Exhibit 2
ASSET PURCHASE AGREEMENT
Among
HEYER-SCHULTE NEUROCARE, L.P.,
NEURO NAVIGATIONAL, L.L.C.,
INTEGRA NEUROCARE LLC
And
REDMOND NEUROCARE LLC
Dated as of March 29, 1999
ASSET PURCHASE AGREEMENT
THIS AGREEMENT (this "Agreement") is made and entered into as
of March 29, 1999, among Integra NeuroCare LLC, a Delaware limited liability
company ("INLLC"), and Redmond NeuroCare LLC, a Delaware limited liability
company ("Redmond"), and Heyer-Schulte NeuroCare, L.P., a Delaware limited
partnership ("HSNLP") and Neuro Navigational, L.L.C., a Delaware limited
liability company and a wholly-owned subsidiary of HSNLP ("Neuro Nav"). Integra,
INLLC and Redmond are collectively referred to herein as the "Buyers" and each
is referred to herein as a "Buyer." HSNLP and Neuro Nav are collectively
referred to herein as the "Sellers" and each is referred to herein as a
"Seller." Buyers and Sellers are referred to collectively herein as the
"Parties," and other capitalized terms used herein and not otherwise defined are
defined in Article VIII below.
Sellers and the Subsidiaries are engaged in the business of
researching, developing, manufacturing, selling and distributing neurological
and hemodynamic shunting, monitoring and related products, neurological
endoscopy and related products and neurosurgical instruments and related
products and other neurosurgery and intensive care and related products (the
"Business").
Subject to the terms and conditions set forth in this
Agreement, Sellers desire to sell to Buyers, and Buyers desire to acquire from
Sellers, substantially all of the assets of Sellers (including all interests in
the Subsidiaries), and Sellers desire to assign to Buyers, and Buyers desire to
assume from Sellers, substantially all of the liabilities of Sellers.
NOW, THEREFORE, in consideration of the mutual covenants
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Parties agree as follows:
ARTICLE I
BASIC TRANSACTION
1.1 Purchase and Sale of Assets. On and subject to the terms and conditions of
this Agreement, at the Closing (as hereinafter defined), except for Excluded
Assets, Buyers shall purchase from Sellers, and Sellers shall sell, transfer,
convey and deliver to Buyers, all right, title and interest of Sellers in and to
all of their respective assets and property as it exists as of the Closing,
including, without limitation, all of their right, title and interest in the
following:
(1) all accounts, notes and other receivables;
(2) all raw materials and supplies, manufactured and
purchased parts, work-in-process, finished goods and other items of inventory;
(3) all machinery, equipment, furniture, fixtures,
leasehold improvements (including, without limitation, leasehold improvements
made on the premises subject to the Pleasant Prairie Lease, whether such lease
is transferred to Buyers by assignment or sublease), vehicles, tooling, molds,
dies and other tangible personal property;
(4) all fee, leasehold and other interests in real
property;
(5) all Intellectual Property, including, without
limitation, the names "Heyer-Schulte NeuroCare," "Innerspace," "NeuroCare,"
"Camino NeuroCare," "Neuro Navigational," "Redmond Diamond Kerrison," "Ventrix"
and goodwill associated therewith, remedies against infringements thereof and
rights to protection of interests therein under the laws of all jurisdictions;
(6) all agreements, contracts, leases, licenses,
commitments, purchase orders and other similar arrangements (collectively, the
"Assumed Contracts");
(7) all prepayments, deposits and prepaid expenses to
the extent transferable and all insurance policies;
(8) all claims, refunds, causes of action, choses in
action, rights of recovery, rights of set off and rights of recoupment of any
kind, including warranties, indemnities (including, without limitation,
indemnities with respect to prior acquisitions and insurance proceeds with
respect to Assumed Liabilities) and other intangible assets;
(9) all franchises, approvals, permits, licenses,
orders, registrations, certificates, consents, authorizations of, or
declarations to or filings with, and variances and similar rights obtained from
governments and governmental agencies (collectively, the "Permits") to the
extent transferable;
(10) all books, records, ledgers, files, documents,
correspondence, lists, drawings, and specifications, advertising and promotional
materials, studies, reports, and other printed or written materials;
(11) all of the capital stock of Camino and HSN,
Inc.;
(12) all rights to payment under any settlement
agreements, including, without limitation, royalty payments;
(13) all cash and cash equivalents; and
(14) all other property owned by Sellers or in which
Sellers have an interest as of the Closing Date (as hereinafter defined).
In addition, Sellers shall cause Saba Medical Management Co., Inc., a
Delaware corporation ("Saba, Inc."), to transfer, convey and deliver to Buyers
all right, title and interest of
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Saba, Inc. in and to the Employment Agreement between Saba, Inc. and Roderick G.
Johnson (the "Johnson Employment Agreement"). All of the assets and property set
forth in this Section 1.01 is referred to herein as the "Acquired Assets".
1.2 Excluded Assets. Notwithstanding the foregoing provisions of
Section 1.01 above, the Acquired Assets shall not include any of the following
assets and property of Sellers or the Subsidiaries (the "Excluded Assets"),
which shall not be conveyed to Buyers:
(1) the Directors and Officers Liability/Employment
Practices insurance policies covering the Sellers and Subsidiaries (policies
GPL1000281, IXG960322 and FD022500N) (the "D&O Policies") and prepaid premiums
with respect thereto and benefits under Sellers' other insurance policies (but
not the policies) to the extent such benefits cover Excluded Liabilities;
(2) the bank account of HSNLP at LaSalle National
Bank, account no. 8600726718, and all funds therein;
(3) Each Seller's formation and organizational
documents (including partnership agreements and/or operating agreements),
qualifications to conduct business as a foreign entity, arrangements with
registered agents relating to foreign qualifications, any identification
numbers, seals, minute books, and other documents relating to the organization,
maintenance, and existence of such Seller;
(4) all claims, deposits, prepayments, refunds,
causes of action, choses in action, rights of recovery, rights of set off, and
rights of recoupment (including warranties, indemnities and other intangible
assets) with respect to any Excluded Asset;
(5) the Contribution Agreement, the Management
Agreement and the Investment Agreement; and
(6) all rights of Sellers arising under this
Agreement and under any other agreement between Buyers or their Affiliates and
Sellers entered into in connection with this Agreement.
1.3 Assumption of Liabilities. On and subject to the terms and
conditions of this Agreement at the Closing, Buyers shall expressly assume all
of the liabilities and obligations (other than Excluded Liabilities) of whatever
kind and nature, primary or secondary, direct or indirect, absolute or
contingent, liquidated or unliquidated, known or unknown, whether or not
accrued, whether or not set forth on any Disclosure Schedule, whether arising
before, on or after the Closing Date, regardless of when asserted (i) of the
Sellers, including, without limitation, the following liabilities and
obligations of Sellers and the Subsidiaries:
(1) all notes and accounts payable;
(2) all accrued liabilities and expenses (including,
without limitation, accrued salary and wages, bonuses and accrued vacation pay);
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(3) all obligations and liabilities under the Assumed
Contracts;
(4) all obligations and liabilities for refunds,
advertising, coupons, adjustments, allowances, repairs, exchanges, returns and
warranty, merchantability and other claims;
(5) all liabilities and obligations imposed by laws,
statutes, governmental rules and regulations, including Environmental and Safety
Requirements;
(6) all judgments, orders and decrees and all pending
claims and litigation relating to any such liabilities and obligations; and
(7) all obligations and liabilities of the Sellers
set forth on the Disclosure Schedules and all other obligations and liabilities
arising out of the conduct of the Business (including, without limitation,
product liability and infringement claims, obligations and liabilities arising
under or relating to the activities and operations of third-party contract
manufacturers);
and (ii) of Saba, Inc. under the Johnson Employment Agreement
(including, without limitation, all accrued salary and wages, bonuses and
accrued vacation pay). All of the liabilities and obligations set forth in this
Section 1.03 are referred to herein as the "Assumed Liabilities."
1.4 Excluded Liabilities. Notwithstanding anything to the contrary
contained in this Agreement or any of the Disclosure Schedules, Buyers shall not
assume or be liable for any of the following obligations or liabilities of
Sellers or the Subsidiaries (the "Excluded Liabilities"):
(1) all Income Taxes (if any) of Sellers (but not the
Subsidiaries, it being understood that this provision shall not negate any
indemnification obligation of Sellers under Section 7.02 with respect to Taxes
of the Subsidiaries);
(2) the Subordinated Notes and any other
indebtedness, guaranties or similar obligations owed by Sellers or the
Subsidiaries to or for the benefit of Saba, Inc. or Saba Medical Group, L.P., a
Delaware limited partnership ("Saba, LP");
(3) liabilities for principal payments, if any are
ever payable, under the Redmond Notes in excess of $100,000 in the aggregate;
(4) the Heyer-Schulte NeuroCare, L.P. Special Units
Plan and the purchase agreements and other documents relating thereto;
(5) the Excluded Plans;
(6) liabilities relating to the Surgical Sales
Corporation d/b/a Connell Neurosurgical v. Heyer-Schulte NeuroCare, L.P., et al.
litigation, other than investigation and defense fees and expenses paid or
accrued on or prior to the Closing Date;
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(7) the Contribution Agreement, the Management
Agreement and the Investment Agreement;
(8) all liabilities and obligations arising from any
suit, action or other litigation related to or arising out of the transactions
contemplated hereby by any stockholder, unitholder or holder of Subordinated
Notes; and
(9) all liabilities and obligations of Sellers
arising under this Agreement and under any other agreement between Buyers or
their Affiliates and Sellers entered into in connection with this Agreement
including, without limitation, payment obligations of Sellers to third parties
arising under this Agreement, including the fees and expenses of Piper, Jaffray
Inc. ("Piper") and the other fees and expenses allocated to Sellers under
Section 9.03.
1.5 Purchase Price. The aggregate purchase price for the Acquired
Assets (the "Purchase Price") shall consist of $14.0 million in cash payable at
the Closing by wire transfer of funds to an account designated by Sellers (it
being understood that on the Closing Date the Sellers shall repay an amount
outstanding under the Loan and Security Agreement equal to the amount that would
have been required to be repaid to reduce the outstanding balance, including
unpaid interest and unpaid line fees, under the revolver portion of the Security
and Loan Agreement to zero and under the term loan portion to $11.0 million as
of the business day prior to the Closing Date) (the "Cash Payment").
1.6 Adjustment Amount.
(1) No later than 45 calendar days following the
Closing Date (or such longer period as it shall take Arthur Andersen LLP,
independent auditors for Seller ("AA") to complete the agreed upon procedures),
Sellers shall, at Buyers' expense and with the full cooperation and assistance
of Buyers and their personnel, prepare and deliver to Buyers (i) a combined
consolidated balance sheet dated as of the second business day immediately
preceding the Closing Date reflecting the financial condition of the Saba Group
as of the close of business on the second business day immediately preceding the
Closing Date (the "Closing Balance Sheet"), and (ii) a reasonably detailed
calculation of the Adjustment Amount described below. The Closing Balance Sheet
shall be prepared in accordance with GAAP, consistent in all respects with the
preparation of the Latest Balance Sheet, including past policies, practices and
procedures, shall fairly and accurately present the financial condition of the
Saba Group as of the close of business on the second business day immediately
preceding the Closing Date, and shall be reviewed by AA in accordance with the
procedures to be mutually agreed upon by Buyers and Sellers. The Parties shall
use reasonable efforts to cause AA to complete its review within 30 days of the
Closing Date.
(2) Adjustment Amount. If (i) the Adjusted Closing
Date Working Capital is less than the Adjusted Year End Working Capital, Sellers
shall pay to Buyers an amount equal to the difference between the Adjusted
Closing Date Working Capital and the Adjusted Year End Working Capital and (ii)
if the Adjusted Closing Date Working Capital is greater than the Adjusted Year
End Working Capital, Buyers shall pay to Sellers an
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amount equal to the difference between the Adjusted Closing Date Working Capital
and the Adjusted Year End Working Capital (the amount of any such payment by
Sellers or Buyers being referred to as the "Adjustment Amount").
