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AMENDED AND RESTATED
ASSET PURCHASE AGREEMENT
AMONG
CYTOMEDIX, INC.,
CHS SERVICES, INC.,
AND
CURATIVE HEALTH SERVICES, INC.,
EFFECTIVE AS OF
OCTOBER 12, 2000,
AND EXECUTED AS OF
DECEMBER 26, 2000
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TABLE OF CONTENTS
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ARTICLE I.DEFINITIONS.............................................................................................1
ARTICLE II.SALE AND TRANSFER OF ASSETS; CLOSING...................................................................9
Section 2.1 Assets to Be Sold.......................................................................9
Section 2.2 Excluded Assets........................................................................10
Section 2.3 Consideration..........................................................................11
Section 2.4 Liabilities............................................................................12
Section 2.5 Allocation.............................................................................13
Section 2.6 Closing................................................................................13
Section 2.7 Closing Obligations....................................................................14
Section 2.8 Adjustment Amount......................................................................16
ARTICLE III.REPRESENTATIONS AND WARRANTIES OF SELLER.............................................................17
Section 3.1 Organization and Good Standing.........................................................17
Section 3.2 Enforceability, Authority, No Conflict.................................................18
Section 3.3 Financial Statements...................................................................19
Section 3.4 Books and Records......................................................................20
Section 3.5 Sufficiency of Assets..................................................................20
Section 3.6 Real Property, Condition of Facilities.................................................20
Section 3.7 Personal Property......................................................................22
Section 3.8 Inventories............................................................................22
Section 3.9 No Undisclosed Liabilities.............................................................22
Section 3.10 Taxes..................................................................................23
Section 3.11 No Material Adverse Change.............................................................23
Section 3.12 Employees..............................................................................23
Section 3.13 Employee Benefits......................................................................24
Section 3.14 Compliance With Legal Requirements; Governmental Authorizations........................24
Section 3.15 Legal Proceedings; Orders..............................................................26
Section 3.16 Absence of Certain Changes and Events..................................................26
Section 3.17 Contracts; No Defaults.................................................................27
Section 3.18 Insurance..............................................................................28
Section 3.19 Environmental Matters..................................................................28
Section 3.20 Intellectual Property..................................................................29
Section 3.21 Compliance with FDA and Related Legal Requirements.....................................31
Section 3.22 Certain Payments.......................................................................32
Section 3.23 Relationships with Related Persons.....................................................32
Section 3.24 Brokers or Finders.....................................................................33
Section 3.25 Solvency...............................................................................33
ARTICLE IV.REPRESENTATIONS AND WARRANTIES OF BUYER...............................................................33
Section 4.1 Organization and Good Standing.........................................................33
Section 4.2 Authority, No Conflict.................................................................34
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Section 4.3 Certain Proceedings....................................................................34
Section 4.4 Financial Statements...................................................................35
Section 4.5 Brokers or Finders.....................................................................35
Section 4.6 No Material Adverse Change.............................................................35
Section 4.7 No Undisclosed Liabilities.............................................................35
Section 4.8 Solvency...............................................................................35
ARTICLE V.COVENANTS OF SELLER PRIOR TO CLOSING...................................................................36
Section 5.1 Access and Investigation...............................................................36
Section 5.2 Operation of the Business of Seller....................................................36
Section 5.3 Negative Covenant......................................................................36
Section 5.4 Required Approvals.....................................................................37
Section 5.5 Notification...........................................................................37
Section 5.6 No Negotiation.........................................................................37
Section 5.7 Best Efforts...........................................................................37
Section 5.8 Payment of Liabilities.................................................................37
ARTICLE VI.COVENANTS OF BUYER PRIOR TO CLOSING...................................................................38
Section 6.1 Required Approvals.....................................................................38
Section 6.2 Best Efforts...........................................................................38
ARTICLE VII.CONDITIONS PRECEDENT TO BUYER'S OBLIGATION TO CLOSE..................................................38
Section 7.1 Accuracy of Representations............................................................38
Section 7.2 Seller's Performance...................................................................38
Section 7.3 Intentionally Omitted..................................................................39
Section 7.4 Additional Documents...................................................................39
Section 7.5 No Proceedings.........................................................................39
Section 7.6 No Injunction..........................................................................40
Section 7.7 Governmental Authorizations............................................................40
Section 7.8 Employees..............................................................................40
ARTICLE VIII.CONDITIONS PRECEDENT TO SELLER'S OBLIGATION TO CLOSE................................................40
Section 8.1 Accuracy of Representations............................................................40
Section 8.2 Buyer's Performance....................................................................40
Section 8.3 Intentionally Omitted..................................................................41
Section 8.4 Additional Documents...................................................................41
Section 8.5 No Injunction..........................................................................41
ARTICLE IX.TERMINATION...........................................................................................41
Section 9.1 Termination Events.....................................................................41
Section 9.2 Effect of Termination..................................................................42
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ARTICLE X.ADDITIONAL COVENANTS...................................................................................42
Section 10.1 Employees and Employee Benefits........................................................42
Section 10.2 Payment of All Taxes Resulting From Sale of Assets by Seller...........................44
Section 10.3 Payment of Other Retained Liabilities..................................................44
Section 10.4 Reports and Returns....................................................................44
Section 10.5 Insurance..............................................................................44
Section 10.6 Further Assurances.....................................................................44
Section 10.7 Access to Patient Data Base of Seller..................................................44
Section 10.8 Cooperation in the Event of FDA Action.................................................45
Section 10.9 Audited Financial Statements...........................................................45
Section 10.10 Right to Audit.........................................................................45
Section 10.11 BTG Agreement..........................................................................45
ARTICLE XI.INDEMNIFICATION.......................................................................................45
Section 11.1 Survival...............................................................................45
Section 11.2 Indemnification and Reimbursement By Seller............................................46
Section 11.3 Indemnification and Reimbursement by Buyer.............................................46
Section 11.4 Time Limitations.......................................................................47
Section 11.5 Recoveries.............................................................................47
Section 11.6 Limitations on Amount -Seller..........................................................47
Section 11.7 Limitations on Amount -Buyer...........................................................48
Section 11.8 Procedure for Indemnification -Third Party Claims......................................48
Section 11.9 Procedure For Indemnification -Other Claims............................................49
ARTICLE XII.GENERAL PROVISIONS...................................................................................50
Section 12.1 Confidentiality; Public Announcements..................................................50
Section 12.2 Expenses...............................................................................50
Section 12.3 Notices................................................................................50
Section 12.4 Jurisdiction, Service of Process.......................................................51
Section 12.5 Enforcement of Agreement...............................................................51
Section 12.6 Waiver.................................................................................52
Section 12.7 Entire Agreement and Modification......................................................52
Section 12.8 Assignments, Successors, and No Third-Party Rights.....................................52
Section 12.9 Severability...........................................................................52
Section 12.10 Section Headings, Construction, Schedules..............................................53
Section 12.11 Governing Law..........................................................................53
Section 12.12 Execution of Agreement, Counterparts...................................................53
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AMENDED AND RESTATED
ASSET PURCHASE AGREEMENT
This Amended and Restated Asset Purchase Agreement (the
"Agreement"), is effective as of October 12, 2000, and executed as of December
26, 2000, by and among Cytomedix, Inc., a Delaware corporation (the "Buyer"),
Curative Health Services, Inc., a Minnesota corporation ("Curative Health
Services"), and CHS Services, Inc., a Delaware corporation ("CHS Services")
(Curative Health Services and CHS Services, jointly and severally, "Seller").
RECITALS
WHEREAS, Buyer, Cytomedix N.V., a Netherlands corporation,
Curative Health Services and CHS Services entered into that certain Asset
Purchase Agreement dated as of October 12, 2000 (the "Original Agreement"); and
WHEREAS, the parties now desire to amend and restate the
Original Agreement in its entirety on the terms and conditions set forth herein;
AGREEMENT
NOW, THEREFORE, in consideration of the respective covenants
and promises contained herein and for other good and valuable consideration, the
receipt and adequacy of which is hereby acknowledged, the parties hereto agree
as follows:
ARTICLE I.
DEFINITIONS
For purposes of this Agreement, the following terms and
variations thereof have the meanings specified or referred to in this Article I:
"Accounts Receivable" - (a) all trade accounts receivable and
other rights to payment from customers of Seller and the full benefit of all
security for such accounts or debts, (b) all other accounts or notes receivable
and the full benefit of all security for such accounts or notes, and (c) any
claims, remedies and other rights related to any of the foregoing.
"Actual Knowledge" - an individual will be deemed to have
"Actual Knowledge" of a particular fact or other matter if such individual is
actually aware of such fact or other matter, without conducting any
investigation. Seller will be deemed to have "Actual Knowledge" of a particular
fact or other matter if Karen Wood Blume, Bobby Kimbro, William Tella or John
Prior has Actual Knowledge of such fact or other matter (as set forth above).
Buyer will be deemed to have "Actual Knowledge" of a particular fact or other
matter if Christopher Caywood, James Cour or Glenn Charlesworth has Actual
Knowledge of such fact or other matter (as set forth above).
"Adjustment Amount" - as defined in Section 2.8(a).
"Agreement" - as defined in the first paragraph of this
Agreement.
"Asset and Liability Information" - as defined in Section 3.3.
"Assets" - as defined in Section 2.1(a).
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"Assignment and Assumption Agreement" - as defined in Section
2.7(a)(ii).
"Assignment and Assumption of Lease" - as defined in Section
2.7(a)(iii).
"Assignment of Copyrights" - as defined in Section 2.7(a)(vi).
"Assignment of Marks" - as defined in Section 2.7(a)(iv).
"Assignment of Patents" - as defined in Section 2.7(a)(v).
"Assumed Liabilities" - as defined in Section 2.4(a).
"Best Efforts" - the efforts that a prudent Person desirous of
achieving a result would use in similar circumstances to ensure that such result
is achieved as expeditiously as possible; provided, however, that a Person
required to use Best Efforts under this Agreement will not be required to take
actions that would result in a materially adverse change in the benefits to such
Person of this Agreement and the Contemplated Transactions, dispose of or make
any change to its business, or expend any material funds or incur any other
material burden.
"Bill of Sale" - as defined in Section 2.7(a)(i).
"Breach" - any violation or breach of, any misrepresentation
or inaccuracy in, any default under, or any failure to perform or comply with
any representation, warranty, covenant, obligation, or other provision of any
Contract, or any event which with the passing of time or the giving of notice,
or both, would constitute such a violation, breach, misrepresentation,
inaccuracy, default or failure.
"BTG Agreement" - that certain Commercialization Agreement
dated as of January 19, 1998, by and between BTG USA, Inc., a Delaware
corporation, and Curative Health Services.
"Bulk Sales Law" - as defined in Section 5.8.
"Business Day" - any day other than Saturday or Sunday or any
other day on which banks in New York are permitted or required to be closed.
"Buyer" - as defined in the first paragraph of this Agreement.
"Buyer Indemnified Persons" - as defined in Section 11.2.
"Buyer's Advisors" - as defined in Section 5.1.
"Buyer's Closing Documents" - as defined in Section 4.2(a).
"Buyer Public Financial Statements" - as defined in Section
4.4.
"CHS Services" - as defined in the first paragraph of this
Agreement.
"Closing" - as defined in Section 2.6.
"Closing Date" - as defined in Section 2.6.
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"Closing Date Valuation" - as defined in Section 2.8(c).
"Closing Tangible Assets Book Value" - as defined in Section
2.8(c).
"COBRA" - the requirements of Section 4908 of the Code and
Sections 601 through 608 of ERISA.
"Code" - the Internal Revenue Code of 1986, as amended, or any
successor law, regulations issued by the IRS pursuant to the Code or any
successor law.
"Consent" - any approval, consent, ratification, waiver, or
other authorization.
"Contemplated Transactions" - all of the transactions
contemplated by this Agreement.
"Contract" - any agreement, contract, lease, consensual
obligation, promise, or undertaking (whether written or oral and whether express
or implied).
"Contribution Margin Information" - as defined in Section 3.3.
"Copyrights" - as defined in Section 3.20(a)(i)(C).
"Curative Corporate Headquarters" - as defined in Section
2.2(k).
"Curative Health Services" - as defined in the first paragraph
of this Agreement.
"Cytomedix 10-Q" - as defined in Section 4.6.
"Damages" - as defined in Section 11.2.
"Employee Benefit Plan" - any plan, program or agreement which
Seller has maintained, sponsored or obligated itself under with respect to
employees' benefits or welfare, including without limitation employee pension
benefit plans (as defined in Section 3(2) of ERISA), employee welfare benefit
plans (as defined in Section 3(1) of ERISA), bonus or incentive compensation,
stock option or equity participation plans.
"Employees" - as defined in Section 3.12(a).
"Encumbrance" - any charge, claim, community property
interest, condition, equitable interest, lien, option, pledge, security
interest, mortgage, right-of-way, easement, encroachment, servitude, right of
first option, right of first refusal or restriction of any kind, including any
restriction on use, voting (in the case of any security), transfer, receipt of
income, or exercise of any other attribute of ownership.
"Environmental, Health and Safety Liabilities" - any Damages
or Legal Requirements arising from or under any Environmental Law or
Occupational Safety and Health Law.
"Environmental Law" - any Legal Requirement designed to
regulate, punish or remedy the consequences of actions that damage the
environment or public health and safety.
"ERISA" - the Employee Retirement Income Security Act of 1974,
as amended, or any successor law, and regulations and rules issued pursuant to
that Act or any successor law.
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"Exchange Act" - the Securities Exchange Act of 1934, as
amended.
"Excluded Assets" - as defined in Section 2.2.
"Facilities" - the blood processing facilities owned or
operated by Seller in connection with the Procuren Operations located on the
Leased Parcels and the Hospital Parcels set forth on Schedule 3.6(b).
"FDA" - the United States Food and Drug Administration.
"GAAP" - generally accepted accounting principles for
financial reporting in the United States, applied on a basis consistent with the
basis on which the financial statements referred to in Section 3.3 were
prepared.
"Governing Documents" - with respect to any particular entity,
(a) if a corporation, the articles or certificate of incorporation and the
bylaws; (b) if a general partnership, the partnership agreement and any
statement of partnership; (c) if a limited partnership, the limited partnership
agreement and the certificate of limited partnership; (d) if a limited liability
company, the articles of organization and operating agreement; (e) any other
charter or similar document adopted or filed in connection with the creation,
formation or organization of a Person; (f) all equity holders' agreements,
voting agreements, voting trust agreements, joint venture agreements,
registration rights agreements or other agreements or documents relating to the
organization, management or operation of any Person, or relating to the rights,
duties and obligations of the equity holders of any Person; and (g) any
amendment or supplement to any of the foregoing.
"Governmental Authorization" - any Consent, license, or permit
issued, granted, given, or otherwise made available by or under the authority of
any Governmental Body or pursuant to any Legal Requirement, but specifically
excluding any general business license.
"Governmental Body" - any:
(a) domestic or foreign federal, state, local, or
municipal government;
(b) domestic or foreign governmental authority of any
nature (including any agency, branch, department, board,
commission, court, tribunal or other entity exercising
governmental powers);
(c) domestic or foreign body exercising any
administrative, executive, judicial, legislative, police,
regulatory, or taxing authority or power; or
(d) official of any of the foregoing.
"Hazardous Material" - any substance, material or waste which
is regulated by any Governmental Body, including any waste which is defined or
contains a "hazardous waste," "hazardous material," "hazardous substance,"
"extremely hazardous waste," "restricted hazardous waste," "biohazardous waste,"
biomedical waste," "medical waste," "sharps," "contaminant," "pollutant," "toxic
waste" or "toxic substance" under any provision of Environmental Law, and
including petroleum, petroleum products, asbestos or asbestos-containing
material, urea formaldehyde, radioactive materials, and polychlorinated
biphenyls.
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"Hired Employees" - as defined in Section 10.1(a).
"Hospital Parcels" - as defined in Section 3.6(b).
"Hospital Parcel Contract" - as defined in Section 3.6(b).
"Improvements" - all trade fixtures and improvements made by
or on behalf of the tenant located on the Parcels or included in the Assets,
including those under construction.
"Independent Accountants" - as defined in Section 2.8(e).
"Intellectual Property Assets" - as defined in Section
3.20(a).
"Interim Asset and Liability Information" - as defined in
Section 3.3.
"Interim Tangible Assets Book Value" - as defined in Section
2.8(b).
"Inventories" - all inventories of Seller used in connection
with the Procuren Operations (including the Product), wherever located,
including all work in process, raw materials, and all other materials and
supplies to be used or consumed by Seller in the production and distribution of
finished goods, but excluding the finished Product.
"IRS" - the United States Internal Revenue Service or any
successor agency, and, to the extent relevant, the United States Department of
the Treasury.
"Knowledge" - an individual will be deemed to have "Knowledge"
of a particular fact or other matter if:
(a) such individual is actually aware of such fact or
other matter; or
(b) a prudent individual could be expected to
discover or otherwise become aware of such fact or other
matter in the ordinary course of conducting a reasonably
comprehensive investigation regarding the accuracy of any
representations or warranties contained in this Agreement.
Seller will be deemed to have "Knowledge" of a particular fact
or other matter if Karen Wood Blume, Bobby Kimbro, William Tella or John Prior,
has Knowledge of such fact or other matter (as set forth in (a) and (b) above).
