany profits.
"GAAP" means United States generally accepted accounting principles as
in effect from time to time.
"▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ ACT" means the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust
Improvements Act of 1976, as amended.
"INDEMNITEE" has the meaning set forth in Section 9(c)(i) below.
"INDEMNITOR" has the meaning set forth in Section 9(c)(i) below.
"INITIAL PURCHASE PRICE" has the meaning set forth in Section
2(c)(i)(B) below.
"INTELLECTUAL PROPERTY" means (a) all inventions (whether patentable or
unpatentable and whether or not reduced to practice), all improvements thereto,
and all patents, patent applications, and patent disclosures, together with all
reissuances, continuations, continuations-in-part, revisions, extensions, and
reexaminations thereof, (b) all trademarks, service marks, trade dress, logos,
domain names, trade names, and corporate names, together with all translations,
adaptations, derivations, and combinations thereof and including all goodwill
associated therewith, and all applications, registrations, and renewals in
connection therewith, (c) all copyrightable works, all copyrights, and all
applications, registrations, and renewals in connection therewith, (d) all mask
works and all applications, registrations, and renewals in connection
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therewith, (e) all trade secrets and confidential business information
(including ideas, research and development, know-how, formulas, compositions,
manufacturing and production processes and techniques, technical data, designs,
drawings, specifications, customer and supplier lists, pricing and cost
information, and business and marketing plans and proposals), (f) all computer
software (including data and related documentation), (g) all other proprietary
rights, and (h) all copies and tangible embodiments thereof (in whatever form or
medium).
"INTELLECTUAL PROPERTY ASSIGNMENT AGREEMENTS" means the Intellectual
Property Assignment Agreements dated as of the Closing Date between the Seller
and the Buyer, in the form of EXHIBIT 5 hereto.
"INVENTORY" means the inventory associated with the Business as
identified in Section 1(a) of the Disclosure Schedule, as amended pursuant to
Section 5(j) and Section 2(d) below.
"INVENTORY PAYMENTS" has the meaning set forth in Section 2(c)(i)(C)
below.
"JOSTRA AG" means Jostra AG, a German corporation.
"KNOWLEDGE" means actual knowledge after reasonable investigation.
"LEASEHOLD IMPROVEMENTS" means all buildings, structures, improvements
and fixtures located at the Puerto Rico Plant which are owned by the Seller,
regardless of whether the same are subject to reversion to the landlord or other
third party upon termination or expiration of the Existing Puerto Rico Lease.
"LIABILITY" means any liability (whether known or unknown, whether
asserted or unasserted, whether absolute or contingent, whether accrued or
unaccrued, whether liquidated or unliquidated, and whether due or to become
due), including, without limiting the generality of the foregoing, (i) any
liability for Taxes, environmental matters, litigation or products liability
which is either existing, pending or threatened as of the Closing Date or (ii)
which arose prior to the Closing Date and to which the Buyer may be subject by
virtue of its acquisition of the Acquired Assets as the Seller's successor in
interest to the Business.
"LOSSES" has the meaning set forth in Section 9(b)(i) below.
"MACCHI BUSINESS" means the business conducted by ▇▇▇▇▇▇▇ Lifesciences
Macchi LTDA in Sao Paulo, Brazil, including all assets used in connection with
such business.
"METAPLUS AGREEMENT" means the License Agreement dated as of January
16, 1995 by and between Michigan Critical Care Consultants, Inc. and AVECOR
Cardiovascular Inc.
"MATERIAL ADVERSE CHANGE" means any event, circumstance, condition,
development or occurrence causing, resulting in, having, or that could
reasonably be expected to have, a material adverse effect on the financial
condition, business, prospects, properties or results of operations of the
Business or the Acquired Assets.
"MEMBRANA AGREEMENT" means the Amended and Restated Supply Agreement
dated as of January 1, 1994 between Akzo Nobel ▇▇▇▇▇ ▇▇, business unit Membrana
and ▇▇▇▇▇▇ Healthcare Corporation, as amended, supplemented and extended from
time to time.
"MOST RECENT BALANCE SHEET" means the balance sheet of the Seller as of
December 31, 1999.
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"MOST RECENT FISCAL YEAR END" means December 31, 1999.
"MULTIEMPLOYER PLAN" has the meaning set forth in ERISA Section 3(37).
"NEW GRANT OF TAX EXEMPTION" means the grant of industrial tax
exemption under the 1998 Tax Act that Jostra PR has requested the government of
Puerto Rico to issue to Jostra PR.
"NEW PUERTO RICO LEASE" has the meaning set forth in Section 5(h)
below.
"NON-COMPETE PRODUCTS" has the meaning set forth in Section 6(e) below.
"NON-COMPETE TERRITORY" has the meaning set forth in Section 6(e)
below.
"NON-EXCLUSIVE LICENSE AND SUPPLY AGREEMENT" means the Non-Exclusive
License and Supply Agreement dated as of the Closing Date between the Buyer and
▇▇▇▇▇▇▇ LLC, in the form of EXHIBIT 6 hereto.
"NOTICE OF INTEREST" has the meaning set forth in Section 6(f) below.
"OBSOLETE" means Inventory which has a shelf life that has expired or
will expire within six months of the Closing Date or is damaged, or was produced
pursuant to a customer contract which is no longer valid or has been terminated,
as more particularly identified in Section 1(a) of the Disclosure Schedule, as
amended pursuant to Section 5(j) and Section 2(d) below.
"ORDINARY COURSE OF BUSINESS" or "ORDINARY COURSE" means the ordinary
course of business consistent with past custom and practice (including with
respect to quantity and frequency).
"PARTY" has the meaning set forth in the preface above.
"PBGC" means the Pension Benefit Guaranty Corporation.
"PERFUSION SUPPLY AGREEMENT" means the Perfusion Supply Agreement dated
as of the Closing Date between the Buyer, as supplier, and ▇▇▇▇▇▇▇ LLC, as
purchaser, in the form of EXHIBIT 7 hereto.
"PERSON" means an individual, a partnership, a corporation, an
association, a joint stock company, a trust, a joint venture, an unincorporated
organization, or a governmental entity (or any department, agency, or political
subdivision thereof).
"PLEXUS AGREEMENT" means the draft Manufacturing Agreement between
Plexus and Seller.
"PRIDCO" has the meaning set forth in Section 5(h) below.
"PRIRC" means the Puerto Rico Internal Revenue Code.
"PRODUCTS" means the products set forth in Section 1(b) of the
Disclosure Schedule.
"PROMISSORY NOTE" means one or more negotiable promissory notes between
▇▇▇▇▇▇▇ LLC, as obligee, and the applicable Buyer entities, as joint and several
obligors, in the form of EXHIBIT 8 hereto.
"PUERTO RICO PLANT" means the property currently leased pursuant to the
Existing Puerto Rico Lease.
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"PURCHASE PRICE" means the aggregate of the Initial Purchase Price
(which includes the Deposit), the Trademark Price and the Inventory Payments.
"PWC" means PricewaterhouseCoopers LLP.
"REPAYMENT AMOUNT" has the meaning set forth in Section 10(c)(i) below.
"RESEARCH MEDICAL, INC. TRADEMARK LICENSE" shall mean the Research
Medical, Inc. Trademark License dated as of the Closing Date to be entered into
between Jostra U.S. and ▇▇▇▇▇▇▇ Lifesciences Research Medical, Inc. in the form
of EXHIBIT 19 hereto
"SALES PERSONS" shall have the meaning set forth in Section 7(a)(v)
below.
"SALES TERRITORY" means each of (i) Alabama, Mississippi and Arkansas,
(ii) North Carolina, South Carolina and Virginia and (iii) Louisiana, Texas and
Oklahoma.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SECURITIES EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.
"SECURITY INTEREST" means any mortgage, pledge, lien, encumbrance,
charge, or other security interest, other than (a) mechanic's, materialmen's,
and similar liens, (b) liens for Taxes not yet due and payable or for Taxes that
the taxpayer is contesting in good faith through appropriate proceedings, (c)
purchase money liens and liens securing rental payments under capital lease
arrangements, and (d) other liens arising in the ordinary course of business and
not incurred in connection with the borrowing of money.
"SELLER" has the meaning set forth in the preface above.
"SELLER'S 401(K) PLAN" has the meaning set forth in Section 7(a)(vi)
below.
"SELLER'S PUERTO RICO PLAN" has the meaning set forth in Section
7(a)(vii) below.
"SHARED AGREEMENTS" means the shared agreements set forth in Section
2(a)(iv) of the Disclosure Schedule under the heading "Shared Agreements."
"SHARED INTELLECTUAL PROPERTY" means the Intellectual Property owned by
the Seller as of the Closing Date, subject to any pre-existing licenses thereto,
and necessary to conduct both the Business and the Seller's remaining operations
excluding the Business.
"SOFTWARE LICENSE AGREEMENT" means the Software License Agreement dated
as of the Closing Date between ▇▇▇▇▇▇▇ LLC, as licensor, and the Buyer, as
licensee, in the form of EXHIBIT 9 hereto.
"STERILIZATION AGREEMENT" means the Sterilization Agreement dated as of
the Closing Date between ▇▇▇▇▇▇▇ ▇▇ and Jostra PR.
"STOCK-TAKE" means the stock-take to be conducted pursuant to Section
5(j) below.
"SUBSIDIARY" means any corporation with respect to which a specified
Person (or a Subsidiary thereof) owns a majority of the common stock or has the
power to vote or direct the voting of sufficient securities to elect a majority
of the directors.
7
"TAX" means any federal, state, local, or foreign income, gross
receipts, license, payroll, employment, excise, severance, stamp, occupation,
premium, windfall profits, environmental (including taxes under Code Section
59A), customs duties, capital stock, franchise, profits, withholding, social
security (or similar), unemployment, disability, real property, personal
property, sales, use, transfer, registration, value added, alternative or add-on
minimum, estimated, or other tax of any kind whatsoever, including any interest,
penalty, or addition thereto, whether disputed or not.
"TAX RETURN" means any return, declaration, report, claim for refund,
or information return or statement relating to Taxes, including any schedule or
attachment thereto, and including any amendment thereof.
"TRADEMARK PRICE" shall have the meaning set forth in Section
2(c)(i)(A) below.
"TRANSACTION DOCUMENTS" means, collectively, the Agency Agreement for
Tender Contracts, the ▇▇▇▇ of Sale, the Baxter Consent Agreement, the Bentley
License Agreement, the CPP Supply and Distribution Agreement, the ▇▇▇▇▇▇▇ Supply
Agreement, the Trademark Assignment Agreement, the Patent Assignment Agreement,
the Non-Exclusive License and Supply Agreement, the Perfusion Supply Agreement,
the Promissory Note, the Software License Agreement, the Research Medical, Inc.
Trademark License, the ETO Sterilization Agreement, the Transition Services
Agreement, the Agency Agreement for Shared Agreements, the Agency Agreement for
Cannulae Sales, the Agency Agreement for CPP Sales, the Agency Agreement for
Spain Sales and the Belgian VAT Agreement.
"TRANSFERRED EMPLOYEES" has the meaning set forth in Section 3(s)(i)
below.
"TRANSITION SERVICES AGREEMENT" means the Transition Services Agreement
dated as of the Closing Date between ▇▇▇▇▇▇▇ LLC and ▇▇▇▇▇▇▇ ▇▇, and Jostra PR
and Jostra U.S., in the form of EXHIBIT 10 hereto.
"UDEN FACILITY" means the Seller's facility located at Uden,
Netherlands.
"UNDELIVERED CONTRACTS" has the meaning set forth in Section 5(l)
below.
"WARN" has the meaning set forth in Section 7(d).
2. BASIC TRANSACTION.
(a) PURCHASE AND SALE OF ASSETS. On and subject to the terms and
conditions of this Agreement:
(i) Jostra U.S. agrees to purchase from ▇▇▇▇▇▇▇ Corp., and
▇▇▇▇▇▇▇ Corp. agrees to sell, transfer, convey and deliver to Jostra
U.S., all of ▇▇▇▇▇▇▇ Corp.'s right, title and interest in and to the
Acquired Assets set forth as items 86-131, inclusive, in Section
3(j)(iii) and 11-15, inclusive, of Section 3(j)(v) of the Disclosure
Schedule, at the Closing for the consideration specified below in
Section 2(c)(i)(A).
(ii) Jostra PR agrees to purchase from ▇▇▇▇▇▇▇ Corp., and
▇▇▇▇▇▇▇ Corp. agrees to sell, transfer, convey and deliver to Jostra
PR, all of ▇▇▇▇▇▇▇ Corp.'s right, title and interest in and to the
Acquired Assets set forth as items 1-85, inclusive, and 132-135,
inclusive, in Section 3(j)(iii) and 1-10,inclusive, of Section 3(j)(v)
of the Disclosure Schedule, at the Closing for the consideration
specified below in Section 2(c)(i)(B).
8
(iii) Jostra PR agrees to purchase from ▇▇▇▇▇▇▇ LLC, and
▇▇▇▇▇▇▇ LLC agrees to sell, transfer, convey and deliver to Jostra PR,
all of ▇▇▇▇▇▇▇ LLC's right, title and interest in and to the Acquired
Assets (including, without limitation, the assets set forth in Section
1(a), Section 1(b) and Section 2(a)(iii) of the Disclosure Schedule,
but excluding the Acquired Assets set forth in Section 3(j)(iii) of the
Disclosure Schedule), at the Closing for the consideration specified
below in Section 2(c)(i)(B) and (C). ▇▇▇▇▇▇▇ LLC shall transfer, and
shall cause ▇▇▇▇▇▇▇ ▇▇ and ▇▇▇▇▇▇▇ ▇▇ to transfer, to Jostra PR those
Transferred Employees who elect to accept employment with Jostra PR.
(iv) The Seller is not selling, transferring or conveying any
of the Excluded Assets to the Buyer.
(b) NON-ASSUMPTION OF LIABILITIES. The Buyer will not assume or have
any responsibility, with respect to any obligation or Liability of the Seller,
including, without limitation, any obligation or Liability of the Business or
associated with or related to the Acquired Assets, other than performance
obligations arising as a result of the Buyer's action or inaction after the
Closing Date with respect to any contract that is an Acquired Asset. The Buyer
is not assuming any Liability relating to the Excluded Assets.
(c) PURCHASE PRICE.
(i) The Buyer agrees to pay to the Seller:
(A) At the Closing, Jostra U.S. will pay to ▇▇▇▇▇▇▇ Corp.
$600,000 (the "TRADEMARK PRICE") in cash payable by
wire transfer or delivery of other immediately
available funds;
(B) Jostra PR will pay to ▇▇▇▇▇▇▇ LLC and ▇▇▇▇▇▇▇ Corp.