(3) Disputed Adjustment Amount. Buyers shall have 15
days after receipt of the Closing Balance Sheet and the calculation of the
Adjustment Amount (hereinafter, the "Dispute Period") to examine the Closing
Balance Sheet and calculation of the Adjustment Amount and to determine if they
propose any adjustments to amounts set forth therein, and Buyers shall provide a
written notice to Sellers (a "Dispute Notice") within the Dispute Period setting
forth such proposed adjustments (if any). For a period of 30 days after delivery
of the Dispute Notice, Buyers and Sellers shall meet and attempt to resolve such
proposed adjustments and upon reaching agreement shall set forth such agreement
in writing and prepare a final Closing Balance Sheet and final calculation of
the Adjustment Amount. In the event that Sellers and Buyers are unable to
resolve any such Dispute within the 30-day period (or such longer period as the
Parties may mutually agree), then within 10 days the Parties shall jointly
select an independent auditor of recognized national standing to settle any
remaining dispute (which the Parties initially agree will be Ernst & Young, if
Ernst & Young will accept such appointment). The independent auditor shall
consider only those disputed items and amounts set forth in the Dispute Notice
and unresolved by the Parties. The independent auditor's determination with
respect to any dispute shall be the exclusive method for the resolution of such
dispute, shall be final and binding upon the parties hereto and may be enforced
by any court of competent jurisdiction. The Parties shall use reasonable efforts
to cause the independent auditor to make its determination within 30 days of
accepting its selection.
(4) Payment of Adjustment Amount. Within 10 days
after (i) the end of the Dispute Period, if Buyers do not within the Dispute
Period dispute the Closing Balance Sheet or the Adjustment Amount, (ii) Buyers
and Sellers mutually agree as to the Closing Balance Sheet and the Adjustment
Amount or (iii) the independent auditor has made its final determination and the
calculation of Closing Balance Sheet and the Adjustment Amount, the Adjustment
Amount shall be paid by the Buyers or the Sellers, as applicable, by wire
transfer of immediately available funds. The independent auditor shall allocate
its costs and expenses between Buyers and Sellers based upon the percentage
which the portion of the contested amount not awarded to each Party bears to the
amount actually contested by such Party.
1.7 Allocation of the Purchase Price and Assumed Liabilities. The
Purchase Price and Assumed Liabilities shall be allocated among the Acquired
Assets as set forth on the Purchase Price and Assumed Liabilities Allocation
Schedule. Buyers shall deliver the Purchase Price and Assumed Liabilities
Allocation Schedule to the Sellers within 10 days after final resolution of all
disputes with respect to the Closing Balance Sheet. It is understood that no
less than $17 million in the aggregate shall be allocated to the capital stock
of the Subsidiaries on such schedule. The allocation of the Purchase Price and
Assumed Liabilities among the Acquired Assets shall be made pursuant to Code
Section 1060 and shall be used by the Parties in preparing Form 8594 (Asset
Acquisition Statement) for each of Buyers and Sellers and all Tax Returns of
Buyers and Sellers. Buyers and Sellers shall each file Form 8594, prepared in
accordance with this Section 1.07, with its federal income Tax Return for the
tax period in which the Closing occurs. The
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Parties agree that all allocations made pursuant to this Section 1.07 are
binding upon them and upon each of their successors and assigns, and that they
shall report the transaction herein in accordance with such allocations.
ARTICLE II
CLOSING OF THE TRANSACTION
2.1 The Closing. The closing of the transactions contemplated by this
Agreement (the "Closing") shall take place at the offices of Kirkland & Ellis in
Chicago, Illinois, at 10:00 a.m. local time on March 29, 1999, or such other
time, date or place as the Parties may mutually determine (the "Closing Date").
2.2 Deliveries at the Closing. At the Closing:
(1) Sellers shall deliver to Buyers (i) the various
certificates, instruments and documents referred to in Section 3.01 below, (ii)
a bill of sale and assignment in form and substance reasonably acceptable to
Buyers, (iii) Intellectual Property transfer documents in form and substance
reasonably acceptable to Buyers, if any are reasonably required, and (iv) such
other instruments of sale, transfer, conveyance and assignment as Buyers
reasonably may request; and
(2) Buyers shall deliver to Sellers (i) an amount
equal to the Cash Payment by wire transfer of immediately available funds to an
account specified by Sellers, (ii) the various certificates, instruments and
documents referred to in Section 3.02 below, (iii) an assumption agreement in
form and substance reasonably acceptable to Sellers and (iv) such other
instruments of assumption as Sellers reasonably may request.
ARTICLE III
CONDITIONS TO OBLIGATION TO CLOSE
3.1 Conditions to Obligation of Buyers. The obligation of Buyers to
consummate the transactions contemplated by this Agreement is subject to
satisfaction of the following conditions as of the Closing Date:
(1) the representations and warranties set forth in
ARTICLE IV below are true and correct in all material respects, without
duplication of any materiality standard therein contained, at and as of the date
hereof (except those representations and warranties that address matters only as
of a particular date, which shall be true and correct in all material respects
without duplication of any material standard therein contained as of that date),
and shall be true and correct in all material respects, without duplication of
any materiality standard contained therein, at and as of the Closing Date
(except those representations and warranties that address matters only as of a
particular date, which shall be true and correct as of that date) as though then
made and as though the Closing Date was substituted for the date of this
Agreement throughout such representations and warranties, except for changes
expressly
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contemplated by this Agreement or attributable to matters disclosed by Sellers
in the Disclosure Schedules which do not have a Material Adverse Effect;
(2) the Sellers shall have performed and complied
with in all material respects all of the covenants and agreements required to be
performed by them hereunder at or prior to the Closing;
(3) no action, suit or proceeding shall be pending
before any court, arbitrator or other body or administrative agency of any
federal, state, local or foreign jurisdiction wherein an unfavorable injunction,
judgment, order, decree, ruling or charge would prevent the performance of this
Agreement or the consummation of any of the transactions contemplated hereby,
declare unlawful the transactions contemplated by this Agreement or cause such
transactions to be rescinded (and no such injunction, judgment, order, decree,
ruling or charge shall be in effect);
(4) the Sellers shall have procured all material
third party consents to items identified on the Third-Party Consents Schedule
attached hereto, and Buyers shall have received copies thereof;
(5) all material governmental filings, consents,
authorization and approvals that are required for the consummation of the
transactions contemplated hereby (all of which items are set forth on the
Governmental Consents Schedule attached hereto) shall have been made and
obtained, and Buyers shall have received copies thereof;
(6) the Sellers shall have delivered to Buyers a
certificate in the form set forth in Exhibit A attached hereto, dated the
Closing Date, to the effect that each of the conditions specified above in
Section 3.01(a) and (b), inclusive, have been satisfied;
(7) the Sellers shall have delivered to Buyers
certified copies of the resolutions duly adopted by the general partner or
managing member, as applicable, of such Seller authorizing the execution,
delivery and performance of this Agreement and each of the other agreements
contemplated hereby;
(8) Sellers shall have delivered an opinion, dated as
of the Closing Date, of Kirkland & Ellis, special counsel to Sellers, with
respect to the matters set forth on Exhibit B attached hereto;
(9) Fleet Capital shall simultaneously execute the
assumption documents in connection with the assumption of the Loan and Security
Agreement by Buyers and certain other parties thereto;
(10) Buyers shall have received assurances from AA
reasonably satisfactory to them, that AA will consent to the incorporation of
their audit reports on each of Saba Groups' 1996, 1997 and 1998 audited
financial statements into future filings by Integra LifeSciences Corporation, a
Delaware corporation ("Integra"), with the Securities and
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Exchange Commission upon receipt by AA of information reasonably requested by AA
regarding Buyers and upon certain changes being made to such financial
statements so that they conform to Regulation S-X of the Securities and Exchange
Commission;
(11) Since the date hereof, there shall not have been
any Material Adverse Effect (other than as a result of contingencies
specifically disclosed on the Disclosure Schedules);
(12) Sellers shall simultaneously repay an amount
outstanding under the Loan and Security Agreement equal to the amount that would
have been required to be paid to reduce the outstanding balance, including
unpaid interest and unpaid fees, under the revolving loan portion of the Loan
and Security Agreement to zero and the balance outstanding under the term loan
portion to $11.0 million on the business day prior to the Closing Date;
(13) Sellers shall have delivered to Buyers such
other documents relating to the transactions contemplated by this Agreement as
Buyers or their special counsel may reasonably request. Buyers may waive any
condition specified in this Section 3.01 if it executes a writing so stating at
or prior to the Closing.
3.2 Conditions to Obligation of Each Seller. The obligation of each
Seller to consummate the transactions contemplated by this Agreement is subject
to satisfaction of the following conditions as of the Closing Date:
(1) the representations and warranties set forth in
ARTICLE V below are true and correct in all material respects, without
duplication of any materiality standard therein contained, at and as of the date
hereof (except those representations and warranties that address matters only as
of a particular date, which shall be true and correct in all material respects
without duplication of any materiality standard contained therein, as of that
date), and shall be true and correct in all material respects, without
duplication of any materiality standard contained therein, at and as of the
Closing Date (except those representations and warranties that address matters
only as of a particular date, which shall be true and correct as of that date)
as though then made and as though the Closing Date was substituted for the date
of this Agreement throughout such representations and warranties,
(2) Buyers shall have performed and complied with in
all material respects all of its covenants and agreements required to be
performed by it hereunder at or prior to the Closing;
(3) no action, suit or proceeding shall be pending
before any court, arbitrator or other body or administrative agency of any
federal, state, local or foreign jurisdiction wherein an unfavorable injunction,
judgment, order, decree, ruling or charge would prevent the performance of this
Agreement or the consummation of any of the transactions contemplated hereby,
declare unlawful the transactions contemplated by this Agreement or cause
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such transactions to be rescinded (and no such injunction, judgment, order,
decree, ruling or charge shall be in effect);
(4) all consents that are required as a result of the
transactions contemplated hereunder in order to prevent a material breach of or
a material default under or a termination of any material agreement related to
the Business to which any Seller is a party or to which any material portion of
such Seller's property related to the Business is subject (all of which consents
are set forth on the Third-Party Consents Schedule attached hereto) shall have
been obtained, and Sellers shall have received copies thereof;
(5) all material governmental filings, consents,
authorizations and approvals that are required for the consummation of the
transactions contemplated hereby (all of which items are set forth on the
Government Consents Schedule) shall have been duly made and obtained, and
Sellers shall have received copies thereof;
(6) Buyers shall have delivered to Sellers a
certificate in the form set forth in Exhibit C attached hereto to the effect
that each of the conditions specified above in Sections 3.02(a) and (b),
inclusive, is satisfied;
(7) Buyers shall have delivered to Sellers certified
copies of the resolutions duly adopted by its board of directors or other
similar body authorizing the execution, delivery and performance of this
Agreement and each of the other agreements contemplated hereby;
(8) Buyers shall have delivered to Sellers the
opinions, dated as of the Closing Date, of Drinker Biddle & Reath LLP, special
counsel to Buyers, and of GoodSmith, Gregg & Unruh, special counsel to the
Buyers, with respect to the matters set forth on Exhibit D attached hereto;
(9) Buyers and each of the other parties thereto
shall have executed an amendment and restatement of the Loan and Security
Agreement releasing the Sellers, Saba, LP, Saba, Inc. and their Affiliates
(other than the Subsidiaries) from their obligations thereunder and under the
Loan Documents (as defined therein); and
(10) Buyers shall have delivered to each Seller such
other documents relating to the transactions contemplated by this Agreement as
such Seller or its special counsel may reasonably request.
Sellers may waive any condition specified in this Section 3.02 if they
execute a writing so stating at or prior to the Closing.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF SELLERS
Each Seller represents and warrants to Buyers as follows:
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4.1 Organization and Corporate Power. Each Seller and each of the
Subsidiaries is a limited partnership, limited liability company or corporation,
as applicable, duly organized, validly existing and in good standing under the
laws of the jurisdiction of its organization, with full partnership, limited
liability company or corporate (as applicable) authority to carry out its
business as currently conducted and to execute and to deliver this Agreement (to
the extent it is a party) and each of the other agreements contemplated hereby
to which it is a party and to perform its obligations hereunder and thereunder.
The Foreign Qualification Schedule attached hereto lists all of the
jurisdictions in which each Seller and each of the Subsidiaries is qualified to
do business, which constitute all of the jurisdictions in which such entity is
required to be qualified (except where the failure to have such qualification
would not have a Material Adverse Effect).
4.2 Authorization. The execution, delivery and performance of this
Agreement and each of the other agreements contemplated hereby to which it is a
party by each Seller and the consummation of the transactions contemplated
hereby and thereby have been duly and validly authorized by all requisite
partnership or limited liability company action (as applicable), no other
proceedings on its part are necessary to authorize the execution, delivery or
performance of this Agreement and each of the other agreements contemplated
hereby to which it is a party. This Agreement and each of the other agreements
contemplated hereby constitutes the valid and legally binding obligation of each
Seller (to the extent it is a party to such agreement), enforceable in
accordance with its terms and conditions.