Buyer will be deemed to have "Knowledge" of a particular fact or other matter if
Christopher Caywood, James Cour or Glenn Charlesworth has Knowledge of such fact
or other matter (as set forth in (a) and (b) above).
"Leased Parcel" - as defined in Section 3.6(b).
"Legal Requirement" - any applicable domestic or foreign
federal, state, local, or municipal law, ordinance, principle of common law,
code, regulation, statute, or treaty.
"Liability" - with respect to any Person, any liability or
obligation of such Person of any kind, character or description, whether known
or unknown, absolute or contingent, accrued or unaccrued, liquidated or
unliquidated, secured or unsecured, joint or several, due or to become due,
vested or unvested, executory, determined, determinable or otherwise, and
whether or not the same is required to be accrued on the financial statements of
such Person.
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"Marks" - as defined in Section 3.20(a)(i)(A).
"Non-Real Property Encumbrances" - as defined in Section
3.7(a).
"Occupational Safety and Health Law" - any Legal Requirement
designed to regulate occupational safety and health hazards in the workplace,
including the Occupational Safety and Health Act, 29 U.S.C. ss. 651 et seq.
"Order" - any order, injunction, judgment, decree, ruling,
assessment or arbitration award of any Governmental Body or arbitrator.
"Ordinary Course of Business" - an action taken by a Person
will be deemed to have been taken in the "Ordinary Course of Business" only if
such action:
(a) is consistent in nature, scope and magnitude with
the past practices of such Person and is taken in the ordinary
course of the normal day-to-day operations of such Person;
(b) does not require authorization by the board of
directors or shareholders of such Person (or by any Person or
group of Persons exercising similar authority) and does not
require any other separate or special authorization of any
nature; and
(c) is similar in nature, scope and magnitude to
actions customarily taken, without any separate or special
authorization, in the ordinary course of the normal day-to-day
operations of other Persons that are in the same line of
business as such Person.
"Original Agreement" - as defined in the Recitals.
"Other Authorities" - as defined in Section 3.21(a).
"Parcels" - the Leased Parcels and the Hospital Parcels.
"Patents" - as defined in Section 3.20(a)(ii).
"Peptides Patents" - as defined in Section 3.20(a)(ii).
"Permitted Encumbrance" - any Permitted Non-Real Property
Encumbrances or Permitted Real Property Encumbrances.
"Permitted Non-Real Property Encumbrances" - as defined in
Section 3.7(a).
"Permitted Real Property Encumbrance" - means all Encumbrances
on the fee interest in the Parcels.
"Person" - an individual, partnership, corporation, business
trust, limited liability company or partnership, joint stock company, trust,
unincorporated association, joint venture or other entity, or a Governmental
Body.
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"Personnel Records" - any Records relating to any Employee
that have previously been disclosed to such Employee, including such Employee's
resume, job description, application, performance reviews, discipline records,
salary history and letters of commendation.
"Proceeding" - any action, arbitration, audit, hearing,
investigation, litigation, or suit (whether civil, criminal, administrative,
judicial or investigative, whether formal or informal, whether public or
private) commenced, brought, conducted, or heard by or before, or otherwise
involving, any Governmental Body or arbitrator.
"Procuren Operations" - the development, manufacturing,
marketing, licensing and distribution of the Product as currently conducted by
Seller.
"Procuren Patents" - as defined in Section 3.20(a)(i)(B).
"Product" - Procuren(R), a thrombin-induced platelet
releasate.
"Promissory Note" - as defined in Section 2.7(b)(xii).
"Purchase Price" - as defined in Section 2.3.
"Real Property" - the Parcels and Improvements.
"Record" - information that is inscribed on a tangible medium
or that is stored in an electronic or other medium and is retrievable in
perceivable form.
"Registration Rights Agreement" - as defined in Section
2.7(a)(xviii).
"Related Person" - is:
(a) with respect to a particular individual, each
other member of the individual's Family;
(b) any Person that, directly or indirectly,
controls, is controlled by, or is under common control with a
specified Person, including a member of an individual's
Family;
(c) any Person (including members of an individual's
Family, individually or in the aggregate) that holds a
Material Interest in a specified Person;
(d) each Person that, or with respect to which one or
more members of a specified individual's Family, serves as a
director, officer, partner, executor, or trustee of a
specified Person (or in a similar capacity);
(e) any Person in which a specified Person holds a
Material Interest; and
(f) any Person with respect to which a specified
Person serves as a general partner or a trustee (or in a
similar capacity).
For purposes of this definition, (a) "control" (including
"controlling," "controlled by" and "under common control with") means the
possession, direct or indirect, of the power to direct or cause the direction of
the management and policies of a Person, whether through the ownership of voting
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securities, by contract or otherwise; (b) the "Family" of an individual includes
any relationship by blood, marriage or adoption, not more remote than first
cousin; and (c) "Material Interest" means direct or indirect beneficial
ownership (defined as the power to vote or to direct the voting of, or the power
to dispose of, an equity security) of voting securities or other voting
interests representing at least five percent (5%) of the outstanding voting
power of a Person or equity securities or other equity interests representing at
least five percent (5%) of the outstanding equity securities or equity interests
in a Person.
"Representative" - with respect to a particular Person, any
director, officer, employee, agent, consultant, advisor, or other authorized
representative of such Person, including legal counsel, accountants, and
financial advisors.
"Retained Liabilities" - as defined in Section 2.4(c).
"Royalty Agreement" - as defined in Section 2.7(a)(viii).
"Securities Act" - the Securities Act of 1933, as amended.
"Securities Purchase Agreement" - as defined in Section
2.7(a)(xvii).
"Security Agreement" - as defined in Section 2.7(a)(xiii).
"Seller" - as defined in the first paragraph of this
Agreement.
"Seller Contract" - as defined in Section 2.1(a)(iv).
"Seller Lease" - as defined in Section 3.6(b).
"Seller's Closing Documents" - as defined in Section 3.2(a).
"Seller Public Financial Statements" - as defined in Section
3.3.
"Severance Plan" - as defined in Section 10.1(a).
"Stock Purchase Warrant" - as defined in Section 2.7(b)(xiii).
"Subsidiary" - with respect to any Person (the "Owner"), any
corporation or other Person of which securities or other interests having the
power to elect a majority of board of directors or similar governing body, or
otherwise having the power to direct its business and policies (other than
securities or other interests having such power only upon the happening of a
contingency that has not occurred) are held by Owner, directly or indirectly.
"Supply Agreement" - as defined in Section 2.7(a)(x).
"Tangible Assets Book Value" - as defined in Section 2.8(b).
"Tangible Personal Property" - all machinery, equipment,
tools, furniture, office equipment, computer hardware, supplies, materials,
vehicles and other items of tangible personal property (other than Inventories)
of every kind owned or leased by Seller in connection with the Procuren
Operations (wherever located and whether or not carried on Seller's books),
together with any express or implied warranty by the manufacturers or sellers or
lessors of any item or component part thereof, and all
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maintenance records and other documents relating thereto, but excluding those
items set forth in Section 2.2(k).
"Tax" - any income, gross receipts, license, payroll,
employment, excise, severance, stamp, occupation, premium, property,
environmental, windfall profit, customs, vehicle, airplane, boat, vessel or
other title or registration, capital stock, franchise, employees' income
withholding, foreign or domestic withholding, social security, unemployment,
disability, real property, personal property, sales, use, transfer, value added,
alternative, add-on minimum, and other tax, fee, assessment, levy tariff, charge
or duty of any kind whatsoever, and any interest, penalties, additions or
additional amounts thereon, imposed, assessed, collect by or under the authority
of any Governmental Body or payable under any tax-sharing agreement or any other
Contract.
"Trade Secrets" - as defined in Section 3.20(a)(i)(D).
"Transitional Services Agreement" - as defined in Section
2.7(a)(ix).
ARTICLE II.
SALE AND TRANSFER OF ASSETS; CLOSING
Section 2.1 Assets to Be Sold.
(a) Upon the terms and subject to the conditions set
forth in this Agreement, at the Closing, Curative Health
Services shall sell, convey, assign, transfer and deliver to
Buyer, and Buyer shall purchase and acquire from Curative
Health Services, free and clear of any Encumbrances other than
Permitted Encumbrances and Encumbrances set forth as such on
Schedule 3.20(c) and 3.20(i) - Software, all of Seller's
right, title and interest in and to the following assets,
wherever located (the "Assets"):
(i) all leasehold and other title to or
interest in the Real Property;
(ii) all Tangible Personal Property as of
the Closing Date, including those items described in
Schedule 2.1(a)(ii);
(iii) all Inventories as of the Closing
Date;
(iv) all Seller's rights in, to and under
all the Contracts listed on Schedule 3.6(b), Schedule
3.17(a) and Schedule 3.20(b) (the "Seller Contracts")
and such other contracts that principally relate to
the Intellectual Property Assets;
(v) all Governmental Authorizations relating
to the Procuren Operations listed on Schedule
3.14(b), and all pending applications therefor or
renewals thereof, in each case to the extent
transferable to Buyer;
(vi) all of the following data and Records
of Seller principally relating to the Procuren
Operations and the Peptide Patents: (i) client and
customer lists and Records, (ii) raw data, (iii)
research and development reports and Records, (iv)
production reports and Records, (v) service and
warranty Records, (vi) equipment logs, operating
guides and manuals, (vii) the creative materials,
advertising materials and promotional materials
described in Schedule
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2.1(a)(vi), (viii) clinical research or other
studies, reports and correspondence with respect
thereto, (ix) copies of the Personnel Records, (x)
copies of all financial and accounting Records of
Seller relating to the Procuren Operations (if
applicable, in compatible electronic format), and
(xi) all other data and Records located at the
Facilities.
(vii) all insurance benefits, including
rights and proceeds, arising from or relating to the
Assets or the Assumed Liabilities prior to the
Closing Date, unless expended in accordance with this
Agreement;
(viii) all claims of Seller against third
parties relating to the Assets, whether choate or
inchoate, known or unknown, contingent or
non-contingent, including all such claims listed in
Schedule 2.1(a)(viii);
(ix) all rights of Seller relating to
deposits and prepaid expenses, claims for refunds and
rights to offset in respect thereof in connection
with the Procuren Operations (including, without
limitation, any security deposits under the Seller
Leases) which are not listed in Schedule 2.2(c) and
which are not excluded under Section 2.2(g);
(x) all of the intangible rights and
property of Seller relating to the Procuren
Operations and the Peptide Patents, including
Intellectual Property Assets, going concern value,
goodwill, and listings and those items listed on
Schedule 3.20(e), Schedule 3.20(f), Schedule 3.20(g)
and Schedule 3.20(i); and
(xi) all other properties and assets of
every kind, character and description, tangible or
intangible, of every kind and description, owned by
Seller and used or held for use in connection with
the Facilities, whether or not similar to the items
specifically set forth above, except as set forth in
Section 2.2 below.
(b) [intentionally omitted]
(c) Notwithstanding the foregoing, the transfer of
the Assets pursuant to this Agreement shall not include the
assumption of any Liability in respect thereof unless the
Buyer expressly assumes such Liability pursuant to Section
2.4(a).
Section 2.2 Excluded Assets.
Notwithstanding anything to the contrary contained in Section
2.1 or elsewhere in this Agreement, all items not included within the Assets
(collectively, the "Excluded Assets") are not part of the sale and purchase
contemplated hereunder, are excluded from the Assets, and shall remain the
property of Seller after the Closing, which Excluded Assets include but are not
limited to:
(a) all cash and cash equivalents and all securities
and short term investments relating to the Procuren
Operations;
(b) all Accounts Receivable relating to the Procuren
Operations;
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(c) those rights of Seller relating to deposits and
prepaid expenses and claims for refunds and rights to offset
in respect thereof in connection with the Procuren Operations
listed on Schedule 2.2(c);
(d) all of Seller's insurance policies and rights
thereunder in connection with the Procuren Operations (except
to the extent specified in Sections 2.1(a)(vii) and
2.1(a)(viii));
(e) all of the Seller Contracts listed Schedule
2.2(e);
(f) all personnel Records and other Records relating
to the Procuren Operations that Seller is required by law to
retain in its possession;
(g) all claims for refund of Taxes and other
governmental charges of whatever nature relating to the
Procuren Operations;
(h) all rights in connection with and assets of any
Employee Benefit Plans;
(i) all rights of Seller in connection with the
Contemplated Transactions;
(j) the property and assets expressly designated in
Schedule 2.2(j);
(k) all of Seller's Tangible Personal Property (i)
used in the general administration of the Procuren Operations
and located at 150 Motor Parkway, Hauppauge, New York 11788
(the "Curative Corporate Headquarters"), or (ii) located at
the wound care centers of Seller, except as set forth in
Schedule 2.1(a)(ii);
(l) all of Seller's data and Records maintained at
the Curative Corporate Headquarters, field offices or wound
care centers, including the MediLink Database and all
financial data and Records relating to the Procuren Operations
or otherwise;
(m) all of Seller's creative materials, advertising
materials and promotional materials and all copyrights that
are a part of such materials except as set forth in Schedule
2.1(a)(vi); and
(n) all of Seller's intellectual property except to
the extent specified in Section 2.1(a)(x), including all of
Seller's right to intellectual property embodied in the wound
care center protocols to the extent that any such protocols do
not relate to the Procuren Operations or the Peptide Patents
and those exclusions identified in Schedule 3.20(i) Software
Section (1), as identified by an asterisk.
Section 2.3 Consideration.
The consideration for the Assets (the "Purchase Price") is (i)
$3,782,571 plus or minus the Adjustment Amount, (ii) the assumption of the
Assumed Liabilities, and (iii) the obligation of Buyer to pay future royalties
as set forth in the Royalty Agreement. In accordance with Section 2.7(b), at the
Closing the Purchase Price, prior to adjustment on account of the Adjustment
Amount, shall be delivered by Buyer to Seller as follows: (a) $2,100,000 by wire
transfer to an account specified by Seller; (b) $1,682,571, payable in the form
of the Promissory Note, and (c) the balance of the Purchase Price by the
execution and delivery of the Assignment and Assumption Agreement and the
Royalty Agreement.
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Section 2.4 Liabilities.
(a) Assumed Liabilities. At the Closing, Buyer shall
assume and agree to discharge only the following specifically
enumerated Liabilities of Seller (the "Assumed Liabilities"):
(i) any Liability arising after the Closing
under any Seller Contract included in the Assets and
those Contracts assigned pursuant to Section
2.1(a)(iv) (other than any Liability arising out of
or relating to a Breach which occurred prior to the
Closing), except as otherwise set forth in the Supply
Agreement; and
(ii) any Liability of Seller described in
Schedule 2.4(a)(ii).
(b) [intentionally omitted]
(c) Retained Liabilities. "Retained Liabilities"
shall mean every Liability of Seller other than the Assumed
Liabilities. All of the Retained Liabilities shall remain the
sole responsibility of and shall be retained, paid, performed
and discharged solely by Seller. Retained Liabilities shall
include, without limitation, all of the following Liabilities
(whether relating to the Procuren Operations or otherwise):
(i) any Liability arising out of or relating
to products of Seller to the extent manufactured or
sold prior to the Closing, including without
limitation any products liability claims with respect
thereto;
(ii) any Liability under any Contract
assumed by Buyer pursuant to Section 2.4(a) which
arises after the Closing but which arises out of or
relates to any Breach that occurred prior to the
Closing;
(iii) (A) any Liability for Taxes arising as
a result of Seller's operation of the Procuren
Operations or ownership of the Assets prior to
Closing, (B) any Liability for Taxes that will arise
as a result of the sale of the Assets pursuant to
this Agreement and (C) any Liability for Taxes which
were deferred prior to Closing;
(iv) any Liability under any Contract not
assumed by Buyer under Section 2.4(a), including any
Liability arising out of or relating to Seller's
credit facilities, indebtedness or any security
interest related thereto;
(v) any Liability under any Environmental
Law or Occupational Safety and Health Law, including
without limitation any Liability arising out of or
relating to (1) any Hazardous Materials or other
contaminants that were present on the Facilities or
Assets at any time on or prior to the Closing Date,
or (2) any property or Facility at or to which, prior
to the Closing Date, Hazardous Materials were
generated, manufactured, refined, transferred,
imported, used or processed by Seller or any other
Person for whose conduct it is or may be held
responsible in connection with the Procuren
Operations;
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(vi) any Liability under the Employee
Benefit Plans or relating to payroll, vacation, sick
leave, workers' compensation, unemployment benefits,
pension benefits, employee stock option or profit
sharing plans, health care plans or benefits, or any
other employee plans or benefits of any kind for
Seller's employees or former employees or both;
(vii) any Liability under any employment,
severance, retention or termination agreement with
any employee of Seller or any of its Related Persons;
(viii) any Liability arising out of or
relating to any employee grievance whether or not the
affected employees are hired by Buyer;
(ix) any Liability of Seller to any Related
Person not assumed by Buyer under Section 2.4(a);
(x) any Liability of Seller to indemnify,
reimburse or advance amounts to any officer,
director, employee or agent of Seller;
(xi) any Liability arising out of any
Proceeding pending as of the Closing, whether or not
set forth in any of the Schedules attached hereto, or
any Proceeding commenced after the Closing and
arising out of, or relating to, any occurrence or
event happening prior to the Closing;
(xii) any Liability arising out of or
resulting from Seller's compliance or non-compliance
prior to the Closing with any Legal Requirement or
Order of any Governmental Body;
(xiii) any Liability of Seller under this
Agreement or any other document executed in
connection with the Contemplated Transactions; and
(xiv) any Liability of Seller based upon
Seller's acts or omissions occurring after the
Closing.
