EXHIBIT 10.48
PURCHASE AGREEMENT
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AGREEMENT (the "Agreement") made effective the 1st day of June, 1996 by
and between ARROW INTERNATIONAL, INC., a Pennsylvania corporation ("AI") and
ARROW TRAY PRODUCTS, INC., a Pennsylvania corporation formerly known as
Endovations, Inc. (the "Company").
RECITALS:
AI desires to purchase, and the Company desires to sell certain of the assets
of the Company pertaining to the Company's liver biopsy and paracentesis tray
product lines (the "Company's Tray Products Business").
NOW, THEREFORE, in consideration of the mutual promises, covenants and
representations contained herein, the parties hereto agree as follows:
ARTICLE I.
DEFINED TERMS
For all purposes of this Agreement, the following terms shall have the
meanings indicated:
1.1 "AI" shall mean Arrow International, Inc., a Pennsylvania
corporation.
1.2 "Arrow Precision" shall mean Arrow Precision Products, Inc., a
Pennsylvania corporation.
1.3 "Assets" shall mean the assets and product lines being sold
hereunder, as listed in Section 2.1 below.
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1.4 "Closing" shall mean the consummation of the purchase and sale
transaction contemplated by this Agreement, which is occurring simultaneously
with the parties' execution of this Agreement.
1.5 "Closing Date" shall mean the date of the Closing, i.e., the
effective date of this Agreement first set forth above.
1.6 "Company" shall mean Arrow Tray Products, Inc., a Pennsylvania
corporation, formerly known as Endovations, Inc., a wholly owned subsidiary of
Arrow Precision.
1.7 "Contracts" shall have the definition set forth in Section 4.14
below.
1.8 "Disclosure Schedule" shall mean the Disclosure Schedule
(attached hereto and made a part of this Agreement) which identifies specific
sections to which each such disclosure relates.
1.9 "FDA" shall mean the United States Food and Drug Administration.
1.10 "Intangible Assets" shall mean the intangibles described in
Section 4.10 below.
1.11 "Inventory" shall mean the inventory described in Section 4.7(a)
below.
1.12 "Products" shall mean the following described products and
product lines of the Company, together with all product ideas, improvements,
and technology (as they are developed to the Closing Date) related thereto:
(a) EN-00370-001 Liver Biopsy Tray
(b) EN-00376-000 Paracentesis Tray
1.13 "Receivables" shall mean the receivables described in Section 4.6
below.
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ARTICLE II.
PURCHASE AND SALE OF ASSETS
2.1 Assets of the Company. The Company agrees to sell, transfer,
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and convey, and AI agrees to purchase and receive, upon the terms and
conditions set forth in this Agreement, the following business, assets,
properties, and rights of the Company wheresoever located and whether or
not carried or reflected on the books and records of the Company, together
with all associated goodwill (hereinafter sometimes collectively called the
"Assets"):
(a) The right to use the Company's former name of
"Endovations" to the extent permitted in Section 2.1(a) of a certain
agreement by and between the Company and Medical Innovations Corporation, a
California corporation, dated and effective April 19, 1996.
(b) The Products (as defined herein).
(c) All trade secrets, plans, formulas, engineering notes
and notebooks, shop rights, production data, customer lists, and
supplier/vendor lists necessary to manufacture, assemble, and sell the
Products.
(d) All of the Receivables (as defined herein) regardless
of age.
(e) The Inventory (as defined herein).
(f) The Intangible Assets (as defined herein).
The Company will also cause Arrow Precision to sell, transfer and convey
to AI all of Arrow Precision's right, title and interest in the Intangible
Assets.
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Except for contractual obligations under the Contract, the Assets shall be
conveyed and transferred to AI free and clear of all liabilities, obligations,
liens, and encumbrances (except the Receivables which are subject only to the
customer credit balances, if any, disclosed pursuant to Section 4.6(a)(iii)
below).
2.2 Excluded Assets. No interest is being sold in any assets of the
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Company not specifically provided in this Agreement to be sold to AI. By way
of example, no interest in the following assets is being sold by the Company
to AI under this Agreement (the "Excluded Assets"):
(a) The Company's franchise to be a corporation.
(b) The Company's stock transfer book and records, the
record books containing the minutes of meetings of directors and shareholders
of the Company and such other of the Company's records as have exclusively
to do with its organization, existence, or stock capitalization.