4.3 No Violation. Except as set forth on the Authorization Schedule
attached hereto, the execution, delivery and performance of this Agreement by
each Seller and each of the other agreements contemplated hereby to which it is
a party and the consummation of the transactions contemplated hereby do not and
will not, with or without the giving of notice or passage of time, conflict with
or result in any breach of any of the provisions of, or constitute a default or
event of default under, result in a violation of, result in the creation of any
lien, security interest, charge or encumbrance upon any assets of either Seller
or either Subsidiary or require any authorization, consent, approval, exemption
or other action by or notice to any Person, under the provisions of (i) either
Seller's or either Subsidiary's organizational documents, (ii) any indenture,
mortgage, lease, loan agreement or other agreement or instrument to which either
Seller or either Subsidiary is bound, or (iii) any law, statute, rule or
regulation or order, judgment or decree to which either Seller or either
Subsidiary is subject, except in the case of clauses (ii) or (iii) hereof, where
such conflict, breach, lien failure, default or violation would not have a
Material Adverse Effect or would not have a material adverse effect on the
ability of the Sellers to comply with their obligations under this Agreement.
4.4 Subsidiaries and Investments. The Subsidiaries Schedule sets forth for each
Subsidiary (i) its name and jurisdiction of organization, (ii) the number of
shares of authorized capital stock of each class of its capital stock and the
par value, (iii) the number of issued and outstanding shares of each class of
its capital stock, and (iv) its directors and officers. All of the issued and
outstanding shares of capital stock or other equity interests of each Subsidiary
have been duly authorized and are validly issued, fully paid and nonassessable,
are owned by HSNLP free and clear of any liens (other than liens in connection
with the Loan and Security
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Agreement), are not subject to any agreement regarding their voting or transfer
and have not been offered or sold in violation of the Securities Act of 1933, as
amended (the "Securities Act") or any preemptive rights. Except as set forth on
the Subsidiaries Schedule or the Investments Schedule attached hereto, (i)
neither Subsidiary has any other capital stock authorized, issued or outstanding
and there are not outstanding any subscriptions, calls, commitments, warrants or
options for the purchase of shares of any capital stock of either Subsidiary or
any other commitments of any kind for the issuance of additional shares of
capital stock or other securities of either Subsidiary and (ii) neither Seller
owns or holds the right to acquire any stock, partnership interest or joint
venture interest or other equity ownership interest in any Person other than
Neuro Nav.
4.5 Financial Statements. Sellers have furnished Buyers with copies of
(i) the audited combined consolidated balance sheet as of December 31, 1998, and
the related statement of income and cash flows for the twelve-month period then
ended (such balance sheet referred to herein as the "Latest Balance Sheet") of
Saba Medical Management Co., Inc., a Delaware corporation, Saba Medical Group,
L.P., a Delaware limited partnership, and their subsidiaries (the "Saba Group")
and (ii) the audited combined consolidated balance sheet and statements of
income and cash flows for the fiscal year ended December 31, 1997 of the Saba
Group (collectively, the "Financial Statements"). Except as set forth on the
Accounting Schedule attached hereto, the Financial Statements have been based
upon the information contained in Saba Group's books and records, have been
prepared in accordance with GAAP, consistently applied throughout the periods
indicated (except as described in the notes thereto), and present fairly in all
material respects the financial condition, results of operations and cash flows
of the Saba Group as of the times and for the periods referred to therein.
4.6 Accounts Receivable. Except as set forth on the Accounts Receivable
Schedule, each account receivable of Sellers or the Subsidiaries reflected on
the Latest Balance Sheet or on the Closing Balance Sheet (each, an "Account
Receivable" and collectively, the "Accounts Receivable"):
(1) is genuine and is not evidenced by a judgment;
(2) arises out of a bona fide sale and delivery of
goods or rendition of services by the Sellers or the Subsidiaries in the
ordinary course of business; and the debtor thereunder is not an Affiliate of
any Seller or Subsidiary;
(3) is for a liquidated amount;
(4) to the Knowledge of Sellers, is not subject to
any offset, deduction defense, dispute or counterclaim that would reasonably be
expected to exceed in the aggregate the aggregate amount of the reserves
therefore reflected on the Latest Balance Sheet or the Closing Balance Sheet, as
applicable; and
(5) none of the Sellers or the Subsidiaries has made
any agreement with the debtor thereunder for any compromise or settlement of
such Account
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Receivable or any deduction therefrom that would exceed the aggregate amount of
the reserves reflected on the Latest Balance Sheet or the Closing Balance Sheet,
as applicable.
4.7 Inventory. Except as set forth on the Inventory Schedule, the
inventory of the Sellers and the Subsidiaries reflected in the Latest Balance
Sheet and the Closing Balance Sheet consisted as of such date of a quality
usable and salable in the ordinary course of business except for obsolete items
and items of below-standard quality, which, in the aggregate, after taking into
account any reserves or provisions therefor, has been written off or written
down to net realizable value in the Latest Balance Sheet or the Closing Balance
Sheet, as applicable, and the inventory not written off, in the aggregate, after
taking into account any reserves or provisions therefor, has been priced at the
lower of cost or market on a first in, first out basis.
4.8 Right to Use Assets. Sellers and the Subsidiaries own or have the
right to use all of the assets that are material to the conduct of the business
as it is currently conducted.
4.9 Undisclosed Liabilities. To the Knowledge of Sellers, except as set
forth on the Additional Liabilities Schedule attached hereto, none of the
Sellers or the Subsidiaries has any liabilities or obligations of any nature
(whether absolute, accrued, contingent, matured or unmatured or otherwise)
except for (a) liabilities or obligations reflected on or reserved against in
the Latest Balance Sheet; (b) liabilities or obligations incurred in the
ordinary course of business since the date thereof; (c) liabilities or
obligations under Assumed Contracts and (d) liabilities or obligations disclosed
in the Disclosure Schedules or not required to be so disclosed because of their
failure to meet the materiality thresholds set forth herein.
4.10 Absence of Certain Developments. Since the date of the Latest
Balance Sheet, there has not been any Material Adverse Effect. Except as set
forth on the Developments Schedule attached hereto and except as expressly
contemplated by this Agreement, since the date of the Latest Balance Sheet,
neither Seller nor any of the Subsidiaries has:
(1) borrowed any amount or incurred or become subject
to any material liabilities, except liabilities incurred in the ordinary course
of business, liabilities under contracts entered into in the ordinary course of
business and borrowings from banks (or similar financial institutions) necessary
to meet ordinary course working capital requirements;
(2) mortgaged, pledged or subjected to any material
lien, charge or other encumbrance, any material portion of its assets, except
liens for current property taxes not yet due and payable;
(3) sold, assigned or transferred any portion of its
tangible assets, except in the ordinary course of business;
(4) sold, assigned or transferred any material
Intellectual Property;
(5) suffered any material extraordinary losses or
waived any rights of material value;
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(6) made any distributions to partners of HSNLP;
(7) made any capital expenditures or commitments
therefor except in the ordinary course of business;
(8) entered into any other transaction except in the
ordinary course of business;
(9) increased the compensation, commissions and
perquisites payable to any officer, employee or agent of the Sellers or the
Subsidiaries, made any payment of any bonus or other extraordinary compensation
to any officer, employee or agent of the Sellers or the Subsidiaries or entered
into any agreement to make any such increase or payment, other than any such
increase or payment paid or to become payable in the ordinary course of business
consistent with past practice other than with respect to any Executive Officer;
(10) experienced any damage, destruction or casualty
loss, whether or not covered by insurance, in excess of $50,000;
(11) entered into any other Affiliate transaction,
contract or arrangement;
(12) made any change in accounting practices;
(13) settled any litigation; and
(14) suffered any strike, work stoppage or other
material labor problem (other than the resignation or potential resignation of
employees or officers of the Sellers or the Subsidiaries).
4.11 Title to Properties; Leased Real Property.
(1) The real property demised by the leases described
on the Leased Real Property Schedule attached hereto constitutes all of the real
property leased by each Seller and the Subsidiaries.
(2) To the Knowledge of Sellers, the leases described
on the Leased Real Property Schedule are in full force and effect, and one of
the Sellers or the Subsidiaries, as applicable, holds a valid and existing
leasehold interest under each of the leases for the term set forth on the Leased
Real Property Schedule. Sellers have delivered to Buyers complete and accurate
copies of each of the leases described on the Leased Real Property Schedule, and
none of the leases have been modified from the copies of such leases previously
delivered to Buyers. Neither Seller nor any of the Subsidiaries is in default in
any material respect under any of such leases.
(3) none of Sellers or the Subsidiaries owns fee
title to any real property.
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(4) Except for matters which would not have a
Material Adverse Effect, Sellers and the Subsidiaries own good and marketable
title to (i) all of the tangible personal property shown on the Latest Balance
Sheet (other than personal property disposed of in the ordinary course of
business since the date of the Latest Balance Sheet) and (ii) all of the
tangible personal property shown on the Closing Balance Sheet, free and clear of
all liens, security interests and other encumbrances, except for Permitted
Liens.
4.12 Tax Matters.
(1) Except as set forth on the Taxes Schedule, each
Seller and each of the Subsidiaries has filed all federal and all material
foreign, state, county and local income, excise, property and other Tax Returns
which are required to be filed by it. Except as set forth on the Taxes Schedule,
all taxes shown as owing by each Seller and each of the Subsidiaries on all such
Tax Returns have been fully paid or properly accrued, (ii) all such Tax Returns
are true and correct in all material respects and, in the case of the
Subsidiaries, in all respects; (iii) the provision for Taxes on the Latest
Balance Sheet is sufficient for all accrued and unpaid Taxes prior to the date
thereof as of the date thereof; and (iv) all Taxes which either Seller or any of
the Subsidiaries is obligated to withhold from amounts owing to any employee,
creditor or third party have been fully paid or properly accrued.
(2) With respect to Tax matters of Sellers or the
Subsidiaries, there are no actions, suits, investigations, orders or proceedings
pending or, to the Knowledge of Sellers, threatened against Sellers or the
Subsidiaries, at law or in equity, or before or by any federal, state, municipal
or other governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign.
(3) None of the Subsidiaries: (i) has filed a consent
or agreement under Section 341(f) of the Code; (ii) is obligated to make any
payments, or is a party to any agreement that under certain circumstances could
obligate it to make any payments, that will be nondeductible by reason of
Section 280G of the Code; (iii) is subject to any adjustment under Section
481(a) of the Code as a result of any change in accounting method; (iv) uses the
LIFO method of inventory accounting; (v) owns any shares of stock in a passive
foreign investment company, as defined in Section 1297 of the Code; or (vi) has
transferred any intangible property to a foreign corporation in an exchange
described in Section 367(d) of the Code.
4.13 Contracts and Commitments.
(1) Except as set forth on the Contracts Schedule
attached hereto, neither Seller nor any of the Subsidiaries is a party to any:
(i) collective bargaining agreement or contract with any labor union; (ii)
bonus, pension, profit sharing, retirement or other form of deferred
compensation plan; (iii) contract for the employment of any officer, individual
employee or other person on a full-time or consulting basis; (iv) agreement or
indenture relating to the borrowing of money or to mortgaging, pledging or
otherwise placing a lien on any material portion of such entity's assets; (v)
guaranty of any obligation for borrowed money or other material guaranty; (vi)
lease or agreement under which it is lessee of, or holds or
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operates any personal property owned by any other party, for which the annual
rental exceeds $50,000; (vii) lease or agreement under which it is lessor of or
permits any third party to hold or operate any personal property for which the
annual rental exceeds $50,000; (viii) contract or group of related contracts
with the same party for the purchase of products or services, under which the
undelivered balance of such products or services has a purchase price in excess
of $100,000; (ix) contract or group of related contracts with the same party for
the sale of products or services under which the undelivered balance of such
products or services has a sales price in excess of $100,000; or (x) contract or
arrangement with any director, equityholder or other Affiliate including
arrangements governing the right to use assets used in the Business; (xi)
confidentiality agreement restricting the Sellers or the Subsidiaries from
disclosing any information (xii) confidentiality agreement with the Sellers or
the Subsidiaries Known to Sellers restricting others from disclosing any
information regarding the Sellers or the Subsidiaries; (xiii) non-compete
agreement restricting the Sellers or the Subsidiaries from freely engaging in
business anywhere in the world; (xiv) non-compete agreement with the Sellers or
the Subsidiaries Known to Sellers restricting others from freely engaging in
business in competition with the Sellers or the Subsidiaries anywhere in the
world; (xv) power of attorney or agency agreement; (xvi) contract for contingent
payments relating to acquisitions; or (xvii) other contract that remains
material to the Sellers and Subsidiaries as of the date hereof.
(2) Except as set forth on the Contracts Schedule,
neither Seller nor any of the Subsidiaries is in default (and no event which,
with the passage of time or giving of notice, or both, would constitute a
default has occurred) under any contract listed on the Contracts Schedule,
except where such default would not have a Material Adverse Effect and none of
the Sellers or the Subsidiaries has provided or received any written notice of
any default under the Loan and Security Agreement.
