1
EXHIBIT 10.9
ASSET ACQUISITION AGREEMENT
THIS ASSET ACQUISITION AGREEMENT ("Agreement") is made and entered into
upon the 27th day of December, 1996 and shall be effective as of January 1,
1997, by and between IOMED, INC., ("Seller") and FILLAUER, INC., ("Purchaser").
WITNESSETH:
WHEREAS, Seller is a corporation, duly organized and existing under the
laws of the State of Utah, owning and operating a research, development,
manufacturing and selling division devoted to prosthetics and products derived
therefrom known as "Motion Control" located at 0000 Xxxx 0000 Xxxxx, Xxxx Xxxx
Xxxx, Xxxx 00000 ("Location");
WHEREAS, Purchaser is a corporation, duly organized and existing under the
laws of the State of Delaware, and desires to purchase from Seller the assets
of Motion Control;
WHEREAS, Seller is willing to sell the assets of and associated with
Motion Control to Purchaser;
NOW, THEREFORE, in consideration of the mutual agreements, covenants,
terms and conditions herein contained the parties hereto agree as follows:
ARTICLE I.
Purchase and Sale of Assets
1.1 Purchase and Sale of Assets. Subject to the terms and conditions set
forth in this Agreement, Seller shall sell, transfer and convey to Purchaser,
and Purchaser shall purchase and acquire from Seller, on the Effective Date (as
hereinafter defined), the following tangible assets of the Seller used by
Seller exclusively in the operation of Seller's Motion Control division (such
assets, excluding, however, those listed in Section 1.3 hereof, collectively,
the "Assets"), all said Assets being owned by Seller on the Effective Date:
(a) All Accounts Receivable as set forth on Schedule
1.1(a);
(b) All inventory of materials, work in process,
finished goods and overhead as set forth on Schedule 1.1(b);
(c) All machinery, equipment, furniture and fixtures
as set forth on Schedule 1.1(c);
(d) All demonstrators and loaners as set forth on
Schedule 1.1(e); and
(e) All customer files and records as set forth on Schedule 1.1(f).
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1.2 Transfer of Government Equipment. The Seller has disclosed to the
Purchaser that Seller utilizes certain property and equipment owned by various
governmental agencies and authorities in connection with the business of Motion
Control. Such property and equipment is referred to herein as the "Government
Equipment" and is more particularly described on Schedule 1.2 hereto. On or
promptly after the Effective Date, the Seller will transfer control and
possession of the Government Equipment to the Purchaser; provided, however,
that the Seller makes no representation or warranty, whatsoever, concerning the
right of the Purchaser to retain possession of or to continue to use the
Government Equipment, and the Purchaser shall assume all risks associated with
or attributable to its possession of and continued use of the Government
Equipment. At the Purchaser's request, the Seller shall provide the Purchaser
with reasonable assistance in connection with any efforts undertaken by the
Purchaser to secure consents and approvals from the appropriate governmental
agencies for the continued possession and use of the Government Equipment. The
Seller shall have no obligation or liability to the Purchaser in regard to the
Government Equipment except as specifically set forth in this paragraph 1.2,
and it is specifically agreed that no adjustment in the Purchase Price (as
hereinafter defined) for the Assets shall be required in the event the
Purchaser is unable to continue to use all or any portion of the Government
Equipment.
1.3 Excluded Assets. Seller shall not sell or transfer and Purchaser
shall not purchase or accept any of the property or assets used in connection
with Motion Control which are set forth on Schedule 1.3 attached hereto and
incorporated herein, and which are specifically excluded from the Assets
(collectively, "Excluded Assets").
1.4 Consideration for Tangible Assets. As consideration for the Assets
purchased hereunder, Purchaser shall pay Seller the amount of One Million
Dollars, (the "Purchase Price"). The Purchase Price shall be paid at the
Signing (as hereinafter defined) by transfer of immediately available funds to
an account designated by Seller.
1.5 License Agreement. Purchaser and Seller have in good faith negotiated
a License Agreement in the form attached hereto as Schedule 1.5 and
incorporated herein by reference (the "License Agreement"), pursuant to which
the Seller will authorize the Purchaser to utilize certain proprietary,
intellectual property rights in connection with its continued operation of
Motion Control. As provided in paragraph 1.9 hereof, the Seller and the
Purchaser shall execute and deliver the License Agreement in connection with
the Signing.
1.6 Assumption of Obligations. Except as otherwise specifically provided
herein, Purchaser shall assume no liability or obligation whatsoever arising
out of or connected with the Assets or any other liabilities or obligations the
Seller, except for those liabilities set forth on Schedule 1.6 attached hereto
and incorporated herein ("Assumed Liabilities").
1.7 UCC Searches. Purchaser, at Seller's expense, shall obtain a report
of a recognized search firm of a search of the records of the Utah Secretary of
State and the appropriate county Recorder of Deeds regarding financing
statements and tax liens filed against the Assets and/or Seller in connection
with the Assets, (the "UCC Search").
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ARTICLE II.
Signing and Effective Date
2.1 Time and Place. The execution and delivery of this Agreement (the
"Signing") will take place on the 27th day of December, 1996, at the offices of
Xxxxxxx, Xxxxx & Xxxxxxx, located in Salt Lake City, Utah, at a time mutually
agreeable to the parties. The transactions contemplated by this Agreement
shall be effective upon January 1, 1997 (the "Effective Date").
2.2 Seller's Obligation at Signing. At the Signing, Seller shall deliver
or cause to be delivered to Purchaser executed counterparts of the following
instruments of transfer and other documents in form and substance reasonably
satisfactory to Purchaser's counsel, effectively vesting in Purchaser title to
the Assets upon the Effective Date and evidencing compliance with the terms and
conditions of this Agreement:
(a) A Xxxx of Sale conveying the Assets listed on
Schedule 1.1(a) through and including Schedule 1.l(e) to
Purchaser and a General Assignment; and
(b) Such other instruments of assignment, transfer,
conveyance, endorsement, direction or authorization as will be
sufficient or requisite to vest in Purchaser full, complete,
legal and equitable right, title and interest in and to all
the Assets to be acquired pursuant to this Agreement as may
reasonably be requested by Purchaser's counsel; and
(c) The License Agreement; and
(d) A Temporary Use Agreement with Purchaser for
Purchaser's continued operation of the Motion Control
operations at the Location, in the form of Schedule 2.2(d)
(the "Use Agreement"); and
(e) An Administrative Services Agreement, in the form
of Schedule 2.2(e) hereto, pursuant to which the Seller shall
provide the Purchaser with certain services in connection with
the Purchaser's operation of the business of Motion Control
(the "Administrative Services Agreement").
2.3 Purchaser's Obligations at Signing. At the Signing, Purchaser shall
deliver or cause to be delivered to Seller:
(a) The sum of $1,000,000 in immediately available
funds, by wire transfer, to an account designated by the
Seller; and
(b) An executed counterpart of the License
Agreement; and
(c) An executed counterpart of the Use Agreement;
and
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(d) An executed counterpart of the Administrative
Services Agreement; and
(e) An Assumption Agreement in form and substance
reasonably satisfactory to Seller's counsel pursuant to which
the Purchaser specifically assumes those obligations and
liabilities of the Seller specified on Schedule 1.6 hereto.
2.4 Possession of the Assets. On the Effective Date the Seller shall
deliver possession and control of the Assets to the Purchaser, and the
Purchaser shall assume possession and control thereof.
ARTICLE III.
Representations and Warranties
3.1 Representation and Warranties of Seller. Seller represents and
warrants to Purchaser as follows:
(a) Authorization. This Agreement has been duly
authorized and approved by the Board of Directors of the
Seller in accordance with State law. No other approval or
authorization is necessary for Seller to execute, deliver and
perform this Agreement. The execution, delivery and
performance of this Agreement by Seller will not result in any
breach of or conflict with any of the terms, conditions or
provisions of the Articles of Incorporation or the Bylaws of
Seller, any material agreement, indenture, mortgage, lease,
license, research, development or other instrument by which
Seller is a party or by which Seller is bound.
(b) Customer Files and Records. To the knowledge of
Seller, the customer files and records specified on Schedule
1.1(e) contain materially complete records (including the
names, addresses, and telephone numbers) of all customers of
Motion Control for at least the twelve month period prior to
the Effective Date.
(c) Title to Assets. Seller has, and upon the
execution and delivery by Seller at the Signing of the
documents referred to in Section 2.2 hereof, Purchaser, upon
the Effective Date, will be vested with, good and marketable
title to the Assets, free and clear of all liens and charges
of encumbrance, other than the Assumed Liabilities set forth
on Schedule 1.6.
(d) Litigation and Violations. No claim, litigation,
investigation or other proceeding is pending, or to the best
knowledge of Seller, threatened against Seller, which relates
to or affects the Assets, or Motion Control, except as set
forth in Schedule 3.1(d).
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(e) Employees. None of the employees of Seller who
are identified on Schedule 3.1(e) (the "Motion Control
Employees") are covered by or subject to any employment
contract, collective bargaining agreement, union contract,
labor agreement or conciliation agreement.
(f) Taxes. For all periods prior to the Effective
Date, proper and accurate amounts have been withheld by Seller
from the Motion Control Employees for all such periods to
insure full and complete compliance with tax withholding
provisions of applicable federal, State and local tax laws;
proper and accurate federal, State and local tax returns have
been filed by Seller for all periods for which returns were
due with respect to sales, withholding, F.I.C.A. and
unemployment taxes, in the amount shown thereunder to be due
and payable and all such amounts have been paid in full. For
all periods up to and including the Effective Date, Seller has
duly filed or will file when due all federal, State and local
tax returns and reports, and all tax returns and reports of
all government units having jurisdiction with respect to taxes
imposed on Seller which might create a lien or encumbrance on
any of the Assets, which would be a valid and subsisting lien
thereon after transfer thereof to Purchaser hereunder or
affect adversely Purchaser's ability to operate the business
of Motion Control through the use of the Assets after the
Effective Date, and Seller has paid or will pay when due all
such taxes shown thereon to be due and payable.
(g) Employee Benefit Plans. Seller has no unfunded
liabilities to the Motion Control Employees under any pension
or other employee benefit plan. Seller, not Purchaser, shall
make any required contribution to such plans as to the Motion
Control Employees. Seller, not Purchaser, is legally
responsible in regard to all matters involving such plans.
(h) Binding Effect. This Agreement has been duly
executed and delivered by Seller and constitutes the legal,
valid and binding obligation of Seller enforceable in
accordance with its terms, except as limited by bankruptcy,
insolvency, reorganization, or other laws affecting the rights
of creditors generally.
3.2 Representations and Warranties of Purchaser. Purchaser represents and
warrants to Seller as follows:
(a) Authorization. This Agreement has been duly
authorized and approved by the Board of Directors of the
Purchaser in accordance with State law. No other approval or
authorization is necessary for Purchaser to execute, deliver
and perform this Agreement. The execution, delivery and
performance of this Agreement by Purchaser will not result in
any breach of or conflict with any of the terms,
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conditions or provisions of the Articles of Incorporation or
the Bylaws of Purchaser, any material agreement, indenture,
mortgage, lease, license, research, development or other
instrument by which Seller is a party or by which Purchaser
is bound.
(b) Binding Effect. This Agreement has been duly
executed and delivered by Purchaser and constitutes the legal,
valid and binding obligation of Purchaser enforceable in
accordance with its terms, except as limited by bankruptcy,
insolvency, reorganization, or other laws affecting the rights
of creditors generally.