(c) The Company's financial records.
(d) Any contracts related to employment arrangements with
current employees.
(e) Any employment benefit, pension, profit sharing, or
similar plan established by the Company.
2.3 Purchase Price for the Assets.
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(a) The purchase price to be paid by AI to the Company for
the Assets (and the noncompete covenant under Section 6.2 below) shall be the
sum of the following:
(i) $1,050,000; plus
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$ 17,479.00 representing the value of the
Company's Inventory valued at the
Company's standard cost as of May
31, 1996; plus
$ 67,699.27 representing the dollar amount of
the Company's total Receivables
which are less than ninety (90)
days old as of the date shown in
Section 4.6(a) below, reduced by
customer credit balances, if any.
$1,135,178.27 Total purchase price.
(b) A physical count of the Company's Inventory has been
taken during the several day period ending on the day immediately preceding
the Closing Date by representatives of AI and the Company, for purposes
of calculating the purchase price for the Inventory.
(c) All payments and checks received by the Company after
the Closing on account of any of the Assets (including, without limitation,
payments on the Receivables) shall be promptly endorsed and delivered
over to AI, or if only a portion of a payment or check received is on
account of any of the Assets, then that portion shall be promptly remitted
to AI.
2.4 Payment. The purchase price will be paid at Closing by AI in
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cash or certified funds to the Company.
2.5 Liabilities.
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(a) Assumed Liabilities. In connection with the sale,
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transfer, conveyance, assignment and delivery of the Assets pursuant to this
Agreement, on the terms and subject to the
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conditions set forth in this Agreement, at the Closing AI will assume and
agree to pay, perform and discharge when due the following obligations (the
"Assumed Liabilities") of the Company:
(i) the customer credits, if any, set forth in
Section 4.6(a)(iii) of the Disclosure Schedule, if any.
(b) Retained Liabilities. Except for the Assumed
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Liabilities, AI shall not assume by virtue of this Agreement or the
transactions contemplated hereby, and shall have no liability for, any
liabilities or indebtedness or other obligations of the Company or Arrow
Precision of any kind, character or description whatsoever (the "Retained
Liabilities"). The Company and Arrow Precision will retain sole
responsibility for the Retained Liabilities, and shall individually defend,
indemnify, and hold harmless AI from and against and in respect of their
respective Retained Liabilities.
2.6 Inventory.
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(a) The Inventory consists only of finished goods. The
Inventory will be transferred to AI at Closing.
ARTICLE III.
CLOSING
3.1 Date and Place. The Closing is occurring contemporaneously
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with the parties' execution of this Agreement, at a place mutually agreed to
by the parties.
3.2 Deliveries by the Company. At this Closing, the Company
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delivers herewith or makes available to AI:
(a) A bills of sale, in form mutually agreeable to the
parties (the "Company Xxxx of Sale"). transferring and conveying to AI good
and marketable title to the Inventory.
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(b) Such bulk or individual assignments, dated as of the
Closing Date, as may be necessary or desirable to transfer to AI all of the
Company's right, title, and interest in the Intangible Assets.
(c) Possession of and title to the Assets owned by the
Company, and AI shall be entitled to full use and possession of the Assets
as of the Closing Date. AI shall arrange for and pay for the transfer of
the Inventory, documents, and other Assets.
(d) A copy of the Articles of Incorporation and By-Laws of
the Company, with all amendments thereto and restatements thereof, and a
certificate of good standing from the State of Pennsylvania. The Articles of
Incorporation shall be certified as of a date within a reasonable time prior
to the Closing Date by the Pennsylvania Secretary of State, and the By-Laws
shall be certified within a reasonable period of time prior to the Closing
Date by the Company's secretary.
(e) All consents and approvals of governmental agencies, if
required, and third parties, if required, to the transactions contemplated by
this Agreement.
(f) A unanimous resolution of the Directors of the Company,
approving this Agreement and the related closing documents, and authorizing
the taking of such other action as shall be advisable or necessary on the
part of the Company to complete the transactions contemplated by this
Agreement.
(g) A UCC-1 financing statement search from a reputable
private search firm, dated within ten (10) days prior to the effective date
of this Agreement, showing all financing statements filed against any of the
Assets with the Secretary of the Commonwealth of Pennsylvania
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and the Prothonotary of Berks County, plus copies of all such financing
statements, plus a lien certificate.