4.14 Intellectual Property. The Intellectual Property Schedule sets
forth all of the patents, registered trademarks, registered service marks,
corporate names, registered copyrights and any applications for registration
thereof owned by the Sellers or the Subsidiaries (collectively, "Scheduled
Intellectual Property"), and the Sellers and the Subsidiaries own and possess
all right, title and interest in and to the Scheduled Intellectual Property.
Sellers and the Subsidiaries have the right to use all of the Scheduled
Intellectual Property and other intellectual property used by them in the
Business (together, "Intellectual Property") except where such failure would not
have a Material Adverse Effect. Except as set forth on the Intellectual Property
Schedule, neither the Sellers nor the Subsidiaries have received any written
notices of infringement, misappropriation, interference or opposition proceeding
from any third party with respect to any patent, copyright or trade name of any
third party. Except as set forth on the Intellectual Property Schedule, to the
Knowledge of Sellers, no third-party is currently infringing or has infringed
upon the Intellectual Property. Except as set forth on the Intellectual Property
Schedule, to the Knowledge of Sellers, the Closing will not have a Material
Adverse Effect on Sellers' or the Subsidiaries' rights to use the Intellectual
Property.
4.15 Litigation. Except as set forth on the Litigation Schedule
attached hereto, there are no actions, suits, investigations, orders or
proceedings pending or, to the Knowledge of Sellers, threatened against Sellers
or the Subsidiaries, at law or in equity, or before or by any
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federal, state, municipal or other governmental department, commission, board,
bureau, agency or instrumentality, domestic or foreign, which would have a
Material Adverse Effect; and, with respect to the matters set forth on the
Litigation Schedule, to the Knowledge of Sellers, HSN, Inc. did not receive any
written disclosure statement of the type described in Section 8.1(b) of the
Asset Purchase Agreement, dated as of June 29, 1994, among HSN, Inc., Baxter
International Inc., Baxter Healthcare Corporation and Baxter Healthcare
Corporation of Puerto Rico, prior to the Closing Date (as defined therein),
except for the schedules attached thereto.
4.16 Brokerage. Except as set forth on the Seller Brokerage Schedule
attached hereto, there are no claims for brokerage commissions, finders' fees or
similar compensation in connection with the transactions contemplated by this
Agreement based on any arrangement or agreement made by or on behalf of Sellers
or the Subsidiaries. Sellers agree that they, and not Buyers, shall be liable
for any claims set forth on the Seller Brokerage Schedule.
4.17 Consents. Except for the applicable requirements of the
Hart-Scott-Rodino Antitrust Improvements Act of 1976 (the "HSR Act") and except
as set forth on the Governmental Consents Schedule or Third-Party Consents
Schedule, no permit, consent, approval or authorization of, or declaration to or
filing with, any governmental or regulatory authority or other Person is
required in connection with any of the execution, delivery or performance of
this Agreement by Sellers or the consummation by Sellers of any other
transaction contemplated hereby.
4.18 Employee Benefit Plans.
(1) Except as listed on the Employee Benefits
Schedule attached hereto, none of the Sellers or the Subsidiaries (i) maintains
or contributes to any nonqualified deferred compensation or retirement plans,
(ii) maintains or contributes to any qualified defined contribution retirement
plans (the plans described in (i) and (ii) are referred to as the "Pension
Plans"), (iii) maintains or contributes to any welfare benefit plans (the
"Welfare Plans"), (iv) maintains any stock option or other equity-based plans,
and (v) maintains or contributes to any other plans or arrangements to provide
benefits to employees. The Pension Plans and the Welfare Plans and other plans
and arrangements describe above are collectively referred to as the "Plans."
Except as set forth on the Employee Benefits Schedule, the Plans comply in form
and in operation in all material respects with the requirements of the Code, the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"), and all
other applicable laws.
(2) With respect to the Plans, (i) all required
contributions have been made or properly accrued, (ii) there are no actions,
suits or claims pending (other than routine claims for benefits) and (iii) with
respect to the Pension Plans and Welfare Plans, there have been no prohibited
transactions (as that term is defined in Section 406 of ERISA or Section 4975 of
the Code).
(3) None of the Sellers or the Subsidiaries currently
maintains or contributes to, or has ever maintained or contributed to, a Pension
Plan which is (or
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was) a defined benefit plan, and none of the Sellers or the Subsidiaries
contributes to or has any liability with respect to any "multiemployer plan" (as
defined in Section 3(37) of ERISA).
(4) Complete and correct copies of the following
documents have been delivered or made available by Sellers to Buyers: (i) all
current plan documents and insurance contracts (if any), and amendments thereto,
with respect to each of the Plans, (ii) for each of the most recently ended two
plan years, all IRS Form 5500 series forms (and any financial statement and
other schedules attached thereto) with respect to any Pension Plan and Welfare
Plan, (iii) the most recent IRS determination letter for each Pension Plan, and
(iv) all current summary plan descriptions and subsequent summaries of material
modifications with respect to each of the Plans subject to ERISA and any similar
documents for any other Plan.
(5) Except as disclosed on the Employee Benefits
Schedule, none of the Welfare Plans nor any binding contract provides for
continuing welfare benefits or coverage for any participant or any beneficiary
of a participant following termination of employment, except as may be required
under Section 601 et. seq. of ERISA, or except at the expense of the participant
or the participant's beneficiary.
(6) Neither the Sellers nor the Subsidiaries nor any
of their respective officers, employees or any other "fiduciary," as such term
is defined in Section 3 of ERISA, has committed any breach of fiduciary
responsibility imposed by ERISA or any other applicable law with respect to the
Pension Plans and Welfare Plans which would subject Buyers or any of its
directors, officers or employees to any liability under ERISA or any applicable
law.
(7) Neither Seller nor the Subsidiaries has incurred
any liability for any tax or civil penalty imposed by Section 4975 of the Code
or Section 502 of ERISA.
(8) The payroll information set forth in Annex D to
the Employee Benefits Schedule is true and correct in all material respects as
of March 25, 1999.
4.19 Insurance.
(1) Sellers have delivered to Buyers:
(i) true and complete copies of all policies of insurance to
which any Seller or Subsidiary is a party or under which any such entity is or
has been covered at any time since January 1, 1998, other than those that have
been renewed provided such renewed policy is so listed and so delivered (all of
which are listed on the Insurance Schedule) within the one year preceding the
date of this Agreement;
(ii) true and complete copies of all pending applications for
policies of insurance; and
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(iii) any statement by the most recent auditor of any Seller's
or Subsidiary's financial statements with regard to the adequacy of such
entity's coverage or of the reserves for claims.
(2) Except as set forth on the Insurance Schedule
attached hereto,
(i) all policies to which any Seller or Subsidiary is a party
or that provide coverage to any Seller or Subsidiary are (A) valid; outstanding,
and enforceable and (B) are sufficient for compliance with all legal
requirements and contracts to which any Seller or Subsidiary is a party or by
which any of them is bound;
(ii) No Seller or Subsidiary has received (A) within the prior
twelve months any refusal of coverage or at any time any notice that a defense
will be afforded with reservation of rights, or (B) any notice of cancellation
or any other indication that any insurance policy listed on the Insurance
Schedule is no longer in full force or effect or that the issuer of any policy
is not willing or able to perform its obligations thereunder.
(iii) Sellers and the Subsidiaries have paid all premiums due
and have otherwise performed in all material respects under each policy to which
any Seller or Subsidiary is a party or that provides coverage to any Seller or
Subsidiary.
4.20 Compliance with Laws. To the Knowledge of Sellers, except as set
forth on the Compliance Schedule, Sellers and the Subsidiaries have complied
with all applicable laws and regulations of foreign, federal, state and local
governments and all agencies thereof, except where the violation of which would
not have a Material Adverse Effect, and neither Seller nor the Subsidiaries have
received any written notice of alleged noncompliance with any law or regulation.
4.21 Permits. The Permits Schedule attached hereto lists all of the
Permits of Seller and the Subsidiaries. To the Knowledge of Sellers, Seller and
the Subsidiaries hold all Permits necessary for the conduct of their business
(except where the failure to hold a Permit would not have a Material Adverse
Effect), and all Permits are in full force. Neither the Sellers nor the
Subsidiaries have received any written notice of its failure to hold a Permit
necessary for the conduct of its busineSection Each Seller and each Subsidiary
is in compliance with all material terms, conditions and requirements of all
such Permits, and no proceeding is pending or, to Sellers' Knowledge, threatened
relating to the revocation or limitation of any such Permit. Except as set forth
on the Permits Schedule, all Permits shall remain in full force and effect after
the Closing, except as would not have a Material Adverse Effect.
4.22 Environmental Compliance and Conditions.
(1) To the Knowledge of Sellers and except as set
forth on the Environmental Matters Schedule: Sellers and the Subsidiaries are in
compliance with, and have all Permits required under, all federal, state and
local laws and regulations relating to public health and safety, worker health
and safety, and pollution or protection of the environment
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(including laws relating to emissions, discharges, releases or threatened
releases of pollutants, contaminants or hazardous or toxic materials or wastes
into ambient air, surface water, groundwater, or lands or otherwise relating to
the manufacture, processing, distribution, use, treatment, storage, disposal,
transport, or handling of pollutants, contaminants or hazardous or toxic
materials or waste, as the foregoing are constituted on or prior to the Closing
Date ("Environmental and Safety Requirements")) except where the failure to
comply or to hold such Permits would not have a Material Adverse Effect and
Sellers and the Subsidiaries are in compliance with all terms and conditions of
any and all required permits, licenses and authorizations and all other
limitations, restrictions, conditions, standards, prohibitions, requirements,
obligations, schedules and timetables contained in any Environmental and Safety
Requirements or any legally binding notice or demand letter issued, entered,
promulgated or approved thereunder, except where the failure to so comply would
not have a Material Adverse Effect.
(2) Except as set forth on the Environmental Matters
Schedule: neither Seller nor the Subsidiaries nor, to the Knowledge of Sellers,
any of their respective predecessors, have arranged for the disposal of toxic
wastes or other toxic or hazardous substances or materials (including, without
limitation, asbestos) in such a manner or location as has given rise to
conditions of contamination requiring remedial action pursuant to Environmental
and Safety Requirements, the costs of which would have a Material Adverse
Effect; during the period in which Seller and the Subsidiaries have owned,
leased or used any real property and, to the Knowledge of Sellers, prior to such
period, there have been no toxic wastes or other toxic or hazardous substances
or materials (including without limitation asbestos) stored, disposed of or
released on, under or about such property in such a manner or location as has
given rise to conditions of contamination requiring remedial action pursuant to
Environmental and Safety Requirements, the costs of which would have a Material
Adverse Effect; and there are no actions, suits, orders or proceedings pending
or, to the Knowledge of Sellers, threatened against Sellers or the Subsidiaries,
at law or in equity, or before or by any federal, state, municipal or other
governmental department, commission, board, bureau, agency or instrumentality,
domestic or foreign, with respect to any violation of or liability under any
Environmental and Safety Requirements which actions, orders or proceedings would
have a Material Adverse Effect. To the Knowledge of Sellers, Sellers have
delivered to Buyers true and complete copies and results of any material
reports, studies, analyses, tests, or monitoring possessed by Sellers or the
Subsidiaries pertaining to toxic wastes or other toxic hazardous substances or
materials (including, without limitation, asbestos) in, on or under any real
property at any time owned, leased or used by Sellers or the Subsidiaries, or
concerning compliance by Sellers, the Subsidiaries, or any other Person for
whose conduct they are or would be held responsible, with Environmental and
Safety Requirements.
(3) This Section 4.22 sets forth the sole and
exclusive representations and warranties of Sellers with regard to
environmental, health and safety matters, including without limitation all
matters arising under Environmental and Safety Requirements.
4.23 Relationships with Affiliates.
Except as set forth on the Affiliate Relationship Schedule attached
hereto:
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(1) no Affiliate of Sellers or of any Subsidiary
(other than the Sellers or the Subsidiaries) has, or since January 1, 1998, has
had, any interest in any property (whether real, personal, or mixed and whether
tangible or intangible) used or pertaining to the Business of the Sellers and
the Subsidiaries;
(2) no Affiliate of Sellers or of any Subsidiary
(other than the Sellers or the Subsidiaries) is, or since January 1, 1998, has
owned (of record or as a beneficial owner) an equity interest or any other
financial or profit interest in, a Person that has had business dealings or a
material financial interest in any transaction with any Seller or Subsidiary
other than business dealings or transactions conducted in the ordinary course of
business with such Seller or Subsidiary at substantially prevailing market
prices and on substantially prevailing market terms; and
(3) no Affiliate of Sellers or of any Subsidiary
(other than the Sellers or the Subsidiaries) is a party to any contract with, or
has any claim or right against, any Seller or Subsidiary.