Section 2.5 Allocation.
The Purchase Price shall be allocated in accordance with
Exhibit 2.5. After the Closing, the parties shall make consistent use of the
allocation specified in Exhibit 2.5 for all Tax purposes and in any tax returns
filed with the IRS in respect thereof, including IRS Form 8594. In any
Proceeding related to the determination of any Tax, neither Buyer nor Seller
shall contend or represent that such allocation is not a correct allocation.
Section 2.6 Closing.
The consummation of the purchase and sale provided for in this
Agreement (the "Closing") will take place at the offices of Latham & Watkins,
885 Third Avenue, Suite 1000, New York, New York at 10 a.m. (local time) on
December 26, 2000, or at such other time and place as the parties may agree
(the "Closing Date"). Subject to the provisions of Article IX, failure to
consummate the purchase and sale provided for in this Agreement on the date and
time and at the place determined pursuant to this Section 2.6 will not result in
the termination of this Agreement and will not relieve any party of any
obligation under this Agreement.
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Section 2.7 Closing Obligations.
In addition to any other documents to be delivered under other
provisions of this Agreement, at the Closing:
(a) Seller shall deliver to Buyer, together with
funds sufficient to pay all Taxes subject to Section 10.2
necessary for the transfer, filing or recording thereof:
(i) a bill of sale in the form of Exhibit
2.7(a)(i) (the "Bills of Sale") for all of the
Assets, executed by Seller;
(ii) an assignment in the form of Exhibit
2.7(a)(ii) of all of the Assets which are intangible
personal property, which assignment shall also
contain Buyer's undertaking and assumption of the
Assumed Liabilities (the "Assignment and Assumption
Agreement"), executed by Seller;
(iii) for each Seller Lease identified on
Schedule 3.6(b), an Assignment and Assumption of
Lease in the form of Exhibit 2.7(a)(iii) (the
"Assignment and Assumption of Lease"), or such other
appropriate document or instrument of transfer, as
the case may require, each in form and substance
satisfactory to Buyer and its counsel and executed by
Seller;
(iv) an assignment of all of the Marks in
the form of Exhibit 2.7(a)(iv), executed by Seller
(the "Assignment of Marks");
(v) an assignment of all of the Patents in
the form of Exhibit 2.7(a)(v), executed by Seller
(the "Assignment of Patents");
(vi) an assignment of all of the Copyrights
in form of Exhibit 2.7(a)(vi), executed by Seller
(the "Assignment of Copyrights");
(vii) such other deeds, bills of sale,
assignments, certificates of title, documents and
other instruments of transfer and conveyance as may
reasonably be requested by Buyer, each in form and
substance satisfactory to Buyer and its counsel and
executed by Seller;
(viii) a royalty agreement in the form of
Exhibit 2.7(a)(viii), executed by Seller (the
"Royalty Agreement");
(ix) a transitional services agreement in
the form of Exhibit 2.7(a)(ix), executed by Seller
(the "Transitional Services Agreement");
(x) a supply agreement in the form of
Exhibit 2.7(a)(x), executed by Seller (the "Supply
Agreement");
(xi) [intentionally omitted]
(xii) [intentionally omitted]
(xiii) a security agreement in the form of
Exhibit 2.7(a)(xiii), executed by Seller (the
"Security Agreement");
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(xiv) a certificate executed by each of
Curative Health Services and CHS Services as to the
accuracy of their respective representations and
warranties as of the effective date of this Agreement
and as of the Closing in accordance with Section 7.1
and as to their respective compliance with and
performance of their covenants and obligations to be
performed or complied with at or before the Closing
in accordance with Section 7.2;
(xv) a certificate of the Secretary of
Curative Health Services certifying, as complete and
accurate as of the Closing, attached copies of the
bylaws of Curative Health Services, certifying and
attaching all requisite resolutions or actions of
Curative Health Services' board of directors
approving the execution and delivery of this
Agreement and the consummation of the Contemplated
Transactions and certifying to the incumbency of the
officers of Curative Health Services executing this
Agreement and any other document relating to the
Contemplated Transactions;
(xvi) a certificate of the Secretary of CHS
Services certifying, as complete and accurate as of
the Closing, attached copies of the bylaws of CHS
Services, certifying and attaching all requisite
resolutions or actions of CHS Services' board of
directors approving the execution and delivery of
this Agreement and the consummation of the
Contemplated Transactions and certifying to the
incumbency of the officers of CHS Services executing
this Agreement and any other document relating to the
Contemplated Transactions;
(xvii) a securities purchase agreement in
the form of Exhibit 2.7(a)(xvii), executed by Seller
(the "Securities Purchase Agreement"); and
(xviii) a registration rights agreement in
the form of Exhibit 2.7(a)(xviii), executed by Seller
(the "Registration Rights Agreement").
(b) Buyer shall deliver to Seller:
(i) $2,100,000 by wire transfer from Buyer
to accounts specified in writing by Seller and
delivered to Buyer at least one (1) Business Day
prior to Closing;
(ii) [intentionally omitted]
(iii) the Assignment and Assumption
Agreement, executed by Buyer;
(iv) [intentionally omitted]
(v) the Assignment and Assumption of Leases,
executed by Buyer;
(vi) the Royalty Agreement, executed by
Buyer;
(vii) the Transitional Services Agreement,
executed by Buyer;
(viii) the Supply Agreement, executed by
Buyer;
(ix) the Securities Purchase Agreement,
executed by Buyer;
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(x) the Registration Rights Agreement,
executed by Buyer;
(xi) the Security Agreement, executed by
Buyer;
(xii) the promissory note in the form of
Exhibit 2.7(b)(xii), executed by Buyer (the
"Promissory Note");
(xiii) the warrant to purchase common stock
in the form of Exhibit 2.7(b)(xiii), executed by
Buyer (the "Stock Purchase Warrant");
(xiv) a certificate executed by Buyer as to
the accuracy of its representations and warranties as
of the effective date of this Agreement and as of the
Closing in accordance with Section 8.1 and as to its
compliance with and performance of its covenants and
obligations to be performed or complied with at or
before the Closing in accordance with Section 8.2;
and
(xv) a certificate of the Secretary of Buyer
certifying, as complete and accurate as of the
Closing, attached copies of the bylaws of Buyer and
certifying and attaching all requisite resolutions or
actions of Buyer's board of directors approving the
execution and delivery of this Agreement and the
consummation of the Contemplated Transactions and
certifying to the incumbency of the officers of Buyer
executing this Agreement and any other document
relating to the Contemplated Transactions.
Section 2.8 Adjustment Amount.
(a) The "Adjustment Amount" (which may be a positive
or negative number) will be an amount equal to the amount
determined by subtracting the Interim Tangible Assets Book
Value (as defined in Section 2.8(b) below) from the Closing
Tangible Assets Book Value (as defined in Section 2.8(c)). If
the Adjustment Amount is positive, the difference shall be
paid by wire transfer by Buyer to an account specified by
Seller. If the Adjustment Amount is negative, such difference
shall be paid by wire transfer by Seller to an account
specified by Buyer. All payments due and owing under this
Section 2.8(a) shall be made together with interest at the
rate of ten percent (10%) per annum, which interest shall
begin accruing on the Closing Date and end on the date the
payment is made. Within three (3) Business Days after the
calculation of the Adjustment Amount becomes binding and
conclusive on the parties pursuant to Sections 2.8(d) and
2.8(e), Seller or Buyer, as the case may be, shall make the
wire transfer payment provided for in this Section 2.8(a).
(b) "Tangible Assets Book Value" shall mean the
tangible assets book value of the Tangible Personal Property
and the Inventories as of any given date. The Tangible Assets
Book Value of Seller as of September 30, 2000 (the "Interim
Tangible Assets Book Value") was $3,102,450, as more
specifically set forth on Schedule 2.8(b) attached hereto.
(c) Buyer shall determine the book value (the
"Closing Tangible Assets Book Value") of the Tangible Personal
Property and the Inventories as of the Closing Date (the
"Closing Date Valuation") using generally accepted accounting
principles as applied in the determination of the book value
of the Tangible Personal Property and
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Inventories as set forth in Schedule 2.8(b); provided,
however, that the Assets listed on Schedule 2.8(b) shall be
deemed to have the same book value in the Closing Date
Valuation as set forth on Schedule 2.8(b) and any adjustment
based upon the Closing Date Valuation shall result from any
difference in the Assets included in the Closing Date
Valuation compared to the Assets included on Schedule 2.8(b)
other than changes reflecting the further depreciation of the
Assets using GAAP consistently applied. Buyer shall deliver
the Closing Date Valuation and its determination of the
Closing Tangible Assets Book Value to Seller within forty-five
(45) days following the Closing Date.
(d) If within fifteen (15) days following delivery of
the Closing Date Valuation, Seller has not given Buyer written
notice of its objection to the Closing Tangible Assets Book
Value calculation (which notice must state the basis of
Seller's objection), then the Closing Tangible Assets Book
Value shall be binding and conclusive on the parties and shall
be used in computing the Adjustment Amount.
(e) If Seller duly gives Buyer such notice of
objection, and if Seller and Buyer fail to resolve the issues
outstanding with respect to the Closing Date Valuation and the
calculation of the Closing Tangible Assets Book Value within
fifteen (15) days of Buyer's receipt of Seller's objection
notice, Seller and Buyer shall submit the issues remaining in
dispute to a certified public accountant mutually agreed to by
KPMG LLP and Ernst & Young LLP (the "Independent
Accountants"). If issues are submitted to the Independent
Accountants for resolution, (i) Seller and Buyer shall furnish
or cause to be furnished to the Independent Accountants such
work papers and other documents and information relating to
the disputed issues as the Independent Accountants may request
and are available to that party or its agents and shall be
afforded the opportunity to present to the Independent
Accountants any material relating to the disputed issues and
to discuss the issues with the Independent Accountants; (ii)
the determination by the Independent Accountants, as set forth
in a notice to be delivered to both Seller and Buyer within
thirty (30) days of the submission to the Independent
Accountants of the issues remaining in dispute, shall be
final, binding and conclusive on the parties; and (iii) Seller
and Buyer will each bear fifty percent (50%) of the fees and
costs of the Independent Accountants for such determination.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to Buyer as follows:
Section 3.1 Organization and Good Standing.
(a) Schedule 3.1(a) contains a complete and accurate
list of Curative Health Services' jurisdiction of
incorporation and any other jurisdictions in which it is
qualified to do business as a foreign corporation. Curative
Health Services is a corporation duly organized, validly
existing, and in good standing under the laws of its
jurisdiction of incorporation, with full corporate power and
authority to conduct the Procuren Operations as it is now
being conducted, to own or use the properties and assets that
it purports to own or use in connection with the Procuren
Operations, and to perform all its obligations under the
Seller Contracts. Curative Health Services is duly qualified
to do business as a foreign corporation and is in good
standing under the laws of each state or other jurisdiction in
which either the ownership or use of the properties owned or
used
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by it in connection with the Procuren Operations, or the
nature of the activities conducted by it in connection with
the Procuren Operations, requires such qualification and in
which the failure to be so qualified would have a material
adverse effect on the business and financial condition of the
Procuren Operations.
(b) Complete and accurate copies of the certificate
of incorporation and bylaws of Curative Health Services, as
currently in effect, are attached as Schedule 3.1(b).
(c) Schedule 3.1(c) contains a complete and accurate
list of CHS Services' jurisdiction of incorporation and any
other jurisdictions in which it is qualified to do business as
a foreign corporation. CHS Services is a corporation duly
organized, validly existing, and in good standing under the
laws of its jurisdiction of incorporation, with full corporate
power and authority to conduct the Procuren Operations as it
is now being conducted, to own or use the properties and
assets that it purports to own or use in connection with the
Procuren Operations, and to perform all its obligations under
the Seller Contracts. CHS Services is duly qualified to do
business as a foreign corporation and is in good standing
under the laws of each state or other jurisdiction in which
either the ownership or use of the properties owned or used by
it in connection with the Procuren Operations, or the nature
of the activities conducted by it in connection with the
Procuren Operations, requires such qualification and in which
the failure to be so qualified would have a material adverse
effect on the business and financial condition of the Procuren
Operations.
(d) Complete and accurate copies of the certificate
of incorporation and bylaws of CHS Services, as currently in
effect, are attached as Schedule 3.1(d).
(e) Except for CHS Services, Curative Health Services
does not have any Subsidiaries that are used by Seller in the
conduct of the Procuren Operations or which own any of the
Assets.
Section 3.2 Enforceability, Authority, No Conflict.
(a) This Agreement constitutes the legal, valid, and
binding obligation of each Seller, enforceable against it in
accordance with its terms. Upon the execution and delivery by
each Seller, as applicable, of the Bill of Sale, the
Assignment and Assumption Agreement, the Assignment and
Assumption of Leases, the Assignment of Marks, the Assignment
of Patents, the Assignment of Copyrights, the Royalty
Agreement, the Supply Agreement, the Transitional Services
Agreement, the Securities Purchase Agreement, the Registration
Rights Agreement, the Security Agreement and each other
document or instrument to be executed or delivered by such
Seller at Closing (collectively, the "Seller's Closing
Documents"), each of Seller's Closing Documents will
constitute the legal, valid, and binding obligation of each
Seller that is a party thereto, enforceable against it in
accordance with its terms. Each Seller has the power and
authority to execute and deliver this Agreement and the
Seller's Closing Documents to which it is a party and to
perform its obligations under this Agreement and the Seller's
Closing Documents to which it is a party, and such action has
been duly authorized by all necessary action by each Seller's
board of directors.
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(b) Except as set forth in Schedule 3.2(b), neither
the execution and delivery of this Agreement nor the
consummation or performance of any of the Contemplated
Transactions will, directly or indirectly (with or without
notice or lapse of time):
(i) breach (A) any provision of any of the
Governing Documents of Seller, or (B) any resolution
adopted by the board of directors or the shareholders
of Seller;
(ii) breach or give any Governmental Body or
other Person the right to exercise any remedy or
obtain any relief under, any Legal Requirement or any
Order to which Seller, or any of the Assets, may be
subject;
(iii) contravene, conflict with, or result
in a violation or breach of any of the terms or
requirements of, or give any Governmental Body the
right to revoke, withdraw, suspend, cancel,
terminate, or adversely modify, any Governmental
Authorization that is held by Seller or that
otherwise relates to the Assets or to the Procuren
Operations;
(iv) cause Buyer to become subject to, or to
become liable for, the payment of any Tax;
(v) Breach any provision of, or give any
Person the right to declare a default or exercise any
remedy under, or to accelerate the maturity or
performance of, or payment under, or to cancel,
terminate, or modify, any Seller Contract; or
(vi) result in the imposition or creation of
any Encumbrance upon or with respect to any of the
Assets,
in each case of (i) through (vi) above, the result of which
could reasonably expected to have a material adverse effect on
the financial condition of the Procuren Operations or the
Assets as a whole or the operation of any of the Facilities
individually.
(c) Except as set forth in Schedule 3.2(c), Seller is
not required to give any notice to or obtain any Consent from
any Person in connection with the execution and delivery of
this Agreement or the consummation or performance of any of
the Contemplated Transactions.
Section 3.3 Financial Statements.
Seller has delivered, or shall have delivered within ten (10)
days of the effective date of this Agreement, to Buyer: (a) an unaudited
statement of net assets and liabilities of Seller with respect to the Procuren
Operations (the "Asset and Liability Information") as of December 31, 1999, 1998
and 1997 and related unaudited statement of revenue, cost, expenses and cash
flows of Seller with respect to the Procuren Operations (the "Contribution
Margin Information") for each of the years then ended, including the notes
thereto; (b) Asset and Liability Information as of August 31, 2000 (the "Interim
Asset and Liability Information") and the related Contribution Margin
Information for the eight (8) months then ended, including the notes thereto.
Such Asset and Liability Information and the Contribution Margin Information
referred to above presents fairly in all material respects the Asset and
Liability Information and Contribution Margin Information of the Procuren
Operations in accordance with GAAP.
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In addition, Seller acknowledges that Buyer has relied upon the consolidated
financial statements and other information contained in the Curative Health
Services' Annual Report on Form 10-K for the years ended 1999, 1998, and 1997
and Form 10-Q for the fiscal periods ended March 31, 2000 and June 30, 2000
filed with the Securities and Exchange Commission in compliance with its
reporting requirements as a public company (such financial information, the
"Seller Public Financial Statements"). The Seller Public Financial Statements
referred to in this Section 3.3, fairly present the financial condition and the
results of operations, changes in shareholders' equity, and cash flows of Seller
as at the respective dates of and for the periods referred to in such financial
statements, all in accordance with GAAP. The Seller Public Financial Statements,
Asset and Liability Information and Contribution Margin Information referred to
in this Section 3.3, reflect the consistent application of GAAP throughout the
periods involved. The Seller Public Financial Statements, Asset and Liability
Information and Contribution Margin Information referred to in this Section 3.3,
have been prepared from books and records of Seller referred to in Section 3.4.
Section 3.4 Books and Records.