$9,400,000 (the "INITIAL PURCHASE PRICE"), of which
$2,000,000 was paid to ▇▇▇▇▇▇▇ LLC on June 5, 2000 (the
"DEPOSIT"), and of which $7,400,000 shall be paid to
▇▇▇▇▇▇▇ LLC and ▇▇▇▇▇▇▇ Corp. at the Closing in cash
payable by wire transfer or delivery of other
immediately available funds; and
(C) As set forth in the installment schedule below, Jostra
PR will pay to ▇▇▇▇▇▇▇ LLC 70% of the net book value
based on Full Manufacturing Costs of the Inventory as
set forth in Section 1(a) of the Disclosure Schedule
(as amended pursuant to Section 5(j) below), PROVIDED,
HOWEVER, that Jostra PR shall pay nothing for any
Inventory which is Obsolete as of the Closing Date (the
"INVENTORY PAYMENTS"), plus interest at an annual rate
of 3% on any unpaid Inventory Payments. The aggregate
amount payable with respect to the Inventory will be
calculated by taking the net book value based on Full
Manufacturing Costs of the Inventory, subtracting from
it the net book value based on Full Manufacturing Costs
of the Obsolete Inventory and multiplying the result of
such subtraction by 0.70. The Inventory Payments,
together with any interest that is due, shall be paid
in six equal installments on each of December 1, 2000;
March 1, 2001; June 1, 2001; September 1, 2001;
December 1, 2001; and March 1, 2002. In the event that
any such payment date is a Saturday, Sunday or public
holiday in Germany or the United States, the payment
shall be made on the next succeeding business day.
Notwithstanding the foregoing, Jostra PR shall not be
required to purchase the Inventory
9
with an aggregate net book value based on full
manufacturing costs exceeding $29,000,000. The Buyer
shall determine, in its sole discretion, the Inventory
that shall comprise such aggregate amount.
(ii) All amounts payable pursuant to this Section 2(c) shall
be in U.S. dollars.
(d) ADJUSTMENTS TO FIXED ASSETS AND INVENTORY; INVENTORY PAYMENTS
ADJUSTMENT.
(i) Prior to the Closing Date, the Seller, in cooperation with
the Buyer and its representatives, shall produce a final schedule of
fixed assets that comprise the Business.
(ii) As promptly as practicable after the Closing Date (but in
no event more than 15 days after the Closing Date), the Seller and the
Buyer shall produce a final schedule of the Inventory and fixed assets
of the Business as of the Closing Date (the "FINAL SCHEDULE"), which
shall reflect any changes in the Inventory and the fixed assets between
the date of the Stock-take and the Closing Date.
(iii) If the Buyer accepts the Final Schedule, the Inventory
Payments shall be adjusted accordingly.
(iv) In the event the Buyer disputes the Final Schedule within
7 days of receiving the Final Schedule, the Parties shall cooperate to
(A) conduct a further physical stock-take of the Inventory and fixed
assets within 7 days of the Buyer giving notice to the Seller that it
disputes the Final Schedule and (B) mutually agree to the terms of the
Final Schedule. The cost of such further Stock-take shall be borne
equally by the Parties.
(v) Upon the Buyer's acceptance of the Final Schedule, the
Buyer shall execute and deliver a Promissory Note in the amount of the
aggregate Inventory Payments.
(vi) The Promissory Note will be secured by the Bank Guaranty,
the aggregate principal amount of which shall be reduced to the then
aggregate amount of the outstanding Inventory Payments when the
Inventory Payments outstanding are $15,000,000 or less.
(e) THE CLOSING. The closing of the transactions contemplated by this
Agreement (the "CLOSING") shall take place at the offices of ▇▇▇▇▇▇, ▇▇▇▇ &
▇▇▇▇▇▇▇▇ LLP in Irvine, California, commencing at 10:00 a.m. local time on the
fifth day following the satisfaction or waiver of all conditions to the
obligations of the Parties to consummate the transactions contemplated hereby
(other than conditions with respect to actions the respective Parties will take
at the Closing itself) or such other date as the Parties may mutually determine
(the "CLOSING DATE").
(f) DELIVERIES AT THE CLOSING. At the Closing, (i) the Seller will
deliver to the Buyer the various certificates, instruments, and documents
referred to in Section 8(a) below; (ii) the Buyer will deliver to the Seller the
various certificates, instruments, and documents referred to in Section 8(b)
below; (iii) the Seller will execute, acknowledge (if appropriate), and deliver
to the Buyer (A) assignments (including the Intellectual Property transfer
documents) in the forms attached hereto as EXHIBIT 5 and EXHIBIT 11 and (B) such
other instruments of sale, transfer, conveyance, and assignment as the Buyer and
its counsel may reasonably request to vest in the Buyer title in and to the
Acquired Assets; and (iv) the Buyer will deliver to the Seller the consideration
specified in Section 2(c)(i)(A) and Section 2(c)(i)(B) above.
(g) EFFECTIVE TIME. The Acquired Assets will be deemed to be
transferred to Buyer from Seller as of the Effective Time. Seller shall be
responsible for, shall have all rights to and shall accrue all benefits from the
Acquired Assets prior to the Effective Time, and Buyer shall be responsible for,
shall
10
have all rights to and shall accrue all benefits from the Acquired Assets at and
following the Effective Time.
(h) CONTINGENT INVENTORY REPURCHASE. The Seller shall use commercially
reasonable efforts to assist the Buyer in obtaining an extension of the term of
the Baxter Consent Agreement until August 31, 2002. In connection therewith, the
Buyer shall, as promptly as practicable, but in no event later than December 31,
2000, develop an executable re-labeling plan with respect to all Products that
carry a Baxter Trademark. In the event such extension is not obtained then the
Seller will repurchase from the Buyer all non-Obsolete Inventory which the Buyer
is unable to sell solely as a result of the expiration of the Baxter Consent
Agreement. The repurchase price shall be equal to 50% of the amount which the
Buyer paid to the Seller for such repurchased Inventory and shall be payable
solely by offset against any amounts then owing to the Seller from the Buyer
under the Promissory Note; PROVIDED, HOWEVER, that in no event shall the
Seller's repurchase obligation hereunder exceed the then outstanding principal
amount of the Promissory Note.
3. REPRESENTATIONS AND WARRANTIES OF THE SELLER. Each Seller jointly
and severally represents and warrants to the Buyer that the statements contained
in this Section 3 are correct and complete as of the date of this Agreement and
will be correct and complete as of the Closing Date (as though made then and as
though the Closing Date were substituted for the date of this Agreement
throughout this Section 3), except as set forth in the schedule accompanying
this Agreement (the "DISCLOSURE SCHEDULE"). The Disclosure Schedule will be
arranged in paragraphs corresponding to the lettered and numbered paragraphs and
subparagraphs contained in this Section 3.
(a) ORGANIZATION OF THE SELLER. The Seller is duly organized, validly
existing, and in good standing under the laws of the jurisdiction of its
organization.
(b) AUTHORIZATION OF TRANSACTION. The Seller has full power and
authority to execute and deliver this Agreement and each Transaction Document to
which it is a party and to perform its obligations hereunder and thereunder.
This Agreement, the Transaction Documents and the transactions contemplated
hereby and thereby have been approved and adopted by the Seller's Board of
Directors, or other governing body, as applicable. Each of this Agreement and
the Transaction Documents to which the Seller is a party constitutes the valid
and legally binding obligation of the Seller, enforceable in accordance with its
terms and conditions, except as such enforceability may be limited by general
principles of equity, bankruptcy, insolvency, reorganization and moratorium and
other similar laws relating to creditors' rights (the "BANKRUPTCY EXCEPTIONS").
(c) NONCONTRAVENTION. Neither the execution and the delivery of this
Agreement or any Transaction Document, nor the consummation of the transactions
contemplated hereby or thereby (including the assignments referred to in Section
2 above), will (i) violate any constitution, statute, regulation, rule,
injunction, judgment, order, decree, ruling, charge, or other restriction of any
government, governmental agency, or court to which the Seller, the Business or
the Acquired Assets is subject, except for such violations that in the aggregate
will not cause a Material Adverse Change, (ii) violate any provision of the
articles, bylaws, operating agreement or other constitutional agreements of the
Seller or (iii) conflict with, result in a breach of, constitute a default
under, result in the acceleration of, create in any party the right to
accelerate, terminate, modify, or cancel, or require any notice under any
agreement, contract, lease, license, instrument, or other arrangement to which
the Seller is a party or by which it is bound or to which the Business or the
Acquired Assets are subject (or result in the imposition of any Security
Interest thereon), except where such conflict, breach, default, acceleration, or
right of acceleration, termination, modification, cancellation or notice
requirement will not result in a Material Adverse Change. The Seller does not
need to give any notice to, make any filing with, or obtain any authorization,
consent, or approval of any government or governmental agency in order for the
Parties to
11
consummate the transactions contemplated by this Agreement or any Transaction
Document (including the assignments referred to in Section 2 above).
(d) BROKERS' FEES. The Seller has no Liability or obligation to pay any
fees or commissions to any broker, finder, or agent with respect to the
transactions contemplated by this Agreement for which the Buyer could become
liable or obligated.
(e) TITLE TO ASSETS; SUFFICIENCY OF ASSETS. The Seller has good and
marketable title to, or a valid leasehold or license interest in or to, the
Acquired Assets, free and clear of all Security Interests or restriction on
transfer. Except for the Excluded Assets, the Acquired Assets constitute all of
the assets, whether tangible or intangible, real or personal, that are necessary
for the conduct of the Business as currently conducted.
(f) EVENTS SUBSEQUENT TO MOST RECENT FISCAL YEAR END. Since the Most
Recent Fiscal Year End and except for the spin-off of the Seller's business from
▇▇▇▇▇▇ International on March 31, 2000, there has not been any Material Adverse
Change. Without limiting the generality of the foregoing, since that date (or
any other date specifically provided for below):
(i) the Seller has not sold, leased, transferred, or assigned any
of the Business' assets, tangible or intangible, other than for a fair
consideration in the ordinary course;
(ii) the Seller has not entered into any agreement, contract,
lease, or license (or series of related agreements, contracts, leases,
and licenses) relating to the Business either involving more than
$25,000 (other than contracts on the Seller's standard form purchase
order set forth in Section 3(q) of the Disclosure Schedule) or outside
the ordinary course;
(iii) no party has accelerated, terminated, modified, or
cancelled any agreement, contract, lease, or license (or series of
related agreements, contracts, leases, and licenses) relating to the
Business involving more than $25,000 to which the Seller is a party or
by which it is bound;
(iv) the Seller has not granted any license or sublicense of any
rights under or with respect to any Intellectual Property;
(v) the Seller has not experienced any damage, destruction, or
loss (normal wear and tear excepted) (whether or not covered by
insurance) to any Acquired Asset;
(vi) the Seller has not made any loan to, or entered into any
other transaction with, any of the Transferred Employees outside the
ordinary course;
(vii) the Seller has not entered into any employment contract or
collective bargaining agreement relating to any Transferred Employee,
written or oral, or modified the terms of any existing such contract or
agreement;
(viii) the Seller has not granted any increase in the base
compensation of any Transferred Employee outside the ordinary course;
(ix) since April 1, 2000, the Seller has not adopted, amended,
modified, or terminated any bonus, profit-sharing, incentive,
severance, or other plan, contract, or commitment for the benefit of
any of the Transferred Employees or taken any such action with respect
to any other Employee Benefit Plan that is not in the ordinary course
of business or that has not been disclosed to the Buyer in the
Disclosure Schedule;
12
(x) the Seller has not made any other change in employment terms
for any of the Transferred Employees outside the ordinary course;
(xi) there has not been any other material occurrence, event,
incident, action, failure to act, or transaction outside the ordinary
course involving the Business; or
(xii) the Seller has not committed to any of the foregoing.
(g) LEGAL COMPLIANCE. The Seller and its Affiliates have complied with
all applicable laws (including rules, regulations, codes, plans, injunctions,
judgments, orders, decrees, rulings, and charges thereunder) of federal, state,
local, and foreign governments (and all agencies thereof) relating to the
Business (except where the failure to so comply would not result in a Material
Adverse Change), and no action, suit, proceeding, hearing, investigation,
charge, complaint, claim, demand, or notice has been filed or commenced against
the Seller alleging any failure so to comply.
(h) TAX MATTERS.
(i) The Seller has filed all material Tax Returns that it was
required to file with respect to the Business. All such Tax Returns
were correct and complete in all material respects. All material Taxes
owed by the Seller with respect to the Business (whether or not shown
on any Tax Return) have been paid. The Seller currently is not the
beneficiary of any extension of time within which to file any Tax
Return. No claim has ever been made by an authority in a jurisdiction
where the Seller does not file Tax Returns that it is or may be subject
to taxation by that jurisdiction. There are no Security Interests on
any of the Acquired Assets that arose in connection with any failure
(or alleged failure) to pay any Tax.
(ii) The Seller has withheld and paid all material Taxes required
to have been withheld and paid with respect to the Business in
connection with amounts paid or owing to any employee, independent
contractor, creditor, stockholder, or other third party.
(iii) No officer of the Seller (or employee responsible for Tax
matters) expects any authority to assess any additional Taxes with
respect to the Business for any period for which Tax Returns have been
filed. There is no dispute or claim concerning any Tax Liability either
(A) claimed or raised by any authority in writing or (B) as to which
any of the officers (and employees responsible for Tax matters) of the
Seller has Knowledge based upon personal contact with any agent of such
authority.
(iv) Since its inception, ▇▇▇▇▇▇▇ LLC has been treated as a
single-member disregarded entity for federal income tax purposes.
(v) The Seller has not been reimbursed by PRIDCO for the cost of
any of the Acquired Assets.
(i) [Reserved].
(j) INTELLECTUAL PROPERTY.
(i) The Seller owns or has the right to use pursuant to license,
sublicense, agreement, or permission all Bentley Intellectual Property
and Shared Intellectual Property necessary for the operation of the
Business as presently conducted. Each such item of Bentley Intellectual
Property and Shared Intellectual Property will be owned or available
for use by the Buyer on identical
13
terms and conditions immediately subsequent to the Closing hereunder.
The Seller has taken all necessary and reasonable action to maintain
and protect each such item of Intellectual Property.
(ii) In connection with the Business, to the Seller's Knowledge,
it has not interfered with, infringed upon, misappropriated, or
otherwise come into conflict with any Intellectual Property rights of
third parties. None of the officers (and employees with responsibility
for Intellectual Property matters) of the Seller has ever received any
charge, complaint, claim, demand, or notice alleging any such
interference, infringement, misappropriation, or violation (including
any claim that the Seller must license or refrain from using any
Intellectual Property rights of any third party). To the Knowledge of
any of the officers (and employees with responsibility for Intellectual
Property matters) of the Seller, no third party has interfered with,
infringed upon, misappropriated, or otherwise come into conflict with
any Intellectual Property rights of the Seller relating to the
Business. The foregoing Section 3(j)(ii) shall not apply to issues
which have been settled by written agreement and with respect to which
no third party has any present claim.