4.24 Year 2000 Compliance. The Sellers have been informed by ISARDS,
the Sellers' systems consultant with respect to the PRMS systems of HSN, Inc.
that such system is year 2000 compliant in all material respects, and has
received product information from ROI, Systems, Inc. the manufacturer of the ROI
Mange 2000 version 6.2E system of Camino that year 2000 compliance for such
system is a non-issue.
4.25 Due Diligence. Sellers have supplied copies or offered to make
available to Buyers or their employees, agents or representatives each of the
documents specifically identified on the Data Room List attached hereto as
Exhibit E or on the Disclosure Schedules.
4.26 Minute Books. The minutes of meetings and consents in lieu of
meetings of the stockholders and boards of directors of the Subsidiaries
contained in the applicable minute books of the Subsidiaries are true and
correct records of the actions so taken to the extent of the descriptions of
such actions contained in such records.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF BUYERS
Each Buyer represents and warrants to Sellers that:
5.1 Organization and Corporate Power. Each Buyer is a limited liability
company duly organized, validly existing and in good standing under the laws of
the jurisdiction of its formation, with full limited liability company power and
authority to enter into this Agreement and each of the other agreements
contemplated hereby to which it is a party and to perform its obligations
hereunder and thereunder.
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5.2 Authorization. The execution, delivery and performance of this
Agreement and the other agreements contemplated hereby by each Buyer and the
consummation of the transactions contemplated hereby and thereby have been duly
and validly authorized by all requisite limited liability company action, and no
other limited liability company proceedings on its part are necessary to
authorize the execution, delivery or performance of this Agreement and each of
the other agreements contemplated hereby to which it is a party. Each of this
Agreement and each of the other agreements contemplated hereby to which it is a
party constitutes a valid and binding obligation of it, enforceable in
accordance with its terms.
5.3 No Violation. No Buyer is subject to or obligated under its
organizational documents, any applicable law, or rule or regulation of any
governmental authority, or any material agreement or instrument, or any license,
franchise or permit, or subject to any order, writ, injunction or decree, which
would be breached or violated in any material respect by such Buyer's execution,
delivery or performance of this Agreement or the other agreements contemplated
hereby.
5.4 Governmental and Other Consents. Except as disclosed on the Buyer
Consent Schedule attached hereto, no Buyer is required to submit any notice,
report or other filing with any governmental authority in connection with the
execution or delivery by it of this Agreement or the consummation of the
transactions contemplated hereby. No consent, approval or authorization of any
governmental or regulatory authority or any other party or Person is required to
be obtained by any Buyer in connection with its execution, delivery and
performance of this Agreement or the transactions contemplated hereby.
5.5 Litigation. There are no actions, suits, proceedings, orders or
investigations pending or, to the Knowledge of Buyers, threatened against or
affecting Buyers at law or in equity, or before or by any federal, state,
municipal or other governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, which would adversely affect any Buyer's
performance under this Agreement or the consummation of the transactions
contemplated hereby.
5.6 Brokerage. Except as set forth on the Buyer Brokerage Schedule
attached hereto, there are no claims for brokerage commissions, finders' fees or
similar compensation in connection with the transactions contemplated by this
Agreement based on any arrangement or agreement made by or on behalf of Buyers
or their Affiliates. Buyers agree that Buyers, and not Sellers or the
Subsidiaries, shall be liable for any claims set forth on Buyer Brokerage
Schedule.
5.7 Solvency. Immediately after giving effect to the transactions
contemplated by this Agreement, including any financing arrangements entered
into by Buyers in connection with the transactions contemplated hereby, each of
INLLC, Redmond and the Subsidiaries acquired by Buyers shall be able to pay its
debts as they become due and shall own property which has a fair saleable value
greater than the amounts required to pay its debts (including a reasonable
estimate based on the representations and warranties of Sellers herein of the
amount of all contingent liabilities and a reasonable allocation of all joint
liabilities). Immediately after giving effect to the transactions contemplated
by this Agreement, INLLC, Redmond and each of the Subsidiaries acquired by
Buyers shall have adequate capital to carry on its business (including the
Business)
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based on reasonable projections of working capital needs and the nature of the
expected busineSection No transfer of property is being made and no obligation
is being incurred in connection with the transactions contemplated by this
Agreement with the intent to hinder, delay or defraud either present or future
creditors of the BusineSection
ARTICLE VI
POST-CLOSING COVENANTS OF BUYERS
6.1 Access to Books and Records. From and after the Closing, Buyers
shall, and shall cause their Affiliates to, provide Sellers and their agents
with reasonable access (for the purpose of examining and copying), during normal
business hours, to the books and records relating to the Business with respect
to periods or occurrences prior to the Closing Date in connection with any
matter whether or not relating to or arising out of this Agreement and the
transactions contemplated hereby and as reasonably required by Sellers to
prepare the Closing Balance Sheet. Unless otherwise consented to in writing by
Sellers, Buyers shall not, and shall not permit their Affiliates to, destroy,
alter or otherwise dispose of any of the books and records relating to the
Business for so long as the representations and warranties with respect to such
matters are in effect.
6.2 Maintain Insurance. The Buyers shall maintain claims-based product
liability insurance in amounts not less than those currently carried by Sellers
and the Subsidiaries which shall cover the products previously or currently
included in the Business for a period of at least one year after any product
that was manufactured prior to the Closing Date is sold or otherwise disposed
of.
6.3 Employees and Employee Benefits. One of the Buyers shall assume,
effective as of the Closing Date, the Johnson Employment Agreement and each of
the employment agreements set forth on the Contracts Schedule or shall have
entered into a replacement employment agreement with such employees which
terminates the existing employment agreement on the Closing Date. In addition,
one of the Buyers will offer to hire, on an at-will basis, all of the other
employees of the Sellers and the Subsidiaries on the Closing Date (the
"Noncontract Employees"), on terms and conditions that in the aggregate are
substantially comparable to similarly situated employees of Integra or the
applicable Affiliate. Buyers shall cause Integra to allow Noncontract Employees,
as soon as is practicable after Closing to participate in the stock option plans
available to the employees of Integra and its Affiliates, if any.
6.4 Excluded Plans. Buyers shall not, directly or through any of its
Affiliates, assume administration for or liability for the Saba Plan or the
HSNLP Plan. Immediately prior to the Closing, the Subsidiaries' participation in
the Excluded Plans shall cease. After termination of the HSNLP Plan and receipt
of a favorable determination letter from the IRS with respect thereto, Buyers
will cause its and its Affiliates' Code Section 401(k) plans to accept rollovers
of benefits distributed from the HSNLP Plan, subject to the terms of such Code
Section 401(k) plan and to applicable law. Sellers agree to take reasonable
actions in order to obtain a favorable IRS determination letter for the HSNLP
Plan.
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ARTICLE VII
ADDITIONAL COVENANTS
7.1 Survival. The representations and warranties set forth in this
Agreement and in any certificates delivered at the Closing in connection with
this Agreement shall survive the Closing Date and the consummation of the
transactions contemplated hereby (even if the other Parties had Knowledge or had
reason to know of any misrepresentation or breach of warranty) for a period of
twelve (12) months after the Closing Date, provided that:
(1) the representations and warranties set forth in
Section 4.12 (and in any certificates delivered at the Closing in connection
with such representations and warranties) hereof shall survive until the statute
of limitations relating to the liabilities related thereto expire;
(2) the representations and warranties set forth in
Section 4.22 hereof (and in any certificates delivered at the Closing in
connection with such representations and warranties) shall survive for a period
of three years; and
(3) the representations and warranties set forth in
Sections 4.03, 4.13, 4.17 and 4.26 hereof (and in any certificates delivered at
the Closing in connection with such representations and warranties), as such
representations and warranties relate to the absence of any violation or
requirement of consent or authorization under material agreements or instruments
with, or the absence of any defaults under contracts and agreements with, debt-
or equity-holders of Sellers and the Subsidiaries, shall survive indefinitely.
Notwithstanding anything in this Agreement to the contrary, to the extent that a
claim is brought within the time period specified in this Section 7.01, the
representations and warranties which underlie such claim will survive solely
with respect to such claim until the final resolution of such claim pursuant to
this Article VII.
7.2 Indemnification.
(1) After the Closing Date, subject to the provisions
of Section 7.02(c) below, Sellers, jointly and severally, shall indemnify and
hold harmless each Buyer, its Affiliates and each of their respective officers,
directors, shareholders, employees and agents (the "Buyer Group") against any
actual loss, liability, damage, expense, lawsuits, deficiencies or claims,
including without limitation interest, penalties, reasonable legal fees and all
other amount paid in investigation, defense or settlement of any of the
foregoing, but excluding any incidental, consequential, lost profits, or special
or punitive damages (other than such amounts actually paid by any member of the
Buyer Group to a third party) and taking into account any amounts reimbursed by
third parties, including insurance (collectively, "Losses" and individually, a
"Loss") which any member of the Buyer Group suffers, sustains or becomes subject
to as a result of (i) any breach of the representations and warranties of
Sellers set forth in Article IV hereof and as restated in any certificates
delivered by Sellers at the Closing, in each case taking into account any
disclosures made in the Disclosure Schedules, (ii) any breach of the covenants
of any Seller set forth herein, (iii) any Excluded Liability, (iv) the amounts
paid by
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Buyers as transition bonuses to each of Gerald Klopp, Terry Layton and
George McHugh under the employment agreements between the Buyers and each such
employee, but not to exceed $25,000, $25,000 and $35,000, respectively, (v) Item
2 set forth on the Taxes Schedule, (vi) Income Taxes of the Sellers and the
Subsidiaries with respect to periods ending on or before December 31, 1998 (less
the amount of any reserves or accruals therefor on the Closing Balance Sheet)
and (vii) additional Income Taxes of the Subsidiaries for the period from
January 1, 1999to the business day prior to the Closing Date that result from a
challenge or audit of the Sellers' or the Subsidiaries' tax structure; provided
that (x) the Buyer Group's right to seek indemnification under clause (i) above
shall not exceed $9,690,727.50, and (y) members of the Buyer Group shall not be
entitled to seek indemnification under clause (i) with respect to any individual
Loss unless the aggregate amount of all such Losses exceeds $200,000, in which
case members of the Buyer Group shall be entitled to indemnification for the
full amount.
In addition, Sellers and each member of the Indemnitor Group
set forth on the Indemnitor Schedule shall, for a period of twelve (12) months
from the Closing Date, cause HSNLP to maintain cash or cash equivalents with a
value of not less than (i) $500,000 minus (ii) any expenses incurred or amounts
paid by Sellers with respect to any liabilities or obligations retained by
Sellers pursuant to this Agreement, including, without limitation, with respect
to Section 1.06, this Section 7.02 or the Excluded Liabilities portion of the
Redmond Notes (the "Retained Amount").
Each member of the Indemnitor Group set forth on the
Indemnitors Schedule shall have, prior to HSNLP making any distribution to or
entering into any transaction with, such Person, executed a Contribution
Agreement in the form of Exhibit F attached hereto, and HSNLP hereby covenants
not to make any such distribution or enter into any such transaction until such
Contribution Agreement has been executed by such Person. CIVC hereby covenants
to be bound by the terms of the Contribution Agreement executed by it
simultaneously herewith, and hereby acknowledges Buyers' reliance on such
covenant.
(2) After the Closing, subject to the provisions of
Section 7.02(d) below, INLLC and Redmond, jointly and severally, shall indemnify
and hold harmless Sellers, their respective Affiliates and each of their
respective officers, directors, shareholders, employees and agents (the "Seller
Group") against any Loss which it suffers, sustains or becomes subject to as a
result of (i) any breach of the representations and warranties of Buyers set
forth in Article V and as restated in any certificates delivered by the Buyers
at the Closing, (ii) any breach of the covenants of any Buyer set forth herein,
(iii) the operations of the Business following the Closing and (iv) any Assumed
Liability, and INLLC and Redmond shall pay to Sellers promptly upon receipt by
Buyer all refunds or rebates of Taxes paid by the Sellers or the Subsidiaries
with respect to periods ending on or prior to December 31, 1998 (provided,
however, that no such payment need be made with respect to any refunds of Taxes
attributable to a carryback of losses or credits recognized in periods beginning
on or after January 1, 1999); provided that members of the Seller Group shall
not be entitled to seek indemnification under clause (i) above with respect to
any individual Loss unless the aggregate amount of all such Losses exceeds
$200,000, in which case members of the Buyer Group shall be entitled to
indemnification for the full amount.
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In the event that HSN, Inc. shall pay a dividend such that it
is able to utilize as a tax credit with respect to any period ending on or
before December 31, 2001, any portion of the Puerto Rico toll gate taxes paid by
the Sellers and the Subsidiaries prior to the business day prior to the Closing
Date or accrued on the Closing Balance Sheet, Buyer shall pay the Sellers an
amount equal to such tax credit.