The books of account and other financial Records of Seller
relating to the Procuren Operations, all of which have been made available to
Buyer, are complete and correct in all material respects and represent actual,
bona fide transactions and have been maintained in accordance with sound
business practices and the requirements of Section 13(b)(2) of the Exchange Act,
including the maintenance of an adequate system of internal controls.
Section 3.5 Sufficiency of Assets.
Except as set forth in Schedule 3.5 and except to the extent
contemplated by the Transitional Services Agreement, the Assets constitute all
of the assets, tangible and intangible, of any nature whatsoever, necessary to
conduct the Procuren Operations in the manner presently operated by Seller.
Section 3.6 Real Property, Condition of Facilities.
(a) Seller does not own any real property in fee
simple in connection with the Procuren Operations.
(b) Schedule 3.6(b) contains the street address,
approximate rentable square footage, landlord and applicable
expiration date of the Seller Lease or Hospital Parcel
Contract, as the case may be, with respect to all Facilities
in which Seller, in connection with the Procuren Operations,
(i) has a leasehold interest, excluding the real property
leases expressly designated as excluded in Schedule 2.2(j)
(each such parcel, a "Leased Parcel," and each such Lease, a
"Seller Lease"), or (ii) licenses or uses space at a hospital
pursuant to the terms of a Contract with such hospital (each
such parcel, a "Hospital Parcel," and each such Contract, a
"Hospital Parcel Contract"). Seller has good and marketable
title to its (i) leasehold estate in each Leased Parcel, and
(ii) estate in, or right to, each Hospital Parcel, in each
case free and clear of all Encumbrances on such estate or
right, except Permitted Real Property Encumbrances.
(c) With respect to each Leased Parcel, except as set
forth in Schedule 3.6(c):
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(i) the Seller Lease is legal, valid,
binding, enforceable, and in full force and effect;
(ii) the Seller Lease will continue to be
legal, valid, binding, enforceable, and in full force
and effect on identical terms following the
consummation of the Contemplated Transactions;
(iii) Neither Seller nor, to the Knowledge
of Seller, the lessor under the Seller Lease, is in
Breach of the Seller Lease, and no event has occurred
which, with notice or lapse of time, would constitute
a Breach by Seller of the Seller Lease or permit
termination, modification, or acceleration
thereunder;
(iv) Neither Seller nor, to the Knowledge of
Seller, the lessor under the Seller Lease has
repudiated any provision thereof;
(v) there are no disputes, oral agreements,
or forbearance programs in effect as to the Seller
Lease;
(vi) if such Seller Lease is a sublease, the
representations and warranties set forth in
subsections (i)-(v) above are also true and correct
with respect to the underlying lease;
(vii) Neither Seller nor any predecessor of
Seller has assigned, transferred, conveyed or
encumbered any interest in the leasehold or
subleasehold;
(viii) To the Actual Knowledge of Seller,
there are no pending or threatened condemnation or
other Proceedings relating to the Leased Parcel, or
other covenants, restrictions or other matters
affecting adversely or which would materially impair
the current use or occupancy thereof; and
(ix) the Leased Parcel is equipped with
utilities and other services necessary for the
operation of the Leased Parcel.
(d) With respect to each Hospital Parcel, except as
set forth in Schedule 3.6(d):
(i) to the Actual Knowledge of Seller, there
are no pending or threatened, condemnation or other
Proceedings relating to the Hospital Parcel, or other
covenants, restrictions or other matters affecting
adversely or which would materially impair the
current use or occupancy thereof; and
(ii) the Hospital Parcel is equipped with
utilities and other services necessary for the
operation of the Hospital Parcel.
(e) Seller has delivered to Buyer accurate and
complete copies of each written Seller Lease, and a true and
accurate description of each oral Seller Lease and each
Hospital Parcel Contract to the extent such Contracts relates
to the use or occupancy of the Hospital Parcel.
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(f) To the Actual Knowledge of Seller, each Facility
and all Improvements located therein are in compliance with
applicable Legal Requirements (including those pertaining to
zoning, building and the disabled), are in good repair and in
good condition and are free from latent and patent defects,
except where the noncompliance, failure to be in good
condition or defect would not result in a material adverse
effect on the operation of the Facility of which such
Improvements are a part or in a material obligation of the
tenant under the applicable Seller Lease.
Section 3.7 Personal Property.
(a) Seller owns good and transferable title to all of
the Assets other than the Parcels free and clear of any
Encumbrances except as described in Schedule 3.7(a) ("Non-Real
Property Encumbrances"). Seller warrants to Buyer that at the
time of Closing, all Assets other than the Parcels shall be
free and clear of all Non-Real Estate Encumbrances other than
those identified on Schedule A as acceptable to Buyer
("Permitted Non-Real Property Encumbrances").
(b) Each item of Tangible Personal Property is in
good repair and good operating condition, ordinary wear and
tear excepted, is suitable for the purpose for which it is
currently being used. No item of Tangible Personal Property is
in need of repair or replacement other than as part of routine
maintenance in the Ordinary Course of Business. All Tangible
Personal Property is in the possession of Seller.
Section 3.8 Inventories.
All items included in the Inventories consist of a quality and
quantity usable, and with respect to finished goods, saleable, in the Ordinary
Course of Business of Seller, except for obsolete items and items of
below-standard quality, all of which have been or will be written off or written
down to net realizable value in the Interim Asset and Liability Information as
the case may be. Seller is not in possession of any inventory relating to the
Procuren Operations not owned by Seller, including goods already sold. All of
the Inventories not written off have been priced at the lower of cost or fair
market value on a first in, first out basis. Inventories now on hand that were
purchased subsequent to the date of the Interim Asset and Liability Information
were purchased in the Ordinary Course of Business of Seller at a cost not
materially exceeding market prices prevailing at the time of purchase. The
quantities of each item of Inventories are not excessive, but are reasonable in
the present circumstances of Seller. Work-in-process Inventories are now valued,
and will be valued on the Closing Date, according to GAAP.
Section 3.9 No Undisclosed Liabilities.
Except as set forth in Schedule 3.9, Seller has no Liability
except for (a) Liabilities reflected or reserved against in the Interim Asset
and Liability Information or (b) current liabilities incurred in the Ordinary
Course of Business of Seller since the date of the Interim Asset and Liability
Information.
Section 3.10 Taxes.
(a) Seller has paid or made provision for the payment
of, all sales and use taxes that have or may become due in
connection with the Procuren Operations.
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(b) There are no liens for Taxes (other than for
current Taxes not yet due and payable) on the Assets.
(c) Seller is not a person other than a United States
person within the meaning of the Code.
(d) The transaction contemplated herein is not
subject to the tax withholding provisions of Section 3406 of
the Code, or of Subchapter A of Chapter 3 of the Code or of
any other provision of law.
Section 3.11 No Material Adverse Change.
Since the date of the Interim Asset and Liability Information,
there has not been any material adverse change with respect to the operations or
financial condition of the Procuren Operations or the Assets, taken as a whole,
other than changes caused by changes in general economic conditions affecting
the types of businesses substantially similar to the Procuren Operations, and no
event has occurred or circumstance exists that could reasonably be expected to
result in such a material adverse change.
Section 3.12 Employees.
(a) Schedule 3.12(a) sets forth a complete and
accurate list, giving name, job title, current compensation
paid or payable, vacation accrued, and services credited for
purposes of vested and eligibility to participate under any
Employee Benefit Plan (in each case, to the extent
applicable), for each employee of Seller performing some or
all of his services in connection with the Procuren Operations
(the "Employees").
(b) Seller has not experienced any organized
slowdown, work interruption strike or work stoppage by its
Employees, and, to the Knowledge of Seller, there is no
strike, labor dispute or union organization activities pending
or threatened affecting it in connection with the Procuren
Operations. The terms and conditions of the Employees'
employment are not subject to the terms of any collective
bargaining agreement.
(c) Seller is in compliance in all material respects
with all applicable Legal Requirements regarding employment
and employment practices, terms and conditions of employment,
wages and hours, and Occupational Safety and Health Laws,
including laws concerning unfair labor practices within the
meaning of Section 8 of the National Labor Relations Act and
the employment of non-residents under the Immigration Reform
and Control Act of 1986.
(d) Except as set forth on Schedule 3.12(d), Seller
has not received any notice from any Employee regarding his
intent to terminate his employment with Seller, nor does
Seller have a present intention to terminate the employment of
any Employee except pursuant to the terms of Section 10.1
herein. Except as set forth on Schedule 3.12(d) and subject to
general principles related to wrongful termination of
employees, the employment of each Employee of Seller is
terminable at the will of the Seller. Except as set forth on
Schedule 3.12(d), no employee of Seller is a party to, or is
otherwise bound by, any employment, confidentiality or
noncompetition Contract with Seller or any other Person, or
any other Contract that in any way adversely affected,
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affects, or will affect the ability of Seller or Buyer to
conduct the Procuren Operations as heretofore carried on by
Seller.
Section 3.13 Employee Benefits.
Seller has no Liability with respect to the Employees under
any Employee Benefit Plan other than normal salary or wage accruals and paid
vacation, sick leave and holiday accruals in accordance with Seller's past
practice and policy. Seller has performed all obligations required to be
performed under, and has complied, with all Legal Requirements in connection
with, all such Employee Benefit Plans and is not in arrears under any of the
terms thereof.
Section 3.14 Compliance With Legal Requirements; Governmental
Authorizations.
(a) Except as set forth in Schedule 3.14(a):
(i) Seller is, and at all times since
January 1, 1995, has been, in compliance with each
Legal Requirement that is or was applicable to the
operation of the Procuren Operations, the ownership
or use of the Product, or the ownership or use of any
of the other Assets, unless the failure to comply
would not be reasonably expected to have a material
adverse effect on the financial condition of the
Procuren Operations or the Assets;
(ii) no event has occurred or circumstance
exists that may (with or without notice or lapse of
time), the effect of which could reasonably expected
to have a material adverse effect on the financial
condition of the Procuren Operations or the Assets;
(A) constitute or result in a violation by Seller of,
or a failure on the part of Seller to comply with,
any Legal Requirement in connection with the Procuren
Operations or the ownership or use of the Product or
any of the other Assets or (B) give rise to any
obligation on the part of Seller to undertake, or to
bear all or any portion of the cost of, any remedial
action of any nature relating to the Procuren
Operations, the Product or any of the other Assets.
(iii) Seller has not received, at any time
since January 1, 1995, any notice or other
communication (whether oral or written) from any
Governmental Body or any other Person regarding (A)
any actual, alleged, possible, or potential violation
of, or failure to comply with, any Legal Requirement
in connection with the Procuren Operations or the
ownership or use of the Product or any of the other
Assets, or (B) any actual, alleged, possible, or
potential obligation on the part of the Seller to
undertake, or to bear all or any portion of the cost
of, any remedial action of any nature relating to the
Procuren Operations, the Product or any of the other
Assets.
(b) Schedule 3.14(b) contains a complete and accurate
list of each Governmental Authorization that is held by Seller
which relates to the Procuren Operations, the Product or any
of the other Assets. Each Governmental Authorization listed or
required to be listed in Schedule 3.14(b) is valid and in full
force and effect. Except as set forth in Schedule 3.14(b):
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(i) Seller is, and at all times since
January 1, 1995, has been, in compliance with each
Governmental Authorization listed or required to be
listed in Schedule 3.14(b), unless the failure to
comply would not be reasonably expected to have a
material adverse effect on the financial condition of
the Procuren Operations or the Assets;
(ii) no event has occurred or circumstance
exists that may (with or without notice or lapse of
time), the effect of which could reasonably be
expected to have a material adverse effect on the
financial condition of the Procuren Operations or the
Assets: (A) constitute or result directly or
indirectly in a violation of or a failure to comply
with any term or requirement of any Governmental
Authorization listed or required to be listed on
Schedule 3.14(b), or (B) result directly or
indirectly in the revocation, withdrawal, suspension,
cancellation, or termination of, or any modification
to, any Governmental Authorization listed or required
to be listed pursuant to Schedule 3.14(b);
(iii) Seller has not received, at any time
since January 1, 1995, any notice or written
communication from any Governmental Body or any other
Person regarding (A) any actual, alleged, possible,
or potential violation of or failure to comply with
any term or requirement of any Governmental
Authorization, or (B) any actual, proposed, possible,
or potential revocation, withdrawal, suspension,
cancellation, termination of, or modification to any
Governmental Authorization; and
(iv) all applications required to have been
filed for the renewal of the Governmental
Authorizations listed in Schedule 3.14(b) have been
duly filed on a timely basis with the appropriate
Governmental Bodies, and all other filings required
to have been made with respect to such Governmental
Authorizations have been duly made on a timely basis
with the appropriate Governmental Bodies.
Except as set forth on Schedule 3.14(b), the Governmental
Authorizations listed in Schedule 3.14(b) collectively
constitute all of the Governmental Authorizations necessary to
permit Seller to lawfully conduct and operate the Procuren
Operations and to permit Seller to own and use the Product and
the other Assets in the manner in which it currently owns and
uses the Product and the other Assets.
Section 3.15 Legal Proceedings; Orders.
(a) Except as set forth in Schedule 3.15(a) or
Schedule 3.21(a), there are no Proceedings pending (i) by or
against Seller that could reasonably be expected to materially
and adversely affect the Procuren Operations, the Product or
the other Assets; or (ii) that challenge, or that may have the
effect of preventing, delaying, making illegal or otherwise
interfering with, any of the Contemplated Transactions. To the
Knowledge of Seller, except as set forth in Schedule 3.15(a),
no such Proceeding has been threatened in writing.
(b) Except as set forth in Schedule 3.15(b), there
are no Orders outstanding (i) against Seller that could
reasonably be expected to materially and adversely affect the
Procuren Operations, the Product or the other Assets; or (ii)
that challenge, or that may
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have the effect of preventing, delaying, making illegal or
otherwise interfering with, any of the Contemplated
Transactions. To the Knowledge of Seller, except as set forth
in Schedule 3.15(b), no such Order has been threatened in
writing. Except as set forth in Schedule 3.15(b), Seller is,
and at all times since January 1, 1997, has been, in material
compliance with all of the terms and requirements of each
Order relating to the Procuren Operations or the Assets.
Section 3.16 Absence of Certain Changes and Events.
Except as set forth in Schedule 3.16, since the date of the
Interim Asset and Liability Information, Seller has conducted the Procuren
Operations only in the Ordinary Course of Business and there has not been any:
(a) amendment to the Governing Documents of Seller;
(b) payment (except in the Ordinary Course of
Business) or increase by Seller of any bonuses, salaries, or
other compensation to any Employee in connection with the
Procuren Operations or entry into any employment, severance,
or similar Contract in connection with the Procuren
Operations;
(c) adoption of, amendment to, or increase in the
payments to or benefits under, any Employee Benefit Plan with
respect to the Employees;
(d) damage to or destruction or loss of any Asset
exceeding $5,000, whether or not covered by insurance;
(e) entry into, termination of, or receipt of notice
of termination in connection with the Procuren Operations of
(i) any license, distributorship, dealer, sales
representative, joint venture, credit, or similar agreement to
which Seller is a party, or (ii) any Contract or transaction
involving a total remaining commitment by Seller of at least
$10,000;
(f) sale, lease, or other disposition of any Asset
other than in the Ordinary Course of Business;
(g) mortgage, pledge, or imposition of any
Encumbrance on any Asset;
(h) modification of any material Contract or
Governmental Authorization in connection with the Procuren
Operations;
(i) failure to spend funds for any budgeted capital
expenditures in connection with the Procuren Operations;
(j) delay or postponement in the payment of accounts
receivable or Liabilities outside of the Ordinary Course of
Business in connection with the Procuren Operations;
(k) compromise or settlement of any Proceeding
relating to the Procuren Operations or the Assets in excess of
$10,000;
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(l) cancellation or waiver of any claims or rights
with a value to Seller in excess of $10,000 in connection with
the Procuren Operations;
(m) indication by any material customer or supplier
of an intention to discontinue or change the terms of its
relationship with Seller in connection with the Procuren
Operations;
(n) material change in the accounting methods used by
Seller; or
(o) written agreement or, to the Knowledge of Seller,
oral agreement by Seller to do any of the foregoing.
Section 3.17 Contracts; No Defaults.
(a) Schedule 3.17(a) contains an accurate and
complete list of each Seller Contract not otherwise set forth
on Schedule 3.6(b) and Schedule 3.20(b). Seller has delivered
to Buyer accurate and complete copies of each written Seller
Contract, and has provided Buyer with a true and accurate
description of each oral Seller Contract.
(b) Except as set forth on Schedule 3.17(b)
(excluding Seller Leases):
(i) each Seller Contract is valid and
binding and in full force and effect;
(ii) neither Seller nor, to the Knowledge of
Seller, any other party to any Seller Contract, is or
has been in default under any Seller Contract, the
result of such default which would reasonably be
expected to result in a material adverse effect on
the financial condition of the Procuren Operations or
the Assets as a whole or the operation of any of the
Facilities individually;
(iii) no event has occurred which with the
giving of notice or passage of time or both would
constitute a default under any Seller Contract which
would reasonably be expected to result in a material
adverse effect on the financial condition of the
Procuren Operations or the Assets as a whole or the
operation of any of the Facilities individually; and
(iv) to the Knowledge of Seller, no Person
has failed to comply with any obligation under any
Seller Contract which would materially adversely
affect, either individually or together with other
defaults, the financial condition of the Procuren
Operations or the Assets;
(c) There are no renegotiations of, attempts to
renegotiate, or outstanding rights to renegotiate any material
amounts paid or payable to Seller under current or completed
Seller Contracts with any Person and, to the Knowledge of
Seller, no such Person has made written demand for such
renegotiation.