(iii) In connection with the Business, to the Seller's Knowledge,
Section Section 3(j)(iii) and 3(j)(v) of the Disclosure Schedule
identify the Bentley Intellectual Property and the Shared Intellectual
Property. Included in Section 3(j)(iii) and 3(j)(v) of the Disclosure
Schedule is each patent or registration which has been issued to the
Seller with respect to any of the Bentley Intellectual Property and
Shared Intellectual Property, each pending patent application or
application for registration which the Seller has made with respect to
any of the Bentley Intellectual Property and Shared Intellectual
Property, and each license, agreement, or other permission which the
Seller has granted to any third party with respect to any of the
Bentley Intellectual Property and Shared Intellectual Property
(together with any exceptions). Section 3(j)(iii) and 3(j)(v) of the
Disclosure Schedule also identify each trademark (whether registered or
unregistered), service ▇▇▇▇, trade dress, logo, domain name, trade
name, corporate name and registered copyright, and all applications for
the foregoing, used by the Seller in connection with the Business. With
respect to each item of Intellectual Property required to be identified
in Section 3(j)(iii) and 3(j)(v) of the Disclosure Schedule:
(A) the Seller possesses all right, title, and interest in
and to the item, free and clear of any Security Interest,
license, or other restriction;
(B) the item is not subject to any outstanding injunction,
judgment, order, decree, ruling, or charge; and
(C) no action, suit, proceeding, hearing, investigation,
charge, complaint, claim, or demand is pending or, to the
Knowledge of any of the officers (and employees with
responsibility for Intellectual Property matters) of the Seller
is threatened which alleges the legality, validity,
enforceability, use, or ownership of the item.
(iv) Section 3(j)(iv) of the Disclosure Schedule identifies each
item of Intellectual Property that any third party owns and that the
Seller uses pursuant to license, sublicense, agreement, or permission
primarily relating to the business. With respect to each item of
Intellectual Property required to be identified in Section 3(j)(iv) of
the Disclosure Schedule:
(A) the license, sublicense, agreement, or permission
covering the item is legal, valid, binding, enforceable, and in
full force and effect;
(B) the license, sublicense, agreement, or permission will
continue to be legal, valid, binding, enforceable, and in full
force and effect on identical terms following the
14
consummation of the transactions contemplated hereby (including
the assignments referred to in Section 2 above);
(C) no party to the license, sublicense, agreement, or
permission is in breach or default, and no event has occurred
which with notice or lapse of time would constitute a breach or
default or permit termination, modification, or acceleration
thereunder;
(D) no party to the license, sublicense, agreement, or
permission has repudiated any provision thereof;
(E) the underlying item of Intellectual Property is not
subject to any outstanding injunction, judgment, order, decree,
ruling, or charge;
(F) no action, suit, proceeding, hearing, investigation,
charge, complaint, claim, or demand is pending or, to the
Knowledge of any of the officers (and employees with
responsibility for Intellectual Property matters) of the Seller
is threatened which challenges the legality, validity, or
enforceability of the underlying item of Intellectual Property;
and
(G) the Seller has not granted any sublicense or similar
right with respect to the license, sublicense, agreement, or
permission.
(v) To the Knowledge of any of the officers (and employees with
responsibility for Intellectual Property matters) of the Seller, the
Seller would not interfere with, infringe upon, misappropriate, or
otherwise come into conflict with, any Intellectual Property rights of
third parties as a result of the continued operation of the Business as
presently conducted.
(vi) To the Knowledge of the Seller, the only Shared Intellectual
Property is the patents identified in Section 3(j)(v) of the Disclosure
Schedule and certain manufacturing processes.
(k) TANGIBLE ASSETS. The tangible Acquired Assets, taken as a whole, to
the Seller's Knowledge, are free from defects (patent and latent), have been
maintained in accordance with normal industry practice, are in good operating
condition and repair (subject to normal wear and tear), and are suitable for the
purposes for which they presently are used.
(l) INVENTORY. Other than the Inventory which is Obsolete, the
Inventory of the Business consists of raw materials and supplies, manufactured
and purchased parts, goods in process, and finished goods, all of which is
merchantable and fit for the purpose for which it was procured or manufactured,
and none of which is obsolete, damaged, or defective.
(m) CONTRACTS. Section 3(m)(1) and Section 3(m)(2) of the Disclosure
Schedule list the following contracts and other agreements (whether written or
oral) primarily relating to the Business to which (A) the Seller is a party (by
assignment or otherwise), (B) the Seller's predecessor is a party and the Seller
has applied for the other party(ies) consent to the assignment of the rights and
benefits under such contract or agreement to the Seller; and (C) the Seller's
predecessor is a party and the Seller has not requested the other party(ies)
consent to an assignment of the rights and obligations under such contract or
agreement to the Seller:
(i) any agreement (or group of related agreements) for the lease
of personal property to or from any Person providing for lease payments
in excess of $25,000 per annum;
(ii) any agreement (or group of related agreements) for the
purchase or sale of raw materials, commodities, supplies, products, or
other personal property, or for the furnishing or
15
receipt of services, the performance of which will extend over a period
of more than one year, result in a loss to the Seller, or involve
consideration in excess of $25,000;
(iii) any agreement concerning a partnership or joint venture;
(iv) any agreement (or group of related agreements) under which
it has created, incurred, assumed, or guaranteed any indebtedness for
borrowed money, or any capitalized lease obligation, in excess of
$25,000 or under which it has imposed a Security Interest on any of the
Acquired Assets, tangible or intangible;
(v) form of any agreement concerning confidentiality or
noncompetition between the Seller and any Transferred Employee;
(vi) any agreement involving any of the Seller's stockholders and
their Affiliates (including the Seller and its Subsidiaries);
(vii) any profit sharing, stock option, stock purchase, stock
appreciation, deferred compensation, severance, or other plan or
arrangement for the benefit of the Transferred Employees;
(viii) any collective bargaining agreement relating to the
Transferred Employees;
(ix) any agreement for the employment of any of the Transferred
Employees on a full-time, part-time, consulting, or other basis
providing annual compensation in excess of $50,000 or providing
severance benefits;
(x) any agreement under which it has advanced or loaned any
amount to any of the Transferred Employees;
(xi) any agreement under which the consequences of a default or
termination could result in a Material Adverse Change;
(xii) any agreement relating to the license, sublicense,
ownership, use, or transfer of Intellectual Property; or
(xiii) any other agreement (or group of related agreements) the
performance of which involves consideration in excess of $25,000.
Section 3(m)(1) of the Disclosure Schedule sets forth the contracts and
agreements, full and complete copies of which have been delivered to the Buyer
prior to the date of this Agreement. Section 3(m)(2) of the Disclosure Schedule
sets forth the contracts and agreements which have not been delivered to the
Buyer prior to the date of this Agreement and those contracts and agreements
which have been delivered to the Buyer prior to the date of this Agreement but
where certain information has been redacted or is missing.
The Seller has delivered to the Buyer a correct and complete copy of each
written agreement listed in Section 3(m)(1) of the Disclosure Schedule (as
amended to date) and a written summary setting forth the terms and conditions of
the oral agreements relating to Metaplus and any intra-company arrangement
referred to in Section 3(m)(1) of the Disclosure Schedule.
With respect to each agreement listed on either Section 3(m)(1) or Section
3(m)(2) of the Disclosure Schedule: (A) the agreement is legal, valid, binding,
enforceable, and in full force and effect; (B) the agreement will continue to be
legal, valid, binding, enforceable, and in full force and effect on identical
terms following
16
the consummation of the transactions contemplated hereby (including the
assignments referred to in Section 2 above); (C) no party is in breach or
default, and no event has occurred which with notice or lapse of time would
constitute a breach or default, or permit termination, modification, or
acceleration, under the agreement; and (D) no party has repudiated any provision
of the agreement.
(n) [Reserved].
(o) INSURANCE. The Seller has maintained insurance in scope and amount
customary and reasonable for businesses comparable to the Business and the
Seller believes such insurance is adequate to meet all reasonable and
foreseeable claims against the Seller arising in connection with the Business.
(p) LITIGATION. Section 3(p) of the Disclosure Schedule sets forth each
instance in which the Seller (i) is subject to any outstanding injunction,
judgment, order, decree, ruling, or charge relating to or affecting the Business
or (ii) is a party or has been threatened in writing to be made a party to any
action, suit, proceeding, hearing, or investigation of, in, or before any court
or quasi-judicial or administrative agency of any federal, state, local, or
foreign jurisdiction or before any arbitrator relating to or affecting the
Business. To the Seller's Knowledge, none of the actions, suits, proceedings,
hearings, and investigations set forth in Section 3(p) of the Disclosure
Schedule could result in a Material Adverse Change.
(q) PRODUCT WARRANTY. Each product manufactured, sold, leased, or
delivered by the Seller relating to the Business has been in material conformity
with all applicable contractual commitments and all express and implied
warranties, and the Seller has no Liability (and to the Seller's Knowledge there
is no basis for any present or future action, suit, proceeding, hearing,
investigation, charge, complaint, claim, or demand against the Seller giving
rise to any Liability) for replacement or repair thereof or other damages in
connection therewith. No product manufactured, sold, leased, or delivered by the
Seller in the Non-compete Territory relating to the Business is subject to any
guaranty, warranty, or other indemnity beyond the applicable standard terms and
conditions of sale or lease. Section 3(q) of the Disclosure Schedule includes
copies of the standard terms and conditions of sale or lease for the Business
used in the Non-compete Territory (containing applicable guaranty, warranty, and
indemnity provisions).
(r) PRODUCT LIABILITY. The Seller has no Liability (and to the Seller's
Knowledge there is no basis for any present or future action, suit, proceeding,
hearing, investigation, charge, complaint, claim, or demand against the Seller
giving rise to any Liability) arising out of any injury to individuals or
property as a result of the ownership, possession, or use of any product
manufactured, sold, leased, or delivered by the Seller relating to the Business.
(s) EMPLOYEES.
(i) Section 3(s)(i) of the Disclosure Schedule sets forth a
complete list of all permanent, temporary and full-time employees of the Seller
conducting the Business who will be offered employment by the Buyer (the
"TRANSFERRED EMPLOYEES"), their salaries and wage rates, position, and length of
service as of July 15, 2000, the vacation pay schedule for Jostra PR's employees
as of June 30, 2000 and the vacation pay schedule for Jostra U.S.' employees as
of July 31, 2000 and, the accrued Christmas bonus entitlement of Jostra PR's
employees as of August 31, 2000.
(ii) To the Knowledge of any of ▇▇▇▇▇▇▇ LLC's or ▇▇▇▇▇▇▇ PR's
directors and the Seller's officers (and employees with responsibility for
employment matters), none of the Transferred Employees has any plans to
terminate his/her employment.
(iii) The Seller is not a party to or bound by any collective
bargaining agreement relating to the Transferred Employees, nor has it
experienced any strikes, grievances, claims of unfair labor practices, or other
collective bargaining disputes, in each case relating to the Transferred
Employees. The
17
Seller has not committed any unfair labor practice. None of the directors of
▇▇▇▇▇▇▇ LLC or ▇▇▇▇▇▇▇ ▇▇ or the officers (and employees with responsibility for
employment matters) of the Seller has any Knowledge of any organizational effort
presently being made or threatened by or on behalf of any labor union with
respect to the Transferred Employees.
(t) EMPLOYEE BENEFITS.
(i) Section 3(t) of the Disclosure Schedule lists each Employee
Benefit Plan that the Seller maintains in connection with the Business,
to which the Seller contributes or has any obligation to contribute, or
with respect to which the Seller has any Liability or potential
Liability, and the Seller has delivered to the Buyer correct and
complete copies of the plan documents and summary plan descriptions,
and all related trust agreements, insurance contracts, and other
funding arrangements which implement each such Employee Benefit Plan,
and solely for those Employee Benefit Plans which are not Excluded
Assets, to the extent applicable, the most recent determination letter
received from the Internal Revenue Service, the most recent annual
report (IRS Form 5500, with all applicable attachments).
(A) Each such Employee Benefit Plan (and each related
trust, insurance contract, or fund) which is not an Excluded
Asset has been maintained, funded and administered in accordance
with the terms of such Employee Benefit Plan and in material
compliance in form and in operation with the applicable
requirements of ERISA, the Code, the PRIRC, and other applicable
laws. The requirements of COBRA have been met with respect to
each such Employee Benefit Plan which is an Employee Welfare
Benefit Plan subject to COBRA and which is not an Excluded Asset.
(B) All contributions (including all employer
contributions and employee salary reduction contributions) which
are due have been made within the time period prescribed by ERISA
to each such Employee Benefit Plan which is an Employee Pension
Benefit Plan which is not an Excluded Asset and all contributions
for any period ending on or before the Closing Date which are not
yet due have been made to each such Employee Pension Benefit Plan
or accrued in accordance with the past custom and practice of the
Seller. All premiums or other payments for all periods ending on
or before the Closing Date have been paid with respect to each
such Employee Benefit Plan which is an Employee Welfare Benefit
Plan and is not an Excluded Asset.
(C) For each such Employee Benefit Plan which is intended
to meet the requirements of a "qualified plan" under Code Section
401(a) or PRIRC Section 1165(a) and which is not an Excluded
Asset, the Seller will provide a representation of its counsel as
to the intention that the plans be qualified under applicable law
in the form of opinion attached hereto as EXHIBIT 14.
(ii) None of the Seller, its Subsidiaries, and any ERISA
Affiliate has any obligation to contribute to, contributes to, or has
any Liability (including withdrawal liability as defined in ERISA
Section 4201) under or with respect to any Multiemployer Plan or
otherwise under Title IV of ERISA to the extent such Liability could
become a liability of the Buyer.
(iii) The Seller does not maintain, contribute to or have an
obligation to contribute to, or have any Liability or potential
Liability with respect to, any Employee Welfare Benefit Plan providing
medical, health, or life insurance or other welfare-type benefits for
current or future retired or terminated employees, their spouses, or
their dependents (other than in accordance with COBRA).
18
(u) [Reserved].
(v) ENVIRONMENTAL, HEALTH, AND SAFETY MATTERS. Except as set forth in
Section 3(v) of the Disclosure Schedule:
(i) The Seller is and has been in material compliance with all
Environmental, Health, and Safety Requirements relating to the
Business.
(ii) The Seller has obtained and complied with, and is in
compliance with, all permits, licenses and other authorizations that
are required pursuant to Environmental and Safety Requirements for the
occupation of any of its facilities that relate to any activities of
the Business (the "BUSINESS FACILITIES") and the operation of its
business; a list of all such permits, licenses and other authorizations
is set forth in Section 3(v) of the Disclosure Schedule.