(h) A copy of the ten (10) day notice filed by the Company
with the Pennsylvania Department of Revenue, as required by 69 P.S.
Section 529, 72 P.S. Section 7240, Pennsylvania Statutes.
(i) A copy of the ten (10) day notice filed by the Company
with the Pennsylvania Department of Labor and Industry, as required by
43 P.S. Section 788.3 Pennsylvania Statutes.
(j) The following documents and files pertaining to the
Assets:
- All 510(k) applications and files.
- Bills of material for Products
- The drug and device master record for all of
the Products.
- All listing forms for all Products.
- All complaint files and logs for all Products.
- All label approval forms associated with the
Products.
(k) A certified list of the Company's creditors pertaining
to the Products (names, addresses and balances owed) as of the end of the
calendar month immediately preceding the Closing Date (an updated list of
the Company's creditors pertaining to the Products, as of the Closing Date,
will be provided to AI within thirty (30) days after the Closing Date).
(l) The form of notices sent or intended to be sent to the
Company's independent representatives and dealers in form and substance
satisfactory to the Company and AI.
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(m) Marketing materials of the Company related to the
Products, including, without limitation, photographs, catalogues, videos,
brochures and other sales literature, graphics, and artwork.
3.3 Deliveries by Arrow Precision. At this Closing, the Company
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will also cause Arrow Precision to deliver or make available to AI:
(a) Such bulk or individual assignments, dated as of
the Closing Date, as may be necessary or desirable to transfer to AI all of
Arrow Precision's right, title and interest in the Intangible Assets.
(b) A copy of the Articles of Incorporation and By-Laws of
Arrow Precision with all amendments thereto and restatements thereof, and a
certificate of good standing from the State of Pennsylvania, each of which
shall be certified as of a date within a reasonable time prior to the Closing
Date by the Pennsylvania Secretary of State.
(c) A unanimous resolution of the Directors of Arrow
Precision approving this Agreement and the related closing documents, and
authorizing the taking of such other action as shall be advisable or
necessary on the part of Arrow Precision to complete the transactions
contemplated by this Agreement, both with respect to Assets owned by
Arrow Precision and as sole shareholder of the Company.
(d) All documents and files pertaining to the Intellectual
Properties (consisting of 510(k) applications and files).
(e) A consent to this transaction from CoreStates Bank, N.A.
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(f) A termination of any lien and security interest
of CoreStates Bank, N.A. (f/k/a Xxxxxxxx Bank) of Lancaster, Pennsylvania,
in form and substance satisfactory to AI in all of the Assets being
transferred hereunder by Arrow Precision to AI.
3.4 Deliveries by AI. At the Closing, AI herewith makes the
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following deliveries:
(a) AI delivers to the Company a check in the amount of the
total purchase price.
(b) A copy of the Articles of Incorporation and By-Laws
of AI.
(c) A copy of the unanimous resolution (or a
certification thereof) of the Board of Directors of AI approving this
Agreement and the related closing documents and authorizing the taking
of such other action as shall be advisable or necessary on the part of AI
to complete the transactions contemplated by this Agreement.
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES
OF THE COMPANY
As a material inducement to AI's willingness to enter into and perform
this Agreement, the Company represents and warrants to AI as follows:
4.1 Organization. The Company is a corporation duly organized,
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validly existing and in good standing under the laws of the State of
Pennsylvania.
4.2 Subsidiaries/Affiliates. The Company has no subsidiaries or
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affiliated companies. The Company has no interest, direct or indirect, and
has no commitment to purchase any interest, direct or indirect, in any other
corporation or in any partnership, joint venture or other business enterprise
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or entity. The business carried on by the Company has not been conducted
through any direct or indirect subsidiary or affiliate.
4.3 Capitalization. The authorized capital stock of the Company
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consists solely of 1,000 common shares, of which 1,000 shares are issued
and outstanding. There are no voting trusts, and there are no other
agreements or understandings to which the Company or Arrow is a party,
with respect to any of the capital stock of the Company.
4.4 Ownership of Shares. Arrow Precision is the sole record and
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beneficial owner of all of the outstanding shares of Company stock.