Section 3.18 Insurance.
Schedule 3.18 sets forth (a) a complete and accurate list of
all insurance under which any of the Assets is covered or otherwise relating to
the Procuren Operations, including policy numbers,
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names and addresses of insurers and liability or risk covered, amounts of
coverage, limitations and deductions and expiration dates, and (b) all life
insurance policies covering the life of any Employee for which Seller has paid
any premiums, including the policy numbers, names and addresses of insurers,
lives covered, death benefits, owner and beneficiary under each policy, and cash
surrender value (excluding any group life insurance policies). Such policies are
in full force and effect, and Seller has paid all premiums due, and has
otherwise performed all of its obligations under, each such policy of insurance.
Seller has not received any notice of (i) cancellation or intent to cancel, or
(ii) an increase or intent to increase premiums, with respect to such insurance
policies, and is not aware of any basis for any such action.
Section 3.19 Environmental Matters.
(a) Except as set forth on Schedule 3.19(a), Seller
is, and at all times has been, in material compliance with
applicable Environmental Law in connection with the Procuren
Operations. Seller possesses all material Governmental
Authorizations required by Environmental Law in connection
with the Procuren Operations.
(b) Except as set forth on Schedule 3.19(b), there
are no pending or, to the Knowledge of Seller, threatened,
claims or Encumbrances resulting from any Environmental,
Health, and Safety Liabilities or arising under or pursuant to
any Environmental Law, with respect to or affecting any of the
Facilities or the Assets.
(c) Except as set forth on Schedule 3.19(c), to the
Knowledge of Seller, Seller has no material Environmental,
Health, and Safety Liabilities with respect to the Facilities
or the Assets.
(d) Except as set forth on Schedule 3.19(d), Seller
has not received any actual or threatened notice, or other
written communication from (i) any Governmental Body or
private citizen claiming to act in the public interest, or
(ii) the current or prior owner or operator of any Facilities,
describing circumstances which would be any violation of any
Environmental Law in connection with the Procuren Operations,
or describing any obligation to undertake or bear the cost of
any Environmental, Health, and Safety Liabilities with respect
to any of the Facilities or with respect to any property or
Facility at or to which Hazardous Materials were generated,
manufactured, refined, transferred, imported, used, or
processed by Seller or from which Hazardous Materials have
been transported, treated, stored, handled, transferred,
disposed, recycled, or received in connection with the
Procuren Operations.
(e) Except as set forth in Schedule 3.19(e), to the
Knowledge of Seller, there are no Hazardous Materials present
on or in the environment at the Facilities, including any
Hazardous Materials contained in barrels, above or underground
storage tanks, landfills, land deposits, dumps, equipment
(whether movable or fixed) or other containers, either
temporary or permanent, and deposited or located in land,
water, sumps, or any other part of the Facilities, except for
such Hazardous Materials that are permitted to be present
under applicable Environmental Law. Any Hazardous Materials
present on or in the environment at the Facilities as set
forth in Schedule 3.19(e) have been handled or disposed of as
set forth in Schedule 3.19(e).
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(f) Except as set forth on Schedule 3.19(f), to the
Knowledge of Seller, there has been no release or threat of
release, of any Hazardous Materials at or from the Facilities.
(g) Seller has delivered to Buyer true and complete
copies and results of any reports, studies, analyses, tests,
or monitoring possessed or initiated by Seller since January
1, 1999, pertaining to Hazardous Materials or the disposal
thereof in, on, or under the Facilities, or concerning
compliance by Seller with Environmental Laws.
Section 3.20 Intellectual Property.
(a) The term "Intellectual Property Assets" means:
(i) all intellectual property owned, used or
licensed (as licensor or licensee) by Seller in
connection with the Procuren Operations, including:
(A) all registered and unregistered
domestic and foreign trademarks for the name
Procuren, and all applications for domestic
and foreign trademarks for the name Procuren
(collectively, the "Marks");
(B) all domestic and foreign
patents and all domestic and foreign patent
applications (pending or abandoned), and
inventions and discoveries that may be
patentable owned, used or licensed (as
licensor or licensee) by Seller in
connection with the Procuren Operations,
including continuations,
continuations-in-part, divisions,
substitutes, reissues, reexaminations or
extensions thereof (collectively, the
"Procuren Patents");
(C) all registered and unregistered
copyrights throughout the world in both
published and unpublished works directed
primarily to Procuren Operations except for
those listed on Schedule 3.20(a)(i)(C)
(collectively, the "Copyrights"); and
(D) all know-how, trade secrets,
confidential or proprietary information,
customer lists, software, technical
information, data, process technology,
plans, drawings, and blue prints, owned,
used or licensed by Seller primarily in
connection with the Procuren Operations
except for those listed on Schedule
3.20(a)(i)(D) (collectively, "Trade
Secrets").
(ii) all domestic and foreign patents and
all domestic and foreign patent applications (pending
or abandoned) and inventions and discoveries that may
be patentable owned, used or licensed (as licensor or
licensee) by Seller relating to peptides derived from
platelet factor 4, including continuations,
continuations-in-part, divisions, substitutes,
reissues, reexaminations or extensions thereof
(collectively, the "Peptides Patents," and together
with the Procuren Patents, the "Patents").
(b) Schedule 3.20(b) contains a complete and accurate
list and summary description, including any royalties paid or
received by the Seller, and Seller has
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delivered to Buyer accurate and complete copies, of all Seller
Contracts relating to the Intellectual Property Assets.
(c) The Intellectual Property Assets include, without
limitation, all those necessary for the Procuren Operations as
it is currently conducted. Except as set forth in Schedule
3.20(c) or the exceptions set forth in Schedule 3.20(i),
Seller is the owner of all right, title, and interest in and
to each of the Intellectual Property Assets, free and clear of
all Encumbrances, and has the right to use without payment to
a third party all of the Intellectual Property Assets.
(d) Except as set forth in Schedule 3.20(d), all
former and current employees of Seller that have performed
services in connection with the Procuren Operations have
executed written Contracts with Seller that assign to Seller
all rights to any inventions, improvements, discoveries, or
information relating to the Procuren Operations.
(e) Schedule 3.20(e) contains a complete and accurate
list of all of the Patents, including country, inventor,
title, filing date and application and/or issuance number. All
of the issued Patents not listed as inactive or abandoned are
currently in compliance, in all material respects, with formal
Legal Requirements (including payment of filing, examination,
and maintenance fees and proofs of working or use), are to the
Knowledge of Seller, valid and enforceable, and except for the
fees and actions shown in the docket lists attached to
Schedule 3.20(e) are not subject to any maintenance fees or
taxes or actions falling due within one hundred twenty (120)
days after the effective date of this Agreement. Except as set
forth in Schedule 3.20(e), no Patent has been or is now
involved in any interference, reissue, reexamination, or
opposition Proceeding. To Seller's Knowledge, and except as
set forth in Schedule 3.20(e), there is no potentially
interfering patent or patent application of any third party.
To Seller's Knowledge and except as set forth in Schedule
3.20(e), no Patent is infringed or has been challenged or
threatened in any way. To Seller's Knowledge, none of the
Products manufactured or sold, nor any process or know-how
used in the Procuren Operations, by Seller infringes or is
alleged to infringe any patent or other proprietary right of
any other Person.
(f) Schedule 3.20(f) contains a complete and accurate
list and summary description of all the Marks, including
country, mark, goods and registration and/or application
number. All Marks that have been registered with the United
States Patent and Trademark Office or the patent and trademark
offices of any other jurisdiction are currently in compliance,
in all material respects, with all formal Legal Requirements
(including the timely post-registration filing of affidavits
of use and incontestability and renewal applications), are
valid and enforceable, and except for the fees and actions
shown in the docket list attached to Schedule 3.20(f) are not
subject to any maintenance fees or taxes or actions falling
due within one hundred twenty (120) days after the effective
date of this Agreement. No Mark has been or is now involved in
any opposition, invalidation, or cancellation Proceeding and,
to Seller's Knowledge, no such action is threatened with
respect to any of the Marks. To Seller's Knowledge and except
as set forth in Schedule 3.20(f), there is no potentially
interfering trademark or trademark application of any other
Person. Except as set forth in Schedule 3.20(f), no Mark is
infringed or, to Seller's Knowledge, has been challenged or
threatened in any way. To Seller's Knowledge, none of the
Marks used by Seller infringes or is alleged to infringe any
trade name, trademark, or service mark of any other Person. To
Seller's Knowledge,
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all products and materials containing a Mark bear the proper
domestic or foreign federal registration notice where
permitted by law.
(g) Schedule 3.20(g) contains a complete and accurate
list and summary description of all Copyrights. No Copyright
is infringed or, to Seller's Knowledge, has been challenged or
threatened in any way. To Seller's Knowledge, none of the
subject matter or any of the Copyrights infringes or is
alleged to infringe any copyright of any third party or is an
infringing derivative work based on the work of any other
Person.
(h) With respect to each Trade Secret listed in
Schedule 3.20(i), the documentation relating to such Trade
Secret is current, accurate, and sufficient in detail and
content to identify and explain it and to allow its full and
proper use without reliance on the knowledge or memory of any
individual. Seller has taken all reasonable precautions to
protect the secrecy, confidentiality and value of all Trade
Secrets (including the enforcement by Seller of a policy
requiring each employee or contractor to execute proprietary
information and confidentiality agreements substantially in
Seller's standard form and all current and former employees
and contractors of Seller providing services in connection
with the Procuren Operations have executed such an agreement).
(i) Schedule 3.20(i) contains a complete and accurate
list and summary description of all Trade Secrets. Except as
set forth in Schedule 3.20(i), Seller has good title and an
absolute right to use the Trade Secrets. Except as set forth
in Schedule 3.20(i), the Trade Secrets are not part of the
public knowledge or literature, and, to Seller's Knowledge,
have not been used, divulged, or appropriated either for the
benefit of any Person (other than Seller) or to the detriment
of Seller. No Trade Secret is subject to any adverse claim or,
to the Knowledge of Seller, has been challenged or threatened
in any way or infringes any intellectual property right of any
other Person.
Section 3.21 Compliance with FDA and Related Legal
Requirements.
(a) Except as set forth in Schedule 3.21(a):
(i) the operations of Seller in connection
with the Procuren Operations are, and at all times
since January 1, 1990, have been, in compliance, in
all material respects, with all Legal Requirements of
the FDA and all local, state and foreign agencies
that have jurisdiction over the Product (the "Other
Authorities").
(ii) Seller has no Knowledge of any actual
or currently threatened enforcement action by the FDA
or the Other Authorities with respect to the Product,
including, without limitation, any fines,
injunctions, civil or criminal penalties, recalls,
seizures, detentions, investigations or suspensions.
(iii) Seller possesses all such
certificates, authorizations, licenses or permits as
are legally required for the operation of the
Procuren Operations.
(iv) Seller has not received any notice of
Proceedings relating to, or otherwise has Knowledge
that any authority is considering, limiting,
suspending, modifying or revoking any such
certificate, authorization, license or permit.
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(b) All reports, documents, claims and notices
required to be filed, maintained or furnished in connection
with the Product or Facilities have been so filed (or an
extension has been granted thereto), maintained or furnished.
All such reports, documents, claims and notices were complete
and correct in all material respects on the date filed (or
were corrected in or supplemented by a subsequent filing).
(c) Seller has not, and, to Seller's Knowledge, no
party acting on Seller's behalf has, made any false statement
in, or omission from, any applications, approvals, reports or
other submissions to the FDA and Other Authorities or in or
from any other records and documentation prepared or
maintained to comply with the requirements of the FDA or the
Other Authorities in connection with the Product.
(d) Seller has provided to Buyer (i) copies of all
reports of inspection observations, establishment inspection
reports, warnings letters and other all documents received by
Seller from the FDA and the Other Authorities in connection
with the Product that have been requested by Buyer, (ii)
copies of all documents sent by Seller to the FDA and the
Other Authorities in connection with the Product that have
been requested by Buyer, and (iii) copies of all minutes of
any meeting with the FDA and the Other Authorities.
Section 3.22 Certain Payments.
Neither Seller nor any director, officer, agent, or employee
of Seller, or to the Knowledge of Seller, any other Person associated with or
acting for or on behalf of Seller, has directly or indirectly in violation of
any Legal Requirement in connection with the Procuren Operations (a) made any
contribution, gift, bribe, rebate, payoff, influence payment, kickback, or other
payment to any Person, regardless of form, whether in money, property, or
services (i) to obtain favorable treatment in securing business, (ii) to pay for
favorable treatment for business secured, (iii) to obtain special concessions or
for special concessions already obtained, for or in respect of Seller or any
affiliate thereof, or (b) established or maintained any fund or asset that has
not been recorded in the books and Records of Seller.
Section 3.23 Relationships with Related Persons.
Except as disclosed in Schedule 3.23, no Related Person of
Seller has, or, since January 1, 1997, has had, any interest in any property
(whether real, personal, or mixed and whether tangible or intangible), used in
or pertaining to the Procuren Operations. Neither Seller nor any Related Person
of Seller owns, or, since January 1, 1997, has owned, of record or as a
beneficial owner, an equity interest or any other financial or profit interest
in any Person that has (a) had business dealings or a material financial
interest in any transaction with Seller in connection with the Procuren
Operations other than business dealings or transactions disclosed in Schedule
3.23, each of which has been conducted in the Ordinary Course of Business with
Seller at substantially prevailing market prices and on substantially prevailing
market terms, or (b) engaged in competition with Seller with respect to any line
of the products or services of Seller in the Procuren Operations any market
presently served by Seller. Except as set forth in Schedule 3.23, no Related
Person of Seller is a party to any Contract with, or has any claim or right
against, Seller in connection with the Procuren Operations.
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Section 3.24 Brokers or Finders.
Neither Seller nor any of its officers, directors, employees
or agents have incurred any Liability for brokerage or finders' fees or agents'
commissions or other similar payment in connection with the sale of the Procuren
Operations or the Assets or the Contemplated Transactions.
Section 3.25 Solvency.
Seller is not now insolvent, and will not be rendered
insolvent by any of the Contemplated Transactions. In addition, immediately
after giving effect to the consummation of the Contemplated Transactions, (a)
Seller will be able to pay its debts as they become due, (b) Seller will not
have insufficient assets or resources with which to conduct its present or
proposed business and (c) taking into account all pending and threatened
litigation, final judgments against Seller in actions for money damages are not
reasonably anticipated to be rendered at a time when, or in amounts such that,
Seller will be unable to satisfy any such judgments promptly in accordance with
their terms (taking into account the maximum probable amount of such judgments
in any such actions and the earliest reasonable time at which such judgment
might be rendered) as well as all other obligations of Seller. The cash
available to Seller, after taking into account all other anticipated uses of the
cash, will be sufficient to pay all such debts and judgments promptly in
accordance with their terms. As used in this Section 3.25, (i) "insolvent" means
that the sum of the present fair saleable value of the Seller's assets does not
and will not exceed its debts and other probable liabilities, and (ii) "debts"
includes any legal liability, whether matured or unmatured, liquidated or
unliquidated, absolute, fixed or contingent, disputed or undisputed or secured
or unsecured. Seller acknowledges and agrees that, after giving effect to the
transactions contemplated by this Agreement, the Purchase Price is reasonably
equivalent value for the Assets.
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Seller as follows:
Section 4.1 Organization and Good Standing.
Buyer is a corporation duly organized, validly existing, and
in good standing under the laws of its jurisdiction of incorporation, with full
corporate power and authority to conduct its business as it is now being
conducted.
Section 4.2 Authority, No Conflict.
(a) This Agreement constitutes the legal, valid, and
binding obligation of Buyer, enforceable against Buyer in
accordance with its terms. Upon the execution and delivery by
Buyer of the Assignment and Assumption Agreement, the
Assignment and Assumption of Leases, the Royalty Agreement,
the Transitional Services Agreement, the Supply Agreement, the
Securities Purchase Agreement, the Registration Rights
Agreement, the Security Agreement, the Promissory Note, the
Stock Purchase Warrant and each other agreement to be executed
or delivered by Buyer at Closing (collectively, the "Buyer's
Closing Documents"), each of Buyer's Closing Documents will
constitute the legal, valid, and binding obligation of Buyer,
enforceable against it in accordance with its terms. Buyer has
the power, and authority to execute and deliver this Agreement
and the Buyer's Closing Documents and to perform its
obligations under this Agreement
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and the Buyer's Closing Documents, and such action has been
duly authorized by all necessary corporate action.
(b) Except as set forth in Schedule 4.2(b), neither
the execution and delivery of this Agreement nor the
consummation or performance of any of the Contemplated
Transactions will, directly or indirectly (with or without
notice or lapse of time):
(i) breach (A) any provision of any of the
Governing Documents of Buyer, or (B) any resolution
adopted by the board of directors or the shareholders
of Buyer;
(ii) breach or give any Governmental Body or
other Person the right to exercise any remedy or
obtain any relief under, any Legal Requirement or any
Order to which Buyer may be subject;
(iii) contravene, conflict with, or result
in a violation or breach of any of the terms or
requirements of, or give any Governmental Body the
right to revoke, withdraw, suspend, cancel,
terminate, or adversely modify, any Governmental
Authorization that is held by Buyer; or
(iv) cause Buyer to become subject to, or to
become liable for, the payment of any Tax;
in each case of (i) through (iv) above, the result of which
could reasonably expected to have a material adverse effect on
the financial condition of Buyer.