(iii) The Seller has not received any written or oral notice,
report or other information regarding any material liabilities or
material potential liabilities (whether accrued, absolute, contingent,
unliquidated or otherwise), including any investigatory, remedial or
corrective obligations, relating to itself (that directly or indirectly
relates to any activities of the Business), any Business Facility or
the Business and arising under any Environmental, Health and Safety
Requirements.
(iv) Except as would not give rise to material liabilities to the
Business, none of the following exists at any of the Business
Facilities or any property that directly or indirectly relates to any
activities of the Business owned or operated by the Seller:
(A) Asbestos-containing material in any form or condition;
(B) Materials or equipment containing polychlorinated
biphenyls;
(C) Underground storage tanks or surface impoundments; or
(D) Landfills, open dumps or waste disposal areas.
(v) The Seller has not treated, stored, disposed of, arranged for
or permitted the disposal of, transported, handled, or released any
substance, including without limitation any hazardous substance, or
owned or operated any Business Facility or properties that relate to
any activities of the Business, so as to give rise to liabilities of
the Seller for response costs, natural resource damages or attorneys
fees, or damages for injuries to persons, property or the environment,
pursuant to Environmental, Health, and Safety Requirements.
(w) YEAR 2000. To the Seller's Knowledge, none of the computer
software, computer firmware, computer hardware (whether general or special
purpose) or other similar or related items of automated, computerized or
software systems that are used or relied on in the conduct of the Business, and
none of the Products and services sold, licensed, rendered, or otherwise
provided by the Seller in the conduct of the Business, will malfunction, cease
to function, generate incorrect data or produce incorrect results when
processing, providing or receiving (i) date-related data from into and between
the twentieth and twenty-first centuries or (ii) date-related data in connection
with any valid date in the twentieth and twenty-first centuries.
Except as set forth in Section 3(w) of the Disclosure Schedule, the
Seller has not made any representations or warranties regarding the ability of
any product or service sold, licensed, rendered, or otherwise provided by the
Seller in the conduct of the Business to operate without malfunction, to operate
19
without ceasing to function, to generate correct data or to produce correct
results when processing, providing or receiving (i) date-related data from, into
and between the twentieth and twenty-first centuries and (ii) date-related data
in connection with any valid date in the twentieth and twenty-first centuries.
(x) DISCLOSURE. The representations and warranties contained in this
Section 3 do not contain any untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements and
information contained in this Section 3 not misleading.
4. REPRESENTATIONS AND WARRANTIES OF THE BUYER. Each Buyer jointly and
severally represents and warrants to the Seller that the statements contained in
this Section 4 are correct and complete as of the date of this Agreement and
will be correct and complete as of the Closing Date (as though made then and as
though the Closing Date were substituted for the date of this Agreement
throughout this Section 4), except as set forth in the Disclosure Schedule. The
Disclosure Schedule will be arranged in paragraphs corresponding to the lettered
and numbered paragraphs contained in this Section 4.
(a) ORGANIZATION OF THE BUYER. The Buyer is a corporation duly
organized, validly existing, and in good standing under the laws of the
jurisdiction of its incorporation.
(b) AUTHORIZATION OF TRANSACTION. The Buyer has full power and
authority to execute and deliver this Agreement and each Transaction Document to
which it is a party and to perform its obligations hereunder and thereunder.
This Agreement, the Transaction Documents and the transactions contemplated
hereby and thereby have been approved and adopted by the Buyer's Board of
Directors. Each of this Agreement and the Transaction Documents to which the
Buyer is a party constitutes the valid and legally binding obligation of the
Buyer, enforceable in accordance with its terms and conditions, except as
limited by the Bankruptcy Exceptions.
(c) NONCONTRAVENTION. Neither the execution and the delivery of this
Agreement or any Transaction Document, nor the consummation of the transactions
contemplated hereby or thereby (including the assignments referred to in Section
2 above), will (i) violate any constitution, statute, regulation, rule,
injunction, judgment, order, decree, ruling, charge, or other restriction of any
government, governmental agency, or court to which the Buyer is subject or any
provision of its charter or bylaws or (ii) conflict with, result in a breach of,
constitute a default under, result in the acceleration of, create in any party
the right to accelerate, terminate, modify, or cancel, or require any notice
under any agreement, contract, lease, license, instrument, or other arrangement
to which the Buyer is a party or by which it is bound or to which any of its
assets is subject. The Buyer does not need to give any notice to, make any
filing with, or obtain any authorization, consent, or approval of any government
or governmental agency in order for the Parties to consummate the transactions
contemplated by this Agreement or any Transaction Document (including the
assignments referred to in Section 2 above).
(d) BROKERS' FEES. The Buyer has no Liability or obligation to pay any
fees or commissions to any broker, finder, or agent with respect to the
transactions contemplated by this Agreement for which the Seller could become
liable or obligated.
(e) FUNDING. At Closing, the Buyer will have $8,000,000 to pay the
remainder of the Initial Purchase Price. Jostra U.S. and Jostra PR will have
adequate funds to make, when due, all payments under the Promissory Note
provided for in Section 2(d)(v) above.
(f) DISCLOSURE. The representations and warranties contained in this
Section 4 do not contain any untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements and
information contained in this Section 4 not misleading.
20
5. PRE-CLOSING COVENANTS. The Parties agree as follows with respect to
the period between the execution of this Agreement and the Closing.
(a) GENERAL. Each of the Parties will use commercially reasonable
efforts to take all action and to do all things necessary, proper, or advisable
in order to consummate and make effective the transactions contemplated by this
Agreement (including satisfaction, but not waiver, of the Closing conditions set
forth in Section 8 below).
(b) NOTICES AND CONSENTS. The Seller will give any notices to third
parties, and the Seller will use commercially reasonable efforts to obtain any
third party consents, that the Buyer may reasonably request in connection with
the matters referred to in Section 3(c) above. Each of the Parties will give any
notices to, make any filings with, and use commercially reasonable efforts to
obtain any authorizations, consents, and approvals of governments and
governmental agencies in connection with the matters referred to in Section 3(c)
and Section 4(c) above. Without limiting the generality of the foregoing, each
of the Parties will file any notification and report forms and related material
that it may be required to file with the Federal Trade Commission and the
Antitrust Division of the United States Department of Justice under the
▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act within 7 days of the date of this Agreement, will use
commercially reasonable efforts to obtain an early termination of the applicable
waiting period, and will make any further filings pursuant thereto that may be
necessary, proper, or advisable in connection therewith.
(c) OPERATION OF THE BUSINESS. The Seller will not engage in any
practice, take any action, or enter into any transaction with respect to the
Business that is outside the ordinary course of business. Without limiting the
generality of the foregoing, the Seller will not engage in any practice, take
any action, or enter into any transaction of the sort described in Section 3(f)
above.
(d) PRESERVATION OF BUSINESS. The Seller will use commercially
reasonable efforts to keep the Business and the Acquired Assets substantially
intact, including the Business' present operations, physical facilities, working
conditions, and relationships with lessors, licensors, suppliers, customers, and
employees.
(e) FULL ACCESS. The Seller will permit representatives of the Buyer to
have full access at all reasonable times, and in a manner so as not to interfere
with the normal business operations of the Seller, to all premises, properties,
personnel, books, records (including Tax records), contracts, and documents of
or pertaining to the Business.
(f) NOTICE OF DEVELOPMENTS. Each Party will give prompt written notice
to the other Party of any Material Adverse Change causing a breach of any of its
own representations and warranties in Section 3 and Section 4 above. No
disclosure by any Party pursuant to this Section 5(f), however, shall be deemed
to amend or supplement the Disclosure Schedule or to prevent or cure any
misrepresentation, breach of warranty, or breach of covenant.
(g) EXCLUSIVITY. The Seller will not (i) solicit, initiate, or
encourage the submission of any proposal or offer from any Person relating to
the acquisition of any substantial portion of the assets of the Business or any
material portion of the Acquired Assets (other than the sale of inventory in the
ordinary course of business), or (ii) participate in any discussions or
negotiations regarding, furnish any information with respect to, assist or
participate in, or facilitate in any other manner any effort or attempt by any
Person to do or seek any of the foregoing. The Seller will notify the Buyer
immediately if any Person makes any proposal, offer, inquiry, or contact with
respect to any of the foregoing.
(h) LEASED PROPERTY. The Seller will use commercially reasonable
efforts to assist the Buyer with negotiating and entering into a new lease
agreement with the Puerto Rico Industrial Development Company ("PRIDCO"), which
will demise all of the Puerto Rico Plant on at least as favorable terms as
21
the Existing Puerto Rico Lease and in form and substance reasonably satisfactory
to the Buyer (such new lease, the "NEW PUERTO RICO LEASE"). The Buyer will use
commercially reasonable efforts to assist the Seller to terminate the Existing
Puerto Rico Lease without payment or penalty by the Seller.
(i) LANDLORD CONSENTS. The Seller will use commercially reasonable
efforts to obtain such landlord lien waiver agreements or other consents from
PRIDCO with respect to the Puerto Rico Plant, as reasonably required by the
Buyer, each in form reasonably satisfactory to the Buyer (collectively, the
"LANDLORD Agreements").
(j) STOCK-TAKING.
(i) Representatives of the Seller and the Buyer shall
cooperate to conduct a physical stock-take of the Inventory and the
fixed assets (the "STOCK-TAKE") and the Seller shall cause PWC to
confirm in writing (A) that PWC observed the Stock-take; (B) the
Stock-take was conducted in a reasonable manner; and (C) that PWC
conducted spot checks to confirm the accuracy of the Stock-take and the
Seller shall deliver a copy of such written confirmation to the Buyer.
The costs of the Stock-take and PWC's confirmation shall be borne by
the Seller. Section 1(a) of the Disclosure Schedule shall be amended to
reflect the results of the Stock-take; and
(ii) The Seller shall promptly notify the Buyer not less than
every 15 days, of all changes in the Inventory and fixed assets,
following completion of the Stock-take through the Closing Date.
(k) NEW GRANT OF TAX EXEMPTION. The Seller will use commercially
reasonable efforts to assist the Buyer with negotiating and entering into the
New Grant of Tax Exemption with the government of Puerto Rico on at least as
favorable terms as the Existing Grant of Tax Exemption and in form and substance
reasonably satisfactory to the Buyer. The Buyer will use commercially reasonable
efforts to assist the Seller with renegotiating reductions to headcount,
investment, and minimum net income commitments in the Existing Grant of Tax
Exemption with PRIDCO in form and substance reasonably satisfactory to the
Seller.
(l) DELIVERY OF CONTRACTS. The Seller shall use commercially reasonable
efforts to deliver to the Buyer full and complete copies of all contracts,
agreements and other information listed in Section 3(m)(2) of the Disclosure
Schedule ("UNDELIVERED CONTRACTS"), it being understood that Seller will also
use commercially reasonable efforts to obtain a waiver of any confidentiality
provision contained in any such agreement which would prohibit delivery of such
agreement to the Buyer; PROVIDED, HOWEVER, the Buyer acknowledges that the
Seller will not deliver any such agreement in contravention of an applicable
confidentiality provision.
The Buyer shall be obligated to purchase, as part of the Acquired
Assets, any Undelivered Contracts that relate solely to the sale of the Products
in the ordinary course of business. With respect to any other Undelivered
Contracts, the Buyer shall have the right to elect on a contract by contract
basis whether each such Undelivered Contract is part of the Acquired Assets or
part of the Excluded Assets.
(m) IRVINE LEASE. The Seller will use commercially reasonable efforts
to assist the Buyer with negotiating and entering into a lease of premises
located at ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, on terms reasonably
acceptable to the Buyer.
(n) ECO CONTRACT. The Seller will deliver the ECO Contract to the
Buyer.
(o) [Intentionally omitted.]
22
(p) EVERGREEN AGREEMENT. The Seller shall make all payments due under
the Evergreen Agreement prior to the Closing Date including, without limitation,
the payments due with respect to the Phase 1 Completion Milestones with an
anticipated achievement date of July 21, 2000 and July 28, 2000 pursuant to
Section 13 of the Evergreen Agreement.
(q) TERRITORIES. By no later than five days prior to the Closing Date,
the Seller shall deliver to the Buyer:
(i) a list setting forth all of the countries in which the
Seller sells, or intends to sell, products produced by the Macchi
Business; and
(ii) a list setting forth all of the countries in which the
Seller will only sell the Products and will not sell any products that
compete with the Products.
The countries set forth in the list produced pursuant to (ii) will be the
territories in which the Seller shall act as the Buyer's exclusive distributor
pursuant to the terms of the CPP Supply and Distribution Agreement.
(r) BAXTER CONSENT AGREEMENT. The Seller will use commercially
reasonable efforts to cooperate with and assist the Buyer in obtaining the
executed Baxter Consent Agreement.
(s) PRICING DILIGENCE. The Buyer shall be entitled to conduct a
reasonable investigation, without requiring the Seller to incur third party or
unreasonable expense, to verify the costs of the Seller which shall form the
basis of the initial pricing under the terms of the CPP Supply and Distribution
Agreement, the Perfusion Supply Agreement, the ▇▇▇▇▇▇▇ Supply Agreement and the
Non-Exclusive License and Supply Agreement.
6. POST-CLOSING COVENANTS. The Parties agree as follows with respect to
the period following the Closing.
(a) GENERAL. In case at any time after the Closing any further action
is necessary or desirable to carry out the purposes of this Agreement, each of
the Parties will take such further action (including the execution and delivery
of such further instruments and documents) as the other Party reasonably may
request. The Seller acknowledges and agrees that from and after the Closing the
Buyer will be entitled to (i) possession of all documents, books, records
(including Tax records), agreements, and financial data of any sort relating
directly to the Business; and (ii) copies of all other documents, books, records
(including Tax records), agreements and financial data, as the Buyer may
reasonably request that relate to the Business.
(b) LITIGATION SUPPORT. In the event and for so long as any Party
actively is contesting or defending against any action, suit, proceeding,
hearing, investigation, charge, complaint, claim, or demand in connection with
(i) any transaction contemplated under this Agreement or (ii) any fact,
situation, circumstance, status, condition, activity, practice, plan,
occurrence, event, incident, action, failure to act, or transaction on or prior
to the Closing Date involving the Acquired Assets or the Business, the other
Party will cooperate with the contesting or defending Party and its counsel in
the contest or defense, make available its personnel, and provide such testimony
and access to its books and records as shall be necessary in connection with the
contest or defense, all at the sole cost and expense of the contesting or
defending Party (unless the contesting or defending Party is entitled to
indemnification therefor under Section 9 below).