ARTICLE IV.
Covenants, of Seller and Purchaser
4.1 Liability for Expenses.
(a) Seller. With the exception of the Assumed
Liabilities, Seller shall be responsible for the payment of
all liabilities incurred in connection with the operation of
Motion Control up to the Effective Date and shall promptly pay
all such obligations.
(b) Purchaser. Purchaser shall be responsible for
the payment of all liabilities incurred in connection with the
operations of Motion Control from and after the Effective Date
and shall promptly pay all such obligations. Additionally,
the Purchaser shall be responsible for and shall promptly pay
all of the Assumed Liabilities as set forth on Schedule 1.6.
4.2 Seller's Maintenance of Insurance. Seller shall maintain appropriate
insurance coverage which provides continuing coverage of its manufacturing and
product liability up to the Effective Date. Seller shall provide evidence of
such insurance to Purchaser upon request.
4.3 Collection of Accounts Receivable. Except as specifically provided in
the Administrative Services Agreement, the collection of all accounts
receivable specified on Schedule 1.l(a), and of all accounts receivable arising
on or after the Effective Date as the result of the Purchaser's operation of
Motion Control, shall, on and after the Effective Date be the sole
responsibility of Purchaser.
ARTICLE V.
Condition of Assets
5.1 AS-IS SALE. THE ASSETS BEING SOLD HEREUNDER ARE BEING SOLD AS-IS, AND
SELLER MAKES NO REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED, WITH RESPECT
TO THE CONDITION OR FITNESS OF THE ASSETS.
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ARTICLE VI.
Transition of Motion Control and Notice to Customers
6.1 Seller's Obligations. Seller will use reasonable efforts to transfer
the operations of Motion Control to Purchaser as soon as practicable following
the Effective Date by appropriate means, including the following:
(a) Notices to Customers. At Purchaser's direction
and expense, Seller and Purchaser will jointly author notices
to customers of Motion Control as soon as reasonably practical
after the Effective Date, informing them of Seller's transfer
of operations to Purchaser pursuant to the purchase and sale
of Assets hereunder (the "Notices").
(b) Notices to Other Interested Parties. At
Purchaser's direction and expense, Seller and Purchaser will
jointly author notices to other interested parties of Motion
Control as soon as reasonably practical after the Effective
Date, informing them of Seller's transfer to Purchaser
pursuant to the purchase and sale of Assets hereunder (the
"Notices").
ARTICLE VII.
Employees of Seller
7.1 Termination. Effective at the close of business on December 31, 1996,
Seller shall terminate the employment of all of the Motion Control Employees.
On the Effective Date, Purchaser shall offer employment to all of the Motion
Control Employees in the capacities, and for the compensation set forth
opposite their respective names on Schedule 3. l(e) hereto. Additionally, the
Purchaser shall provide the Motion Control Employees with benefits generally
comparable to those provided by the Seller. Purchaser shall not assume any
obligations and liabilities of Seller to any of the Motion Control Employees,
including, without limitation, any liability or obligation for wages, bonuses,
medical reimbursement, pension or profit sharing benefits, or any other
liability or obligation whatsoever of Seller to such employees arising out of
or in connection with their prior employment with Seller or with their
termination as employees of Seller. The Purchaser will not terminate the
employment of any of the Motion Control Employees, without good cause, for at
least 90 days following the Effective Date.
ARTICLE VIII.
Indemnification
8.1 Survival. The representations, warranties and covenants of each party
shall survive the Effective Date for a period of one year.
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8.2 Of Purchaser.
(a) Seller hereby agrees to indemnify and hold
Purchaser harmless against each and every claim, demand, loss,
liability, damage, or expense (including, without limitation,
any settlement payment, reasonable attorneys' fees, and other
expenses incurred in litigation or settlement or any claims) of
whatever nature suffered by Purchaser or arising out of or in
connection with (i) the conduct of the business of Motion
Control up to the Effective Date (other than the Assumed
Liabilities set forth on Schedule 1.6), and (ii) any material
breach of warranty, covenant, or agreement or any material
misrepresentation of Seller contained in this Agreement or in
any Schedule or Exhibit attached-to or furnished pursuant to
this Agreement any other document furnished or required to be
furnished in connection with this Agreement or pursuant hereto.
(b) Seller hereby agrees to indemnify and hold
Purchaser harmless against each and every claim, demand, loss,
liability, damage, or expense, based on or rising out of
environmental matters attributable to Seller's operation of its
business, including Seller's use and occupation of the
Location, including, without limitation, contamination or
cleanup of contamination (also including, without limitation,
any settlement payment, reasonable attorney's fees, and other
expenses incurred in litigation or settlement of any claims)
that may occur prior to the Effective Date.
8.3 Of Seller.
(a) Purchaser hereby agrees to indemnify and hold
Seller harmless against each and every claim, demand, loss,
liability, damage, or expense (including, without limitation,
any settlement payment, reasonable attorney's fees, and other
expenses incurred in litigation or settlement of any claims)
of whatever nature suffered by Seller arising out of or in
connection with (i) the conduct by the Purchaser of the
business of Motion Control or the use of the Assets by
Purchaser from and after the Effective Date, (ii) any material
breach of warranty, covenant, or agreement or any material
misrepresentation of Purchaser contained in this Agreement, or
(iii) the failure of the Purchaser to timely pay or otherwise
satisfy its obligations in connection with the Assumed
Liabilities, set forth on Schedule 1.6.
(b) Purchaser hereby agrees to indemnify and hold the
Seller harmless against each and every claim, demand, loss,
liability, damage or expense, based on or arising out of
environmental matters attributable to the Purchaser's
operation of its business, including the business of Motion
Control and the Purchaser use and occupation of the Location,
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including, without limitation, contamination or cleanup of
contamination (also including, without limitation, any
settlement payment, reasonable attorneys' fees and other
expenses incurred in any litigation or settlement of any
claims) that may occur on or after the Effective Date.
8.4 Notice and Participation. Upon receipt of written notice of any claim
or the service of a summons or other initial legal process upon it in any
action instituted against it in respect of which indemnity may be sought under
this Agreement, Purchaser, or Seller, as the case may be, shall promptly give
written notice of such claim, or the commencement of such action, or threat
thereof, to Seller or Purchaser, as the case may be. The party required
hereunder to provide indemnification in regard to such claim or action shall
assume the defense thereof, at its expense and with counsel of its choice.
Such party shall control the defense of such claim or action, as well as the
terms of its settlement or other termination. The indemnified party shall be
entitled, at its own expense, to participate in the defense of such claim or
action, but such participation shall not include the right to control the
defense or approve a settlement.
ARTICLE IX.
Other Agreements
9.1 License Agreement. Seller and Purchaser agree that the effectiveness
of this Agreement shall be contingent upon the execution and delivery by both
parties of the License Agreement.
9.2 Use Agreement. Seller and Purchaser agree that the effectiveness of
this Agreement shall further be contingent upon the execution and delivery by
both parties of the Use Agreement.
9.3 Administrative Services Agreement. The Seller and the Purchaser agree
that the effectiveness of this Agreement shall further be contingent upon the
execution and delivery by both parties of the Administrative Services
Agreement.
ARTICLE X.
Miscellaneous Provisions
10.1 Expenses. Whether or not the transactions contemplated by this
Agreement are consummated, each of the parties hereto shall pay the fees and
expenses incurred by their own respective legal counsel, accountants, other
experts and all other expenses incurred by such party incidental to the
negotiation, preparation and execution of this Agreement.
10.2 Binding Effect. This Agreement shall be binding upon and inure to
the benefit of all of the parties hereto and their successors in interest;
provided, however, that this Agreement may not be assigned by either party
without the prior written consent of the other.
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10.3 Amendments. This Agreement may not be amended in whole or in part at
any time except by a written instrument setting forth such changes and signed
by each of the parties hereto.
10.4 Entire Agreement. This Agreement, the Schedules and the Exhibits
hereto, and the License Agreement, the Use Agreement and the Administrative
Services Agreement set forth the entire understanding between the parties
relating to the transactions described herein, there being no terms,
conditions, warranties or representations, other than those contained herein,
and no change or modification hereto shall be valid unless made in writing and
signed by the parties hereto.
10.5 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed-an original, but all of which
shall constitute one and the same instrument.
10.6 Governing Law. This Agreement shall be governed by the laws of the
State of Utah.
10.7 Headings. The headings contained herein are for reference only, are
not a part of this Agreement and shall have no substantive meaning.
10.8 Notices. All notices, requests or demands and other communications
from any of the parties hereto to the other shall be sufficient and shall be
deemed given, made or served, on personal delivery or seventy-two (72) hours
after deposit with the U.S. Postal Service if sent by certified mail, postage
prepaid, return receipt requested, to the other party at the address set forth
below, or at any other address as any party may later designate by written
notice.
As to Purchaser: Attn: President and Chief Operating Officer
FILLAUER, INC.
0000 Xxxxxxxx Xxxxxxx
X.X. Xxx 0000
Xxxxxxxxxxx, XX 00000-0000
with a copy to Xxxxxx X. Xxxxxxx, Esquire
Xxxxxxx & Bowling
The Financial Center at Capital Place
0000 Xxxxxxxx Xxxx, Xxxxx 000
Xxxxxxxxx, XX 00000
As to Seller: Attn: President and Chief Executive Officer
IOMED, INC.
0000 Xxxx 0000 Xxxxx
Xxxx Xxxx Xxxx, Xxxx 00000
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with a copy to: Xxxxxx X. Xxxxxxxxx, Esquire
Xxxxxxx, Xxxxx & Xxxxxxx
One Utah Center
000 Xxxxx Xxxx Xxxxxx, Xxxxx 0000
X.X. Xxx 00000
Xxxx Xxxx Xxxx, Xxxx 00000-0000
10.9 Severability. If any portion or portions of this Agreement shall be,
for any reason, invalid or unenforceable, the remaining portion or portions
shall nevertheless be valid, enforceable and carried into effect, unless to do
so would clearly violate the present legal and valid intention of the parties
hereto.
10.10 Further Assurances. Seller agrees that after the Closing Date it
will execute and deliver such further instruments of conveyance and transfer as
Purchaser may reasonably request to effect the transfer of the Assets to
Purchaser.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date and year first written above.
IOMED, INC. FILLAUER, INC.
By: By:
------------------------- -----------------------------
Title: Title:
------------------------- -----------------------------
SELLER'S FEIN: 00-0000000 PURCHASER'S FEIN: 00-0000000'
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SCHEDULE 1.1(a)
Accounts Receivable
13
SCHEDULE 1.1(a)
MOTION CONTROL
Division of Iomed, Inc.
ACCOUNTS RECEIVABLE
The attached schedule totaling **** represents the balance of the accounts
receivable of Motion Control as of December 18, 1996 and subject to adjustments
for cash receipts and sales activity through the end of business on December 31,
1996, represents the accounts receivable to be sold to the Purchaser pursuant to
the Asset Acquisition Agreement effective January 1, 1997.