(c) Except as set forth in Schedule 4.2(c), Buyer is
not and will not be required to obtain any Consent from any
Person in connection with the execution and delivery of this
Agreement or the consummation or performance of any of the
Contemplated Transactions.
Section 4.3 Certain Proceedings.
There are no Proceedings pending or Orders outstanding (i) by
or against Buyer that could reasonably be expected to materially and adversely
affect the operations or financial condition of Buyer and its Affiliates; or
(ii) that challenge, or that may have the effect of preventing, delaying, making
illegal or otherwise interfering with, any of the Contemplated Transactions. To
the Knowledge of Buyer, no such Proceeding has been threatened.
Section 4.4 Financial Statements.
Buyer acknowledges that Seller has relied upon the financial
information of Buyer filed with the Securities and Exchange Commission in
compliance with its reporting requirements as a public company for the calendar
year 2000 and for the calendar year ended 1999 (such financial information, the
"Buyer Public Financial Statements"). The Buyer Public Financial Statements
fairly present financial condition and the results of operations, changes in
shareholders' equity, and cash flows of Buyer as at the respective dates of and
for the periods referred to in such financial statements, all in accordance with
GAAP. The Buyer Public Financial Statements, reflect the consistent application
of such accounting principles throughout the periods involved, except as may be
disclosed in the notes to such financial statements.
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Section 4.5 Brokers or Finders.
Neither Buyer nor any of its officers, directors, employees or
agents have incurred any Liability for brokerage or finders' fees or agents'
commissions or other similar payment in connection with the Contemplated
Transactions.
Section 4.6 No Material Adverse Change.
Since the date of the 10-Q of Buyer for the second quarter of
2000 (the "Cytomedix 10-Q"), there has not been any material adverse change with
respect to the operations or financial condition of Buyer and its Affiliates,
and no event has occurred or circumstance exists that could reasonably be
expected to result in such a material adverse change.
Section 4.7 No Undisclosed Liabilities.
Except as set forth in Schedule 4.7, Buyer has no Liability
except for (a) Liabilities reflected or reserved against in financial
information of Buyer in the Cytomedix 10-Q filed with the Securities and
Exchange Commission or (b) current liabilities incurred in the Ordinary Course
of Business of Buyer since the date of the Cytomedix 10-Q.
Section 4.8 Solvency.
Buyer is not now insolvent, and will not be rendered insolvent
by any of the Contemplated Transactions. In addition, immediately after giving
effect to the consummation of the Contemplated Transactions, (a) Buyer will be
able to pay its debts as they become due, (b) Buyer will not have insufficient
assets or resources with which to conduct its present or proposed business and
(c) taking into account all pending and threatened litigation, final judgments
against Buyer in actions for money damages are not reasonably anticipated to be
rendered at a time when, or in amounts such that, Buyer will be unable to
satisfy any such judgments promptly in accordance with their terms (taking into
account the maximum probable amount of such judgments in any such actions and
the earliest reasonable time at which such judgment might be rendered) as well
as all other obligations of Buyer. The cash available to Buyer, after taking
into account all other anticipated uses of the cash, will be sufficient to pay
all such debts and judgments promptly in accordance with their terms. As used in
this Section 4.8, (i) "insolvent" means that the sum of the present fair
saleable value of the Buyer's assets does not and will not exceed its debts and
other probable liabilities, and (ii) "debts" includes any legal liability,
whether matured or unmatured, liquidated or unliquidated, absolute, fixed or
contingent, disputed or undisputed or secured or unsecured. Buyer acknowledges
and agrees that, after giving effect to the transactions contemplated by this
Agreement, the Purchase Price is reasonably equivalent value for the Assets.
ARTICLE V.
COVENANTS OF SELLER PRIOR TO CLOSING
Section 5.1 Access and Investigation.
Between the effective date of this Agreement and the Closing
Date, and upon reasonable advance notice received from Buyer, Seller shall (a)
afford Buyer and its Representatives (collectively, "Buyer's Advisors") full and
free access, during regular business hours, to, with respect to the Procuren
Operations, Seller's personnel, properties, Contracts, Governmental
Authorizations, surveys, maps, building plans and certificates of occupancy,
books and Records, and other documents and data, such
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rights of access to be exercised in a manner that does not unreasonably
interfere with the operations of Seller, (b) furnish Buyer and Buyer's Advisors
with copies of all such Contracts, Governmental Authorizations, books and
Records, and other existing data as Buyer may reasonably request, (c) furnish
Buyer and Buyer's Advisors with such additional financial, operating, and other
relevant data and information as Buyer may reasonably request, and (d) otherwise
cooperate and assist, to the extent reasonably requested by Buyer, with Buyer's
investigation of the properties, assets and financial condition of Seller. In
addition, Buyer shall have the right to have the Real Property and Tangible
Personal Property inspected by Buyer's Representatives, at Buyer's sole cost and
expense, for purposes of determining the physical condition and legal
characteristics of the Real Property and Tangible Personal Property.
Section 5.2 Operation of the Business of Seller.
Between the effective date of this Agreement and the Closing
Date, unless otherwise consented to by Buyer (which such consent shall not be
unreasonably withheld or delayed), Seller shall:
(a) conduct the Procuren Operations only in the
Ordinary Course of Business;
(b) with respect to the Procuren Operations, use its
Best Efforts to preserve intact its current business
organization, keep available the services of its officers,
employees, and agents, and maintain its relations and good
will with suppliers, customers, landlords, creditors,
employees, agents, and others having business relationships
with it;
(c) confer with Buyer prior to implementing
operational decisions of a material nature relating to the
Procuren Operations; and
(d) otherwise report periodically to Buyer concerning
the status of its operations and finances and the Procuren
Operations.
Section 5.3 Negative Covenant.
Except as otherwise expressly permitted herein, between the
effective date of this Agreement and the Closing Date, Seller shall not, without
the prior written Consent of Buyer (which consent shall not be unreasonably
withheld or delayed), take any affirmative action, or fail to take any
reasonable action within its control, as a result of which any of the changes or
events listed in Section 3.11 or 3.16 would be likely to occur.
Section 5.4 Required Approvals.
As promptly as practicable after the effective date of this
Agreement, Seller shall make all filings required by Legal Requirements to be
made by it in order to consummate the Contemplated Transactions. Seller also
shall cooperate with Buyer and its Representatives with respect to all filings
that Buyer elects to make, or pursuant to Legal Requirements shall be required
to make, in connection with the Contemplated Transactions. Seller also shall
cooperate with Buyer and its Representatives in obtaining or attempting to
obtain all Consents referenced in Schedule 3.2(c).
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Section 5.5 Notification.
Between the effective date of this Agreement and the Closing
Date, Seller shall promptly notify Buyer in writing if it becomes aware of (a)
any fact or condition that causes or constitutes a Breach of any of Seller's
representations and warranties made as of the effective date of this Agreement,
or (b) the occurrence after the effective date of this Agreement of any fact or
condition that would or be reasonably likely to (except as expressly
contemplated by this Agreement) cause or constitute a Breach of any such
representation or warranty had that representation or warranty been made as of
the time of the occurrence of, or Seller's discovery of, such fact or condition.
Should any such fact or condition require any change to the Schedules, Seller
shall promptly deliver to Buyer updated Schedules containing such changes. Such
delivery shall not affect any rights of Buyer under Article IX and Article XI.
During the same period, Seller also shall promptly notify Buyer of the
occurrence of any Breach of any covenant of Seller in this Article V or of the
occurrence of any event that may make the satisfaction of the conditions in
Article VII impossible or unlikely.
Section 5.6 No Negotiation.
Until such time as this Agreement shall be terminated pursuant
to Section 9.1, Seller shall not directly or indirectly solicit, initiate,
encourage or entertain any inquiries or proposals from, discuss or negotiate
with, provide any non-public information to, or consider the merits of any
inquiries or proposals from, any Person (other than Buyer) relating to the sale
of any of the Assets (other than in the Ordinary Course of Business). Seller
shall notify Buyer of any such inquiry or proposal within twenty-four (24) hours
of receipt or awareness of the same by Seller.
Section 5.7 Best Efforts.
Seller shall use its Best Efforts to cause the conditions in
Article VII to be satisfied.
Section 5.8 Payment of Liabilities.
Seller shall pay or otherwise satisfy in the Ordinary Course
of Business all of its liabilities and obligations relating to the Procuren
Operations. Buyer and Seller hereby waives compliance with the bulk transfer
provisions of the Uniform Commercial Code (or any similar law) ("Bulk Sales
Laws") in connection with the Contemplated Transactions.
ARTICLE VI.
COVENANTS OF BUYER PRIOR TO CLOSING
Section 6.1 Required Approvals.
As promptly as practicable after the effective date of this
Agreement, Buyer shall make, or cause to be made, all filings required by Legal
Requirements to be made by it to consummate the Contemplated Transactions. Buyer
also shall fully cooperate, and cause any Related Person to cooperate, with
Seller (a) with respect to all filings Seller shall be required by Legal
Requirements to make, and (b) in obtaining all Consents identified in Schedule
3.2(c).
Section 6.2 Best Efforts.
Buyer shall use its Best Efforts to cause the conditions in
Article VIII to be satisfied.
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ARTICLE VII.
CONDITIONS PRECEDENT TO BUYER'S OBLIGATION TO CLOSE
Buyer's obligation to purchase the Assets and to take the
other actions required to be taken by Buyer at the Closing is subject to the
satisfaction, at or prior to the Closing, of each of the following conditions
(any of which may be waived by Buyer, in whole or in part):
Section 7.1 Accuracy of Representations.
(a) All of Seller's representations and warranties in
this Agreement (considered collectively), and each of these
representations and warranties (considered individually), must
have been accurate in all material respects as of the
effective date of this Agreement, and must be accurate in all
material respects as of the Closing Date as if made on the
Closing Date, without giving effect to any supplement to the
Schedules (except with respect to any modifications to
Schedule 3.6(c) caused by the failure to receive a consent to
assignment at or prior to Closing under any Seller Lease).
(b) Each of the representations and warranties in
Sections 3.3(a) and 3.4, and each of the representations and
warranties in this Agreement that contains an express
materiality qualification, must have been accurate in all
respects as of the effective date of this Agreement, and must
be accurate in all respects as of the Closing Date as if made
on the Closing Date, without giving effect to any supplement
to the Schedules.
Section 7.2 Seller's Performance.
(a) All of the covenants and obligations that Seller
is required to perform or to comply with pursuant to this
Agreement at or prior to the Closing (considered
collectively), and each of these covenants and obligations
(considered individually), must have been duly performed and
complied with in all material respects.
(b) Seller must have delivered each of the documents
required to be delivered by it pursuant to Section 2.7(a), and
each of the other covenants and obligations in Sections 5.4,
5.7, 10.2 and 10.3 (to the extent due on or before the
Closing), and each covenant or obligation in this Agreement
that contains an express materiality qualification, must have
been duly performed and complied with in all respects.
Section 7.3 Intentionally Omitted.
Section 7.4 Additional Documents.
Seller shall have caused the documents and instruments
required by Section 2.7(a) and the following documents to be delivered (or
tendered subject only to Closing) to Buyer:
(a) an opinion of Dorsey & Whitney LLP dated the
Closing Date, in the form of Exhibit 7.4(a);
(b) the certificate of incorporation and all
amendments thereto of Curative Health Services, duly certified
as of a recent date by the Secretary of State of the
jurisdiction of Curative Health Services' incorporation;
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(c) the certificate of incorporation and all
amendments thereto of CHS Services, duly certified as of a
recent date by the Secretary of State of the jurisdiction of
CHS Services' incorporation;
(d) certificates dated as of a date not earlier than
the fifth Business Day prior to Closing as to the Good
Standing of Curative Health Services, executed by the
appropriate officials of the jurisdiction of Curative Health
Services' incorporation and each jurisdiction in which
Curative Health Services is licensed or qualified to do
business as a foreign corporation as specified in Schedule
3.1(a);
(e) certificates dated as of a date not earlier than
the fifth Business Day prior to Closing as to the Good
Standing of CHS Services, executed by the appropriate
officials of CHS Services' jurisdiction of incorporation and
each jurisdiction in which CHS Services is licensed or
qualified to do business as a foreign corporation as specified
in Schedule 3.1(c);
(f) releases of all Encumbrances on the Assets, other
than Permitted Encumbrances; and
(g) such other documents as Buyer may reasonably
request for the purpose of (i) evidencing the satisfaction of
any condition referred to in this Article VII, or (ii)
otherwise facilitating the consummation or performance of any
of the Contemplated Transactions.
Section 7.5 No Proceedings.
Since the effective date of this Agreement, there shall not
have been commenced or threatened against Buyer, or against any Related Person
of Buyer, any Proceeding (a) involving any challenge to, or seeking Damages or
other relief in connection with, any of the Contemplated Transactions, or (b)
that may have the effect of preventing, delaying, making illegal, imposing
limitations or conditions on, or otherwise interfering, with any of the
Contemplated Transactions.
Section 7.6 No Injunction.
There shall not be in effect any Legal Requirement or any
injunction or other Order that (a) prohibits the consummation of the
Contemplated Transactions, and (b) has been adopted or issued, or has otherwise
become effective, since the effective date of this Agreement.
Section 7.7 Governmental Authorizations.
Buyer shall have received such Governmental Authorizations, if
any, as are necessary to allow Buyer to operate the Assets from and after the
Closing as such Assets are currently being operated on the effective date
hereof.
Section 7.8 Employees.
All requisite notice periods under the WARN Act shall have
expired.
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ARTICLE VIII.
CONDITIONS PRECEDENT TO SELLER'S OBLIGATION TO CLOSE
Seller's obligation to sell the Assets and to take the other
actions required to be taken by Seller at the Closing is subject to the
satisfaction, at or prior to the Closing, of each of the following conditions
(any of which may be waived by Seller, in whole or in part):
Section 8.1 Accuracy of Representations.
All of Buyer's representations and warranties in this
Agreement (considered collectively), and each of these representations and
warranties (considered individually), must have been accurate in all material
respects as of the effective date of this Agreement and must be accurate in all
material respects as of the Closing Date as if made on the Closing Date.
Section 8.2 Buyer's Performance.
(a) All of the covenants and obligations that Buyer
is required to perform or to comply with pursuant to this
Agreement at or prior to the Closing (considered
collectively), and each of these covenants and obligations
(considered individually), must have been performed and
complied with in all material respects.
(b) Buyer must have delivered each of the documents
required to be delivered, and made each of the payments
required to be made, by Buyer pursuant to Section 2.7(b).
Section 8.3 Intentionally Omitted.
Section 8.4 Additional Documents.
Buyer shall have caused the documents and instruments required
by Section 2.7(b) and the following documents to be delivered (or tendered
subject only to Closing) to Seller:
(a) the certificate of incorporation and all
amendments thereto of Buyer, duly certified as of a recent
date by the Secretary of State of the jurisdiction of Buyer's
incorporation;
(b) [intentionally omitted]
(c) opinions dated the Closing Date, in the form of
Exhibit 8.4(c).
Section 8.5 No Injunction.
There shall not be in effect any Legal Requirement or any
injunction or other Order that (a) prohibits the consummation of the
Contemplated Transactions, and (b) has been adopted or issued, or has otherwise
become effective, since the effective date of this Agreement.
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ARTICLE IX.
TERMINATION
Section 9.1 Termination Events.
By written notice given prior to or at the Closing, subject to
Section 9.2, this Agreement may be terminated as follows:
(a) by Buyer if a material Breach of any provision of
this Agreement has been committed by Seller and such Breach
has not been waived by Buyer;
(b) by Seller if a material Breach of any provision
of this Agreement has been committed by Buyer and such Breach
has not been waived by Seller;
(c) by Buyer if any condition in Article VII has not
been satisfied as of the date specified for Closing in the
first sentence of Section 2.6 or if satisfaction of such a
condition by such date is or becomes impossible (other than
through the failure of Buyer to comply with its obligations
under this Agreement) and Buyer has not waived such condition
on or before such date;
(d) by Seller, if any condition in Article VIII has
not been satisfied as of the date specified for Closing in the
first sentence of Section 2.6 or if satisfaction of such a
condition by such date is or becomes impossible (other than
through the failure of Seller to comply with its obligations
under this Agreement) and Seller has not waived such condition
on or before such date;
(e) by mutual consent of Buyer and Seller;
(f) by Buyer if the Closing has not occurred on or
before February 12, 2001, or such later date as the parties
may agree upon, unless the Buyer is in material Breach of this
Agreement; or
(g) by Seller if the Closing has not occurred on or
before February 12, 2001, or such later date as the parties
may agree upon, unless the Seller in material Breach of this
Agreement.
Section 9.2 Effect of Termination.
Each party's right of termination under Section 9.1 is in
addition to any other rights it may have under this Agreement or otherwise, and
the exercise of such right of termination will not be an election of remedies.