4.5 Authority. The Company and Arrow Precision have full power
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and authority to enter into this Agreement. All shareholder and director
actions and authorizations required for the approval of this Agreement and
the consummation of the transactions contemplated hereby have been taken.
This Agreement has been duly executed and delivered by the Company. This
Agreement is a valid and binding obligation of the Company, enforceable in
accordance with its terms, except as may be affected by bankruptcy,
insolvency, reorganization, moratorium or similar laws relating to or
affecting creditors' rights generally or by rules of law governing specific
performance, injunctive relief or by other equitable principles (regardless
of whether such principles are considered in a proceeding at law or in
equity). Neither the execution and delivery of this Agreement nor the
consummation of the transactions contemplated hereby will (i) violate, or
conflict with, or require any consent under, or result in a breach of any
provisions of, or constitute a default (or an event which, with notice or
lapse of time or both, would constitute a default) under, or result in the
termination of, or accelerate the performance required by, or result in the
creation of any lien, security interest, charge or encumbrance
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upon any of the Assets or violate any of the conditions or provisions of the
Articles of Incorporation or By-Laws of the Company or Arrow Precision or of
any note, bond, mortgage, indenture, deed of trust, license, agreement or
other instrument or obligation to which the Company or Arrow Precision is a
party, or by which the Company or Arrow Precision or any of the Assets
may be bound or affected, or (ii) to the knowledge of the Company violate any
order, writ, injunction, decree, statute, rule or regulation applicable to
the Company or Arrow Precision. To the knowledge of the Company, no
consent or approval by, notice to or registration with any governmental or
administrative authority or board or third party (other than Arrow Precision
and CoreStates Bank, N.A.) is required in connection with the execution and
delivery by the Company of this Agreement or the performance by the Company
and Arrow Precision of any of the transactions contemplated hereby.
4.6 Receivables.
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(a) The Disclosure Schedule lists all receivables of
the Company related to the Products (the "Receivables") as of close of
business on May 31, 1996, including, without limitation, the following:
(i) All trade accounts receivable (including dealer
accounts receivable).
(ii) All known claims of every description owned and
receivable by the Company, including, without limitation, claims for refunds,
rebates, and credits.
(iii) All customer credit balances, if any.
(b) All of the Receivables have arisen from and represent
arms length, bona fide transactions made in the ordinary course of business.
The Receivables are good and collectible to the extent of the full amount
thereof, except as set forth in the Disclosure Schedule.
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4.7 Plant, Facilities and Manufacturing.
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(a) Inventory. The Disclosure Schedule lists all of the
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Company's Inventory being sold to AI. All of the Inventory is in good,
usable condition, except as otherwise disclosed in the Disclosure Schedule.
(b) Suppliers. The Disclosure Schedule lists the vendors
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currently used by the Company for all components and parts of the Products.
(c) Substantially All Assets. In connection with this
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Agreement, the Company is transferring and selling substantially all of its
remaining assets (other than cash) to AI.
4.8 Title to Assets and Properties.
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(a) Except as set forth in the Disclosure Schedule, the
Company and Arrow Precision own all of the Assets. Except as set forth in
the Disclosure Schedule, all of the Assets are located in the Company's
offices at Hill and Xxxxxx Avenues, Wyomissing, Pennsylvania.
(b) The Company has good, marketable title to all of the
Assets being sold by the Company hereunder, free and clear of all mortgages,
liens, pledges, charges, security interests, claims, encumbrances or
restrictions of any kind whatsoever (whether accrued, absolute, or
otherwise).
(c) Arrow Precision has good title to all of the
Intellectual Properties, free and clear of all mortgages, liens, pledges,
charges, security interests, claims, encumbrances, or restrictions of any
kind whatsoever (whether accrued, absolute, contingent or otherwise).
4.09 Liabilities.
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(a) The Company has fully complied with the provisions of
69 P.S. Section 529, 72 P.S. Section 7240, and 43 P.S. Section 788.3(a),
Pennsylvania Statutes, by giving the notices of this bulk sale, as required
therein.
(b) Except for the statutes referenced in paragraph (a)
above, Pennsylvania has no other statute or regulation governing the sale by
an entity of substantially all of its assets.