14
SCHEDULE 1.1(a)
****
15
Schedule 1.1(a)
****
16
SCHEDULE 1.1(a)
****
17
****
18
****
19
****
20
****
21
****
22
****
23
****
24
SCHEDULE 1.1(b)
---------------
Inventory of Materials, Work-in-Progress,
Finished Goods and Overhead
25
SCHEDULE 1.1(b)
****
26
SCHEDULE 1.1(b)
RAW MATERIAL - INSPECTION
****
27
****
28
****
29
****
30
****
31
****
32
****
33
****
34
****
35
****
36
****
37
****
38
****
39
40
****
41
****
42
****
43
****
44
****
45
****
46
****
47
****
48
****
49
****
50
****
51
SCHEDULE 1.1 (b)
FINISH GOODS
****
52
SCHEDULE 1.1 (b)
OVERHEAD - WIP & FINISHED GOODS
IOMED, INC.
FY '96 OVERHEAD ALLOCATION
PROSTHETICS WIP & FINISHED GOODS
RATE OVERHEAD OVERHEAD IN
CALCULATION RATE INVENTORY
----------- -------- -----------
Total Prosthetics Indirect Costs 432,454
Less: Arm 1A Project (95,654)
-----------
NET PROSTHETICS INDIRECT COSTS 336,800
Divided by:
TOTAL DIRECT LABOR DOLLARS 182,090
-----------
$1.85
========
DIRECT LABOR $ IN INVENTORY:
Raw Material (WIP) 37,224
WIP 4,697
Finished Goods 13,965
-----------
Total Labor in Ending Inventory 55,885 $1.85 103,000
=========== ======== ===========
Revised allocation of overhead to Prosthetics based on Labor dollars in
Inventory.
53
SCHEDULE 1.1(b)
RAW MATERIAL - HOLD LOCATION
****
54
****
55
****
56
****
57
****
58
IOMED, INC. SCHEDULE 1.1(b)
WORK-IN-PROCESS - INTERNAL WORK IN PROCESS
FOR PERIOD ENDED: DECEMBER 20, 1996
****
59
****
60
IOMED, INC.
WORK-IN-PROCESS-INTERNAL
FOR PERIOD ENDED: DECEMBER 20, 1996
****
61
SCHEDULE 1.1(b)
****
62
SCHEDULE 1.1(c)
Machinery, Equipment, Furniture and Fixtures
63
SCHEDULE 1.1 (c)
Motion Control - Asset Identification Sheet
****
Page 1
64
SCHEDULE 1.1 (c)
Motion Control-Asset Identification Sheet
****
Page 2
65
SCHEDULE 1.1.(c)
Motion Control - Asset Identification Sheet
Instruction: Dated: 11-19-96
****
Page 3
66
SCHEDULE 1.1
Motion Control - Asset Identification Sheet
Instruction: Dated: 11/19/96
****
Page 4
67
SCHEDULE 1.1 (c)
Motion Control-Asset Identification Sheet
****
Page 5
68
SCHEDULE 1.1(d)
Demonstrators and Loaners
69
SCHEDULE 1.1 (d)
DEMO INVENTORY LIST
UTAH ARM DEMOS
Arm# Socket Wrist Flex Circuit Hand Circuit Hand Glove Plastic Servopro Batt Date Status
----- ------ ----- ------------ ------------ ---- ----- ------- -------- --------- ------
1 102 bad no servo servo left good Xxxxxx Xxxxxxxx, Mar. 1997
2 193 good yes servo h & w left good 8/6/96
3 245 good no servo servo left good Xxxxxxxxxx, Nov. 1996
4 296 bad no no no left good
5 312 good no servo servo right good yes
6 340 clear yes h & w new right good yes 7/29/96 Harold's arm
7 359 good yes servo servo left good yes
8 360 good no servo servo left good yes 8/2/96
9 391 good no servo servo good 9/4/96
10 476 no yes no no left no 8/11/96
11 481 good yes servo servo right damaged yes 7/20/96
12 550 no yes servo servo left no yes
13 583 no servo servo left good yes
14 590 yes h & w left good
15 599 good yes servo servo right
16 734 no no servo servo Xxx Xxxxxxx-Field Trial
PROCONTROL DEMOS
1 P2 bad yes n/a n/a right good n/a n/a n/a Kansas University-Med. Ctr.
2 104 good yes n/a n/a right good n/a n/a n/a
3 115 bad yes n/a n/a right good n/a n/a n/a
4 479 good yes n/a n/a right good n/a n/a n/a Harold's arm
5 644 good yes n/a n/a right good n/a n/a n/a
MYOLAB II DEMOS
1 263 n/a n/a n/a n/a n/a n/a n/a n/a n/a In-House
2 270 In-House
3 274 In-House
4 287 In-House
5 379 Xxxxxxxxxx 12/96
6 391 In-House
7 407 Xxxxxx L & B (rental)
8 431 In-House
9 492 RIC (rental)
70
SCHEDULE 1.1.(d)
DEMO INVENTORY LIST
ARM# SOCKET WRIST FLEX CIRCUIT HAND CIRCUIT HAND GLOVE PLASTIC SERVOPRO BATT DATE STATUS
MYOLAB II DEMOS
10 546 n/a n/a n/a n/a n/a n/a n/a n/a n/a In-House
11 579 In-House
12 663 In-House
13 688 KU Med Center 12/96
14 702 In-House
15 703 In-House
00 000 Xx-Xxxxx
00 000 In-House
00 000 Xx-Xxxxx
00 000 In-House
00 000 Xx-Xxxxx
00 000 In-House
00 000 Xx-Xxxxx
00 000 RIC (rental)
24 805 Precision O & P (rental)
25 806 High Tech. Therapy
(consignment)
26 810 In-House
27 811 Riverside Pros. (Rental)
71
SCHEDULE 1.1(e)
Customer Files and Records
72
SCHEDULE 1.1(e)
MOTION CONTROL
Division of Iomed, Inc.
CUSTOMER FILES AND RECORDS
-- Utah Artificial Arm, ServoPro and ProControl Historic Sales Log
-- Customer Service Files.
-- International Customer Service Files.
-- NovaCare Files.
-- List of Prosthetists Trained in the Fitting of the Utah Artificial Arm.
-- Customer Order Files for the Fiscal Year to Date December 31, 1997.
73
SCHEDULE 1.2
Government Equipment
74
SCHEDULE 1.2
MOTION CONTROL
Division of Iomed, Inc.
GOVERNMENT OWNED ASSETS
Asset # Description Make Model Comment
------- ----------- ---- ----- -------
0003 15" X 40" Lathe Xxxxx Xx. SJ-15406 purchased under NIH overhead pool
0143 Prom Programmer Parvus PRV-0339A-02 R&D asset
0144 6805 Series Emulator Motorola 68HC05PFB R&D asset
0145 486 Computer w/17" Compunet custom blt 486-100 R&D asset
NEC monitor
75
SCHEDULE 1.3
Excluded Assets
76
SCHEDULE 1.3
MOTION CONTROL
Division of Iomed, Inc.
EXCLUDED ASSETS
DESCRIPTION
Corporate records
All accounting records
All customer invoice records
All accounts payable records
All cash receipt records
All personnel and payroll records
All administrative support equipment shared with Iomed including, copy machines,
paper shredders, telephones and telephone systems, facsimile machines, common
area network printers and scanners, postage meters and scales, automated
manifest systems,
Common area inventory shelving, ladders, forklifts etc.
Common area cubicles and partitions
Network computer systems, software and software licenses (including 4th shift)
All Intangible assets, including but not limited to, Patens, Patents Pending,
Trade names, Trademarks, Research and Development records, proprietary know-how
including manufacturing, assembly and test processes, procedures, drawings,
schematics, and test procedures
77
SCHEDULE 1.5
License Agreement
78
SCHEDULE 1.6
Assumed Liabilities
79
SCHEDULE 1.6
MOTION CONTROL
Division of Iomed, Inc.
ASSUMED LIABILITIES
SERIAL #'s ESTIMATED # OF UNITS
DESCRIPTION FROM TO UNDER WARRANTY
2 year Limited Warranty Obligations
as outlined on Schedule 1.6(a)
(sales from 1/1/95 to 12/31/96)
Utah Arms #815 and
#817 #966 151
ProControls #000
#000
#000 and
#578 #732 158
Myolabs Not available 42
EMG's Not available 611
2 year Limited Extended Warranty
Obligations as outlined on
Schedule 1.6(b) [Utah Arms,
ProControls and Servopro's only]
Utah Arms
(sales from 1/1/95 to 12/31/96) see above Less than 10 units
(sales from 1/1/93 to 12/31/96) #816 and
#697 #814 Less than 10 units
ProControls
(sales from 1/1/95 to 12/31/96) see above Less than 10 units
(sales from 1/1/93 to 12/31/96) #576
#577 and Less than 10 units
80
SCHEDULE 1.6(A)
LIMITED WARRANTY FOR PROSTHETIC PRODUCTS
Seller warrants to Buyer that the equipment delivered hereunder will be free
from defects in materials and manufacturing workmanship, that it will be of the
kind and quality described and that it will perform as specified in Seller's
written quotation. The preceding limited warranties shall apply only to failures
to meet said warranties that appear within the effective period of this
Agreement. THE EFFECTIVE PERIOD SHALL BE 2 YEARS (24 MONTHS) FROM THE DATE OF
DELIVERY TO THE FITTING CENTER WHICH HAS PURCHASED THE COMPONENTS.
The conditions of any tests to determine failures to meet the above limited
warranties shall be mutually agreed upon between Buyer & Seller. Seller must
be notified of and may be represented at all tests that may be made. If any
equipment fails to meet the foregoing limited warranties, Seller shall correct
any such failure at Seller's option either by: 1) repairing any defective or
damaged part, or parts; or, 2) by making available via collect shipment to the
Buyer any necessary repaired or replacement parts or assemblies.
Except as set forth in any applicable patient indemnity, the foregoing limited
warranties are exclusive and in lieu of all warranties, whether written, oral,
implied or statutory. NO IMPLIED WARRANTY OR MERCHANTABILITY OR FITNESS FOR
PURPOSE SHALL APPLY. Seller does not warranty any products of others where the
Seller serves solely as a distributor or reseller, in particular the Xxxx Xxxx
Hand, Xxxx Xxxx Xxxxxxx, Xxxx Xxxx Wrist Rotator or other devices not
manufactured by Motion Control. The limited warranties and remedies set forth
herein are conditioned: 1) upon inspection of the equipment by Motion Control
or its representative before the initiation of the Limited Warranty, and
verification that the equipment is in good working order and free of damage;
2) upon proper use and maintenance of the equipment and conformance with any
applicable recommendations of Seller; 3) upon buyer promptly notifying Seller
in writing within the Limited Warranty period of 2 years (24 months) of any
defects; 4) upon the Buyer making the equipment available for correction, by
prepaid shipment to the Seller at Seller's option; and, 5) upon receipt of the
fees quoted at the time of the Agreement for the Limited Warranty. In no event
shall Seller be liable for special or consequential damages.
THIS AGREEMENT DOES NOT INCLUDE:
1. Prosthetic services for fitting and maintaining the prosthesis made with
the equipment;
2. Damage caused by neglect, misuse or improper operation by anyone other
than the Seller;
3. Damage due to accident, fire, water, vandalism, unsuitable environmental
conditions or replacement parts not approved or recommended by Motion
Control;
4. Damage or defects occurring prior to the beginning of this Agreement,
except as covered under a previous warranty agreement;
5. Modifications to the equipment which occur during the period of the
Agreement except by mutual consent of the parties in writing, including
payment of additional charges as specified by the Seller.