If the Agreement is terminated pursuant to Section 9.1, all obligations of the
parties under this Agreement will terminate, except that the obligations of the
parties in this Section 9.2 and Articles XII will survive; provided, however,
that if this Agreement is terminated because of a Breach of this Agreement by
the non-terminating party or because one or more of the conditions to the
terminating party's obligations under this Agreement is not satisfied as a
result of the party's failure to comply with its obligations under this
Agreement, the terminating party's right to pursue all legal remedies will
survive such termination unimpaired.
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ARTICLE X.
ADDITIONAL COVENANTS
Section 10.1 Employees and Employee Benefits.
(a) All of the Employees will be available for hiring
by Buyer pursuant to the provisions of this Section 10.1.
Seller will provide Buyer (i) reasonable access to Personnel
Records relating to the Employees, and (ii) reasonable access
to the Facilities for the purpose of allowing Buyer to
interview any Employees that Buyer desires to interview. Buyer
shall make offers of employment to all of the Employees at a
base salary for each such Employee equal to or greater than
the base salary paid to such Employee by Seller as of the
effective date of this Agreement, and shall not terminate the
employment of any Hired Employee (as defined below) except for
cause for a period of sixty (60) days following the Closing
Date. Buyer will promptly provide Seller a list of Employees
to whom Buyer has made an offer of employment that has been
accepted to be effective on or after the Closing Date (the
"Hired Employees"). Effective immediately before the Closing
Date, Seller shall terminate the employment of all of such
Hired Employees and shall release such Hired Employees from
the provisions of any restrictive covenants and/or agreements
with Seller with respect to Buyer so as to enable Buyer to
employ such individuals. Seller shall not solicit the
employment of, or attempt to retain, any Employee; provided,
however, that Seller may solicit the employment of any
Employee who is not a Hired Employee. In the event Buyer
breaches any of its obligations set forth in this Section
10.1(a) with respect to any Employee, the maximum liability of
Buyer to Seller hereunder shall be the amount of Seller's
liability to such Employee under Seller's Severance Plan
Document dated November 15, 1999 (the "Severance Plan").
Except for the requirement to offer employment to the
Employees at the same or greater base salary, nothing
contained in this Section 10.1(a) shall require Buyer's offer
of employment to be on similar terms or conditions as that
Employee enjoyed with Seller, and Buyer shall have discretion
regarding all other terms and conditions of employment,
including but not limited to employee benefits with respect to
the Hired Employees.
(b) It is understood and agreed that (i) except as
set forth in Section 10.1(a) above, Buyer's expressed
intention to extend offers of employment as set forth in this
Section 10.1 shall not constitute any commitment, Contract or
understanding (expressed or implied) of any obligation on the
part of Buyer to a post-Closing Date employment relationship
of any fixed term or duration or upon any terms or conditions
other than those that Buyer may establish pursuant to
individual offers of employment, (ii) except as set forth in
Section 10.1(a) above, employment offered by Buyer is "at
will" and may be terminated by Buyer or by an employee at any
time for any reason (subject to any written commitments to the
contrary made by Buyer specifically to such individual), and
(iii) if Buyer fails to offer employment to any Employee of
Seller on substantially the same or greater base salary at the
rate paid by Seller, such Employee may become eligible to
receive termination or severance payments from Seller under
the Severance Plan. Except as set forth in Section 10.1(a)
above, nothing in this Agreement shall be deemed to prevent or
restrict in any way the right of Buyer to terminate, reassign,
promote or demote any of the Hired Employees after the
Closing, or to change (adversely or favorably) the title,
powers, duties, responsibilities, functions, locations,
salaries, other compensation or terms or conditions of
employment of the Hired Employees.
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(c) Seller shall be responsible for (i) the payment
of all wages and other remuneration due to its employees with
respect to their services as employees of Seller through the
close of business on the Closing Date, (ii) the payment of any
termination or severance payments and the provision of health
plan continuation coverage in accordance with the requirements
of COBRA, and (iii) any and all payments to employees required
under the WARN Act. Seller shall be liable for any claims made
or incurred by the Employees and their beneficiaries through
the Closing Date under the Employee Benefit Plans. For
purposes of the immediately preceding sentence, a claim will
be deemed incurred, in the case of medical or dental benefits,
when the services that are the subject of the charge are
performed, in the case of hospital benefits, when the
individual entered the hospital, and, in the case of other
benefits (such as disability or life insurance), when an event
has occurred or when a condition has been diagnosed which
entitles the employee to the benefit.
(d) Seller and Buyer shall give any notices required
by law and take whatever other actions with respect to the
plans, programs and policies described in this Section 10.1 as
may be necessary to carry out the arrangements described in
this Section 10.1.
(e) Seller and Buyer shall provide each other with
such plan documents and summary plan descriptions, employee
data or other information as may be reasonably required to
carry out the arrangements described in this Section 10.1.
(f) Buyer shall not have any responsibility,
liability or obligation, to the Employees or to any other
Person with respect to any Employee Benefit Plan maintained by
Seller.
(g) No provision of this Section 10.1 shall create
any third party beneficiary or other rights in any employee or
former employee (including any beneficiary or dependent
thereof) of the Seller or any of its Subsidiaries in respect
of continued employment (or resumed employment) with the Buyer
and no provision of this Section 10.1 shall create any such
rights in any such persons in respect of any benefits that may
be provided, directly or indirectly, under any Employee
Benefit Plans or any such similar plan or arrangement that may
be established by the Buyer.
Section 10.2 Payment of All Taxes Resulting From Sale of
Assets by Seller.
Seller shall pay in a timely manner all Taxes resulting from
or payable in connection with the sale of the Assets pursuant to this Agreement,
regardless of the Person on whom such Taxes are imposed by Legal Requirements;
provided, however, that Buyer shall reimburse Seller for all sales and use taxes
resulting from or payable in connection with the sale of the Assets pursuant to
this Agreement to the extent such taxes do not exceed $200,000.
Section 10.3 Payment of Other Retained Liabilities.
In addition to payment of Taxes pursuant to Section 10.2,
Seller shall pay, or make adequate provision for the payment, in full of all of
the Retained Liabilities relating to the Procuren Operations.
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Section 10.4 Reports and Returns.
Seller shall promptly after the Closing prepare and file all
reports and returns required by applicable Legal Requirements relating to the
Procuren Operations.
Section 10.5 Insurance.
For six (6) years after the Closing Date, Seller shall
continue to maintain product liability insurance with respect to Assets insured
as of the Closing Date providing substantially the same coverage as in effect on
the effective date hereof or insurance that is comparable to the policy
maintained by Buyer from time to time and Seller shall cause Buyer to be named
as an additional insured on each such policy.
Section 10.6 Further Assurances.
The parties shall cooperate reasonably with each other and
with their respective Representatives in connection with any steps required to
be taken as part of their respective obligations under this Agreement, and the
parties agree (a) to furnish upon reasonable request to each other such further
information, (b) to execute and deliver to each other such other documents, and
(c) to do such other acts and things, all as the other party may reasonably
request for the purpose of carrying out the intent of this Agreement and the
Contemplated Transactions. In the event that Seller inadvertently does not
deliver any of the Assets at Closing, Buyer agrees that it shall bring no claim
against Seller if (a) Seller promptly delivers such Assets upon notice thereof,
and (b) Buyer has suffered no Damages arising out of or in connection with such
lack of delivery at Closing.
Section 10.7 Access to Patient Data Base of Seller.
From and after the Closing Date until such time that Buyer
receives FDA approval of the Product or terminates the clinical trial conducted
in contemplation of receiving FDA approval, Seller shall, upon reasonable prior
notice by Buyer, provide Buyer and its Representatives with all de-identified
data reasonably requested by Buyer with respect to the full MediLink data base
and all other information of Seller used in connection with the treatment of
patients (including any data on client use and experience with the Product), for
use by Buyer in connection with (a) any clinical trials involving the Product,
or (b) any support and marketing services provided by Buyer involving the
Product in any jurisdiction in which the provision of such services is legal.
Section 10.8 Cooperation in the Event of FDA Action.
In the event that, after the Closing Date the FDA issues any
Warning Letters or other notifications to Buyer, or otherwise brings any
Proceeding against Buyer, as the result of events occurring prior to the
Closing, Seller shall cooperate with Buyer in responding to any such
notification or Proceeding. Nothing contained herein affects Buyer's right to
indemnification as set forth in Article XI.
Section 10.9 Audited Financial Statements.
In the event that after the Closing Date, Buyer determines, in
its reasonable discretion, that in connection with its obligations as a public
company it needs audited financial information with respect to the operation of
the Procuren Operations prior to the Closing Date, Seller shall, at the expense
of Buyer, use its reasonable efforts to cause such financial statements to be
prepared by Ernst & Young.
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Section 10.10 Right to Audit.
From and after the Closing Date, Buyer shall have the right to
audit up to three (3) years of historical financial information of Seller prior
to the Closing Date in the event that such audit is required by the Dutch
Ministry of Justice, Amsterdam Stock Exchange, or other competent authorities.
Section 10.11 BTG Agreement.
In the event that BTG USA, Inc. has not consented to the
assignment of the BTG Agreement to Buyer at or prior to Closing, Seller shall,
at the expense of Buyer and as Buyer may reasonably request, enforce the
provisions of such agreement for the benefit of Buyer as the holder of the
patents and the other intellectual property rights with respect thereto. Buyer
shall indemnify Seller for all Damages incurred in performing its obligations
under this Section 10.11.
ARTICLE XI.
INDEMNIFICATION
Section 11.1 Survival.
All representations, warranties, covenants, and obligations in
this Agreement, the Schedules attached hereto, the certificates delivered
pursuant to Section 2.7, and any other certificate or document delivered
pursuant to this Agreement shall survive the Closing and the consummation of the
Contemplated Transactions. The right to indemnification, reimbursement, or other
remedy based on such representations, warranties, covenants and obligations
shall not be affected by any investigation conducted with respect to, or any
knowledge acquired (or capable of being acquired) about, the accuracy or
inaccuracy of or compliance with, any such representation, warranty, covenant or
obligation. The waiver of any condition based on the accuracy of any
representation or warranty, or on the performance of or compliance with any
covenant or obligation, will not affect the right to indemnification,
reimbursement, or other remedy based on such representations, warranties,
covenants, and obligations. The right to indemnification provided in this
Article XI shall be the exclusive remedy of the parties hereto; provided,
however, that the foregoing restriction shall not limit claims for injunctive
relief or specific performance (including, without limitation, claims for
specific performance pursuant to Section 2.1) or claims based upon the
fraudulent misconduct of the other party.
Section 11.2 Indemnification and Reimbursement By Seller.
Seller shall indemnify and hold harmless Buyer, its
Representatives and shareholders, and its Related Persons (collectively, the
"Buyer Indemnified Persons"), and shall reimburse the Buyer Indemnified Persons,
for any loss, liability, claim, damage, expense (including costs of
investigation and defense and reasonable attorneys' fees and expenses) or
diminution of value, whether or not involving a third-party claim (collectively,
"Damages"), arising from or in connection with:
(a) any Breach of any representation or warranty made
by Seller in this Agreement (without giving effect to any
supplement to the Schedules to Article III), the certificates
delivered pursuant to Section 2.7 (for this purpose, each such
certificate will be deemed to have stated that Seller's
representations and warranties in this Agreement fulfill the
requirements of Section 7.1 as of the Closing Date as if made
on the Closing Date without giving effect to any supplement to
the Schedules to Article III, unless the certificate expressly
states that the matters disclosed in a supplement have caused
a
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condition specified in Section 7.1 not to be satisfied), any
transfer instrument or any other certificate or document
delivered by Seller pursuant to this Agreement;
(b) any Breach of any covenant or obligation of
Seller in this Agreement or in any other document, writing or
instrument delivered by Seller pursuant to this Agreement;
(c) any Retained Liabilities; or
(d) any noncompliance with any Bulk Sales Law in
connection with the Contemplated Transactions.
Section 11.3 Indemnification and Reimbursement by Buyer.
Buyer shall indemnify and hold harmless Seller, and shall
reimburse Seller for any Damages arising from or in connection with:
(a) any Breach of any representation or warranty made
by Buyer in this Agreement or in any transfer instrument,
certificate or document delivered by Buyer pursuant to this
Agreement;
(b) any Breach of any covenant or obligation of Buyer
in this Agreement or in any other document, writing or
instrument delivered by Buyer pursuant to this Agreement;
(c) any Liability arising out or in connection with
the operation of the Procuren Operations after the Closing;
(d) any Assumed Liabilities;
(e) Buyer's use of the patient data base of Seller as
set forth in Section 10.10; or
(f) the performance of Seller's obligations pursuant
to Section 10.11.
Section 11.4 Time Limitations.
(a) If the Closing occurs, Seller will have no
liability (for indemnification (including any contribution) or
otherwise) with respect to any claim for Damages which may be
asserted pursuant to this Article XI, unless on or before the
second anniversary of the Closing Date, Buyer notifies Seller
of a claim specifying the factual basis of that claim in
reasonable detail to the extent then known by Buyer.
Notwithstanding the foregoing, any claim with respect to
Sections 2.4(c) (other than a claim with respect to Sections
2.4(c)(v), 2.4(c)(ix) and 2.4(c)(xii)), 3.13, and 3.22 or a
claim for indemnification or reimbursement based upon the
post-closing covenants or obligations of Seller, may be made
at any time prior to the expiration of the applicable statute
of limitations.
(b) If the Closing occurs, Buyer will have no
liability (for indemnification (including any contribution) or
otherwise) with respect to any claim for Damages which may be
asserted pursuant to this Article XI unless on or before the
second anniversary of
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the Closing Date, Seller notifies Buyer of a claim specifying
the factual basis of that claim in reasonable detail to the
extent then known by Seller. Notwithstanding the foregoing,
any claim for indemnification or reimbursement based upon the
post-closing covenants or obligations of Buyer may be made at
any time prior to the expiration of the applicable statute of
limitations.
Section 11.5 Recoveries.
To the extent that an indemnified party receives a recovery
from any third party after being indemnified for such amount by the indemnifying
party, the indemnified party shall promptly pay the indemnifying party the
amount of such recovery. In no event shall the failure of any party to obtain
insurance or the appropriate type or amount of insurance affect its right to
indemnification hereunder.
Section 11.6 Limitations on Amount - Seller.
(a) Seller shall have no liability (for
indemnification (including any contribution) or otherwise)
with respect to matters described in this Article XI until the
total of all Damages with respect to such matters exceeds
$300,000, and then only for the amount by which such Damages
exceed $150,000, or, with respect to matters described in
Section 11.2(c), until the total Damages with respect to such
matters exceeds $150,000, and then only for the amount by
which such Damages exceeds $150,000; provided, however, that
to the extent Article III contains any materiality
qualifications, such materiality qualifications will not be
taken into account in determining the magnitude of the Damages
occasioned by the Breach for purposes of calculating whether
they are applied to the basket set forth above.
Notwithstanding the foregoing, this Section 11.6(a) will not
apply to matters arising in respect of Sections 2.1.
(b) Seller shall have no liability (for
indemnification (including any contribution) or otherwise)
with respect to matters described in Sections 11.2(a) or
11.2(b) to the extent that all Damages with respect to such
matters exceeds $1,150,000. Seller shall have no liability
(for indemnification or otherwise) with respect to matters
described in Section 11.2(c) or (notwithstanding the foregoing
sentence) arising in respect of Sections 3.19 or 3.23 to the
extent all Damages with respect to such matters exceeds
$2,500,000. Notwithstanding the foregoing, this Section
11.6(b) will not apply to matters arising in respect of
Sections 2.1, 3.6(b), 3.7(a), 3.24 or 3.25 or to any Breach of
any of Seller's representations and warranties of which the
Seller had Knowledge at any time prior to the date on which
such representation and warranty is made, and Seller will be
liable for all Damages with respect to such Breaches.
Section 11.7 Limitations on Amount - Buyer.
(a) Buyer shall have no liability (for
indemnification (including any contribution) or otherwise)
with respect to matters described in this Article XI until the
total of all Damages with respect to such matters exceeds
$300,000, and then only for the amount by which such Damages
exceed $150,000; provided, however, that to the extent Article
III contains any materiality qualifications, such materiality
qualifications will not be taken into account in determining
the magnitude of the Damages occasioned by the Breach for
purposes of calculating whether they are applied to the basket
set forth above.
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(b) Buyer shall have no liability (for
indemnification (including any contribution) or otherwise)
with respect to matters described in Sections 11.3(a) or
11.3(b) to the extent that all Damages with respect to such
matters exceeds $1,150,000. Notwithstanding the foregoing,
this Section 11.7(b) will not apply to matters arising in
respect of Sections 4.4 or to any Breach of any of Buyer's
representations and warranties of which the Buyer had
Knowledge at any time prior to the date on which such
representation and warranty is made, and Buyer will be liable
for all Damages with respect to such Breaches.
Section 11.8 Procedure for Indemnification - Third Party
Claims.
(a) Promptly after receipt by an indemnified party
under Section 11.2 or 11.3 of notice of the commencement of
any Proceeding against it, such indemnified party will, if a
claim is to be made against an indemnifying party under such
Section, give notice to the indemnifying party of the
commencement of such Proceeding, but the failure to notify the
indemnifying party will not relieve the indemnifying party of
any liability that it may have to any indemnified party,
except to the extent that the indemnifying party demonstrates
that the defense of such action is prejudiced by the
indemnified party's failure to give such notice.