(3) Seller shall not be liable for any claim for
indemnification under subsection (a) above unless written notice specifying in
reasonable detail to the extent then known, the nature of the claim thereunder
is delivered by the Person seeking indemnification to the Person from whom
indemnification is sought (i) at any time with respect to any Excluded
Liabilities or breach of covenants required to be performed by Sellers and (ii)
within the period set forth in Section 7.01 after the Closing Date with respect
to claims related to breaches of the representations and warranties set forth in
Article IV or as restated in any certificates delivered by Sellers at the
Closing.
(4) Buyers shall not be liable for any claim for
indemnification under subsection (b) above unless written notice specifying in
reasonable detail, to the extent known, the nature of the claim thereunder is
delivered by the Person seeking indemnification to the Person from whom
indemnification is sought (i) at any time with respect to any Assumed
Liabilities, any breaches of covenants required to be performed by Buyers and
any Losses arising from the operations of the Business following the Closing or
(ii) within twelve months after the Closing Date with respect to claims related
to breaches of representations and warranties of Buyers as set forth in Article
V or as restated in any certificates delivered by Buyers at the Closing.
(5) Promptly after the assertion by any third party
of any claim (a "Third Party Claim") against any Person entitled to
indemnification under this Section 7.02 (the "Indemnitee") that results or may
result in the incurrence by such Indemnitee of any Loss for which such
Indemnitee would be entitled to indemnification pursuant to this Agreement, such
Indemnitee shall promptly notify the parties from whom such indemnification
could be sought (the "Indemnitors") of such Third Party Claim; provided, that
the failure to notify the Indemnitor will not relieve the Indemnitor of any
liability that it may have to the Indemnitee, except to the extent that the
Indemnitor demonstrates that the defense of such action is materially prejudiced
by the Indemnitee's failure to give such notice. The Indemnitor may, at its
option, assume the defense of the Indemnitee against any Third Party Claim with
respect to which the Indemnitee is seeking indemnification under this Article
VII (including the employment of counsel and the payment of expenses) unless the
Indemnitor fails to provide reasonable assurance to the Indemnitee of its
financial capacity to defend such Third Party Claim and provide indemnification
with respect to such Third Party Claim, in which event Indemnitee shall assume
its own defense, and the fees and expenses of Indemnitee's counsel shall be an
expense of the Indemnitor, provided that the Indemnitee will not settle,
compromise or consent to judgment in such Third Party Claim without the consent
of the Indemnitor, which consent shall not be unreasonably withheld. Any
Indemnitee shall have the right to employ separate counsel in any such Third
Party Claim and to participate in the defense thereof, but the fees and expenses
of such counsel shall not be an expense of the Indemnitor unless (i) the
Indemnitor shall have
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failed, within a reasonable time after having been notified by the Indemnitee of
the existence of such Third Party Claim as provided in the first sentence
hereof, to give notice to the Indemnitee of its election to assume the defense
of such Third Party Claim or (ii) the employment of such counsel has been
specifically authorized by the Indemnitor in the case of all Third Party Claims
with respect to which the Indemnitee is entitled to indemnification under this
Article VII. If Indemnitor has assumed the defense of a Third Party Claim,
Indemnitee will not settle, compromise or consent to judgment in such Third
Party Claim without the consent of the Indemnitor, which consent will not be
unreasonably withheld.
A claim for indemnification for any matter not involving a
Third Party Claim may be asserted by notice to the Indemnitor.
(6) Notwithstanding Section 7.02(e), with respect to
any claim for indemnification hereunder which involves, or is alleged to
involve, the conduct of environmental investigatory, corrective or remedial
action, the following additional procedures shall apply: Upon receipt of any
such claim, Sellers shall have the right, at their option, within a reasonable
time after such receipt (such period not to exceed 60 days) to undertake control
over all aspects of such matter (including, without limitation, retention of
consultants, selection of remedial measures and negotiations and agreements with
interested government agencies and third parties) subject to Sellers' obligation
(i) to reasonably consult with Buyers in connection therewith, (ii) to afford
Buyer a reasonable opportunity to comment upon material submittals prior to
submission to governmental authorities, and (iii) to afford Buyer the
opportunity to attend and participate in material meetings or conference calls
with such authorities. In connection therewith, Buyers agree to provide, and to
cause their Affiliates to provide, Sellers and their agents with reasonable
access to the Property (and to relevant documents and personnel). The Parties
shall keep one another apprised of major developments relating to such matter
and shall, subject to applicable legal privileges, make all final reports,
filings, and other documents relating to such matter available for inspection by
one another. Sellers shall have no obligation to provide indemnification with
respect to any investigatory or remedial action unless, and then only to the
extent that, investigation or remediation is required in order to comply with
Environmental and Safety Requirements, based upon continued industrial use of
the Property. Buyers agree, upon request by Sellers, to facilitate imposition of
a deed restriction on the subject facility, provided that such deed restriction
does not materially restrict or impair industrial activities at the subject
facility. Any obligation of Sellers to conduct any investigation or remediation,
or provide indemnification hereunder, shall be deemed satisfied upon completion
of a remediation in a manner which attains standards applicable under
Environmental and Safety Requirements or is otherwise acceptable to applicable
governmental authorities. The Parties agree to reasonably cooperate with one
another in connection with any matter governed hereunder and to generally
conduct themselves in a good faith and cost effective manner with respect
thereto.
(7) The amount of any Loss subject to indemnification
hereunder or of any claim therefor shall be calculated to include the tax cost,
if any, of receiving an indemnity payment for such Loss, but shall be calculated
net of (i) any Tax Benefit inuring to an Indemnitee on account of such Loss and
(ii) any insurance proceeds (net of direct collection
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expenses and costs) received on account of such LoSection If an Indemnitee
receives a Tax Benefit after an indemnification payment is made, such Indemnitee
shall promptly pay to the Indemnitor the amount of such Tax Benefit at such time
or times as and to the extent that such Tax Benefit is received. For purposes
hereof, "Tax Benefit" shall mean any actual refund of Taxes paid (other than
refunds which are paid to Sellers pursuant to Section 7.02(b)(v)) or actual
reduction in the amount of Taxes which otherwise would have been paid currently,
in each case computed at the marginal rate actually applicable to the
Indemnitee. Each Indemnitee shall seek full recovery under all insurance
policies covering any Loss to the same extent as they would if such Loss were
not subject to indemnification hereunder. In the event that an insurance
recovery is made by Buyers or any of its Affiliates with respect to any Loss for
which any such Person has been indemnified hereunder, then a refund equal to the
aggregate amount of the recovery shall be made promptly to Sellers.
(8) All indemnification payments made hereunder shall
be treated by all parties as an adjustment, for tax purposes, to the Purchase
Price.
(9) Notwithstanding any other provision contained
herein to the contrary, Sellers will be permitted to use the Retained Amount to
pay any expenses incurred or amounts paid by Sellers with respect to any
liabilities or obligations retained by Sellers pursuant to this Agreement,
including, without limitation, with respect to Section 1.06, this Section 7.02,
or the Excluded Liabilities portion of the Redmond Notes.
(10) Notwithstanding any other provisions of this
Agreement to the contrary, the indemnification obligations of a Party with
respect to any breach of representation or warranty will not be affected by the
fact that the other Party had Knowledge or had reason to know of such
misrepresentation or breach of warranty.
7.3 Exclusive Remedy; Limitation of Recourse. Following the Closing,
except with respect to claims based upon fraud and remedies to enforce the
Sellers' obligations under Sections 7.08 and 7.09, the indemnification provided
by Section 7.02 shall be the sole and exclusive remedy to the exclusion of all
other remedies and recourse at law or otherwise (including without limitation,
any rights for contribution or otherwise, under CERCLA or any other
Environmental and Safety Requirement) under or in connection with this Agreement
and the transactions contemplated herein, including without limitation, for any
Losses of the Buyer Group or the Seller Group with respect to any
misrepresentation or inaccuracy in, or breach of, any representations or
warranties or any breach or failure in performance prior to Closing of any
covenants or agreements made by Buyers or Seller in this Agreement or in any
Exhibit or Disclosure Schedule attached hereto or any certificate delivered
hereunder. Except as provided in Section 7.02, no claim shall be brought or
maintained by Buyers or Sellers or their respective successors or permitted
assigns against any officer, director or employee (present or former) of
Sellers, Buyers or their respective Affiliates, and no recourse shall be brought
or granted against any of them, by virtue of or based upon any alleged
misrepresentation or inaccuracy in or breach of any of the representations,
warranties or covenants of Seller set forth or contained in this Agreement or
any certificate delivered hereunder, except to the extent that the same shall
have been the result of fraud by any such Person (and in the event of such
fraud, such recourse against such officer, director or employee (present or
former) shall be brought or granted solely against
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such officer, director or employee (present or former) committing such fraud),
and provided that without limiting the foregoing, in no event shall any Buyer,
its successors or permitted assigns be entitled to claim or seek any rescission
of the transactions consummated under this Agreement or other remedy at law or
in equity. In no event shall any officer, director or employee of Sellers,
Buyers or their respective Affiliates have any shared or vicarious liability for
the actions or omissions of any other Person.
7.4 Disclosure Generally. If and to the extent any information required
or permitted to be furnished in any schedule is contained in this Agreement or
in any other schedule attached hereto (each, a "Disclosure Schedule" and,
together, the "Disclosure Schedules"), such information to the extent that it
would appear from the face of the disclosure in this Agreement or such
Disclosure Schedule to be responsive to another Disclosure Schedule, such
disclosure shall be deemed to be included in such other Disclosure Schedule in
which the information is required or permitted to be included. The inclusion of
any information in any Disclosure Schedule shall not be deemed to be an
admission or acknowledgment by any Seller or Subsidiaries that such information
is material to or outside the ordinary course of the business of the Sellers or
the Subsidiaries or that any representation or warranty included in this
Agreement would be inaccurate in any respect if such information were not
included therein. 7.5 Acknowledgment by the Parties. The Parties acknowledge
that they each individually have not made nor has any other Person made any
representation or warranty, express or implied, as to the accuracy or
completeness of any information regarding the respective Party, except as
expressly set forth in this Agreement, the Disclosure Schedules hereto or the
certificates delivered in connection herewith. EXCEPT FOR THE REPRESENTATIONS
AND WARRANTIES EXPRESSLY SET FORTH IN THIS AGREEMENT, OF THE CERTIFICATES
DELIVERED IN CONNECTION HEREWITH, THE PARTIES DO NOT MAKE ANY REPRESENTATION OR
WARRANTY, EXPRESS OR IMPLIED, AT LAW OR IN EQUITY, IN RESPECT OF ANY PARTY OR
ANY OF THE ASSETS, LIABILITIES OR OPERATIONS OF SELLER, OR THE SUBSIDIARIES.
WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, THE PARTIES DO NOT MAKE ANY
IMPLIED REPRESENTATION OR WARRANTY AS TO THE CONDITION, MERCHANTABILITY,
SUITABILITY OR FITNESS FOR A PARTICULAR PURPOSE OF ANY OF THE ASSETS OF SELLER
OR THE SUBSIDIARIES. THE PARTIES EXPRESSLY DISCLAIM ANY RIGHT TO ASSERT ANY
CLAIM UNDER ANY OF THE ABOVE DESCRIBED REPRESENTATIONS OR WARRANTIES (EXCEPT FOR
THE REPRESENTATIONS AND WARRANTIES EXPRESSLY SET FORTH IN THIS AGREEMENT).
7.6 Certain Taxes.
(1) Buyers shall pay all documentary, sales, use,
stamp, registration, value added, business, goods and services, transfer,
recording, conveyancing and other such Taxes and fees (including any penalties,
interest and additions to Tax with respect thereto) incurred in connection with
this Agreement, and Buyers shall, at their own expense, file all necessary Tax
Returns and other documentation with respect to all such Taxes and fees, and if
required by applicable law, each Seller shall, and shall cause its Affiliates
to, join in the execution of any such Tax Returns and other documentation.
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(2) Buyers and Sellers shall cooperate fully with and
assist the other Party, as and to the extent reasonably requested by the other
Party, in connection with the filing of Tax Returns pursuant to this Section
7.06 and in any audit, litigation or other proceeding with respect to Taxes.
Such cooperation shall include the retention and (upon the other Party's
request) the providing of records and information which are reasonably relevant
to any such audit, litigation or other proceeding and making employees available
on a mutually convenient basis to provide additional information and explanation
of any material provided hereunder. Buyers shall retain all books and records
with respect to Tax matters pertinent to the Acquired Assets and Assumed
Liabilities relating to any tax periods for so long as the Sellers' indemnities
under Section 7.02 shall be in effect and shall give Sellers reasonable written
notice prior to transferring, destroying or discarding any such books and
records prior to the expiration of the applicable statute of limitations for
that tax period, and, if Sellers so request, Buyers shall allow Sellers to take
possession of such books and records.
