ICU MEDICAL, INC.
ICU MEDICAL (UTAH), INC.
000 XXXXX XXXXXXXX
XXX XXXXXXXX, XXXXXXXXXX 00000
May 1, 2005
Hospira, Inc.
000 X. Xxxxx Xxxxx
Xxxxxxxx X0, Xxxxxxxxxx 0000
Xxxx Xxxxxx, Xxxxxxxx 00000-0000
Attention: Chief Executive Officer
Re: Asset Purchase Agreement dated February 25, 2005 between
ICU Medical, Inc. and Hospira, Inc. (the "Agreement")
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Dear Xx. Xxxxxx:
This letter agreement amends and supplements the Agreement, which was
assigned by Buyer to ICU Medical (Utah), Inc. ("Newco") by means of an
Assignment and Assumption Agreement dated February 28, 2005. Capitalized terms
used, but not defined, in this letter agreement have the meanings ascribed to
them in the Agreement and Schedule 6.8 to the Agreement. References in this
letter agreement to articles, sections, subsections, schedules and exhibits are
to articles, sections, subsections, schedules and exhibits of the Agreement.
Except as expressly amended by this letter agreement, the Agreement remains in
full force and effect. In the event of any conflict or inconsistency between
this letter agreement and the Agreement, this letter agreement shall control.
Closing Date and Closing
Subject to the provisions of Section 3.1, the Closing will take place on
May 1, 2005 at 12:01 a.m. MDT, or such other date and time as shall be fixed by
agreement of the parties.
Definitions
The following definitions are added to the Agreement:
"Surgicare Assets" means the assets listed on Exhibit A hereto.
"Surgicare Products" means the products listed on Schedule 1.1(c) under
the heading "Surgicare."
Excluded Assets
Schedule 2.2 listing the Excluded Assets is amended to include the
Surgicare Assets.
Purchase Price
Because the parties have agreed that the Surgicare Assets are Excluded
Assets, as provided above, Section 2.3(a) of the Agreement is hereby amended to
read as follows:
"The total purchase price for the Acquired Assets and the Real
Property will be the excess of Thirty-two Million Four Hundred
Forty-five Thousand Dollars ($32,445,000) over the amount of
Seller's accrued liability as of the Closing Date for certain
vacation pay that will be assumed by Buyer pursuant to Section 2.5
(such excess, the "Purchase Price"), subject to adjustment as
provided in Section 2.4 and Exhibit 2.10, together with the
assumption by Buyer of certain obligations of Seller as provided in
Section 2.5."
Vacation Pay
For purposes of Sections 2.3 and 2.5, the amount of Seller's liability to
Employees for vacation pay accrued from January 1, 2005 to the Closing Date
shall be the sum of the Closing Date Accruals (as defined below) of all
Employees. Each Employee's individual vacation accrual as of the Closing Date,
which may be a negative amount, ("Closing Date Accrual") will be (A) the total
vacation pay to which such Employee is entitled for 2005 multiplied by a
fraction, the numerator of which is the number of weeks and fractions thereof
elapsed from and after December 31, 2004 to and including the Closing Date and
the denominator of which is 52, less (B) the amount of vacation pay attributable
to the number of days of vacation taken by such Employee in 2005 on or before
the Closing Date.
Payment of Accrued Vacation Pay
A Hired Employee whose employment by Newco is voluntarily or involuntarily
terminated during 2005 will be entitled to payment of vacation pay credited to
the Hired Employee as of January 1, 2005 in accordance with Seller's vacation
pay policy less the amount of vacation pay attributable to the number of days of
vacation taken by such Hired Employee in 2005 before such termination
("Termination Vacation Pay"). Newco shall be responsible for funding the portion
of such payment equal to such Hired Employee's Termination Date Accrual (as
defined below). As used herein, "Termination Date Accrual" as to a Hired
Employee shall mean (A) the total vacation pay to which such Hired Employee is
entitled for 2005 multiplied by a fraction, the numerator of which is the number
2
of weeks and fractions thereof elapsed from and after December 31, 2004 to and
including the date of such Hired Employee's termination and the denominator of
which is 52, less (B) the amount of vacation pay attributable to the number of
days of vacation taken by such Hired Employee in 2005 on or before such date of
termination. A Hired Employee's Termination Date Accrual may be a negative
number. Seller shall pay to Newco with respect to such Hired Employee (X) an
amount equal to such Hired Employee's Termination Vacation Pay minus such Hired
Employee's Termination Date Accrual plus (Y) all applicable payroll taxes on the
employer and the Hired Employee and other required withholdings on the amount
expressed in clause (X) or, in the event not all of such amount is payable to
such Hired Employee, on the portion of such amount that is payable to such Hired
Employee. The parties acknowledge that if such Hired Employee's Termination Date
Accrual is a negative amount, only a portion of the amount expressed in clause
(X) in the preceding sentence will be payable to such Hired Employee and the
balance will be retained by Newco. At least 10 business days before the date of
each payment of Termination Vacation Pay Newco is required to make to a Hired
Employee under this paragraph, Newco shall deliver to Seller an invoice for the
gross amount of the payment Seller is required to make to Newco in respect of
such Hired Employee as provided above (reflecting the payment date and a
detailed calculation of the gross amount of such payment); and Seller shall pay
in advance to Newco or Buyer, as applicable, the gross amount of such payment at
least three business days before such payment date. Newco and Buyer shall have
no obligation to Seller to make payments in excess of the amounts which Newco is
responsible for funding as provided in this paragraph if, and to the extent
that, Seller does not fund such payments as provided above.