(b) If an indemnified party gives notice to the
indemnifying party of the commencement of a Proceeding
referred to in Section 11.8(a), the indemnifying party will be
entitled to participate in such Proceeding and, to the extent
that it wishes to assume the defense of such Proceeding with
counsel satisfactory to the indemnified party and, after
notice from the indemnifying party to the indemnified party of
its election to assume the defense of such Proceeding, the
indemnifying party will not, as long as it diligently conducts
such defense, be liable to the indemnified party under this
Article XI for any fees of other counsel or any other expenses
with respect to the defense of such Proceeding, in each case
subsequently incurred by the indemnified party in connection
with the defense of such Proceeding, other than reasonable
costs of investigation (unless (i) the indemnifying party is
also a party to such Proceeding and the indemnified party
determines in good faith that joint representation would be
inappropriate, or (ii) the indemnifying party fails to provide
reasonable assurance to the indemnified party of its financial
capacity to defend such Proceeding and provide indemnification
with respect to such Proceeding). If the indemnifying party
assumes the defense of a Proceeding, (x) it will be
conclusively established for purposes of this Agreement that
the claims made in that Proceeding are within the scope of and
subject to indemnification; (y) no compromise or settlement of
such claims may be effected by the indemnifying party without
the indemnified party's Consent unless (A) there is no finding
or admission of any violation of Legal Requirements or any
violation of the rights of any Person and no effect on any
other claims that may be made against the indemnified party,
and (B) the sole relief provided is monetary damages that are
paid in full by the indemnifying party; and (z) the
indemnified party will have no liability with respect to any
compromise or settlement of such claims effected without its
Consent. If notice is given to an indemnifying party of the
commencement of any Proceeding and the indemnifying party does
not, within ten (10) days after the indemnified party's notice
is given, give notice to the indemnified party of its election
to assume the defense of such Proceeding, the indemnifying
party will be bound by any determination made in such
Proceeding or any compromise or settlement effected by the
indemnified party.
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(c) Notwithstanding the foregoing, if an indemnified
party determines in good faith that there is a reasonable
probability that a Proceeding may adversely affect it or its
Related Persons other than as a result of monetary damages for
which it would be entitled to indemnification under this
Agreement, the indemnified party may, by notice to the
indemnifying party, assume the exclusive right to defend,
compromise, or settle such Proceeding, but the indemnifying
party will not be bound by any determination of a Proceeding
so defended for the purposes of this Agreement or any
compromise or settlement effected without its Consent (which
may not be unreasonably withheld or delayed).
(d) Each party hereby consents to the non-exclusive
Jurisdiction of any court in which a Proceeding is brought
against any Buyer Indemnified Person or Seller Indemnified
Person for purposes of any claim that such person may have
under this Agreement with respect to such Proceeding or the
matters alleged therein, and agree that process may be served
on such party with respect to such a claim anywhere in the
world.
Section 11.9 Procedure For Indemnification - Other Claims.
A claim for indemnification for any matter not involving a
third-party claim may be asserted by notice to the party from whom
indemnification is sought.
ARTICLE XII.
GENERAL PROVISIONS
Section 12.1 Confidentiality; Public Announcements.
(a) Buyer and Seller shall maintain in confidence,
and shall cause their respective directors, officers,
employees, agents, and advisors to maintain in confidence, and
not use to the detriment of the other party, any written,
oral, or other information obtained in confidence from another
party in connection with this Agreement or the Contemplated
Transactions, unless (a) such information is already known to
such party or to others not bound by a duty of confidentiality
or such information becomes publicly available through no
fault of such party, (b) the use of such information is
necessary or appropriate in making any filing or obtaining any
Consent required for the consummation of the Contemplated
Transactions, or (c) the furnishing or use of such information
is required by or necessary in connection with any Proceeding.
(b) Any public announcement or similar publicity with
respect to this Agreement or the Contemplated Transactions may
be issued, if at all, at such time and in such manner as
mutually agreed to by Buyer and Seller; provided, however,
that in the case of announcements, statements, acknowledgments
or revelations which either party is required by applicable
Legal Requirements to make, issue or release, the making,
issuing or releasing of any such announcement, statement,
acknowledgment or revelation by the party so required to do by
applicable Legal Requirements shall not constitute a breach of
this Agreement if such party shall have given, to the extent
reasonably possible, notice thereof to the other party not
less than two (2) days prior to such disclosure and shall have
attempted, to the extent reasonably possible, to clear such
announcement, statement, acknowledgment or revelation with the
other party. Subject to the foregoing, Seller and Buyer shall
consult with each other concerning the means by
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which Seller's employees, customers, and suppliers and others
having dealings with the Seller will be informed of the
Contemplated Transactions.
Section 12.2 Expenses.
Except as otherwise expressly provided in this Agreement, each
party to this Agreement shall bear its respective expenses incurred in
connection with the preparation, execution, and performance of this Agreement
and the Contemplated Transactions, including all fees and expenses of its
Representatives. In the event of termination of this Agreement, the obligation
of each party to pay its own expenses is subject to any rights of such party
arising from a Breach of this Agreement by another party.
Section 12.3 Notices.
All notices, Consents, waivers, and other communications under
this Agreement must be in writing and are deemed to have been duly given when
(a) delivered by hand with written confirmation of receipt, (b) sent by
facsimile with confirmation of transmission by the transmitting equipment, (c)
five (5) days after delivery, if sent by certified mail, return receipt
requested, or (d) one (1) day after delivery, if sent by a nationally recognized
overnight delivery service, return receipt requested, in each case to the
appropriate addresses or facsimile numbers set forth below (or to such other
addresses or facsimile numbers as a party may designate by notice to the other
parties):
Buyer: Cytomedix, Inc.
Three Parkway North
Deerfield, Illinois 60015
Attention: Christopher J. Caywood
Vice President of Strategy and Business Development
Fax: (847) 405-7801
with a copy to: Latham & Watkins
1001 Pennsylvania Ave., N.W.
Suite 1300
Washington, D.C. 20004
Attention: Stuart S. Kurlander, Esq.
Fax: (202) 637-2201
Seller: Curative Health Services, Inc.
150 Motor Parkway
Hauppauge, New York 11788
Attention: William Tella
Sr. Vice President of Business Development
Fax: (631) 233-8107
with a copy to: Dorsey & Whitney, LLP
250 Park Avenue
New York, New York 10177
Attention: Seth I. Truwit, Esq.
Fax: (212) 953-7201
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Section 12.4 Jurisdiction, Service of Process.
Any Proceeding arising out of or relating to this Agreement or
any Contemplated Transaction may be brought in the courts of the State of New
York, County of New York, or, if it has or can acquire jurisdiction, in the
United States District Court located therein, and each of the parties
irrevocably submits to the exclusive jurisdiction of each such court in any such
Proceeding, waives any objection it may now or hereafter have to venue or to
convenience of forum, agrees that all claims in respect of the Proceeding shall
be heard and determined only in any such court, and agrees not to bring any
Proceeding arising out of or relating to this Agreement or any Contemplated
Transaction in any other court. Process in any Proceeding referred to in the
preceding sentence may be served on any party anywhere in the world.
Section 12.5 Enforcement of Agreement.
Seller acknowledges and agrees that Buyer would be damaged
irreparably in the event any of the provisions of this Agreement are not
performed in accordance with their specific terms and that any breach of this
Agreement by Seller could not be adequately compensated by monetary damages.
Accordingly, Seller agrees that, in addition to any other right or remedy to
which Buyer may be entitled, at law or in equity, it shall be entitled to
enforce any provision of this Agreement by a decree of specific performance and
to temporary, preliminary and permanent injunctive relief to prevent breaches or
threatened breaches of the provisions of this Agreement, without posting any
bond or other undertaking.
Section 12.6 Waiver.
The rights and remedies of the parties to this Agreement are
cumulative and not alternative. Neither the failure nor any delay by any party
in exercising any right under this Agreement or the documents referred to in
this Agreement operates as a waiver of such right, and no single or partial
exercise of any such right precludes any other or further exercise of such right
or the exercise of any other right. To the maximum extent permitted by
applicable law, (a) no claim or right arising out of this Agreement or the
documents referred to in this Agreement can be discharged by one party, in whole
or in part, by a waiver or renunciation of the claim or right unless in writing
signed by the other party; (b) no waiver that may be given by a party is
applicable except in the specific instance for which it is given; and (c) no
notice to or demand on one party is deemed to be a waiver of any obligation of
such party or of the right of the party giving such notice or demand to take
further action without notice or demand as provided in this Agreement or the
documents referred to in this Agreement.
Section 12.7 Entire Agreement and Modification.
This Agreement supersedes all prior agreements (including (a)
the Original Agreement, (b) that certain Letter of Intent by and between Buyer
and Curative Health Services dated July 17, 2000 (including any extensions
thereof), and (c) that certain Confidentiality Agreement by and between Buyer
and Curative Health Services dated June 6, 2000)), whether written or oral,
between the parties with respect to its subject matter and constitutes (along
with the Schedules, Exhibits and other documents delivered pursuant to this
Agreement) a complete and exclusive statement of the terms of the agreement
between the parties with respect to its subject matter. This Agreement may not
be amended except by a written agreement signed on behalf of each of the parties
hereto.
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Section 12.8 Assignments, Successors, and No Third-Party
Rights.
No party may assign any of its rights or delegate any of its
obligations under this Agreement without the prior written consent of the other
parties, except that Buyer may assign any of its rights and delegate any of its
obligations under this Agreement to any Subsidiary of Buyer and may collaterally
assign its rights hereunder to any financial institution providing financing in
connection with the Contemplated Transactions, provided that no such assignment
or delegation shall relieve Buyer from any of its obligations hereunder. Subject
to the preceding sentence, this Agreement applies to, is binding in all respects
upon, and inures to the benefit of the successors and permitted assigns of the
parties. Nothing in this Agreement is to be construed to give any Person other
than the parties to this Agreement any legal or equitable right under or with
respect to this Agreement or any provision of this Agreement, except such rights
as shall inure to a successor or permitted assignee pursuant to this Section
12.8.
Section 12.9 Severability.
If any provision of this Agreement is held invalid or
unenforceable by any court of competent jurisdiction, the other provisions of
this Agreement remain in full force and effect. The parties further agree that
if any provision contained herein is, to any extent, held invalid or
unenforceable in any respect under the laws governing this Agreement, they shall
take any actions necessary to render the remaining provisions of this Agreement
valid and enforceable to the fullest extent permitted by law and, to the extent
necessary, shall amend or otherwise modify this Agreement to replace any
provision contained herein that is held invalid or unenforceable with a valid
and enforceable provision giving effect to the intent of the parties.
Section 12.10 Section Headings, Construction, Schedules.
The headings of Articles and Sections in this Agreement are
provided for convenience only and will not affect its construction or
interpretation. All Exhibits and Schedules to this Agreement are incorporated
into and constitute an integral part of this Agreement as if fully set forth
herein. The statements in the Schedules, and those in any supplement thereto,
relate only to the representations and warranties in the Section of the
Agreement to which they expressly relate and not to any other representation or
warranty in this Agreement. All words used in this Agreement will be construed
to be of such gender or number as the context requires. All references to
documents, instruments or agreements shall be deemed to refer as well to all
addenda, exhibits, schedules or amendments thereto. The language used in the
Agreement shall be construed, in all cases, according to its fair meaning, and
not for or against any party hereto. The parties acknowledge that each party has
reviewed this Agreement and that rules of construction to the effect that any
ambiguities are to be resolved against the drafting party shall not be available
in the interpretation of this Agreement.
Section 12.11 Governing Law.
This Agreement will be governed by and construed under the
laws of the State of New York without regard to conflicts of laws principles
that would require the application of any other law.
Section 12.12 Execution of Agreement, Counterparts.
This Agreement may be executed in one or more counterparts,
each of which will be deemed to be an original copy of this Agreement and all of
which, when taken together, will be deemed to constitute one and the same
agreement. The exchange of copies of this Agreement and of signature pages by
facsimile transmission shall constitute effective execution and delivery of this
Agreement as to
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the parties and may be used in lieu of the original Agreement for all purposes.
Signatures of the parties transmitted by facsimile shall be deemed to be their
original signatures for any purpose whatsoever.
[remainder of page intentionally left blank]
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[signature page to Amended and Restated Asset Purchase Agreement]
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first written above.
CYTOMEDIX, INC.
By: /s/ illegible
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Name: Christopher J. Caywood
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Its: Vice President
-------------------------------------------
CURATIVE HEALTH SERVICES, INC.
By: /s/ William C. Tella
-------------------------------------------
Name: William C. Tella
-------------------------------------------
Its: Senior Vice President, Business Development
-------------------------------------------
CHS SERVICES, INC.
By: /s/ John C. Prior
-------------------------------------------
Name: John C. Prior
-------------------------------------------
Its: Vice President, Finance
-------------------------------------------
ACKNOWLEDGED AND AGREED TO:
CYTOMEDIX N.V.
By: /s/ illegible
--------------------------------------------
Name: Christopher J. Caywood
--------------------------------------------
Its: Managing Director
--------------------------------------------
54
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LIST OF OMITTED SCHEDULES/EXHIBITS
Exhibit 2.5 - Purchase Price Allocation
Exhibit 2.7(a)(i) - Bill of Sale
Exhibit 2.7(a)(ii) - Assignment and Assumption Agreement
Exhibit 2.7(a)(iii) - Assignment and Assumption of Lease
Exhibit 2.7(a)(iv) - Assignment of Marks
Exhibit 2.7(a)(v) - Assignment of Patents
Exhibit 2.7(a)(vi) - Assignment of Copyrights
Exhibit 2.7(a)(viii) - Royalty Agreement
Exhibit 2.7(a)(ix) - Transitional Services Agreement
Exhibit 2.7(a)(x) - Supply Agreement
Exhibit 2.7(a)(xiii) - Security Agreement
Exhibit 2.7(a)(xvii) - Securities Purchase Agreement
Exhibit 2.7(a)(xviii) - Registration Rights Agreement
Exhibit 2.7(b)(xii) - Promissory Note
Exhibit 2.7(b)(xiii) - Stock Purchase Warrant
Exhibit 7.4(a) - Opinion of Seller's Counsel
Exhibit 8.4(c) - Opinion of Buyer's Counsel
Schedule A - Permitted Non-Real Property Encumbrances
Schedule 2.1(a)(ii) - Tangible Personal Property
Schedule 2.1(a)(vi) - Promotional Materials
Schedule 2.1(a)(viii) - Seller Claims
Schedule 2.2(c) - Excluded Seller Prepaid Expenses
Schedule 2.2(e) - Excluded Seller Contracts
Schedule 2.2(j) - Excluded Seller Assets
Schedule 2.4(a)(ii) - Assumed Liabilities
Schedule 2.8(b) - Interim Tangible Assets Book Value
Schedule 3.1(a) - Organization and Good Standing - Curative Health Services
Schedule 3.1(b) - Governing Documents - Curative Health Services
Schedule 3.1(c) - Organization and Good Standing - CHS Services
Schedule 3.1(d) - Governing Documents - CHS Services
Schedule 3.2(b) - No Conflict (Seller)
Schedule 3.2(c) - Consents (Seller)
Schedule 3.5 - Sufficiency of Assets
Schedule 3.6(b) - Real Property
Schedule 3.6(c) - Leased Parcels
Schedule 3.6(d) - Hospital Parcels
Schedule 3.7(a) - Non-Real Property Encumbrances
Schedule 3.9 - No Undisclosed Liabilities (Seller)
Schedule 3.12(a) - Employees
Schedule 3.12(d) - Employment Matters
Schedule 3.14(a) - Legal Requirements
Schedule 3.14(b) - Government Authorizations
Schedule 3.15(a) - Legal Proceedings
Schedule 3.15(b) - Orders
Schedule 3.16 - Absence of Certain Changes and Events
Schedule 3.17(a) - Contracts
Schedule 3.17(b) - Certain Contractual Events
55
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Schedule 3.18 - Insurance
Schedule 3.19(a) - Environmental Matters
Schedule 3.19(b) - Environmental Matters
Schedule 3.19(c) - Environmental Matters
Schedule 3.19(d) - Environmental Matters
Schedule 3.19(e) - Environmental Matters
Schedule 3.19(f) - Environmental Matters
Schedule 3.20(a)(i)(C) - Excluded Copyrights
Schedule 3.20(a)(i)(D) - Excluded Trade Secrets
Schedule 3.20(b) - Royalties
Schedule 3.20(c) - Encumbrances (Intellectual Property Assets)
Schedule 3.20(d) - Proprietary Rights Agreements
Schedule 3.20(e) - Patents
Schedule 3.20(f) - Marks
Schedule 3.20(g) - Copyrights
Schedule 3.20(i) - Trade Secrets
Schedule 3.21(a) - FDA Related Legal Requirements
Schedule 3.23 - Related Persons
Schedule 4.2(b) - No Conflict (Buyer)
Schedule 4.2(c) - Consents (Buyer)
Schedule 4.7 - No Undisclosed Liabilities (Buyer)
All above schedules and exhibits have been omitted from this report in
accordance with Item 601 of Regulation S-K. The Registrant hereby agrees to
furnish supplementally to the Securities and Exchange Commission a copy of any
omitted schedule or exhibit hereto upon request.
56