DETERMINATION OF THE DAMAGES OR DEFECTS TO BE COVERED UNDER THE LIMITED
WARRANTY SHALL BE MADE BY MOTION CONTROL PERSONNEL.
Utah Artificial Arm or ProControl System # _______________________.
Battery Pack #'s _________ _________ _________ _________ _________.
Two Year (24 months's) Limited Warranty Beginning Date _____________________.
Month Day Year
81
SCHEDULE 1.6
MOTION CONTROL LIMITED EXTENDED WARRANTY
Allows you to provide a total of 4 years of limited warranty
service:
COVERAGE: Extends the usual coverage against failures in normal use,
including circuit boards, motor, etc., for two years. Battery
packs may be replaced under the warranty, after testing.
-- Coverage is available for Motion Control manufactured
products only. No warranty, express or implied, is provided
for prosthetic services for fitting, repairing or adjusting
a prosthesis, and is limited to repair and replacement of
materials.
-- Fitting centers may choose to offer their clients a
""service contract'' for a prosthesis, which includes
prosthesis services, along with the Extended Limited
Warranty. The details and pricing for this type of contract
are up to each fitting center.
-- Motion Control does not offer the extended limited warranty
for other manufacturer's components, such as the Xxxx Xxxx
Hand, Greifer, Wrist Rotator, etc.
PRICE:
-- 2 Year Warranty - Utah Artificial Arm............ $3000
-- 2 Year Warranty - ProControl..................... $ 640
-- 2 Year Warranty - ServoPro....................... $ 500
TERMS: For continuous coverage, the limited extended warranty must be
purchased before expiration of the original two year warranty.
-- If the initial warranty has expired already, an additional
$235 for inspection/rework will be required for the Utah
Arm. Components more than six months out of warranty will
not be eligible for the limited warranty extension.
Exceptions will be considered only on a case-by-case basis.
-- Repairs which are not eligible for warranty service (i.e.,
occurring outside of normal usage, or occurring after
expiration of the initial warranty) must be performed
before the Extended Limited Warranty starts, and will be
billed at the usual repair rates.
-- Coverage may be purchased by the fitting center,
prosthetist, arm user, or a third party agency.
REGISTER: To register for the limited extended warranty, the prosthetist
or the arm wearer must fill out the limited extended warranty
agreement (provided to the prosthetist) and return it to Motion
Control with a check or Purchase Order number; we will complete
it an return a copy for your records. For a copy of the
agreement, please contact Motion Control directly.
We suggest that the extended limited warranty be arranged when
the prosthesis is purchased to insure continuous warranty
coverage.
82
SCHEDULE 2.2 (d)
TEMPORARY USE AGREEMENT
83
TEMPORARY USE AGREEMENT
THIS TEMPORARY USE AGREEMENT ("Agreement") is entered on December 27,
1996 and shall be effective upon January 1, 1997, by and between Iomed, Inc., a
Utah corporation ("Iomed"), and Fillauer, Inc., a Delaware corporation
("Fillauer"), with reference to the following:
A. Iomed, through various of its divisions and departments,
occupies approximately 17,986.94 square feet of office, manufacturing, assembly
and warehouse space located at 0000-0000 Xxxx 0000 Xxxxx, Xxxx Xxxx Xxxx, Xxxx
("Premises"), pursuant to the terms of a Lease Agreement ("Lease") dated March
1, 1994, between Iomed, as tenant, and Xxxxxx Properties, Inc. ("Xxxxxx"), as
landlord. A copy of the Lease is attached hereto as Exhibit "A" and made a part
hereof.
B. Contemporaneous with the effectiveness of this Agreement, Iomed
is selling its Motion Control division to Fillauer. The Motion Control division
operates within the Premises and, to facilitate the smooth transfer of the
Motion Control division from Iomed to Fillauer, Iomed and Fillauer have agreed
that Iomed shall allow Fillauer to temporarily use a portion of the Premises in
accordance with the terms of this Agreement.
FOR GOOD AND VALUABLE CONSIDERATION, the receipt and sufficiency of
which are hereby acknowledged, Iomed and Fillauer hereby covenant and agree as
follows:
1. Definitions. Unless otherwise indicated herein, all capitalized
terms used in this Agreement shall have the definitions assigned to them in the
Lease.
2. Fillauer use Area. Iomed hereby consents to Fillauer's use of
approximately 4,800 square feet of space within the Premises ("Fillauer Use
Area"). The Fillauer Use Area shall not constitute specifically designated areas
within the Premises, but shall be that portion of the Premises previously used
by the Motion Control division in common with other departments and divisions of
Iomed. Fillauer has inspected the Premises, including all equipment which is a
part thereof, and accepts the Premises in the condition it is in at the time of
the commencement of the this Agreement, without any representation expressed or
implied on the part of Iomed or its agents as to the condition of the Premises.
3. Use Period. Fillauer's right to use the Fillauer Use Area shall
commence on and as of the effective date of this Agreement ("Commencement
Date"), and shall end on August 31, 1997, unless sooner terminated pursuant to
this Agreement or the Lease. Fillauer shall have the right to cease using the
Fillauer Use Area by providing Iomed with at least 30 days prior written
notice. If Fillauer continues to use the Fillauer Use Area after August 31,
1997, Fillauer shall do so on a month to month basis.
84
4. Use Payment. As consideration for its right to use the Fillauer
Use Area, Fillauer shall pay to Iomed $5,600.00 per month ("Use Fee"). The
Use Fee shall be paid in advance on the first day of each and every month
during the use period, without deduction or offset. If the Commencement Date is
not the first day of a month, the Use Fee due on the Commencement Date shall be
a prorata share of a full month's Use Fee. Fillauer shall be in default under
this Agreement if any Use Fee payment is not made by the fifth day of the month
it is due.
5. Use. The Fillauer Use Area shall be used solely for uses
permitted by the Lease.
6. Assignment; Subletting. Fillauer shall not assign this Agreement
nor the right to use the Fillauer Use Area, in whole or in part, and shall not
permit Fillauer's interest in this Agreement or the Fillauer Use Area to be
vested in any third party by operation of law or otherwise. Notwithstanding the
foregoing, Fillauer may assign its rights hereunder to Motion Control, Inc., a
Delaware corporation and wholly owned subsidiary of Fillauer. Such assignment
shall not modify or limit the duties or obligations of Fillauer under this
Agreement.
7. Subordination. This Agreement is subject and subordinate to the
Lease. Except as may be inconsistent with the terms hereof, all the terms,
covenants and conditions in the Lease shall be applicable to this Agreement with
the same force and effect as if Iomed were the landlord under the Lease and
Fillauer were the tenant thereunder; and in case of any breach hereof by
Fillauer, Iomed shall have all the rights against Fillauer as would be available
to the landlord against the tenant under the Lease if such breach were by the
tenant thereunder.
8. Fillauer's Right. Notwithstanding anything to the contrary
contained herein, the only services or rights to which Fillauer is entitled
under this Agreement are those to which Iomed is entitled under the Lease.
9. Insurance. During the term of this Agreement, Iomed shall keep
and maintain in full force, at its sole cost and expense, the insurance
required by the Lease. During the term of this Agreement, Fillauer shall keep
and maintain in full force, at its sole cost and expense, (i) worker's
compensation insurance in a form and amount required by Utah law, and
(ii) insurance against loss or damage to Fillauer's equipment, personal
property and any improvements owned by Fillauer and located within the Premises.
10. Hold Harmless. Fillauer shall neither do nor permit anything to
be done which would cause the Lease to be terminated or forfeited by reason of
any right of termination or forfeiture reserved or vested in the landlord under
the Lease, and Fillauer shall indemnify and hold Iomed and Xxxxxx harmless from
and against all claims of any kind whatsoever by reason of any breach or
default on the part of Fillauer by reason of which the Lease may be terminated
or forfeited.
2
85
11. Lease. Fillauer represents that it has read and is familiar
with the terms of the Lease.
12. Taxes and Utilities; Maintenance; Services. All taxes,
assessments and utilities for the Fillauer Use Area shall be paid by Iomed.
Fillauer shall keep the Fillauer Use Area in good condition and repair
throughout the term of this Agreement.
13. Surrender. Upon the expiration or earlier termination of this
Agreement, Fillauer shall deliver the Fillauer Use Area to Iomed in the
same condition as of the date hereof, reasonable wear and tear excepted.
14. Notices. Any notice or demand which either party may or must
give to the other hereunder shall be in writing and delivered personally or
sent by certified mail, return receipt requested, postage prepaid,
addressed as follows:
To Iomed: Iomed Inc.
0000 Xxxx 0000 Xxxxx
Xxxx Xxxx Xxxx, Xxxx 00000
Attention: President
To Fillauer: Fillauer Inc.
0000 Xxxxxxxx Xxxxxxx
X.X. Xxx 0000
Xxxxxxxxxxx, XX 00000-0000
Attention: President
Either party may, by notice in writing, direct that future notices or demands
be sent to a different address.
15. Successors and Assigns. The covenants and agreements herein
contained shall bind and inure to the benefit of Iomed and Fillauer, and
their respective executors, administrators, successors and permitted
assigns.
IN WITNESS WHEREOF, the parties hereto have caused these presents to be
executed the day and year first above written.
IOMED:
Iomed Inc.,
a Utah corporation
By:____________________________________
3
86
Print Name:____________________________
Title:_________________________________
FILLAUER:
Fillauer, Inc.,
a Delaware corporation
By:____________________________________
Print:_________________________________
Title:_________________________________
4
87
EXHIBIT "A"
TO
TEMPORARY USE AGREEMENT
LEASE
THE LEASE AGREEMENT REFERENCED IN THE FOREGOING INSTRUMENT IS ATTACHED HERETO.
88
LEASE AGREEMENT
THIS LEASE AGREEMENT, modifying and amending that certain Lease
Agreement dated June 7, 1991, is executed in duplicate as of this 1st day
of March, 1994, between XXXXXX PROPERTIES, INC., a Utah corporation
("Landlord"), and IOMED, INC., a Utah corporation ("Tenant").
WITNESSETH:
In consideration of the mutual covenants and agreements of the parties
hereinafter set forth, it is agreed as follows:
1. LEASED PREMISES. Landlord has and does hereby lease to Tenant,
the entire premises, including all appurtenances and improvements located at
0000-0000 Xxxx 0000 Xxxxx, Xxxx Xxxx Xxxx, Xxxx, comprised of approximately
17,986.94 square feet of office, manufacturing, assembly and warehouse space,
for the term and upon the rental, conditions and covenants as the parties
herein set forth.
2. TERM. The term of this lease shall be seventeen (17) months,
commencing March 1, 1994, and ending at midnight, August 31, 1995. Tenant shall
have the option to extend this lease for two (2) successive one-year options
(option periods) upon giving landlord six months prior written notice. All
terms and conditions for the option periods shall be the same as the initial
term, as provided herein, except that the rent for said option periods shall be
as set forth in paragraph 3 below.