Health Care
Seller agrees that the Altius and IHC HMOs that Newco will provide to
Hired Employee will satisfy the obligations of Buyer and Newco under paragraph 1
of Annex 6.8A of Schedule 6.8 to provide Hired Employees health care coverage
comparable to health care coverage offered by Seller as of the date of the
Agreement.
Access to Business and Accounting Books and Records
For a period of two (2) years from the Closing Date, Seller agrees to
provide Buyer and Newco with copies of, or reasonable access to, all of the
business and accounting books and records in the actual possession of Seller
that are directly related to the Acquired Assets and the manufacture of the SLC
Products including, without limitation, general ledgers, vendor files and fixed
asset records, but not including any books and records related to sales,
marketing and distribution of the SLC Products. If any such accounting books and
records are in the possession of third parties, Hospira will use commercially
reasonable efforts to obtain reasonable access to such accounting books and
records for Newco.
3
Other Amendments
In Sections 2.1(a)(i) and 2.1(a)(ii) and the ultimate paragraph of Section
2.1, the term "SLC Products" is replaced with "SLC Products (other than the
Surgicare Products)".
In Section 2.4(a), the dollar amounts "$24,945,000" are replaced with
"$21,945,000".
The following language is added at the end of Section 4.4: "The parties
acknowledge that, although all such statements include the Surgicare Assets, the
Surgicare Assets are now "Excluded Assets."
The second and third sentences of Section 4.6 are replaced with the
following language (added language is underlined): "Except as set forth on Part
4.6 of the Disclosure Schedule, the Acquired Assets, the intangible assets to be
licensed to Buyer under the MCDA, the Surgicare Assets to be used by Newco under
the MCDA, the 510(k) Registrations to be transferred to Buyer under the MCDA and
the Real Property to be transferred to Buyer pursuant to the Real Estate
Purchase Agreement together constitute all of the assets necessary to
manufacture the SLC Products and operate the Facility in connection with the
manufacture of the SLC Products in substantially the manner in which the SLC
Products were manufactured by Seller (other than with respect to functions
performed by Hospira outside the Facility). Except as set forth on Part 4.6 of
the Disclosure Schedule and except for maintenance and repair performed in the
ordinary course, the tangible Acquired Assets (and the Surgicare Assets)
necessary to manufacture the SLC Products and operate the Facility to
manufacture the SLC Products in substantially the manner in which the SLC
Products are manufactured by Seller are, and as of the Closing Date will be, in
good operating condition and repair, normal wear and tear excepted."
In Section 8.2(c), after the words "Acquired Assets," insert ", the
Surgicare Assets".
In Section 8.3(d), after the words "Acquired Assets," insert "or the
Surgicare Assets".
Replace Schedule 2.8 ("Tax Allocation") with Schedule 2.8 ("Tax
Allocation") attached hereto.
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Please indicate your agreement to the foregoing by singing below.
ICU Medical, Inc. ICU Medical (Utah), Inc.
By: /s/ Xxxxxxx X. X'Xxxxx By: /s/ Xxxxxxx X. X'Xxxxx
---------------------------- ----------------------------
Name: CFO Name: CFO
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Agreed and Accepted this 1st day of
May 2005
Hospira, Inc.
By: /s/ Xxxxxxxx X. Xxxxxxx
----------------------------
Name: Senior V.P. and Chief Financial Officer
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