(c) TRANSITION. The Seller will not take any action that is designed or
intended to have the effect of discouraging any lessor, licensor, customer,
supplier, or other business associate of the Business
23
from maintaining the same business relationships with the Buyer and the Business
after the Closing as it maintained with the Seller prior to the Closing. The
Seller will refer all customer inquiries relating to the Business to the Buyer
from and after the Closing.
(d) CONFIDENTIALITY. The Seller will treat and hold as such all of the
Confidential Information, refrain from using any of the Confidential Information
except in connection with this Agreement, and deliver promptly to the Buyer or
destroy, at the request and option of the Buyer, all tangible embodiments (and
all copies) of the Confidential Information which are in its possession. In the
event that the Seller is requested or required (by oral question or request for
information or documents in any legal proceeding, interrogatory, subpoena, civil
investigative demand, or similar process) to disclose any Confidential
Information, the Seller will notify the Buyer promptly of the request or
requirement so that the Buyer may seek an appropriate protective order or waive
compliance with the provisions of this Section 6(d). If, in the absence of a
protective order or the receipt of a waiver hereunder, the Seller is, on the
advice of counsel, compelled to disclose any Confidential Information to any
tribunal or else stand liable for contempt, the Seller may disclose the
Confidential Information to the tribunal; PROVIDED, HOWEVER, that the Seller
shall use its reasonable best efforts to obtain, at the request of the Buyer, an
order or other assurance that confidential treatment will be accorded to such
portion of the Confidential Information required to be disclosed as the Buyer
shall designate.
(e) COVENANT NOT TO COMPETE. For a period of three years from and after
the Closing Date, the Seller will not engage directly or indirectly in any
business involving cardiopulmonary devices including, without limitation,
oxygenators, blood reservoirs, custom tubing packs and heart lung machines for
stopped-heart cardiac surgery (collectively, the "NON-COMPETE PRODUCTS"), in the
United States of America, Germany, Switzerland, Italy, the United Kingdom,
France, Sweden, Spain, Portugal, Greece, Denmark, Ireland, Belgium, Austria, the
Netherlands, Norway, Finland, Malta or Poland (collectively, the "NON-COMPETE
TERRITORY"). This Section 6(e) shall also apply to the Macchi Business except as
provided in Section 7(f). This Section 6(e) shall not apply to cannulae,
catheters and any products used in connection with beating heart surgery. In
addition, this Section 6(e) shall not apply to the purchase by the Seller, and
the subsequent sale or distribution to any customer of the Seller, of any
product (the "COMPETING PRODUCT") used by the Seller or a customer of the Seller
when the Seller renders perfusion services or perfusion-related inventory
management services. In such instance, if the Competing Product is sold or
distributed by the Seller in the Territory (as such term is defined in the
Perfusion Supply Agreement), the aggregate purchase cost of such Competing
Product shall be included in the purchase commitment calculation pursuant to
Section 2.1(c) of the Perfusion Supply Agreement. If, however, the Competing
Product is sold or distributed by the Seller in a country outside of the
Territory (as such term is defined in the Perfusion Supply Agreement), the
Seller shall be required to purchase products from the Buyer that compete with
the Competing Product in an amount that would comply with the Seller's purchase
commitment pursuant to Section 2.1(c) of the Perfusion Supply Agreement if
purchases of the Buyer's products and the Competing Products in such country
were included in such purchase commitment calculations.
(f) MACCHI BUSINESS. For a period of three years following the Closing
Date, prior to seeking any buyers or strategic alliances with respect to the
Macchi Business and prior to selling or otherwise divesting itself of all or
part of the Macchi Business, the Seller shall provide written notice (the
"DIVESTITURE NOTICE") to the Buyer of its intention to do so, and offer the
Buyer a right of first negotiation with respect to the acquisition of all or
part of the Macchi Business. The Buyer shall have 10 days after the receipt of
the Divestiture Notice to advise the Seller in writing of the Buyer's good faith
interest in acquiring all or part of the Macchi Business (the "NOTICE OF
INTEREST"). Promptly after the Seller's delivery of the Notice of Interest, the
Parties shall commence good faith negotiations with respect to the sale and
purchase of all or part of the Macchi Business. In the event that the Seller
does not receive a Notice of Interest, within the 10-day period, or the Parties
are unable to reach a mutually acceptable term sheet with respect to the sale
and purchase of the Macchi Business within 45 days of the delivery of the Notice
of
24
Interest, the Seller shall be entitled to divest the Macchi Business to such
person(s) and/or entity(ies) and on such terms (PROVIDED, THAT, such terms shall
be no more favorable than those offered to the Buyer in the Divestiture Notice
or in the course of the negotiations between the Parties) as the Seller may
determine in its sole discretion.
(g) BENTLEY. Unless otherwise authorized in the Transaction Documents,
none of the Seller or its Affiliates shall use, including without limitation,
using as a corporate name, trade name, trademark, service ▇▇▇▇ or domain name,
the term "Bentley" in any manner likely to cause confusion with the Buyer's use
of the same term.
(h) NEW PUERTO RICO LEASE AND NEW GRANT OF TAX EXEMPTION. To the extent
that the New Puerto Rico Lease has not been executed or is not in full force and
effect at Closing, and/or the New Grant of Tax Exemption is not in full force
and effect at Closing, (i) the Seller will continue to use commercially
reasonable efforts to cooperate with and assist the Buyer in negotiating the New
Puerto Rico Lease and the New Grant of Tax Exemption, and (ii) the Buyer will
continue to use commercially reasonable efforts to cooperate with and assist the
Seller in negotiating modifications to the Existing Grant of Tax Exemption and
termination of the Existing Puerto Rico Lease.
(i) [Reserved].
(j) NON-SOLICITATION OF EMPLOYEES. Neither party shall solicit or make
an offer of employment to, any of the other Party's employees for a period of
one year following the Closing Date, PROVIDED, HOWEVER, that (i) the Buyer shall
be entitled to solicit and hire the Seller's sales representative with
responsibility for the Business in the Netherlands, and (ii) this restriction
shall not prohibit either Party from offering employment to any person who makes
an application pursuant to an advertisement placed in the public media.
(k) METAPLUS AGREEMENT. The Seller shall make all payments due or
accruing under the Metaplus Agreement during the year 2000, including any
adjustment necessary to make the minimum royalty payment for the year 2000.
(l) ECO CONTRACT. The Seller shall terminate the ECO Contract by
December 31, 2001. The Seller shall pay any compensation that may be payable to
ECO arising from such termination.
(m) IRVINE LEASE. To the extent that the Irvine Lease has not been
executed in full or is not in full force and effect at Closing, the Seller will
continue to use commercially reasonable efforts to cooperate with and assist the
Buyer in negotiating the Irvine Lease.
(n) ▇▇▇▇▇▇ CONSENT AGREEMENT. To the extent that the Baxter Consent
Agreement has not been executed in full or is not in full force and effect at
Closing, the Seller will continue to use commercially reasonable efforts to
cooperate with and assist the Buyer in obtaining the executed Baxter Consent
Agreement.
(o) TENDER CONTRACTS. To the extent that ▇▇▇▇▇▇ International is a
party to one or more of certain tender contracts that are the subject of the
Agency Agreement, the Seller will use commercially reasonable efforts to cause
▇▇▇▇▇▇ International to transfer the rights and obligations of ▇▇▇▇▇▇
International under such contracts to the Buyer.
7. ADDITIONAL AGREEMENTS.
(a) EMPLOYEE MATTERS.
25
(i) OFFERS OF EMPLOYMENT. Prior to or as of the Closing, the
Buyer shall offer employment to all Transferred Employees on an at-will
basis. The Buyer shall not be obligated to offer employment to any
person other than a Transferred Employee. To the fullest extent
possible under Puerto Rico's severance pay statute, the Buyer shall
have no Liability or obligation (including, but not limited to, any
severance liability or obligations) for any employee involved in the
Business who is not offered employment by the Buyer or who does not
accept an offer of employment from the Buyer (on the terms set forth in
the following sentence). Except as specifically provided herein with
respect to severance benefits, the terms of employment offered by the
Buyer to Transferred Employees shall, for a period of at least one (1)
year following the Closing Date, be substantially comparable in the
aggregate to the Seller's terms of employment with respect to the
Transferred Employees determined as of the Closing Date, except that
Transferred Employees at Puerto Rican operations shall be offered
compensation that is comparable to the compensation paid to any such
Transferred Employee by the Seller as of the Closing Date for a period
of at least two (2) years following the Closing Date. Notwithstanding
the foregoing, in the case of any Transferred Employee who as of the
Closing Date is on an approved leave of absence for any reason other
than such Transferred Employee's long term disability, the Buyer shall
offer employment to such Transferred Employee only upon such
Transferred Employee's return to active employment, provided that such
return to active employment occurs within one (1) year from the Closing
Date.
(ii) EMPLOYEE BENEFIT PLANS. Effective as of the Closing Date,
and subject to this Section 7(a)(ii), Transferred Employees shall cease
participation in the Seller's Employee Benefit Plans, in each case
except to the extent that any rights under such plans shall have
vested, or may vest upon fulfillment of certain conditions, in
accordance with the terms contained therein; provided, however, that
Transferred Employees shall be 100% vested in their account balances
and/or accrued benefits under the Seller's Employee Pension Benefit
Plans. Effective as of the Closing Date, Transferred Employees shall be
eligible to participate in Employee Benefit Plans to be established by
the Buyer for the Transferred Employees. Except as specifically
provided herein with respect to severance benefits, the terms of such
Employee Benefit Plans shall, for a period of no less than one (1) year
from the Closing Date, be substantially comparable in the aggregate to
the terms of the Employee Benefit Plans offered by the Seller to the
Transferred Employees as of the Closing Date. The Seller and the Buyer
shall cooperate with each other in all respects relating to any actions
to be taken pursuant to this Section 7(a)(ii). In addition, copies of
any employee communications to be provided to Transferred Employees by
the Buyer between the date hereof and the Closing Date shall be
provided to the Seller prior to distribution of such communications to
any Transferred Employee. To the extent that the Buyer establishes
Employee Pension Benefit Plans for Transferred Employees, such plans
shall consider Transferred Employees' service with the Seller prior to
the Closing Date as employment with the Buyer for purposes of
eligibility and vesting, but not for purposes of benefit accrual. To
the extent that the Buyer establishes Employee Welfare Benefit Plans
for Transferred Employees, such plans shall waive all limitations as to
preexisting conditions and all waiting or elimination periods and
service requirements applicable to Transferred Employees, except to the
extent preexisting conditions, limitations, waiting or elimination
periods or service requirements in effect immediately prior to the
Closing Date with respect to such employees under the Seller's Employee
Welfare Benefit Plan(s) have not been satisfied.
(iii) VACATION, SICK LEAVE AND SEVERANCE BENEFITS. The Buyer
will provide to the Transferred Employees for a period of three (3)
months following the Closing Date a severance plan or plans with terms
equivalent (such that the amount of the severance payment, exclusive of
continued benefits such as medical, etc., is equal) to those set forth
in the severance plans applicable to such Transferred Employees as
sponsored by the Seller on the date hereof. Subsequent to the date that
is three (3) months following the Closing Date, the Buyer shall for a
26
one-year period from the Closing Date provide to the Transferred
Employees a severance plan or plans with terms which are competitive to
market practices for similarly situated employees in similar industries
as reasonably determined by the Buyer. Any plan or policy established
by the Buyer which provides for vacation, sick leave or severance
benefits for the Transferred Employees shall recognize the Transferred
Employees' service with the Seller determined as of the Closing Date
for the purposes of determining eligibility for and entitlement to such
benefits. As of the Closing Date, the Buyer shall assume the Seller's
liabilities for accrued vacation benefits relating to the Transferred
Employees, and in consideration therefor the Seller shall make a cash
payment to the Buyer in an amount equal to the accrued vacation
benefits relating to the Transferred Employees which sum shall be
reserved for the benefit of the Transferred Employees and an amount
equal to the accrued Christmas bonus entitlement of the Transferred
Employees employed by Jostra PR.
(iv) CONTINUATION COVERAGE. The Seller shall retain liability
for employees (and their qualified beneficiaries) receiving COBRA or
other continuation coverage as of the Closing Date under the Seller's
group health plans and the Seller shall retain any and all liabilities
under COBRA for employees of the Business who do not become Transferred
Employees.
(v) OFFERS OF EMPLOYMENT TO SALES PERSONS. The Buyer shall be
granted access to the individuals named in Section 7(a)(v) of the
Disclosure Schedule (the "SALES PERSONS") for a period expiring at
midnight on July 19, 2000 for the purpose of interviewing and making
each of them offers of employment. To the extent any such Sales Person
is not available during such period, the Buyer shall have additional
time to contact such Sales Person for the purpose of interviewing and
making such Sales Person an offer of employment. The Buyer shall allow
each Sales Person until July 25, 2000 to respond to an offer. The
Seller shall not make any counter-offer of employment to the Sales
Persons, but will be permitted to indicate to a Sales Person that
should he or she decline to accept employment with the Buyer, the
Seller will continue to employ him or her pursuant to his or her
current employment arrangement with the Seller.
(vi) Effective as of the Closing Date, the Buyer shall take
all action necessary and appropriate to extend coverage under a new or
existing defined contribution plan ("BUYER'S DOMESTIC Plan") intended
to be qualified under Section 401(a) of the Code to the Transferred
Employees who have account balances under the ▇▇▇▇▇▇▇ Lifesciences
Corporation 401(k) Savings and Investment Plan ("SELLER'S 401(K) PLAN")
at Closing. The Transferred Employees will be credited with service
under the Buyer's Domestic Plan, for eligibility and vesting purposes,
with the service credited to them under the terms of the Seller's
401(k) Plan as of the Closing Date. As soon as practicable following
the Closing Date, but in no event earlier than the date on which Seller
receives a letter from Buyer's counsel in the form of EXHIBIT 14, the
Seller shall cause to be transferred from the trustee of the Seller's
401(k) Plan to the trustee of the Buyer's Domestic Plan, an amount
equal to the aggregate account balances of the Transferred Employees
under the Seller's 401(k) Plan determined as of the date of transfer in
accordance with the valuation methods of the Seller's 401(k) Plan and
the requirements of Section 414(l) of the Code. Such transfer shall be
made entirely in cash except that promissory notes representing loans
under the Seller's 401(k) Plan to Transferred Employees shall be
transferred in kind. From and after the date of such transfer, the
Buyer shall cause the Buyer's Domestic Plan to assume the obligations
of the Seller's 401(k) Plan with respect to the benefits accrued by the
Transferred Employees under the Seller's 401(k) Plan, and the Seller's
401(k) Plan shall cease to be responsible therefor. Buyer and Seller
shall use commercially reasonable efforts to ensure that any loan
balances outstanding under the Seller's 401(k) Plan with respect to any
Transferred Employee shall be transferred to the Buyer's Savings Plan
without acceleration or default.