(3) Buyers shall cooperate fully with and provide
assistance to Sellers, as and to the extent reasonably requested by the Sellers,
consistent with the cooperation and assistance that Sellers had provided Saba,
LP in connection with the preparation of its Tax Returns and K-1s, in connection
with the preparation of the Sellers' Tax Returns for years 1998, 1999 and 2000,
including the preparations of the Sellers' K-1s, and shall supply Sellers by
April 1 of the subsequent year (or April 8 with respect to 1998), or within a
reasonable time after any request in light of the circumstances, with all
information requested by Sellers for the preparation of Sellers' Tax Returns and
K-1s and in any Buyer's control.
7.7 Further Assurances.
(1) From time to time, as and when requested by any
Party hereto and at such Party's expense, any other Party shall execute and
deliver, or cause to be executed and delivered, all such documents and
instruments and shall take, or cause to be taken, all such further or other
actions as such other Party may reasonably deem necessary or desirable to
evidence and effectuate the transactions contemplated by this Agreement.
(2) In the event and for so long as any Party
actively is contesting or defending against any action, suit, proceeding,
hearing, investigation, charge, complaint, claim or demand in connection with
(i) any transaction contemplated under this Agreement (other than claims under
Section 7.02) or (ii) any fact, situation, circumstance, status, condition,
activity, practice, plan, occurrence, event, incident, action, failure to act,
or transaction on or prior to the Closing Date involving any of Sellers and the
Subsidiaries, the other Party shall cooperate with it and its counsel in the
defense or contest, make available its personnel, make persons available to
testify and provide access to its books and records, in each case, as shall be
necessary in connection with the defense or contest, all at the sole cost and
expense of the contesting or defending Party.
7.8 Use of Trademarks and Corporate Name. After the Closing, Sellers
shall not use the trademarks assigned to Buyers hereunder in connection with the
marketing or sale of any of its products and shall delete the trademarks from
all its advertising signage, stationery, packaging and marketing material, and
as soon as practicable after the Closing, Sellers shall change its
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partnership name and any "d/b/a" to a name which does not include the words
"Heyer-Schulte NeuroCare," "Camino NeuroCare," "Innerspace," "NeuroCare," "Neuro
Navigational," "Redmond Neurotechnologies" or any confusing similar words and
shall not thereafter adopt such name in connection with any busineSection
7.9 Non-Compete.
(1) Sellers acknowledge and agree, as an inducement
for Buyers to enter into this Agreement, that for a period of one year after the
Closing Date, neither Seller shall, without the prior written consent of Buyers,
directly or indirectly, alone or in association with others, either as a
principal, agent, owner, shareholder, officer, director, partner, member,
employee, lender, investor, consultant or manager, engage in any business or
have a financial interest in, or render advice or services to any person or
entity that competes with the Business in the countries in which the Business
currently operates.
(2) Neither Seller will, directly or indirectly, (A)
induce or attempt to induce any employee of the acquired Business to leave the
employ of Buyers or the applicable Affiliate, (B) in any way interfere with the
relationship between Buyers or the applicable Affiliate and any such employee,
(C) employ or otherwise engage as an employee, independent contractor, or
otherwise, any such employee or any Buyer or the applicable Affiliate; or (D)
induce or attempt to induce any customer, supplier, licensee, or business
relation of the acquired Business to cease doing business with any Buyer, or in
any way interfere with the relationship between any customer, supplier, licensee
or business relation of the acquired BusineSection
(3) Neither Seller will, directly or indirectly,
solicit the business of any Person known to Sellers to be a customer of the
acquired Business, with respect to products or activities which compete in whole
or in part with the products or activities of the acquired BusineSection
(4) In the event of a breach by Sellers of any
covenant set forth in this Section 7.09, the term of such covenant will be
extended by the period of the duration of such breach;
(5) In the event the agreement in this Section 7.09
shall be determined by any court of competent jurisdiction to be unenforceable
by reason of its extending for too great a period of time or over too great a
geographical area or by reason of its being too extensive in any other aspect,
it shall be interpreted to extend only over the maximum period of time for which
it may be enforceable and/or the maximum geographical area as to which it may be
enforceable and/or to the maximum extent in all other respects as to which it
may be enforceable all as determined by such court in such action. Sellers each
acknowledge that a breach of the covenants contained in this Section 7.09, will
cause irreparable damage to Buyers, the exact amount of which will be difficult
to ascertain, and that the remedies at law for any such breach will be
inadequate. Accordingly, Sellers agree that if either Seller breaches the
covenant contained in this Section 7.09 in addition to any other remedy which
may be available
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at law or in equity, Buyers shall be entitled to specific performance and
injunctive relief, without posting bond or other security.
7.10 Winding Up. Subsequent to the Closing, each of the Sellers shall
limit its activities to actions (i) related to performing its obligations under
this Agreement; (ii) dealing with the obligations and liabilities it retained
under this Agreement; (iii) dealing with its debtholders, partners and members,
as applicable, subject to the restrictions contained in the last paragraph of
Section 7.02(a), (iv) winding up its affairs, and (v) such other actions as are
reasonably related or incidental to such activities.
ARTICLE VIII
DEFINITIONS
8.1 Definitions. The following terms have the meaning set forth below:
"AA" has the meaning set forth in Section 1.06(a).
"Accounts Receivable" has the meaning set forth in Section
4.06.
"Acquired Assets" has the meaning set forth in Section 1.01.
"Adjustment Amount" has the meaning set forth in Section
1.06(b).
"Adjusted Closing Date Working Capital" means an amount equal
to (i) the Adjusted Current Assets minus (ii) the Adjusted Current Liabilities,
each as of the close of business on the second business day prior to the Closing
Date minus (iii) $50,000.
"Adjusted Current Assets" means, as of any date of
determination, current assets on the applicable balance sheet minus the amount
of such current assets attributable to (i) with respect to the Latest Balance
Sheet only, cash, (ii) prepaid premiums on the D&O Policies, (iii) prepaid
expenses in connection with the transactions contemplated by this Agreement,
(iv) with respect to the Closing Balance Sheet, assets that had been categorized
as long term assets on the Latest Balance Sheet that are classified as current
assets on the Closing Balance Sheet, (v) current assets that but for the
consummation of the transactions contemplated by this Agreement would not exist,
(vi) any deferred tax assets, and (vii) prepaid expense related to the toll gate
Taxes in Puerto Rico and refunds with respect to periods ending on or before
December 31, 1998, in each case, determined in accordance with GAAP,
consistently applied, including all past policies, practices and procedures (it
being understood that the current assets as of the Closing Balance Sheet shall
reflect a write-down of inventory of $110,000 with respect to the Camino Classic
Catheter).
"Adjusted Current Liabilities" means, as of any date of
determination, current liabilities on the applicable balance sheet minus the
amount of such current liabilities attributable to (i) obligations, including
accrued interest, relating to the Loan and Security Agreement, (ii) income
taxes, (iii) reserves for the Connell Neurosurgical litigation (other than the
portion thereof that does not constitute an Excluded Liability) and the Optex
matter, (iv) accruals for the
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1998 Bonuses, (v) accruals for expenses in connection with the transactions
contemplated by this Agreement and (vi) with respect to the Closing Balance
Sheet, liabilities that had been categorized as long term liabilities on the
Last Balance Sheet that would otherwise be classified as current liabilities on
the Closing Balance Sheet as a result of the consummation of the transactions
contemplated by this Agreement, including the Camino Incentive Plan, (vii)
liabilities that but for the consummation of the transactions contemplated by
this Agreement would not exist, including, without limitation, accruals or
reserves for the Employee Transition Bonuses, the Management Transition Bonuses
and the shut down of the facilities at Pleasant Prairie Wisconsin, and (viii)
accruals for severance payments for any of the Executive Officers (it being
understood that the Closing Balance Sheet shall reflect an accrual for the bonus
payable to Vincent Beilvert in the amount of $12,900).
"Adjusted Year End Working Capital" means an amount equal to
the Adjusted Current Assets minus the Adjusted Current Liabilities, each as of
December 31, 1998.
"Affiliate" has the meaning set forth in Rule 12b-2 of the
regulations promulgated under the Securities Exchange Act of 1934, as amended.
"Agreement" has the meaning set forth in the preamble.
"Assumed Contracts" has the meaning set forth in Section
1.01(f).
"Assumed Liabilities" has the meaning set forth in Section
1.03.
"Business" has the meaning set forth in the preamble.
"Buyers" has the meaning set forth in the preamble.
"Buyer Group" has the meaning set forth in Section 7.02(a).
"Camino" means Camino NeuroCare, Inc., a Delaware corporation.
"Camino Incentive Plan" means the Camino NeuroCare, Inc. Cash
Incentive Plan.
"Cash Payment" has the meaning set forth in Section 1.05.
"CIVC" means Continental Illinois Venture Corporation.
"Closing" has the meaning set forth in Section 2.01.
"Closing Date" has the meaning set forth in Section 2.01.
"Closing Date Environmental Standards" has the meaning set
forth in Section 7.02(f).
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"Closing Balance Sheet" has the meaning set forth in Section
1.06(a).
"Code" means the Internal Revenue Code of 1986, as amended.
"Contribution Agreement" means the Contribution Agreement,
dated as of the date of this Agreement, among HSNLP, Saba, LP and the
Noteholders (as defined therein) party thereto.
"D&O Policies" has the meaning set forth in Section 1.02.
"Disclosure Schedules" has the meaning set forth in Section
7.04.
"Dispute Notice" has the meaning set forth in Section 1.06(c).
"Dispute Period" has the meaning set forth in Section 1.06(c).
"Employee Transition Bonuses" means the transition bonuses
(other than the Management Transition Bonuses) offered to the employees of
Sellers and Subsidiaries prior to the Closing by Buyers or their Affiliates.
"ERISA" has the meaning set forth in Section 4.18(a).
"Excluded Assets" has the meaning set forth in Section 1.02.
"Excluded Liabilities" has the meaning set forth in Section
1.04.
"Excluded Plans" means the HSNLP Plan and the Saba Plan.
"Executive Officers" means Roderick G. Johnson, Gerald Klopp,
Terry Layton and George McHugh.
"Financial Statements" has the meaning set forth in Section
4.05.
"Fleet Capital" means Fleet Capital Corporation, a Rhode
Island corporation.
"GAAP" means United States generally accepted accounting
principles, applied on a consistent basis.
"HSN, Inc." means Heyer-Schulte NeuroCare, Inc., a Delaware
corporation.
"HSNLP" has the meaning set forth in the preamble.
"HSNLP Plan" means the Heyer-Schulte NeuroCare, L.P. 401(k)
Profit Sharing Plan and Trust.
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"HSR Act" has the meaning set forth in Section 4.17.
"Income Tax" shall mean any federal, state, county, local or
foreign income, franchise, alternative minimum, add-on minimum or other Tax
measured by net income, together with all interest, penalties or additions to
Tax or other assessments imposed with respect thereto (including any transferee
or secondary liability for any Income Tax and any liability with respect thereto
arising as a result of being (or ceasing to be) a member of any affiliated,
consolidated, combined or unitary group (or being included, or required to be
included, in any Tax Return relating thereto), as well as any liability under
any tax sharing agreement with respect thereto).
"Indemnitee" has the meaning set forth in Section 7.02(e).
"Indemnitor" has the meaning set forth in Section 7.02(e).
"INLLC" has the meaning set forth in the preamble.
"Integra" has the meaning set forth in Section 3.01(j).
"Intellectual Property" has the meaning set forth in Section
4.14.
"Investment Agreement" means the Investment Agreement, dated
June 29, 1994, among HSNLP, Saba, LP and Saba, Inc.
"Johnson Employment Agreement" has the meaning set forth in
Section 1.01.
"Knowledge" or "Known" means, with respect to Sellers, the
current actual knowledge of Roderick G. Johnson, Gerald Klopp, Mike Skiera,
Terry Layton, George McHugh, Linda Littlejohn, Don Goodchild and Joe Celusak
after reasonable inquiry and, with respect to the Buyers, the current actual
knowledge of Stuart M. Essig, John B. Henneman III, David Holtz, George McKinney
and Judi O'Grady after reasonable inquiry.
"Latest Balance Sheet" has the meaning set forth in Section
4.05.
"Loan and Security Agreement" means the Loan and Security
Agreement, dated as of January 8, 1998, among HSNLP, the other Borrowers named
therein, Fleet Capital, as Agent, and the Financial Institutions named therein,
and each of the other documents executed in connection therewith, in each case
as amended from time to time.
"Loss" has the meaning set forth in Section 7.02(a).
"Management Agreement" means the Management Agreement, dated
June 15, 1999, between Saba, LP and HSNLP.