3. RENT. Rent hereunder shall be comprised of a base rent, payable
as set out in paragraphs 3(a) and 3(b), plus property taxes and insurance,
payable as set out in paragraph 3(c):
(a) BASE RENT OVER INITIAL TERM: Tenant agrees to pay as
base rent to Landlord the sum of One Hundred Ten Thousand Five Hundred and
No/100 Dollars ($110,500.00) payable at the rate of Six Thousand Five Hundred
and No/100 Dollars ($6,500.00) per month over the initial lease term;
(b) BASE RENT OVER OPTION PERIODS: The base rent payable
during the option periods shall be as follows:
(1) For the first option period (September 1, 1995
to August 31, 1996), the sum of Eighty Thousand Six Hundred Forty
and no/100 Dollars ($80,640.00), payable at a monthly rate of
Six Thousand Seven Hundred Twenty and No/100 Dollars ($6,720.20)
over the option period; and
(2) For the second option period (September 1, 1996
to August 31, 1997), the sum of Eighty-One Thousand Fifty-Nine
and 20/100 Dollars ($81,059.20), payable at a monthly rate of
Six Thousand Seven Hundred Fifty-Three and 05/100 Dollars
($6,921.60) over the option period.
89
(c) SUPPLEMENTAL MONTHLY RENT: In addition to base rent,
Tenant shall pay, monthly, over the lease term, an amount equal to one-twelfth
of the annual real property taxes and assessments and one-twelfth of the yearly
insurance premiums for insurance procured by Landlord under paragraph 16(a) of
the Lease. Tenant's monthly supplemental payments shall be adjusted in January
of each year for the twelve months following, based, at Landlord's option,
either on the total of the previous year's real property taxes, assessments and
insurance premiums actually paid, or based on escrow amounts required of
Landlord by Landlord's Lender. In either event, Tenant's responsibility for
taxes, assessments, insurance payable as supplemental monthly rent shall not be
greater than or less than one hundred percent (100%) of the total of taxes,
assessments, and insurance premiums actually paid by Landlord.
(c) All rent shall be paid in legal tender of the United
States, deposited to the account of Xxxxxx Properties, Inc., at First Security
Bank of Utah, account no. 051-017-9856, or at such other place or by such other
method as landlord may direct in writing. Each payment hereunder is due on the
first day of each calendar month of the term herein.
4. AUTHORIZED USES. Tenant shall use the leased premises to conduct
business in medical and consumer product research, development and
manufacturing, and for no other purposes without the written consent of Landlord
first being had and obtained, which consent shall not be unreasonably withheld
or delayed. All such use shall be subject to restrictions of applicable zoning
ordinances and restrictions and all relevant codes, laws and statutes.
5. PROHIBITED USES. Tenant will not keep, use or sell, or allow to
be kept, used or sold in or about the leased premises, any article or material
which is prohibited by law or which would render the fire insurance policies in
force with respect to the premises void or voidable. Tenant will further
strictly observe all environmental laws and regulations, together with all other
laws and regulations governing the storage of toxic substances and will not
dispose of such substances on or near the leased premises.
6. REPAIR AND CARE OF BUILDING.
(a) Tenant will not commit any waste of the demised premises,
nor shall it use or permit the use of the premises in violation of any present
or future law of the United States or of the State of Utah, or in violation of
any municipal ordinance or regulation applicable thereto.
(b) Tenant agrees to keep and maintain the interior and
exterior of the building and all the improvements on the premises and the
grounds, including sprinklers, landscaping and asphalt surfacing, in good
condition and repair, and, at its cost, to effect any necessary repairs to the
electrical wiring, heating, ventilation, air conditioning and plumbing systems,
and to clean and paint the interior and exterior of the leased premises as the
same may or might be necessary in order to maintain said premises in a clean,
attractive and sanitary condition. Tenant shall keep all driveways reasonably
free from ice and snow and shall maintain all lawns and landscaping, except as
hereinafter expressly set forth. Any alterations or improvements to the leased
premises shall become the property of Landlord at the expiration or sooner
termination of the lease, except as herein otherwise provided.
(c) Tenant agrees to repair all damage to the premises,
including any damage to foundation, roof or structure, resulting from acts of
the Tenant or Tenant's representatives. Except for Tenant's maintenance
obligations contained in paragraphs 6(b) and 6(c), Landlord agrees
-2-
90
to maintain the roof and the structure and foundation of the building in good
condition and repair. Tenant shall promptly notify Landlord of any repairs to
roof, structure or foundation arising from other than acts of Tenant or
Tenant's representatives and which Tenant believes are necessary. Landlord, at
its discretion, and from time to time as it receives notice of needed repairs
within the scope of its obligation, as Landlord, may request and authorize
Tenant to obtain bids and to contract directly for any such necessary repairs
and to credit the cost of such repairs against lease payments due hereunder.
Absent such specific authorization, however, or unless otherwise agreed in
writing, Tenant shall have no authority to undertake repairs for or on behalf
of Landlord or to otherwise credit lease payments for the costs of any repairs.
(d) Landlord and Tenant acknowledge that the roof on the
premises is approaching the end of its serviceable period and may require
replacement prior to the expiration of the lease period and option period
hereunder. Landlord therefore agrees to undertake responsibility for repair and
maintenance thereof as outlined in subparagraph (c) above. To that end, Tenant
agrees to keep Landlord reasonably advised, in writing, of the condition of the
roof and to allow representatives of Landlord reasonable access thereto, for
purposes of inspection, repair or replacement, as Landlord may, in its
discretion, require. Landlord will be responsible for the costs of roof
replacement caused by other than alterations, installations or other acts by
Tenant or Tenant's representatives.
7. ERECTION OF PARTITIONS, FIXTURES AND OTHER APPURTENANCES;
ALTERATIONS AND CONSTRUCTION.
(a) Tenant shall have the right to erect at Tenant's sole
cost and expense such temporary partitions, including office partitions, and to
alter partitions and to erect shelves, bins, fixtures, machinery, electrical
fixtures, additional lights and wiring and other trade appliances, all as may
be necessary to facilitate the handling of Tenant's business. With the
exception of open office modules, movable partitions, tools, machinery,
specialized environmental control systems, deionized water systems, specialty
production and plumbing fixtures and other specialty manufacturing fixtures,
any such partitions or fixtures installed by Tenant shall remain with the
leased premises and become the property of Landlord upon expiration of the
lease. Damage caused by removal of tools and machinery shall be repaired by
Tenant so as to return the premises to the condition and configuration existing
before installation of said fixtures.
(b) Tenant, at its own cost or expense, may make such
additional alterations in the building as Tenant may reasonably require to
conduct its business, subject to the following conditions: (i) no such
improvements may materially alter the basic character of the building or
existing improvements or weaken any structure of the premises; (ii) all such
construction shall be done in good and workmanlike manner and in accordance
with plans and specifications having the prior written approval of Landlord,
which consent shall not be unreasonably withheld; (iii) all such construction
shall be done free of any liens for labor or materials; and (iv) Tenant shall
indemnify, save hold Landlord harmless from, and defend Landlord against, and
loss, liability, damage or lien resulting from such construction.
8. ERECTION AND REMOVAL OF SIGNS. Tenant shall have the nonexclusive
right to place suitable signs on the leased premises in areas designated by
Landlord for the purpose of identifying Tenant or otherwise indicating the
nature of the business carried on by the Tenant in said premises; provided,
however, that such signs and their locations shall be in keeping with other
signs in the district where the leased premises are located, and shall be
subject to the prior approval of
91
Landlord, which shall not be unreasonably withheld. Damage to the leased
premises caused by the removal of such signs shall be repaired by Tenant.
9. GLASS. Tenant agrees to replace all glass broken or damaged
during the term of its lease with glass of the same quality as that broken or
damaged.
10. RIGHT OF THE ENTRY BY LANDLORD. Tenant at any time during the
term of this lease shall permit inspection of the demised premises during normal
business hours by Landlord or Landlord's agents or representatives for the
purpose of ascertaining the condition of the demised premises. One Hundred
Eighty (180) days prior to the expiration of this lease, Landlord may post
suitable notice on the demised premises that the same are "for sale" or are
"for rent or lease" and may show the premises to prospective tenants or
purchasers at reasonable times. Landlord shall not, however, thereby
unnecessarily interfere with the use of the demised premises by Tenant.
11. PAYMENT OF UTILITIES. Tenant shall pay all charges for water,
heat, gas, sewer, electricity, telephone and any and all other utilities used
on the leased premises.
12. PAYMENT OF TAXES AND OTHER ASSESSMENTS. Tenant shall pay the
general real property taxes, as well as all other taxes, assessments, license
fees and charges related to the leased premises or incidental to the conduct of
Tenant's business on the leased premises during the term of this lease,
including taxes on Tenant's personal property situated on the premises;
provided, however, that Tenant may contest or dispute any such tax, or the
amount thereof, upon providing sufficient surety for the payment thereof. Taxes
shall be paid on to Landlord as part of the monthly rental payments as provided
in paragraph 3(b) above.
13. ASSIGNMENT AND SUBLETTING. Neither this lease nor any interest
herein may be assigned by Tenant voluntarily, or by operation of law, without
the prior written consent of Landlord, and neither all nor any part of the
leased premises shall be sublet by Tenant without the prior written consent of
Landlord. However, Landlord agrees not to withhold or delay its consent
unreasonably. Landlord further agrees not to withhold or delay its consent to an
assignment if the proposed assignee's financial standing and responsibility at
the time of the proposed assignment is sufficient to give Landlord reasonable
assurance of the payment of all rents and other amounts required under this
lease, and of compliance with all of the terms, covenants, provisions, and
conditions hereof. Upon such assignment, Tenant shall be released from all
liability arising or accruing hereunder after the effective date of the
assignment, provided that the assignee shall execute, acknowledge and deliver
to Landlord an assumption agreement, in form and substance satisfactory to
Landlord in the good faith exercise of its reasonable judgement, whereby such
assignee agrees to observe, perform, and keep all of the terms, provisions,
covenants and conditions required to be observed, performed and kept as tenant
hereunder.
14. DAMAGE, DESTRUCTION OR CONDEMNATION. If the demised premises or
any part thereof shall be damaged or destroyed by fire or other casualty,
Landlord, to the extent of available insurance proceeds, shall promptly repair
all such damage and restore the demised premises without expense to Tenant,
subject to delays due to adjustment of insurance claims, strikes and other
causes beyond Landlord's control. If such damage or destruction shall render
the premises untenantable in whole or in part, the rent shall be abated wholly
or proportionately as the case may be until the damage shall be repaired and
the premises restored, unless such damage or destruction shall have been caused
or actively contributed to by Tenant, its agents, servants, employees,
invitees or licensees, in which case the rent shall not be abated to any
extent whatsoever, If the
92
damage or destruction shall be so extensive as to require the substantial
rebuilding (i.e., expenditure of fifty percent (50%) or more of replacement
cost) of the building or buildings on the demised premises, Landlord may elect
to terminate this lease by written notice to Tenant given within thirty (30)
days after the occurrence of such damage or destruction. If in the judgment of
Landlord such damage or destruction cannot be repaired and restored within
ninety (90) days from date of destruction, Tenant shall have the right to
terminate this lease upon written notice given within thirty (30) days following
such date of destruction, providing that, Tenant shall have no right of
termination if such damage or destruction has been caused or actively
contributed to by Tenant, its agents, servants, employees, invitees or
licensees. In the event of condemnation, by any governmental authority, of the
leased premises or such part thereof as shall substantially impair the ability
of Tenant to conduct its business, this lease and the obligations of the parties
hereto shall terminate as of the date of occupancy by such governmental
authority. All proceeds and awards of condemnation, whether received or judgment
of any court, shall be exclusively paid to and owned by Landlord, who shall have
the sole right to negotiate and conclude a settlement of the condemnation award
or to litigate such award, in its sole discretion, provided, however, that
Tenant shall be entitled to make claim in its own name to the condemning
authority for the value of loss of business (to the extent that it does not
reduce Landlord's award) and for the costs of relocating its business and of any
moveable furniture, items of personal property, and other items belonging to
Tenant that can be removed from the premises without in anyway altering or
damaging the lease premises.