27
(vii) Effective as of the Closing, the Buyer shall take all
action necessary and appropriate to extend coverage under a new or
existing defined contribution plan ("BUYER'S PUERTO RICO PLAN")
intended to be qualified under Section 401(a) of the Code and under
Section 1165(e) of the Puerto Rico Internal Revenue Code of 1994, as
amended, to the Transferred Employees who have account balances under
the ▇▇▇▇▇▇▇ Lifesciences Corporation of Puerto Rico 401(k) Savings and
Investment Plan ("SELLER'S PUERTO RICO PLAN") at the Closing Date. The
Transferred Employees will be credited with service under the Buyer's
Puerto Rico Plan, for eligibility and vesting purposes, with the
service credited to them under the terms of the Seller's Puerto Rico as
of the Closing Date. As soon as practicable following the Closing Date,
but in no event earlier than the date that Seller receives a letter
from Buyer's counsel in the form of EXHIBIT 14, the Seller shall cause
to be transferred from the trustee of the Seller's Puerto Rico Plan to
the trustee of the Buyer's Puerto Rico Plan, an amount equal to the
aggregate account balances of the Transferred Employees under the
Seller's Puerto Rico Plan determined as of the date of transfer in
accordance with the valuation methods of the Seller's Puerto Rico Plan
in accordance with Section 414(l) of the Code and applicable provisions
of the Puerto Rico Internal Revenue Code of 1994, as amended. Such
transfer shall be made entirely in cash except that promissory notes
representing loans under the Seller's 401(k) Plan to Transferred
Employees shall be transferred in kind. From and after the date of such
transfer the Buyer shall cause the Buyer's Puerto Rico Plan to assume
the obligations of the Seller's Puerto Rico Plan with respect to the
benefits accrued by the Transferred Employees under the Seller's Puerto
Rico Plan, and the Seller's Puerto Rico Plan shall cease to be
responsible therefor. Buyer and Seller shall use their best efforts to
ensure that any loan balances outstanding under the Seller's Puerto
Rico Plan with respect to any Transferred Employee shall be transferred
to the Buyer's Puerto Rico Plan without acceleration or default.
(viii) SHARED SALES. If any Sales Person becomes an employee
of the Buyer, the Parties shall enter into a distribution agreement
which shall provide that (A) such Sales Person will continue to sell
the Seller's cannulae products for a period of one year following the
Closing Date in the same territory that such Sales Person currently
sells the Seller's cannulae products, (B) the Seller shall pay the
Buyer a commission of 15% of net sales, and (C) the Buyer shall be
prohibited from directly or indirectly selling any product that
competes with the Seller's cannulae products in the sales territory of
any Sales Person who accepts employment with the Buyer for a period of
two years from the Closing Date. If any Sales Person remains an
employee of the Seller, (A) the Seller shall act as the Buyer's agent
with respect to the distribution of the Products in the sales territory
of any such Sales Person for a period of one year following the Closing
Date, and (B) the Buyer shall pay the Seller a commission of 15% of net
sales. The Parties agree that if a distribution or agency relationship
as described above becomes necessary, the Parties shall negotiate in
good faith the terms of a distribution or agency agreement, as
applicable, to be entered into by the Parties at the Closing Date.
(b) RELOCATION OF ACQUIRED ASSETS. The Seller shall be responsible for
ensuring that all of the Acquired Assets in Puerto Rico are relocated, if
necessary as determined by the Buyer, to the Puerto Rico Plant within six months
of the Closing Date, pursuant to the terms of the Transition Services Agreement.
The Seller shall be responsible for all of the costs and expenses incurred in
connection with any relocation and requalification of such Acquired Assets in
accordance with the terms of the Transition Services Agreement.
(c) NEGOTIATION OF PLEXUS AND MEMBRANA AGREEMENTS. The Seller shall
consult with the Buyer with respect to the negotiation and terms of the Plexus
and Membrana Agreements and the Seller shall make such changes or modifications
to such agreements as may be mutually agreed upon.
(d) WARN. The Buyer shall comply with all notice and other requirements
arising after the Closing Date under the Workers Adjustment and Retaining
Notification Act ("WARN") and any similar
28
state, local, or foreign country statute with respect to Transferred Employees.
The Seller shall comply with all notice and any other requirements under WARN
and any similar state, local, or foreign country statute with respect to
employees of the Business who either are not offered employment with Buyer or
who decline offers of employment with the Buyer as well as all other employees
of the Seller.
(e) MISTAKE. If, as a result of mistake or oversight, any asset which
is related to the Business and used or held for use primarily in the conduct of
the Business is not transferred to the Buyer, or any asset which is not used or
held for use primarily in the conduct of the Business is transferred to the
Buyer, the Parties shall negotiate in good faith to determine whether such asset
should be conveyed, or reconveyed, to the Buyer or to the Seller, as the case
may be, and/or the terms and conditions upon which such asset shall be conveyed
or reconveyed to the Seller or the Buyer, as the case may be. The Buyer and the
Seller acknowledge and agree that the terms and conditions upon which any such
assets are conveyed or reconveyed as provided in this Section 7(e) shall be
consistent with the terms of this Agreement and the Transaction Documents and
that it is not intended for either Party to pay or receive any additional
consideration for any such transfer.
(f) GERMAN OPERATIONS. The Seller shall cease selling Macchi products
for distribution in Germany no later than December 31, 2001. The Buyer
acknowledges that it will not be entitled to any compensation from the Seller
relating to Macchi sales in Germany between the Closing Date and December 31,
2001.
(g) SHARED AGREEMENTS. The Seller shall use commercially reasonable
efforts to assist the Buyer in obtaining the benefit of the Shared Agreements as
they relate to the Business. Such efforts shall include negotiating with the
other party to the Shared Agreements to obtain a contract on identical terms (so
far as such terms relate to the Business) between the Buyer and the other party,
to be effective as of the Closing Date. If the Buyer is unable to obtain such
new contracts prior to the Closing Date, the Seller shall act as the agent of
the Buyer under the applicable Shared Agreement, to the extent the Seller can do
so without breaching the applicable Shared Agreement, until such time as the
Shared Agreement expires or until a new contract is obtained. The Parties agree
that if the agency relationship described in the preceding sentence becomes
necessary, the Parties shall enter into an agency agreement which shall include,
among other terms, (i) that any monies received by the Seller pursuant to the
terms of the Shared Agreements will be delivered to the Buyer within 10 days of
receipt by the Seller, (ii) the Buyer bears the credit risk of all sales and any
costs associated with freight, insurance and distribution fees, and (iii) the
Seller shall not receive any compensation, other than any fees described in the
Transition Services Agreement for the provision of its services under the agency
agreement. If any of the Seller's current distributors and agents in Europe
become entitled to any compensation as a result of the termination of the
Seller's existing relationship with such distributors and agents, the Parties
shall share the costs of such termination equally. For purposes of providing a
framework for the parties good faith negotiations with respect to any such
agency agreement, the Agency Agreement shall be considered a reasonable basis
for the Parties to begin such negotiation, it being understood that, the Seller
shall bear all costs and expenses associated with such agency relationship.
Notwithstanding the foregoing, any additional costs or expenses that the Buyer
incurs as a result of pursuing any amendment, modification, or consent to any
Shared Agreement or relating to any agency relationship provided by the Buyer to
the Seller or by the Seller to the Buyer under any of the Shared Agreements
shall be the sole obligation of the Seller. Such costs and expenses shall be
paid by the Seller within 60 days of receipt by the Seller of documentation
reasonably detailing such costs and expenses or as the Buyer and the Seller
shall otherwise agree.
(h) TITLE TO INTELLECTUAL PROPERTY. Prior to the Closing Date, the
Seller shall file, with the appropriate government agency, documents sufficient
to correct any title deficiency existing in any registered Intellectual Property
currently used in the Business, including without limitation the Intellectual
Property scheduled on Section 3(j)(iii) of the Disclosure Schedule. Upon request
of the Buyer, the Seller shall promptly provide the Buyer copies of all such
documentation.
29
(i) SALES OF CANNULAE. The Buyer shall be prohibited for a period of
two years from the Closing Date from directly or indirectly selling any product
that competes with the Seller's cannulae products in any Sales Territory.
(j) LICENSE-BACK TO THE SELLER OF THE SHARED INTELLECTUAL PROPERTY.
(i) GRANT OF LICENSE. The Buyer hereby grants, and the Seller
hereby accepts, a perpetual, nonexclusive, fully-paid-up, worldwide
right and license to use and otherwise practice under the Shared
Intellectual Property. It is understood that the license granted in
this Section 7(j) is limited to the extent that the Seller may continue
to use the Shared Intellectual Property only to the extent that the
Seller used the Shared Intellectual Property, other than in connection
with the Business, prior to the Closing Date.
(ii) OWNERSHIP OF SHARED INTELLECTUAL PROPERTY. The Seller
acknowledges that, subject to the foregoing license, the Buyer is the
sole and exclusive owner of all right, title and interest in and to the
Shared Intellectual Property. The Seller agrees that it will do nothing
inconsistent with the Buyer's ownership of, or rights in, the Shared
Intellectual Property. Notwithstanding the foregoing, the Seller shall
have the right to disclose the Shared Intellectual Property to
third-party contract manufacturers in connection with the Seller's
business, provided that such third-party contract manufacturers agree
to be bound by obligations of confidentiality consistent with Section
6(d) above. The Buyer will not allow any registration or other
protection of the Shared Intellectual Property to lapse without giving
the Seller one month's prior written notice. Upon the Seller's receipt
of such notice, (i) the Seller shall have the right, but not the
obligation, to take steps (at the Seller's expense and in the Seller's
name, if necessary) to prevent such lapse, and (ii) the Buyer shall
cooperate with the Seller (at the Seller's request and at the Seller's
expense) to assign to the Seller such Shared Intellectual Property.
(iii) MARKING AND NOTICES. The Seller shall take all
reasonable steps to ensure that any products that are made (by the
Seller or a third party manufacturer), imported, offered for sale, sold
or distributed by the Seller pursuant to the license granted by the
Buyer in this Section 7(j) shall bear a legal or proprietary rights
notice in such form as may be reasonably requested by and to the extent
directed by the Buyer from time to time.
(iv) TERMINATION OF LICENSE. The license granted pursuant this
Section 7(j) may be terminated by the Buyer only if the Seller is in
breach or default of a material term of this Section 7(j) and such
breach or default continues for 60 days after written notice from the
Buyer to the Seller. Any such termination of the license shall be
solely with respect to the Shared Intellectual Property that is the
subject of such uncured breach. Upon the termination of this license,
the Seller agrees to immediately cease using the Shared Intellectual
Property.
(v) DIVESTITURE. If the Seller sells, assigns, transfers or
otherwise divests itself of ownership of any business unit or product
line that uses or is manufactured under the Shared Intellectual
Property, the license granted in this Section 7(j) may be assigned
without payment of additional consideration, but only with respect to
such business unit or product line and subject to the prior written
consent of the Buyer, which consent shall not be unreasonably withheld.
(k) REMOVAL OF INVENTORY. Buyer has confirmed to the Seller that it
will be in a position to take over the European operations of the Business,
remove all Inventory from all of the European warehousing facilities where
Inventory is stored by Seller, and process orders for Products by the Closing
Date, and Buyer shall satisfy the foregoing requirements by the Closing Date. If
Buyer will be
30
unable to achieve such relocation and assumption of the European operations of
the Business by the Closing Date, the Seller will continue to process orders for
the Products until October 1, 2000 and the Buyer shall pay the Seller a
commission of 5% of net sales for all orders actually shipped between the
Closing Date and October 1, 2000.
8. CONDITIONS TO OBLIGATION TO CLOSE.
(a) CONDITIONS TO OBLIGATION OF THE BUYER. The obligation of the Buyer
to consummate the transactions to be performed by it in connection with the
Closing is subject to satisfaction of the following conditions:
(i) the representations and warranties set forth in Section 3
above that are not qualified as to materiality shall be true and
correct in all material respects at and as of the Closing Date; the
representations and warranties set forth in Section 3 above that are
qualified as to materiality shall be true and correct at and as of the
Closing Date;
(ii) the Seller shall have performed and complied with all of
its covenants hereunder in all material respects through the Closing;
(iii) the Seller shall have procured and delivered to the
Buyer all of the material third party consents specified in Section
5(b) above and all of the Landlord Agreements specified in Section 5(i)
above;
(iv) no action, suit, or proceeding shall be pending or
threatened before any court or quasi-judicial or administrative agency
of any federal, state, local, or foreign jurisdiction or before any
arbitrator wherein an unfavorable injunction, judgment, order, decree,
ruling, or charge would (A) prevent consummation of any of the
transactions contemplated by this Agreement and the Transaction
Documents, (B) cause any of the transactions contemplated by this
Agreement and the Transaction Documents to be rescinded following
consummation, (C) affect adversely the right of the Buyer to own the
Acquired Assets, or to operate the Business (and no such injunction,
judgment, order, decree, ruling, or charge shall be in effect);
(v) the Seller shall have delivered to the Buyer a certificate
to the effect that each of the conditions specified above in
Section 8(a)(i)-(iv) is satisfied in all respects;
(vi) all applicable waiting periods (and any extensions
thereof) under the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act shall have expired or
otherwise been terminated and the Seller and the Buyer shall have
received all other authorizations, consents, and approvals of
governments and governmental agencies referred to in Section 3(c) and
Section 4(c) above;
(vii) the Seller shall have executed and delivered to the
Buyer the Transaction Documents;
(viii) the Buyer shall have received from counsel to the
Seller an opinion in form and substance as set forth in EXHIBIT 12
attached hereto, addressed to the Buyer, and dated as of the Closing
Date;
(ix) the Buyer shall have received from PRIDCO either (i) the
executed New Puerto Rico Lease or (ii) written confirmation that PRIDCO
will endorse the issuance of the New Puerto Rico Lease on terms at
least as favorable as those contained in the Existing Puerto Rico Lease
and in form and substance reasonably acceptable to the Buyer;
31
(x) the Buyer shall have received written confirmation from
PRIDCO and the Puerto Rico Treasury Department that each such agency
will endorse the issuance of the New Grant of Tax Exemption providing
the Buyer with tax exemption benefits at least as favorable as those
offered pursuant to the Existing Grant of Tax Exemption and under terms
and conditions reasonably acceptable to the Buyer;
(xi) the Buyer shall have received the executed ▇▇▇▇▇▇ Consent
Agreement; and
(xii) all actions to be taken by the Seller in connection with
consummation of the transactions contemplated hereby and all
certificates, opinions, instruments, and other documents required to
effect the transactions contemplated hereby will be satisfactory in
form and substance to the Buyer.