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"Management Transition Bonuses" means the bonuses that would
be payable to Gerald Klopp, Terry Layton and George McHugh if they remained in
the employ of a buyer of the Business for a period of 90 days following the
closing of such purchase.
"Material Adverse Effect" means a material adverse effect upon
the financial condition, business, operations, assets or liabilities of Sellers
and the Subsidiaries taken as a whole.
"Neuro Nav" has the meaning set forth in the preamble.
"Noncontract Employees" has the meaning set forth in Section
6.03.
"Parties" has the meaning set forth in the preamble.
"Pension Plans" has the meaning set forth in Section 4.18(a).
"Permit" has the meaning set forth in Section 1.01(i).
"Permitted Liens" means liens relating to current taxes not
yet due and payable, the liens and encumbrances set forth on the Liens Schedule.
"Person" means an individual, a partnership, a corporation, a
limited liability company, an association, a joint stock company, a trust, a
joint venture, an unincorporated organization, or a governmental entity (or any
department, agency, or political subdivision thereof).
"Piper" has the meaning set forth in Section 1.04.
"Plans" has the meaning set forth in Section 4.18(a).
"Pleasant Prairie Lease" means that certain Service Center
Lease, dated March 8, 1996, by and between WISPARK Lake View Limited Partnership
and HSNLP.
"Purchase Price" has the meaning set forth in Section 1.05.
"Redmond" has the meaning set forth in the preamble.
"Redmond Notes" means the Subordinated Promissory Notes, dated
January 2, 1997, from Heyer-Schulte NeuroCare, L.P. to Redmond Neurotechnologies
Corporation in the face amount of $600,000 and $450,000.
"Retained Amount" has the meaning set forth in Section
7.02(a).
"Saba, Inc." has the meaning set forth in Section 1.01.
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"Saba Group" has the meaning set forth in Section 4.05.
"Saba, LP" has the meaning set forth in Section 1.04.
"Saba Plan" means the Saba Medical Management Co., Inc. 401(k)
Profit Sharing Plan and Trust.
"Scheduled Intellectual Property" has the meaning set forth in
Section 4.14.
"Securities Act" has the meaning set forth in Section 4.04.
"Seller Group" has the meaning set forth in Section 7.02(b).
"Subordinated Notes" means the 11% Subordinated Promissory
Notes from HSNLP to Saba Medical Group, L.P.
"Subsidiary" means each of HSN, Inc. and Camino.
"Tax" means any federal, state, local, or foreign income,
gross receipts, license, payroll, employment, excise, severance, stamp,
occupation, premium, windfall profits, environmental, custom duties, capital
stock, franchise, profits, withholding, social security, unemployment,
disability, real property, personal property, sales, use, transfer,
registration, value added, alternative or add-on minimum, estimated, or other
tax of any kind whatsoever, including any interest, penalty, or addition
thereto, whether disputed or not, and including any obligation to indemnify or
otherwise assume or succeed to the Tax liability of any other Person.
"Tax Benefit" has the meaning set forth in Section 7.02(g).
"Tax Return" means any return, declaration, report, claim for
refund, or information return or statement relating to Taxes, including any
schedule or attachment thereto, and including any amendment thereof.
"Third Party Claim" has the meaning set forth in Section
7.02(e).
"Welfare Plans" has the meaning set forth in Section 4.18(a).
"1998 Bonuses" means any bonus accrued on the applicable
balance sheet and payable to employees of Sellers and the Subsidiaries with
respect to calendar year 1998.
ARTICLE IX
MISCELLANEOUS
9.1 Press Releases and Communications. No press release or public
announcement related to this Agreement or the transactions contemplated herein
shall be issued or made by any
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Buyer, Seller or any of their Affiliates without the joint approval of Buyers
and Sellers, unless required by law (in the reasonable opinion of counsel) in
which case Buyers and Sellers shall have the right to review such press release
or announcement prior to publication.
9.2 Confidentiality. After the Closing, Sellers shall, and shall cause
its Affiliates to, continue to maintain the confidentiality of all information,
documents and materials relating to the Business, including all such materials
which remain in the possession of Sellers, except to the extent disclosure of
any such information is required by law or authorized by Buyers or reasonably
occurs in connection with disputes over the terms of this Agreement, and Buyers
shall, and shall cause their respective Affiliates to, maintain the
confidentiality of all information, documents and materials relating to Sellers
(other than that relating to the Business) which Buyers or any of their
Affiliates have obtained in connection with this Agreement or with the
transactions contemplated herein, except to the extent disclosure of any such
information is required by law or authorized by Sellers or reasonably occurs in
connection with disputes over the terms of this Agreement. In the event that any
Party reasonably believes after consultation with counsel that it or its
Affiliates are required by law to disclose any confidential information
described in this Section 9.02, the disclosing Party will (a) provide the other
Party with prompt notice before such disclosure in order that any Party may
attempt to obtain a protective order or other assurance that confidential
treatment will be accorded such confidential information and (b) cooperate with
the other Party in attempting to obtain such order or assurance. The provisions
of this Section 9.02 shall not apply to any information, documents or materials
which are, as shown by appropriate written evidence, in the public domain or, as
shown by appropriate written evidence, shall come into the public domain, other
than by reason of breach by the applicable Party bound hereunder or its
Affiliates.
9.3 Transaction and Other Expenses. (a) Except as otherwise expressly
provided herein, Sellers and Buyers shall pay all of their own expenses and
Sellers shall pay all out-of-pocket expenses of the Subsidiaries incurred prior
to the Closing, in each case, including attorneys', accountants' (it is
understood that Buyers shall pay the fees and expenses for the agreed upon
procedures with respect to the Closing Balance Sheet pursuant to Section 1.06,
any work relating to conforming the financial statements of the Saba Group to
Regulation S-X or changes to their report as a result thereof, and any other
work specifically requested by Buyers or their Affiliates), and advisors' fees
and expenses (it being understood that Sellers shall pay the fees and expenses
of Piper) in connection with the negotiation of this Agreement, or the
performance of their respective obligations hereunder and the consummation of
the transactions contemplated by this Agreement (whether consummated or not).
(b) Buyers shall pay the fees and expenses for the
audit of the Saba Group 1998 financial statements and work related to taxes for
both 1998 and 1999, and it is understood that such expenses are not transaction
expenses.
9.4 Notices. All notices, demands and other communications to be given
or delivered under or by reason of the provisions of this Agreement shall be in
writing and shall be deemed to have been given when personally delivered,
delivered by Federal Express or similar overnight courier service or mailed by
first class mail, return receipt requested. Notices, demands and
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communications to Buyers and Sellers shall, unless another address is specified
in writing, be sent to the address indicated below:
Notices to Buyers:
Integra NeuroCare LLC
Redmond NeuroCare LLC
105 Morgan Lane
Plainsboro, New Jersey 08536
Attn: Stuart M. Essig
with a copy to:
GoodSmith, Gregg & Unruh
300 South Wacker Drive, Suite 3100
Chicago, Illinois 60606
Attn: Marilee C. Unruh
Notices to Sellers:
Heyer-Schulte NeuroCare, L.P.
c/o Continental Illinois Venture Corporation
231 South LaSalle Street
Chicago, Illinois 60697
Attn: Sue Rushmore
with a copy to:
Continental Illinois Venture Corporation
231 South LaSalle Street
Chicago, Illinois 60697
Attn: Sue Rushmore
with a copy to:
Kirkland & Ellis
200 East Randolph Drive
Chicago, Illinois 60601
Attn: Edward T. Swan, P.C.
9.5 Assignment. This Agreement and all of the provisions hereof shall be binding
upon and inure to the benefit of the Parties hereto and their respective
successors and assigns, except that neither this Agreement nor any of the
rights, interests or obligations hereunder may be assigned by any Party hereto
without the prior written consent of the other Parties; provided, that Buyers
may assign it rights, interest or obligations hereunder to any wholly-owned
subsidiary or
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to Fleet Capital as collateral for any Buyer's obligations under the amended and
restated Loan and Security Agreement, it being understood that Buyers shall
remain responsible for all of its liabilities and obligations hereunder.
9.6 Severability. Whenever possible, each provision of this Agreement
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be prohibited
by or invalid under applicable law, such provision shall be ineffective only to
the extent of such prohibition or invalidity, without invalidating the remainder
of such provision or the remaining provisions of this Agreement.
9.7 No Strict Construction. The language used in this Agreement shall
be deemed to be the language chosen by the Parties hereto to express their
mutual intent, and no rule of strict construction shall be applied against any
Person.
9.8 Complete Agreement. This Agreement and the other agreements or
transfer documents referred to herein contain the complete agreement between the
Parties hereto with respect to the subject matter hereof, and supersede any
prior understandings, agreements or representations by or between the Parties,
written or oral, with respect to the subject matter hereof in any way.
9.9 Counterparts. This Agreement may be executed in multiple
counterparts, any one of which need not contain the signatures of more than one
party, but all such counterparts taken together shall constitute one and the
same instrument.
9.10 Governing Law. All matters relating to the interpretation,
construction, validity and enforcement of this Agreement shall be governed by
and construed in accordance with the domestic laws of the State of Illinois
without giving effect to any choice or conflict of law provision or rule
(whether of the State of Illinois or any other jurisdiction) that would cause
the application of laws of any jurisdiction other than the State of Illinois.
9.11 Bulk Transfer Laws. Buyers acknowledge that Seller shall not
comply with the provisions of any so-called bulk sales or transfer laws of any
applicable jurisdiction (similar to Article 6 of the Uniform Commercial Code) in
connection with the sale of Acquired Assets and the other transactions
contemplated by this Agreement.
9.12 Amendments and Waivers. No amendment or waiver of any provision of
this Agreement shall be valid unless the same shall be in writing and signed by
Buyers and Sellers. No waiver of any provision hereunder or any breach or
default thereof shall extend to or affect in any way any other provision or
prior or subsequent breach or default.
9.13 No Third Party Beneficiary. Nothing herein expressed or implied is
intended to or shall be construed to confer upon or give to any Person other
than the Parties hereto, their successors or permitted assigns, any rights or
remedies under or by reason of this Agreement.
* * * *
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IN WITNESS WHEREOF, the parties hereto have executed this
Agreement on the day and year first above written.
INTEGRA NEUROCARE LLC
By: NeuroCare Holding Corporation
Its: Member
By: /s/ John B. Henneman
----------------------------------
John B. Henneman, President
REDMOND NEUROCARE LLC
By: Integra NeuroCare LLC
Its: Member
By: NeuroCare Holding Corporation
Its: Member
By: /s/ John B. Henneman
----------------------------------
John B. Henneman, President
HEYER-SCHULTE NEUROCARE, L.P.
By: Saba Medical Management Co., Inc.
Its: General Partner
By: /s/ Roderick G. Johnson
----------------------------------
Roderick G. Johnson
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NEURO NAVIGATIONAL, L.L.C.
By: Heyer-Schulte NeuroCare, L.P.
Its: Managing Member
By: Saba Medical Management Co., Inc.
Its: General Partner
By: /s/ Roderick G. Johnson
----------------------------------
Roderick G. Johnson
Acknowledged and Agreed with
respect to Section 7.02(a)
CONTINENTAL ILLINOIS VENTURE
CORPORATION
By: /s/ Sue Rushmore
-------------------
Sue Rushmore, Managing Director
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EXHIBITS
Exhibit A Form of Seller Certificate
Exhibit B Form of Opinion of counsel to Sellers
Exhibit C Form of Buyer Certificate
Exhibit D Form of Opinion of counsel to Buyers
Exhibit E Data Room List
Exhibit F Form of Contribution Agreement
SCHEDULES
Allocation of Purchase Price and
Assumed Liabilities (Section 1.07)
Third Party Consents (Sections 3.01, 3.02, 4.17)
Governmental Consents (Sections 3.01, 3.02, 4.17)
Foreign Qualification (Section 4.01)
Authorization (Section 4.03)
Subsidiaries (Section 4.04)
Investments (Section 4.04)
Accounting (Section 4.05)
Accounts Receivable (Section 4.06)
Inventory (Section 4.07)
Additional Liabilities (Section 4.09)
Developments (Section 4.10)
Leased Real Property (Section 4.11)
Taxes (Sections 4.12, 7.02)
Contracts (Sections 4.13, 6.03)
Intellectual Property (Section 4.14)
Litigation (Sections 4.12, 4.15)
Seller Brokerage (Section 4.16)
Employee Benefits (Section 4.18)
Insurance (Section 4.19)
Compliance (Section 4.20)
Permits (Section 4.21)
Due Diligence (Section 4.25)
Environmental Matters (Section 4.22)
Affiliate Relationship (Section 4.23)
Buyer Consent (Section 5.04)
Buyer Brokerage (Section 5.06)
Indemnitors (Section 7.02)
Liens (Section 8.01)