15. INJURIES AND PROPERTY DAMAGE. Tenant agrees to indemnify, hold
harmless and defend Landlord from any and all claims of any kind or nature
arising from Tenant's use of the demised premises during the term hereof,
except for such claims that may arise by virtue of the acts of Landlord, its
agents or contractors, and Tenant hereby waives all claims against Landlord for
damages to goods, wares or merchandise or for injury to persons in and upon the
premises from any cause whatsoever, except such as might result from the
negligence of Landlord to perform its obligations hereunder within a reasonable
time after notice in writing by Tenant requiring such performance by Landlord.
16. INSURANCE.
(a) Landlord shall procure and keep in force fire and
extended coverage insurance insuring Landlord and Tenant against loss of, or
damage to, the building or other improvements on the demised premises, such
insurance shall be equivalent to the replacement value of the building on the
date of this lease as is agreed. The agreed value of the building for these
purposes and as of the date hereof, is $775,000, exclusive of the land. Said
policy shall include an endorsement or term requiring the amount of such
insurance to be increased on a regular basis to maintain the insurance in an
amount equal to the value of the building.
(b) Tenant shall procure and keep in force insurance against
loss of or damage to Tenants improvements or betterments, trade fixtures,
furnishings, equipment, machinery, inventory and contents, which is caused by
fire and other casualties. Such insurance shall be underwritten by a
responsible insurance company or companies qualified to do business in the
State of Utah and such insurance shall be in an amount equal to the full
replacement value of such building and other improvements. Such insurance shall
cover: (1) loss or damage by fire; (2) loss or damage arising from the normal
extended coverage perils which presently are windstorm, hail, explosion, riot,
riot attending a strike, civil commotion, aircraft, vehicles and smoke; (3)
loss or damage arising from vandalism and malicious mischief; and (4) if the
premises contain a fire
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sprinkler system, damage resulting from sprinkler leakage or malfunction.
Landlord (and, at Landlord's option, the lender interested under any mortgage
or similar instrument then affecting the demised premises) shall be named as an
insured on each such policy. The proceeds of insurance in case of loss or
damage to the demised premises shall be paid to Landlord to be applied on
account of the obligations of Landlord to repair and/or rebuild the Premises
pursuant to Section 14 hereunder. Tenant shall pay one-twelfth of the cost of
insurance purchased by Landlord each month with its rental payment.
(c) Tenant agrees to secure and keep in force throughout the
lease term, at Tenant's own cost and expense, comprehensive general liability
insurance covering Tenant against death, bodily or personal injury or property
damage in the combined single limit amount of at least Five Hundred Thousand
Dollars ($500,000.00). Such insurance coverage shall include a contractual
liability endorsement covering Tenant's obligations of indemnity for death,
bodily injury to persons and damage to property set forth in Section 15 hereof
and a personal injury endorsement covering such wrongful acts as false arrest,
false imprisonment, malicious prosecution and libel and slander. Tenant shall
require any contractor of Tenant performing work within the demised premises to
maintain workmen's compensation or similar insurance required by law and
comprehensive general liability insurance including contractor's liability
covering with broad form property damage endorsement.
(d) All insurance for Tenant is responsible under this lease
shall be effected under enforceable policies issued by insurers either
(i) approved by Landlord, or (ii) having a key guide general policy holders'
rating of "B+" or above and a financial category rating of "Class XI" or above
in the most recent edition of "Best's Insurance Reports" and a copy of the
policy or a certificate of insurance shall be delivered to Landlord on or
before the commencement date of this lease. Each policy shall provide by its
terms that it is noncancellable except upon twenty (20) days prior written
notice to Landlord. At least twenty (20) days prior to the expiration date of
any policy, the original renewal policy, a binder for such insurance or an
effective certificate of insurance, shall be delivered by Tenant to Landlord
evidencing compliance with the provisions of this Section 16. All policies
shall name Landlord, Landlord's lender(s), and Tenant as insureds. All policies
shall be written as primary policies, not contributing with and not in excess
of coverage which Landlord may carry. All such policies shall contain a
provision that Landlord, although named as insured, shall nevertheless be
entitled to recover under such policies for any loss occasioned to it, its
servants, agents, and employees by reason of the negligence of Tenant.
(e) Landlord hereby waives, and Tenant hereby waives, any
rights it may have against the other party on account of any loss or damage
(i) to the demised premises and its contents and (ii) arising from any risk
generally covered by fire and extended coverage insurance. Tenant and Landlord
shall obtain a clause or endorsement in the policies of such insurance which
Landlord and Tenant obtains in connection with the demised premises to the
effect that the insurer waives, or shall otherwise be denied, the right of
subrogation against the other party for loss covered by such insurance. It is
understood that such subrogation against the other party for loss covered by
such insurance. It is understood that such subrogation waivers may be operative
only as long as such waivers are available in the State of Utah and do not
invalidate any such policies. If such subrogation waivers are allegedly not
operative in the State of Utah notice of such fact shall be promptly given by
Tenant to Landlord.
(f) Any mortgage lender interested in any part of the demised
premises may, at Landlord's option, be afforded coverage under any policy
required to be secured by Landlord or Tenant hereunder, by use of a named
mortgagee's endorsement to the policy concerned.
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17. SURRENDER OF PREMISES. Tenant agrees to surrender up the leased
premises at the expiration, or sooner termination, of this lease, or any
extension thereof, in the same condition, or as altered pursuant to the
provisions of this lease, ordinary wear, tear and damage by the elements
excepted.
18. QUIET ENJOYMENT. If and so long as Tenant pays the rent reserved
by this lease and performs and observes all the covenants and provisions
hereof, Tenant shall quietly enjoy the demised premises, subject however, to
the terms of this lease, and Landlord will warrant and defend Tenant in the
enjoyment and peaceful possession of the demised premises throughout the term
of this lease.
19. WAIVER OF COVENANTS OR CONDITIONS. It is agreed that the waiving
of any of the covenants or conditions of this lease agreement by either party
shall be limited to the particular instance and shall not be deemed to waive
any other breaches of such covenant, condition, or any provision herein
contained.
20. DEFAULT (OTHER THAN IN PAYMENT OF RENT).
(a) If Tenant shall fail or otherwise default in the
fulfillment of any of the covenants and conditions hereof except default in
payment of rent, Landlord may, at its option, after thirty (30) days' prior
written notice to Tenant, make performance for Tenant and for that purpose
advance such amounts as may be necessary. Any amounts so advanced or any
expense incurred or sum of money paid by Landlord by reason of the failure of
Tenant to comply with any covenant, agreement, obligation or provisions of this
lease or in defending any action to which Landlord may be subject by reason of
any such failure or any reason of this lease or in defending any action to
which Landlord may be subject by reason of any such failure or any reason of
this lease, shall be deemed to be additional rent for the leased premises and
shall be due and payable to Landlord on demand. The receipt by Landlord of any
installment of fixed rent or of any additional rent hereunder shall not be a
waiver of any other rent then due.
(b) If Tenant shall default in fulfillment of any of the
covenants or conditions of this lease (other than the covenants for the
payment of rent or other amounts) and any such defaults shall continue for a
period of thirty (30) days after notice, then Landlord may, at its option,
terminate this lease by giving Tenant notice of such termination and,
thereupon, this lease shall expire as fully and completely as if that day were
the date definitely fixed for the expiration of the term of this lease and
Tenant shall then quit and surrender the leased premises. If such default
cannot be remedied within the period of thirty (30) days by use of reasonable
diligence, then such additional time shall be granted as may be necessary,
provided Tenant takes immediate action on receipt of the notice and proceeds
diligently to remedy the default.
21. DEFAULT IN RENT, INSOLVENCY OF TENANT. If Tenant shall: (i)
default in the payment of the rent reserved hereunder, or any part thereof, or
in making any other payment therein provided for, and any such default shall
continue for a period of fifteen (15) days after the date when payable; (ii)
abandon or vacate the leased premises or any part thereof; (iii) be
dispossessed therefrom by or under any authority other than Landlord; (iv) file
a voluntary petition in bankruptcy; (v) be subjected to any petition to
institute any involuntary proceeding under any insolvency or bankruptcy act or
a composition with creditors or if a receiver or trustee shall be appointed for
Tenant through involuntary bankruptcy proceedings, including an attempted
assumption of this lease by said trustee under Xxxxxxx 000 xx Xxxxx 00, Xxxxxx
Xxxxxx Code, which
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condition is not abated or discharged by Tenant within sixty (60) days; or,
(vi) admit in writing its inability to pay its obligations generally as they
become due; or (vii) if the leasehold estate created hereby shall be taken on
execution or by any process of law and not abated, discharged or redeemed by
Tenant within sixty (60) days; or (viii) by word or action, indicate a clear
intent not to continue with performance of this lease; then Landlord may, as
its option, take any or all of the following actions, without further notice or
demand of any kind to Tenant, or to any guarantor of this lease, or to any
other person:
(a) Landlord may immediately reenter and remove all persons
and property from the leased premises, storing such property in a public
place, warehouse, or elsewhere for the account of, and at the risk of
Tenant, all without service of notice or resort to legal process (unless
required by law) and without being deemed guilty of, or liable in,
trespass, forcible entry or in damages resulting from such reentry and
removal. No such reentry or taking possession of the leased premises by
Landlord shall be construed as an election on its part to terminate this
lease unless a written notice of such intention is given by Landlord to
Tenant. All property of Tenant which is stored by Landlord pursuant
hereto may be redeemed by Tenant within thirty (30) days after Landlord
takes possession thereof upon payment to Landlord in full of all
obligations then due from Tenant to Landlord hereunder and of all costs
incurred by Landlord in moving such property and providing such storage.
If Tenant fails to redeem such property within said thirty (30) day
period, Landlord may sell such property in any reasonable manner and
shall apply the proceeds of such sale actually collected first against
the costs of moving, storage and sale and then against any other
obligation due from Tenant under this lease with any remaining surplus
being remitted to Tenant.
(b) Landlord may relet the leased premises or any portion
thereof at any time or from time to time and for such term or terms and
upon such conditions and at such rentals as are reasonably prudent under
the circumstances. Whether or not the leased premises, or any portion
thereof, are relet by Landlord, Tenant shall pay to Landlord all amounts
required to be paid by Tenant hereunder up to the date that Landlord
removes Tenant from the leased premises, and thereafter Tenant shall pay
to Landlord, until the end of the term, the amount of rent and other
amounts required to be paid by Tenant pursuant to this lease. Such
payments by Tenant shall be due at such times as are provided elsewhere
in this lease, and Landlord need not wait until the termination of this
lease, through expiration of the term or otherwise, to recover such
payments by legal action or in any other manner. If Landlord relets the
leased premises, or any portion thereof, such reletting shall not
relieve Tenant of any obligation hereunder, except that Landlord shall
apply the rent or other proceeds actually collected by it as a result of
such reletting (i) against the costs of removing Tenant and its
property, (ii) against the costs of reletting including the cost of
clean-up, repair or modification of the leased premises and the fee of
any realtor, (iii) against any amount due from Tenant hereunder to the
extent that such rent or other proceeds compensate Landlord for the
nonperformance of any obligation of Tenant hereunder and (iv) any
residue shall be held by Landlord and applied in payment of future rent
as such may become due and payable hereunder. Landlord may execute any
lease made pursuant hereto in its own name, and the tenant thereunder
shall be under no obligation to control or monitor the application by
Landlord of any rent or other proceeds paid to Landlord thereunder nor
shall Tenant have any right to collect any portion of such rent or other
proceeds. Landlord shall not by any reentry or other act be deemed to
have accepted any surrender by Tenant of the leased premises, or any
portion
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thereof or Tenant's interest therein, or be deemed to have otherwise
terminated this lease, or to have relieved tenant of any obligation
hereunder, unless Landlord shall have given tenant express written
notice of Landlord's election to do so. Notwithstanding any such
reletting without termination, Landlord may at any time thereafter
elect to terminate this lease for any previous breach by Tenant.