The Buyer may waive any condition specified in this Section 8(a) if it executes
a writing so stating at or prior to the Closing.
(b) CONDITIONS TO OBLIGATION OF THE SELLER. The obligation of the
Seller to consummate the transactions to be performed by it in connection with
the Closing is subject to satisfaction of the following conditions:
(i) the representations and warranties set forth in Section 4
above that are not qualified as to materiality shall be true and
correct in all material respects at and as of the Closing Date. The
representations and warranties set forth in Section 4 above that are
qualified as to materiality shall be true and correct at and as of the
Closing Date;
(ii) the Buyer shall have performed and complied with all of
its covenants hereunder in all material respects through the Closing;
(iii) no action, suit, or proceeding shall be pending or
threatened before any court or quasi-judicial or administrative agency
of any federal, state, local, or foreign jurisdiction or before any
arbitrator wherein an unfavorable injunction, judgment, order, decree,
ruling, or charge would (A) prevent consummation of any of the
transactions contemplated by this Agreement and the Transaction
Documents or (B) cause any of the transactions contemplated by this
Agreement and the Transaction Documents to be rescinded following
consummation (and no such injunction, judgment, order, decree, ruling,
or charge shall be in effect);
(iv) the Buyer shall have delivered to the Seller a
certificate to the effect that each of the conditions specified above
in Section 8(b)(i)-(iii) is satisfied in all respects;
(v) the Seller shall have received the Initial Purchase Price;
(vi) all applicable waiting periods (and any extensions
thereof) under the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act shall have expired or
otherwise been terminated and the Seller and the Buyer shall have
received all other authorizations, consents, and approvals of
governments and governmental agencies referred to in Section 3(c) and
Section 4(c) above;
(vii) the Buyer shall have executed and delivered to the
Seller the Transaction Documents;
(viii) the Buyer shall have delivered to the Seller the Bank
Guaranty in a form reasonably acceptable to the Seller.
32
(ix) the Seller shall have received from counsel to the Buyer
an opinion in form and substance as set forth in EXHIBIT 13 attached
hereto, addressed to the Seller, and dated as of the Closing Date;
(x) the Seller shall have received written confirmation from
PRIDCO and the Puerto Rico Department of the Treasury that each such
agency will endorse an amendment to the Existing Grant of Tax Exemption
to reduce the requirements the Seller is obligated to meet in order to
enjoy the tax benefits offered to the Seller pursuant to the Existing
Grant of Tax Exemption, such reductions to be comparable to the
obligations imposed in the New Grant of Tax Exemption issued to the
Buyer with respect to those requirements; and
(xi) all actions to be taken by the Buyer in connection with
consummation of the transactions contemplated hereby and all
certificates, opinions, instruments, and other documents required to
effect the transactions contemplated hereby will be reasonably
satisfactory in form and substance to the Seller.
The Seller may waive any condition specified in this Section 8(b) if it executes
a writing so stating at or prior to the Closing.
9. REMEDIES FOR BREACHES OF THIS AGREEMENT.
(a) SURVIVAL OF REPRESENTATIONS AND WARRANTIES
All of the representations and warranties of the Seller contained in
this Agreement (except those representations and warranties of the Seller
specifically referred to below), and all the representation and warranty of the
Buyer contained in Section 4(f) shall survive the Closing and continue in full
force and effect for a period of 18 months thereafter. Notwithstanding the
foregoing, all of the representations and warranties of the Seller contained in
Section 3(a)-(e) and Section 3(h), (j), (p), (r), (s), (t) and (v) of this
Agreement and of the Buyer contained in Section 4(a)-(e) of this Agreement shall
survive the Closing and continue in full force and effect forever thereafter
(subject to any applicable statutes of limitations). As to any matter or claim
which is based upon fraud by the indemnifying Party, the representations and
warranties set forth in this Agreement shall expire only upon expiration of the
applicable statute of limitations. No Party will be liable to another under any
warranty or representation after the applicable expiration of such warranty or
representation; PROVIDED, HOWEVER, if a claim or notice is given under this
Section 9 with respect to any representation or warranty prior to the applicable
expiration date, such claim may be pursued to resolution notwithstanding
expiration of the representation or warranty under which the claim was brought.
Any investigations made by or on behalf of any of the Parties prior to the date
hereof shall not affect any of the parties' obligations hereunder. Completion of
the transactions contemplated hereby shall not be deemed or construed to be a
waiver of any right or remedy of any of the Parties.
(b) INDEMNIFICATION.
(i) Subject to the limits set forth in this Section 9, the
Seller and its successors and assigns, shall indemnify, defend,
reimburse and hold harmless the Buyer and its successors and assigns
and their officers, directors, employees and agents, from and against
any and all claims, losses, damages, liabilities, obligations,
assessments, penalties and interest, demands, actions and expenses,
whether direct or indirect, known or unknown, absolute or contingent
(including, without limitation, settlement costs and any legal,
accounting and other expenses for investigating or defending any
actions or threatened actions) ("LOSSES") reasonably incurred by any
such Indemnitee, arising out of or in connection with any of the
following:
33
(1) the operations of the Business and the ownership
or operation of the Acquired Assets at any time before the
Closing;
(2) any untruth or inaccuracy of any representation,
warranty or certification made by the Seller in this
Agreement;
(3) the breach of any covenant, agreement or
obligation of the Seller contained in this Agreement; and
(4) any Liabilities of the Seller including, without
limitation,
(A) any Liability of the Seller that becomes
a Liability of the Buyer under any bulk transfer law
of any jurisdiction, under any common law doctrine of
de facto merger or successor liability, or otherwise
by operation of law;
(B) any and all employment-related Liability
of the Seller including, but not limited to, any
Liability identified in Section 7(a) and any
severance liabilities relating to any employee or any
Transferred Employee who chooses not to accept an
offer of employment from the Buyer;
(C) any violations of or liabilities arising
under Environmental, Health, and Safety Requirements
of the Seller, including without limitation any
obligations for environmental site investigation or
cleanup, with respect to the past or current
properties, facilities or operations of the Seller
used in connection with the Business, whether or not
constituting a breach of any representation or
warranty hereunder and whether or not disclosed to
the Buyer prior to the Closing Date (whether in the
Disclosure Schedule or otherwise) or identified by
the Buyer or its agents or representatives prior to
the Closing Date, to the extent such violations or
liabilities arise from or relate to (i) the
operations of the Seller or the Business prior to the
Closing Date (including without limitation any
transportation, disposal or release of Hazardous
Substances at any facility or location) or (ii) the
disposal or release of Hazardous Substances prior to
the Closing Date;
(D) any and all products liability-related
Liability of the Seller; and
(E) any and all Tax-related Liability of the
Seller, including any Liability of the Seller for the
unpaid Taxes of any Person (other than the Seller)
under Treas. Reg. 1.1502-6 (or any similar provision
of state, local or foreign law), as a transferee or
successor, by contract or otherwise.
(ii) Subject to the limits set forth in this Section 9, the
Buyer and its successors and assigns, shall indemnify, defend,
reimburse and hold harmless the Seller and its successors and assigns
and their officers, directors, employees and agents from and against
any and all Losses reasonably incurred by any such indemnitee arising
out of or in connection with any of the following:
34
(1) the ownership and operation of the Acquired
Assets and the Business after the Closing, except Losses
arising as a result of successor liability or as a result of
performance obligations arising after Closing which relate to
the action or inaction of the Seller prior to Closing;
(2) any untruth or inaccuracy of any representation,
warranty or certification made by the Buyer in this Agreement;
(3) the breach of any covenant, agreement or
obligation of the Buyer contained in this Agreement;
(4) any and all products liability-related liability
of the Buyer arising after the Closing Date; and
(5) any and all Tax-related liability of the Buyer
arising after the Closing Date.
(iii) Neither Party shall have any obligation to indemnify the
other Party from and against any Losses resulting from, arising out of, relating
to, in the nature of, or caused by the breach (or alleged breach) of any
representation or warranty of the indemnifying Party until the other Party has
suffered Losses by reason of all such breaches (or alleged breaches) in excess
of a $25,000 aggregate threshold (at which point the other Party will be
obligated to indemnify the other Party from and against all such Losses in
excess of such aggregate threshold. The maximum aggregate liability of either
Party to the other Party, for Losses resulting from, arising out of, relating
to, in the nature of, or caused by the breach (or alleged breach) of any
representation or warranty of the indemnifying Party arising under this
Agreement shall be $5,000,000. No Party shall be entitled to indemnification
under this Section 9 for Losses directly or indirectly caused by a breach by
such Party of any representation, warranty, covenant, or other agreement set
forth in this Agreement or any duty to the other Party.
(c) INDEMNIFICATION PROCEDURE.
(i) Whenever any claim shall arise for indemnification
hereunder (a "CLAIM"), the party entitled to indemnification (the
"INDEMNITEE") shall promptly give written notice to the party obligated
to provide indemnity (the "INDEMNITOR") with respect to the Claim after
the receipt by the Indemnitee of reliable information of the facts
constituting the basis for the Claim; but the failure to timely give
such notice shall not relieve the Indemnitor from any obligation under
this Agreement, except to the extent, if any, that the Indemnitor is
materially prejudiced thereby.
(ii) Upon receipt of written notice from the Indemnitee of a
Claim, the Indemnitor shall provide counsel (such counsel subject to
the reasonable approval of the Indemnitee) to defend the Indemnitee
against the matter from which the Claim arose, at the Indemnitor's sole
cost, risk and expense. The Indemnitee shall cooperate in all
reasonable respects, at the Indemnitor's sole cost, risk and expense,
with the Indemnitor in the investigation, trial, defense and any appeal
arising from the matter from which the Claim arose; PROVIDED, HOWEVER,
that the Indemnitee may (but shall not be obligated to) participate in
any such investigation, trial, defense and any appeal arising in
connection with the Claim. If the Indemnitee's participation in any
such investigation, trial, defense and any appeal arising from such
Claim relates to a legal position or defense that varies materially
from the legal positions or defenses pursued by the Indemnitor, and if
the Indemnitee reasonably believes that the Indemnitee's interests will
be adversely and materially affected if such legal position or defense
is not pursued, the Indemnitor shall bear the expense of the
Indemnitee's separate participation, including all fees, costs and
expenses of one separate counsel for the Indemnitee (or multiple
Indemnitees). If the Indemnitee elects to so
35
participate, the Indemnitor shall cooperate with the Indemnitee, and
the Indemnitor shall deliver to the Indemnitee or its counsel copies of
all pleadings and other information within the Indemnitor's knowledge
or possession reasonably requested by the Indemnitee or its counsel
that is relevant to the defense of such Claim and that will not
prejudice the Indemnitor's position, claims or defenses. The Indemnitee
and its counsel shall maintain confidentiality with respect to all such
information consistent with the conduct of a defense hereunder. The
Indemnitor shall have the right to elect to settle any claim for
monetary damages only without the Indemnitee's consent, if the
settlement includes a complete release of the Indemnitee, and PROVIDED,
THAT, such settlement would not establish precedential custom or
practice adverse to the continuing business interests of the
Indemnitee. If the settlement does not include such a release, or has
such an adverse impact, it will be subject to the consent of the
Indemnitee, which will not be unreasonably withheld. The Indemnitor may
not admit any liability of the Indemnitee or waive any of the
Indemnitee's rights without the Indemnitee's prior written consent,
which will not be unreasonably withheld. If the subject of any Claim
results in a judgment or settlement, the Indemnitor shall promptly pay
such judgment or settlement.
(iii) If the Indemnitor fails to assume the defense of the
subject of any Claim in accordance with the terms of Section 9(c)(ii),
if the Indemnitor fails diligently to prosecute such defense, or if the
Indemnitor has, in the Indemnitee's good faith judgment, a conflict of
interest, the Indemnitee may defend against the subject of the Claim,
at the Indemnitor's sole cost, risk and expense, in such manner and on
such terms as the Indemnitee deems appropriate, including, without
limitation, settling the subject of the Claim after giving reasonable
notice to the Indemnitor. If the Indemnitee defends the subject of a
Claim in accordance with this section, the Indemnitor shall cooperate
with the Indemnitee and its counsel, at the Indemnitor's sole cost,
risk and expense, in all reasonable respects, and shall deliver to the
Indemnitee or its counsel copies of all pleadings and other information
within the Indemnitor's knowledge or possession reasonably requested by
the Indemnitee or its counsel that are relevant to the defense of the
subject of any such Claim and that will not prejudice the Indemnitor's
position, claims or defenses. The Indemnitee shall maintain
confidentiality with respect to all such information consistent with
the conduct of a defense hereunder.
(d) PAYMENT. All payments owing under this Section 9 will be made
promptly as indemnifiable Losses are incurred. If the Indemnitee defends the
subject matter of any Claim in accordance with Section 9(c)(ii) or proceeds with
separate counsel in accordance with Section 9(c)(iii), the expenses (including
attorneys' fees) incurred by the Indemnitee shall be paid by the Indemnitor in
advance of the final disposition of such matter as incurred by the Indemnitee,
if the Indemnitee undertakes in writing to repay any such advances in the event
that it is ultimately determined that the Indemnitee is not entitled to
indemnification under the terms of this Agreement or applicable law.
(e) DETERMINATION OF LOSSES. The Parties shall take into account the
time cost of money (using the Applicable Rate as the discount rate) in
determining Losses for purposes of this Section 9. All indemnification payments
under this Section 9 shall be deemed adjustments to the Purchase Price.
(f) EXCLUSIVE REMEDY. Except for fraud and intentional
misrepresentation, and except for equitable remedies, including injunctive
relief, the parties hereto hereby acknowledge and agree that the sole and
exclusive remedy of any Indemnitee from and after the Closing with respect to
Losses and any and all claims for any breach or liability arising under, or in
connection with, this Agreement or any of the agreements ancillary hereto, or
otherwise relating to the subject matter of this Agreement, and the transactions
contemplated hereby and thereby, shall be solely in accordance with, and limited
by, the indemnification provisions set forth in this Section 9. In furtherance
of the foregoing, the Parties hereby waive on their own behalf and on behalf of
each other applicable Indemnitee, to the fullest extent permitted under
applicable law, any and all rights, claims and causes of action it or they have
or may have against
36
the other Party, as the case may be, arising under or based upon any federal,
state or local law, rule or regulation (including without limitation, (i) any
such rights, claims or causes of action arising under or based upon common law
or otherwise and (ii) any and all claims for Losses or contribution arising
under any environmental law).