(c) Landlord may collect by suit or otherwise, without
reletting the leased premises, each installment of rent or other sum as
it becomes due hereunder, or enforce, by suit or otherwise, any other
covenant or obligation which is required to be performed by Tenant or
cure any default on behalf of Tenant and thereafter xxxx Tenant for the
reasonable costs so incurred.
(d) Landlord may terminate this lease by written notice to
Tenant. In the event of such termination, Tenant agrees to immediately
surrender possession of the leased premises. Such termination shall not
relieve Tenant of any obligation hereunder which has accrued prior to
the date of such termination and Landlord may recover from Tenant all
damages it has incurred by reason of Tenant's breach, including the cost
of recovering the leased premises, reasonable attorneys' fees, and the
worth (or present value) at the time of such termination of the excess,
if any, of the amount of rent and charges equivalent to rent reserved
under this lease for the remainder of the stated term over the then
rental value of the leased premises for the reminder of the stated term,
all of which amounts shall be immediately due and payable from Tenant to
Landlord. The "worth or present value" shall be determined by using an
interest rate of ten percent (10%) per annum or the legal rate permitted
by law, whichever is lower. In determining the amount of rent reserved
under this lease subsequent to such termination, the rent which would
have been paid for each year of the unexpired term shall be deemed to
equal the average yearly minimum, percentage and additional rents paid
by Tenant hereunder from the commencement date to the time of default.
22. FAILURE TO PERFORM COVENANT. Any failure on the part of either
party to this lease to perform any obligation hereunder, and any delay in doing
any act required hereby shall be excused if such failure or delay is caused by
any strike, lockout, governmental restriction or any other similar cause beyond
the control of the party so failing to perform, to the extent and for the
period that such cause continues, save and except that provisions of this
paragraph shall not excuse a nonpayment of rent or other sums on due date.
23. TIME. Time is of the essence of this lease and every term,
covenant and condition herein contained.
24. LIENS. Tenant agrees not to permit any lien for moneys owing by
Tenant to remain against the leased premises for a period of more than thirty
(30) days. Should any such lien be filed and not released or discharged within
that time, unless Tenant shall contest the same and provide sufficient surety
for the payment thereof, Landlord may, at Landlord's option (but without any
obligation to do so), pay or discharge such lien and may likewise pay and
discharge any taxes, assessments or other charges against the leased premises
which Tenant is obligated hereunder to pay and which may or might become a lien
on said premises. Tenant agrees to repay any such sums so paid by Landlord upon
demand therefor, together with interest at the rate of eighteen percent (18%)
per annum from the date any such payment is made.
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25. NOTICES. Any notice required or permitted to be given hereunder
shall be deemed sufficient, if given by a communication in writing, by United
States mail, postage prepaid, and addressed as follows:
If to Landlord, at the following address:
Xxxxxx Properties, Inc.
c/o Xxxxx X. Xxxxxxxxx, Esq.
Snow, Xxxxxxxxxxx & Xxxxxxxxx
00 Xxxxxxxx Xxxxx, Xxxxxxxx Floor
X.X. Xxx 00000
Xxxx Xxxx Xxxx, Xxxx 00000-0000
If to Tenant, at the following address:
IOMED, Inc.
Attn: Xxxxxxx X. Xxxx, President
0000 Xxxx 0000 Xxxxx
Xxxx Xxxx Xxxx, Xxxx 00000
With a copy thereof to
Xxxxxx X. Xxxxxxxxx
Xxxxxxx Xxxxx & Xxxxxxx
000 Xxxxx Xxxx Xxxxxx, Xxxxx 0000
X.X. Xxx 00000
Xxxx Xxxx Xxxx, Xxxx 00000-0000
26. RIGHTS OF SUCCESSORS AND ASSIGNS. The covenants and agreements
contained in the within lease shall apply to, inure to the benefit of, and be
binding upon the parties hereto and upon their respective successor in interest
and legal representatives, except as expressly otherwise provided hereinbefore.
28. SECURITY.
(a) Concurrently with execution hereof, Tenant will provide
to Landlord, an Irrevocable Letter of Credit in the amount of Twelve Thousand
Dollars ($12,000.00), issued in favor of Landlord, in form and by a financial
institution acceptable to Landlord, as security for the full and faithful
performance by Tenant of each and every term, provision, covenant and condition
of this lease. Said Irrevocable Letter of Credit shall be maintained or renewed
over the entire period of this lease, and over any option period. If tenant
defaults in respect of any of the terms, provisions, covenants and conditions
of this lease, including but not limited to payment of rent, and renewal of the
Letter of Credit, Landlord may, but shall not be required to, issue its draft
against said Letter of Credit, and may use, apply or retain the whole or any
part of said security for the payment of any rent and additional rent in
default or for any other sum which Landlord may expend or be required to expend
by reason of Tenant's default, including any damages or deficiency in the
reletting of the premises, whether such damages or deficiency accrue before or
after summary proceedings or other re-entry by Landlord. If Tenant shall fully
and faithfully comply with all the terms, provisions, covenants and conditions
of this lease, and after the time
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fixed as the expiration of the demand term, including any renewal options that
are exercised by tenant and after the removal of Tenant and surrender of
possession of the demised premises to Landlord, the Irrevocable Letter of
Credit, or any balance thereof, shall be surrendered. Whenever and as often as
the amount of the security held by Landlord shall be diminished by Landlord's
application thereof, Tenant shall, within 10 days after Landlord's request
therefor deposit additional security in a form permissible hereunder, with
Landlord sufficient to restore the security to its original amount of
$12,000.00. In the absence of evidence satisfactory to Landlord of an assignment
of the right to receive the security, or the remaining balance thereof, Landlord
may return the security to the original Tenant, regardless of one or more
assignments of the lease itself. In case of a sale or transfer of the fee of the
demised premises, or any cessation of Landlord's interest therein, whether in
whole or in part, Landlord may assign its rights under the Irrevocable Letter of
Credit, or may require that said Irrevocable Letter of Credit be reissued to the
benefit of the succeeding owner of the demised premises and from and after such
assignment or transfer, Landlord shall be relieved of all liability with respect
thereto. The provisions of the preceding sentence shall apply to every
subsequent sale or transfer of the fee of the demised premises, and any
successor of Landlord may, upon a sale, transfer, or other cessation of the
interest of such successor in the demised premises, whether in whole or in part,
assign over any unapplied part of said security to the successor owner of the
demised premises and shall thereupon be relieved of all liability with respect
thereto.
(b) Tenant may at any time substitute, in whole or in part,
for such Irrevocable Letter of Credit, cash, bonds of the United States
Government, or other securities satisfactory to Landlord, provided the amount of
such cash or the market value of such bonds or securities, shall at all times
aggregate at least $12,000.00. Such cash, bonds or securities shall be held by
Landlord subject to all the rights and obligations hereinabove set forth with
respect to the Irrevocable Letter of Credit. Whenever and as often as the
aggregate market value of any such bonds, securities and cash falls below said
sum, either by drop in market value or by Landlord's application thereof, Tenant
shall deliver additional cash, bonds or securities of the character hereinabove
mentioned in order that Landlord shall at all times have, for the purposes in
this Article set forth, cash, bonds and securities of the aggregate market value
of at least $12,000.00. During such time as no default in the payment of rent
and/or other money payments shall exist under this lease, any income from the
Certificate of Deposit and/or such bonds and securities shall be paid to Tenant
promptly after the receipt thereof but whenever any such default shall exist the
entire income from such bonds or securities shall be added to the funds so held
by Landlord. At any time or times when, pursuant to the provisions of this
Article, Landlord shall be entitled to apply any of the aforesaid cash, Landlord
is hereby irrevocably authorized, without further notice, to sell the whole or
any part of said bonds or other securities for such purposes at prices deemed
proper by Landlord, which sale may be public or private, and Tenant hereby
consents that Landlord may become the purchaser at any such sale. Landlord shall
be authorized to deduct from the proceeds of any such sale the reasonable
expenses thereof, including attorney's fees. Should Tenant's limitation
hereunder exceed the amount of the security, Tenant shall remain responsible for
any additional amounts.
(c) Absent a default, the security deposit shall be returned
or released to Tenant at the expiration of the lease term or of any extension
thereto granted or exercised hereunder and upon full and complete satisfaction
by Tenant of all covenants and obligations hereunder, except that, at Landlord's
own sole option and upon written notice to Tenant, Landlord may apply any cash
held as security deposit against the final month's lease payment due hereunder,
plus applicable tax and insurance payments ("Remaining Rent"). If the cash
security
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is not sufficient to pay the Remaining Rent in full, Tenant shall promptly pay
any additional amounts required.
28. SURRENDER OF PREMISES. At the expiration of this lease, Tenant
shall surrender the leased premises in the same condition as existed on the
commencement date of this lease, approved alterations and reasonable wear and
tear excepted. Before surrendering the leased premises, Tenant shall remove all
of its personal property and trade fixtures and such alterations or additions
to the leased premises made by Tenant as may be specified for removal by
Landlord, and shall repair any damage caused by such property or the removal
thereof and shall leave the leased premises in a clean and orderly condition.
If Tenant fails to remove its personal property and fixtures on or prior to the
expiration date of this lease, Landlord may either (i) deem such to be
abandoned in which case it shall become the property of Landlord or (ii) remove
and dispose of such at Tenant's expense. On or prior to the expiration date of
this lease, Tenant shall surrender to Landlord all keys to the leased premises.
29. HOLDING OVER. Any holding over after the expiration of the term
hereof shall be construed to be a tenancy from month to month at the rents in
effect on such expiration date (prorated on a monthly basis) and on the other
terms and conditions herein set forth except for those which are inconsistent
with a month to month tenancy. Landlord reserves the right to adjust base rent
amounts payable monthly over the period of any such month-to-month tenancy, on
advance notice of not less than thirty (30) days.
30. ATTORNEYS' FEES. If either party to this lease is required to
initiate or defend litigation in any way connected with this lease, the
prevailing party in such litigation in addition to any other relief which may be
granted, whether legal or equitable, shall be entitled to reasonable attorney
fees. If either party to this lease is required to initiate or defend litigation
with a third party because of the violation by the other party of any term,
provision or obligation contained in this lease, then the party so litigating
shall be entitled to reasonable attorneys' fees from the other party to this
lease. Attorneys' fees shall include attorneys' fees on any appeal, and in
addition a party entitled to attorneys' fees shall also be entitled to all
other reasonable costs for investigating such action, taking depositions and
the discovery, travel, and all other necessary costs incurred in such
litigation. All fees due hereunder shall be paid whether or not any such
litigation is prosecuted to judgement.
31. PAST DUE SUMS. If Tenant fails to pay, when the same is due and
payable, any minimum rent, additional rent, or other sum required to be paid by
it hereunder, such unpaid amounts shall bear interest from the due date thereof
to the date of payment at the rate of one and one-half percent (1-1/2%) per
month, for an annual rate of eighteen percent (18%).
32. GOVERNING LAW; VENUE. This lease shall be deemed to have
been executed in Salt Lake City, Utah, and the laws of the State of Utah shall
govern the validity, performance and enforcement of any obligation contained
herein. Should either party institute a legal suit or action for enforcement of
any obligation contained in this lease, it is agreed that the venue of such
suit or action shall be in the County of Salt Lake, State of Utah.
33. ACCORD AND SATISFACTION. No payment by Tenant or receipt by
Landlord of an amount less than is due hereunder shall be deemed to be other
than payment towards or on account of the earliest portion of the amount then
due, nor shall any endorsement or statement on any check or payment (or any
letter accompanying any check or payment) be deemed an "accord
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and satisfaction" (or payment in full), and Landlord may accept such check or
payment without prejudice to Landlord's right to recover the balance of such
amount or pursue any other remedy provided herein.
34. ALL PRIOR AGREEMENTS SUPERSEDED. This lease modifies and
replaces, as of August 1, 1993, all prior leases and agreements executed
between the parties hereto, which leases are void and unenforceable as of the
first day of the lease term hereunder.
IN WITNESS WHEREOF, the parties hereto caused these presents to be
executed the day and year first above written.
LANDLORD: TENANT:
XXXXXX PROPERTIES, INC. IOMED, INC.
By /s/ X. XXXXXX By /s/ XXXXXX X. XXXXXXX
---------------------------- -------------------------------
Its Company Secretary Its Vice President and CFO
---------------------------- -------------------------------
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SCHEDULE 2.2(e)
Administrative Services Agreement
102
Exhibit 2.2 (e)
ADMINISTRATIVE SERVICES AGREEMENT
This Administrative Services Agreement (the "Agreement"), dated as of
January 1, 1997, is made by and between Iomed, Inc., a Utah corporation
("Iomed") and Fillauer, Inc., a Delaware corporation (the "Company").
WHEREAS, pursuant to that certain Asset Acquisition Agreement and that certain
License Agreement between the Company and loomed, both of even date herewith,
the Company has purchased and licensed from Iomed certain assets of Iomed's
Motion Control Division and
WHEREAS, in furtherance of the objectives of the parties pursuant to these
transactions, the Company and Iomed desire to enter into this Agreement in
order to provide for the provision by Iomed to the Company certain
administrative services in connection with the conduct of the business of the
Motion Control Division by the Company, all on the terms and subject to the
conditions set forth herein.
NOW THEREFORE, the Company and Iomed agree as follows:
1. Services Provided by loomed. During the term of this Agreement, in
connection with the Company's conduct of the business of the Motion Control
Division, Iomed agrees to provide the Company with the following support
services, in a manner consistent with current practices, policies and its
conduct of the business prior to the date hereof (collectively the
"Administrative Services"):
PURCHASING / RECEIVING AND MATERIALS MANAGEMENT:
-- Placement of orders for raw materials pursuant to properly authorized
purchase orders submitted by the Company.
-- Track and follow-up on orders placed.
-- Receive all incoming raw materials and match to PO and submit
documentation for payment.
-- Provide MRP and other inventory stock status reports on a monthly
basis.
-- Allow access to 4th Shift MRP, manufacturing order tracking, and
inventory tracking functions.
-- Allow access to 4th shift Standard Cost modules, including Xxxx of
Material functions.
-- Assist in physical inventory.
-- Process shipping transactions.
103
ADMINISTRATIVE ASSISTANCE:
-- Telephone/reception service (at Iomed West location only) scheduled
access to conference room facilities.
-- Distribution of both internal and external mail.
-- Access to copy, fax and postage machines, scanners, network printers
etc. At Iomed West facility only.
-- Access to human resource consultation, recruiting assistance and
personnel records maintenance.
ACCOUNTING SERVICES:
-- Access to 4th Shift for customer order processing.
-- Customer invoicing pursuant to sales orders submitted by the
Company.
-- Application of cash receipts to customer accounts.
-- Maintenance of the aging and assistance in the collection of
accounts receivable.
-- Process accounts payable for all vendor invoices approved by the
Company.
-- Maintain vendor accounts payable records and aging.
-- Preparation of accounts payable checks for signature by authorized
Company employees.
-- Assistance in the establishment of bank accounts as needed.
-- Assistance in the monthly reconciliation of established bank
accounts.
-- Issue monthly financial reports
-- Provide other financial reports as reasonably requested by the
Company.
-- Maintain fixed asset and depreciation records.
-- Process payroll and make all necessary withholding tax payments.
-- Process and make all necessary sales and use tax payments.
-- Review and match all expense reports.
-- Maintain independent accounting records and files.
2. Standard of Care. IOMED shall provide all Administrative Services in
compliance with applicable law, and in a manner and of a quality consistent
with the analogous services carried out by Iomed in connection with its
operation of the business of Motion Control prior to the date hereof. Iomed
does not undertake any special or fiduciary duties to the Company in connection
with the performance of the Administrative Services, and its conduct shall not
be judged by or subject to any such special standards.
3. Compensation. In consideration for the Administrative Services, the
Company shall pay IOMED each month an amount equal to $4,200 for personnel and
overhead costs. In addition, IOMED shall charge to the Company, any direct out
of pocket costs incurred in connection with the provision of such services
directly to the Company (including, but not limited to printing costs for
invoices, checks, purchase orders, stationary, postage, files etc.)
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4. Invoices Payment Terms. IOMED shall charge the Company once each month
for Administrative Services rendered hereunder, and each such invoice shall be
payable in full by the Company within thirty (30) days of the invoice date.
Each invoice submitted by IOMED shall be accompanied by reasonably detailed
records, including, where applicable, original invoices or copies thereof,
supporting the out of pocket costs being submitted to the Company for payment.
5. Term. Unless otherwise agreed to in writing, the term of this Agreement
shall commence on the date hereof and shall terminate on June 30, 1997;
provided, however, that upon thirty (30) days written notice to the other
party; a) the Company shall have the right to terminate this Agreement in whole
or in part and b) Iomed shall have the right to terminate this Agreement in
whole or in part upon failure of the Company to make any payment pursuant to
the provisions of paragraph 4 hereof. Notwithstanding anything to the contrary
contained herein, the obligation of the Company to pay for Support Services
rendered under this Agreement prior to a termination shall survive any such
termination.
6. Relationship of the Parties. In providing the Administrative Services,
Iomed shall be deemed, for all purposes, to be an independent contractor.
Neither this Agreement nor the provision of the Administrative Services shall be
deemed or construed to create between Iomed and the Company the relationship of
principal and agent, joint venturers, co-partners, employer or employee, master
or servant, or any other similar relationship.
7. Governing Law. This Agreement shall be governed by, and construed in
accordance with, the internal laws of the State of Utah, without reference to
its conflict of law rules.
8. Notices. All notices and other communications required or permitted
hereunder shall be in writing and shall be deemed to have been duly given when
delivered by hand, three (3) business days after mailing by certified or
registered mail, return receipt requested and postage prepaid, and one (1)
business day after transmittal by overnight courier.
9. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original, but all of
which together shall constitute one and the same instrument.
10. Waiver. No waiver of any provision of this Agreement or any right or
obligation of any party hereunder shall be effective unless set forth in a
writing, specifying such waiver, signed by the party against which such waiver
is being enforced. Any such waiver shall be effective only in the specific
instance and for the specific purpose stated in such writing.
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11. Entire Agreement: Amendments. This Agreement sets forth the entire
understanding between the parties with respect to the subject matter hereof and
supersedes any prior oral or written communications, representations,
understandings or agreements existing between the parties with respect to such
subject matter. This Agreement may not be amended, in whole or in part, except
by a writing, specifying such amendment, signed by both parties.
12. Assignment. Neither the rights nor obligations of any party under this
Agreement may be transferred or assigned, directly or indirectly, without the
prior written consent of the other party, which consent will not be unreasonably
withheld; provided, however, that each party may freely assign its rights and
obligations hereunder to any Affiliate. As used in this Agreement, "Affiliate"
means, with respect to any person, a person controlling, controlled by or under
common control with such person, and "control" means ownership of a majority of
the outstanding voting securities of such person.
13. Attorney's Fees. If any legal action is brought for the enforcement of
this Agreement in connection with this Agreement, the prevailing party shall be
entitled to recover reasonable attorney's fees and other costs incurred in such
action or proceeding, in addition to any other relief to which it xxx be
entitled.
14. Binding Agreement. The terms of this Agreement shall be binding upon and
shall inure to the benefit of the parties hereto and their respective
successors and permitted assigns.
IN WITNESS HEREOF, the parties hereto have caused this Agreement to be executed
on the date first written above.
IOMED, INC., a Utah corporation
By:
--------------------------------
Its:
-------------------------------
FILLAUER, INC., a Delaware corporation
By:
--------------------------------
Its:-------------------------------
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SCHEDULE 3.1(d)
LITIGATION
107
SCHEDULE 3.1(d)
MOTION CONTROL
Division of Iomed, Inc.
LITIGATION PROCEEDINGS
-- None.
108
SCHEDULE 3.1(e)
Motion Control Employees
109
SCHEDULE 3.1(e)
MOTION CONTROL EMPLOYEES
LAST NAME FIRST NAME POSITION BASE PAY (1)
--------- ---------- -------- -----------
AU XXXX TECHNICIAN 1, ELECTRONIC ****
XXXXXXXX XXXXX ASSEMBLER, LEAD ELECTRO-MECH ****
XXXXXX XXXXXXXX ASSEMBLER 2, ELECTRO-MECH ****
XXXXXX XXXXXX CO ORDINATOR, REPAIRS ****
XXXXXXXX XXXXXXX ASSEMBLER 2, ELECTRO-MECH ****
XXXX XXXXX TECHNICIAN 3, ELECTRONIC ****
XXXX XXXXXX MACHINIST, PRINCIPAL ****
XXXXXXXX XXXXX ASSEMBLER 2, ELECTRO-MECH ****
XXXXXX XXXXX MACHINIST, ASSOCIATE ****
XXXXXX XXXXXX TECHNICIAN 3, ELECTRONIC ****
XXXXXXX XXXXXXX AST, ADMIN-MOTION CONTROL ****
XXXXXXX XXXXX TECHNICIAN 2, ELECTRONIC ****
XXXXX XXXXXX TECHNICIAN 2, ELECTRONIC ****
LAST NAME FIRST NAME POSITION BASE PAY (2)
--------- ---------- -------- -----------
XXXX XXXXXX DIRECTOR, PRODUCTION/TECHNICAL ****
XXXXXXX XXXXX ENGINEER, DEVELOPMENT ****
SEARS HARDOLD VP & GM, MOTION CONTROL ****
(1) Plus bonus potential for hourly employees in an amount consistent with
that previously attained under employment with Iomed.
(2) Plus bonus potential and other benefits as set forth in the individual
offer letters dated 10/15/96 presented to the respective employees.