10. TERMINATION.
(a) TERMINATION OF AGREEMENT. Certain of the Parties may terminate this
Agreement as provided below:
(i) the Buyer and the Seller may terminate this Agreement by
mutual written consent at any time prior to the Closing; and
(ii) either Party may terminate this Agreement by giving
written notice to the other Party at any time prior to the Closing (A)
in the event the other Party has breached any material representation,
warranty, or covenant contained in this Agreement in any material
respect, the terminating Party has notified the other Party of the
breach, and the breach has continued without cure for a period of 30
days after the notice of breach or (B) if the Closing shall not have
occurred on or before October 31, 2000, by reason of the failure of any
condition precedent under Section 8(a) or Section 8(b) hereof, as
applicable (unless the failure results primarily from the terminating
Party itself breaching any representation, warranty, or covenant
contained in this Agreement).
(b) EFFECT OF TERMINATION. If any Party terminates this Agreement
pursuant to Section 10(a) above, all rights and obligations of the Parties
hereunder shall terminate without any Liability of any Party to the other Party
(except for any Liability of any Party then in breach).
(c) DEPOSIT.
(i) If the Buyer terminates this Agreement for any of the
reasons set forth in this Section 10(c)(i), the Seller shall repay to
the Buyer the Deposit (plus interest from October 31, 2000 through and
including the date of repayment at a rate of 3% per annum) (such total,
the "REPAYMENT AMOUNT"):
(A) in the event the Seller has breached any material
representation, warranty, or covenant contained in this
Agreement, the Buyer has notified the Seller of the breach,
and the breach has continued without cure for a period of 30
days after the notice of breach; or
(B) if the Closing shall not have occurred on or
before October 31, 2000 by reason of the failure of any
condition precedent under Section 8(a) hereof (unless the
failure results primarily from the Buyer itself breaching any
representation, warranty, or covenant contained in this
Agreement).
(ii) If the Buyer terminates this Agreement for reasons other
than those set forth in Section 10(c)(i), the Seller shall be entitled
to retain the Deposit.
11. MISCELLANEOUS.
(a) PRESS RELEASES AND PUBLIC ANNOUNCEMENTS. No Party shall issue any
press release or make any public announcement relating to the subject matter of
this Agreement without the prior written approval of the other Party; PROVIDED,
HOWEVER, that any Party may make any public disclosure it believes in good faith
is required by applicable law or any listing or trading agreement concerning its
37
publicly-traded securities (in which case the disclosing Party will use
commercially reasonable efforts to advise the other Party prior to making the
disclosure).
(b) NO THIRD-PARTY BENEFICIARIES. This Agreement shall not confer any
rights or remedies upon any Person other than the Parties and their respective
successors and permitted assigns.
(c) ENTIRE AGREEMENT. This Agreement (including the documents referred
to herein) constitutes the entire agreement between the Parties and supersedes
any prior understandings, agreements, or representations by or between the
Parties, written or oral, to the extent they have related in any way to the
subject matter hereof.
(d) SUCCESSION AND ASSIGNMENT. This Agreement shall be binding upon and
inure to the benefit of the Parties named herein and their respective successors
and permitted assigns. No Party may assign either this Agreement or any of its
rights, interests, or obligations hereunder without the prior written approval
of the other Party; PROVIDED, HOWEVER, that either Party may (i) assign any or
all of its rights and interests hereunder to one or more of its Affiliates and
(ii) designate one or more of its Affiliates to perform its obligations
hereunder (in any or all of which cases the Party hereto nonetheless shall
remain responsible for the performance of all of its obligations hereunder).
(e) COUNTERPARTS; FACSIMILE SIGNATURES. This Agreement may be executed
in one or more counterparts, each of which shall be deemed an original but all
of which together will constitute one and the same instrument. Any signature
page delivered by facsimile or telecopy shall be binding to the same extent as
an original signature page, with regard to any agreement subject to the terms
hereof or any amendment thereto. Any party who delivers such a signature page
agrees to later deliver an original counterpart to any party who requests it.
(f) HEADINGS. The section headings contained in this Agreement are
inserted for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.
(g) NOTICES. All notices, demands, requests, consents, approvals or
other communications required or permitted to be given with respect to this
Agreement shall be in writing and shall be delivered (charges prepaid, receipt
confirmed or return receipt requested (if available)) by hand, by
internationally and nationally recognized air courier service or by facsimile,
addressed as set forth below or to such other address as such party shall have
specified most recently by written notice. Notice shall be deemed given and
effective (i) if delivered by hand or by internationally or nationally
recognized air courier service, when delivered at the address specified in this
Section 11(g) (or in accordance with the latest unrevoked written direction from
such party) or (ii) if given by facsimile when such facsimile is transmitted to
the facsimile number specified in this Section 11(g) (or in accordance with the
latest unrevoked written direction from such party), PROVIDED, THAT, appropriate
confirmation is received and that any such facsimile is promptly followed by
delivery of written notice delivered by hand or by internationally or nationally
recognized air courier service.
IF TO THE SELLER: COPY TO:
----------------- --------
c/o Edwards Lifesciences LLC ▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ 4 Park Plaza
Fax: (▇▇▇) ▇▇▇-▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: General Counsel Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
38
IF TO THE BUYER: COPY TO:
---------------- --------
▇/▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ 777 South ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇▇) ▇▇▇▇-▇▇▇-▇▇▇ Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Chief Executive Officer Attention: ▇▇▇ ▇. ▇▇▇▇▇, Esq.
(h) GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the domestic laws of the State of New York without giving effect
to any choice or conflict of law provision or rule (whether of the State of New
York or any other jurisdiction) that would cause the application of the laws of
any jurisdiction other than the State of New York.
(i) AMENDMENTS AND WAIVERS. No amendment of any provision of this
Agreement shall be valid unless the same shall be in writing and signed by the
Buyer and the Seller. No waiver by any Party of any default, misrepresentation,
or breach of warranty or covenant hereunder, whether intentional or not, shall
be deemed to extend to any prior or subsequent default, misrepresentation, or
breach of warranty or covenant hereunder or affect in any way any rights arising
by virtue of any prior or subsequent such occurrence.
(j) SEVERABILITY. Any term or provision of this Agreement that is
invalid or unenforceable in any situation in any jurisdiction shall not affect
the validity or enforceability of the remaining terms and provisions hereof or
the validity or enforceability of the offending term or provision in any other
situation or in any other jurisdiction.
(k) EXPENSES. Each of the Buyer and the Seller will bear its own costs
and expenses (including legal fees and expenses) incurred in connection with
this Agreement and the transactions contemplated hereby.
(l) CONSTRUCTION. The Parties have participated jointly in the
negotiation and drafting of this Agreement. In the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the Parties and no presumption or burden of proof shall
arise favoring or disfavoring any Party by virtue of the authorship of any of
the provisions of this Agreement. Any reference to any federal, state, local, or
foreign statute or law shall be deemed also to refer to all rules and
regulations promulgated thereunder, unless the context requires otherwise. The
word "including" shall mean including without limitation. All references herein
to the "Seller" or the "Buyer" shall include each entity that is collectively
defined as such in the introduction to this Agreement and each such entity shall
be jointly and severally liable hereunder for all of the other entities that
comprise the "Seller" or the "Buyer", respectively. Nothing in the Disclosure
Schedule shall be deemed adequate to disclose an exception to a representation
or warranty made herein unless the Disclosure Schedule identifies the exception
with reasonable particularity by reference to the specific Section or
sub-section number hereof.
(m) INCORPORATION OF EXHIBITS AND SCHEDULES. The Exhibits and Schedules
identified in this Agreement are incorporated herein by reference and made a
part hereof.
(n) SPECIFIC PERFORMANCE. Each of the Parties acknowledges and agrees
that the other Party would be damaged irreparably in the event any of the
provisions of this Agreement are not performed in accordance with their specific
terms or otherwise are breached. Accordingly, each of the Parties agrees that
the other Party shall be entitled to an injunction or injunctions to prevent
breaches of the provisions of this Agreement and to enforce specifically this
Agreement and the terms and provisions hereof in any action instituted in any
court of the United States or any state thereof having jurisdiction over the
Parties and the matter (subject to the provisions set forth in Section 11(o)
below), in addition to any other remedy to which it may be entitled, at law or
in equity.
39
(o) ARBITRATION.
(i) GENERAL. Any dispute arising out of or relating to this
Agreement shall be resolved in accordance with the procedures specified
in this Section 11(o), which shall be the sole and exclusive procedures
for the resolution of any such disputes.
(ii) ESCALATION. The parties will attempt in good faith to
resolve any claim or controversy arising out of or relating to the
execution, interpretation and performance of this Agreement (including
the validity, scope and enforceability of this arbitration provision)
promptly by negotiations between executives who have authority to
settle the controversy and who are at a higher level of management than
the persons with direct responsibility for the administration of this
Agreement. Any party may give the other party written notice of any
dispute not resolved in the normal course of business. Within 10 days
after delivery of the notice, the receiving party shall submit to the
other a written response. The notice and the response shall include (a)
a statement of each party's position and a summary of arguments
supporting that position, and (b) the name and title of the executive
who will represent that party and of any other person who will
accompany the executive. Within 20 days after delivery of the notifying
party's notice, the executives of both parties shall meet at a mutually
acceptable time and place, and thereafter as often as they reasonably
deem necessary, to attempt to resolve the dispute. All reasonable
requests for information made by one party to the other will be
honored. All negotiations pursuant to this clause are confidential and
shall be treated as compromise and settlement negotiations for purposes
of applicable rules of evidence.
(iii) ARBITRATION. Any dispute arising out of or relating to
this Agreement or its execution, interpretation and performance
(including the validity, scope and enforceability of this arbitration
provision) which has not been resolved by the specified non-binding
procedure within 90 days of the initiation of the date of delivery of
notice shall be settled by binding arbitration in accordance with the
Commercial Arbitration Rules, as supplemented by the Supplemented
Procedures for Large Complex Disputes of the American Arbitration
Association ("AAA") then in effect, by one independent and impartial
arbitrator who shall be selected, jointly by the Parties. Failing such
agreement, the Parties shall each select an arbitrator who shall
mutually select a third independent and impartial arbitrator who shall
be the sole arbitrator of any such dispute. The arbitration shall be
governed by the United States Arbitration Act, 9 U.S.C. 1-16, and
judgment upon the award rendered by the arbitrator may be entered by
any court having jurisdiction thereof. The place of the arbitration
shall be New York, New York, and shall be determined by the party that
initiated the dispute resolution process. The arbitrator may award
attorneys' fees in his or her discretion.
(iv) PROCEDURES. The parties may request limited discovery in
accordance with the Federal Rules of Civil Procedure for a period of
120 days after the initiation of the arbitration process. All issues
regarding compliance with discovery requests shall be decided by the
arbitrator pursuant to the Federal Rules of Civil Procedure. The
parties agree that the recipient of a discovery request shall have 10
days after the receipt of such request to object to any or all portions
of such request and shall respond to any portions of such request not
so objected within 30 days of the receipt of such request. All
objections shall be in writing and shall indicate the reasons for such
objections The objecting party shall ensure that all objections and
responses are received by the other party within the above time
periods; failure to comply with the specified time period shall be
addressed as set forth in Federal Rules of Civil Procedure 37. Any
party seeking to compel discovery following receipt of an objection
shall file with the other party and the arbitrator a motion to compel,
including a copy of the initial request and the objection. The
arbitrator shall allow 10 days for the responses to the motion to
compel before ruling. Claims of
40
privilege and other objections shall be determined as they would be in
United States federal court in a case applying New York law. The
arbitrator may grant or deny the motion to compel, in whole or in part,
concluding that the discovery request is or is not appropriate under
the circumstances, taking into account the needs of the parties and the
desirability of making discovery expeditious and cost-effective. The
statute of limitations of the State of New York applicable to the
commencement of a lawsuit shall apply to the date of initial written
notification of a dispute and shall be extended until commencement of
arbitration if all interim deadlines have been complied with by the
notifying party.
(v) INJUNCTIVE RELIEF. Nothing contained in this Section 11(o)
shall prevent either party from resorting to judicial process if
injunctive relief from a court is necessary to prevent serious and
irreparable injury to one party or to others. The use of arbitration
procedures will not be construed under the doctrine of laches, waiver
or estoppel to affect adversely either party's right to assert any
claim or defense.
(p) BULK TRANSFER LAWS. The Buyer acknowledges that the Seller will not
comply with the provisions of any bulk transfer laws of any jurisdiction in
connection with the transactions contemplated by this Agreement.
(q) ATTORNEYS' FEES. If the Buyer or any of its Affiliates, successors
or assigns brings any action, suit, counterclaim, cross-claim, appeal,
arbitration, or mediation for any relief against the Seller or any of its
Affiliates successors or assigns, or if the Seller or any of its Affiliates
successors or assigns brings any action, suit, counterclaim, cross-claim,
appeal, arbitration, or mediation for any relief against the Buyer or any of its
Affiliates, successors, or assigns, declaratory or otherwise, to enforce the
terms hereof or to declare rights hereunder (collectively, an "ACTION"), in
addition to any damages and costs which the prevailing party otherwise would be
entitled, the non-prevailing party shall pay to the prevailing party a
reasonable sum for attorneys' fees and costs (at the prevailing party's
attorneys' then-prevailing rates) incurred in bringing and prosecuting such
Action and/or enforcing any judgment, order, ruling, or award (collectively, a
"DECISION") granted therein, all of which shall be deemed to have accrued on the
commencement of such Action and shall be paid whether or not such action is
prosecuted to a Decision. Any Decision entered in such Action shall contain a
specific provision providing for the recovery of attorneys' fees and costs
incurred in enforcing such Decision.
For the purposes of this Section 11(q), attorneys' fees shall include,
without limitation, fees incurred in the following: (i) postjudgment motions and
collection actions; (ii) contempt proceedings; (iii) garnishment, levy and
debtor and third party examinations; (iv) discovery; and (iv) bankruptcy
litigation.
For purposes of this Section 11(q), "prevailing party" includes,
without limitation, a party who agrees to dismiss an action on the other party's
payment of the sum allegedly due or performance of the covenants allegedly
breached, or who obtains substantially the relief sought by it. If there are
multiple claims, the prevailing party shall be determined with respect to each
claim separately. The prevailing party shall be the party who has obtained the
greater relief in connection with any particular claim, although, with respect
to any claim, it may be determined that there is no prevailing party.
41
IN WITNESS WHEREOF, the Parties hereto have executed this Amended and
Restated Asset Purchase Agreement as of the date first written above.
JOSTRA BENTLEY CORPORATION,
a Delaware corporation
By: /s/ ▇▇▇▇ ▇▇▇▇▇
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Name: ▇▇▇▇ ▇▇▇▇▇
Title: President
JOSTRA BENTLEY INC.,
a Puerto Rico corporation
By: /s/ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Title: President
▇▇▇▇▇▇▇ LIFESCIENCES LLC,
a Delaware limited liability company
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Attorney-in-fact
▇▇▇▇▇▇▇ LIFESCIENCES
CORPORATION,
a Delaware corporation
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Attorney-in-fact
S-1