4.10 Intangible Assets.
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(a) The Disclosure Schedule contains a list and complete
description of all PMAs, 510(k)s, permits, franchises, approvals,
authorizations, consents, licenses, accreditations and registrations
("Licenses"), if any, issued or granted to, or held by, the Company or
Arrow Precision related to the Products, and indicating the person or entity
to which any such License was issued or by which it is held. All such
Licenses are valid and in full force and effect, no proceedings or actions
with respect to the suspension, cancellation or any other aspect of any of
them is pending or threatened, and no basis exists therefor, and the
transactions contemplated hereby will not affect such Licenses.
(b) The Disclosure Schedule also (i) contains a list and
brief description of all domestic and foreign patents, patent and know-how
licenses, trade names, trademark and service xxxx registrations, common law
trademarks, copyright registrations, copy rights, and applications for any
of the foregoing, if any ("Intellectual Properties"), owned by the Company
or Arrow Precision and used in the manufacture, marketing and distribution
of the Products, and (ii) specifies the jurisdiction in or by which such
Intellectual Properties have been registered, filed or issued. All such
Intellectual Properties are valid and in full force and effect, or pending.
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(c) Except as set forth on the Disclosure Schedule, the
Company and Arrow Precision have all Licenses and own, or possess adequate
rights to use, all Intellectual Properties and all inventions, technology,
processes, products, designs, computer programs, know-how, trade secrets and
formulae necessary to conduct the Company's Tray Products business and, to
the best knowledge of the Company and except as set forth on the Disclosure
Schedule, there are no actual or threatened claims, assertions or litigation
relating to the Company's ability to use the foregoing. Except as otherwise
described in the Disclosure Schedule and to the knowledge of the Company and
Arrow Precision, the Company and Arrow Precision are not infringing upon or
otherwise violating the rights of any third party with respect to any of the
Intellectual Properties or any of the Products, and the Company and Arrow
Precision are not infringing upon or otherwise violating the rights of any
third party with respect to any of the Intellectual Properties or any of the
Products, and the Company and Arrow Precision have not received any claim or
notice alleging any such infringement or violation. Except as set forth on
the Disclosure Schedule, neither the Company nor Arrow Precision knows of
any basis for any such proceeding or claim. There is no adverse judgment or
order against the Company or Arrow Precision with respect to any of the
foregoing.
4.11 Tax Matters. "Tax" shall mean any federal, state, local,
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foreign or other tax (whether income, sales, use, franchise, excise, real or
personal property or other kind of tax), assessment, levy, impost,
withholding or other governmental charge and shall include all interest and
penalties thereon. Except as otherwise disclosed in the Disclosure Schedule,
the Company has timely filed all Tax returns, reports and forms concerning
Taxes that are required to be filed. Except as otherwise disclosed in the
Disclosure Schedule, the Company has made timely payment of all such Taxes
when
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due and payable, including all interest, penalties, deficiencies and
assessments, if any, heretofore levied or assessed, and where payment was
not required to be made before Closing Date, the Company has set up an
adequate reserve or accrual for the payment of all Taxes required to be
paid in respect of all periods on or prior to the Closing Date. There are
no agreements for extension of time of assessment or payment of any Taxes
of the Company. No waiver of any statute of limitations has been executed
by or on behalf of the Company. Except as set forth in the Disclosure
Schedule, there are no examinations by the Internal Revenue Service "IRS")
of or relating to the Company presently in process, or threatened against
the Company. To the knowledge of the Company, neither the IRS nor any other
taxing authority is now asserting or threatening to assert, any deficiency
or assessment for additional Taxes, including any interest, penalties or
fines against the Company. Except as set forth in the Disclosure Schedule,
no federal income tax returns of the Company have been audited by the IRS.
The Company has not received any notice of any liability for Taxes other
than in the ordinary course of business and the Company has not incurred
any liability for Taxes which, in the aggregate, would result in a material
decrease in the net worth of the Company.
4.12 Conflicts of Interest. Except as set forth in the Disclosure
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Schedule, no present or former officer or director, and no shareholder,
subsidiary, affiliate or related entity of the Company has or, to the
knowledge of the Company, claims to have (a) any interest in the Assets,
trade secrets, know-how, or technology used in or pertaining to the
manufacture and sale of the Products, or (b) any contract, commitment,
arrangement, or understanding regarding any of the foregoing. No present
officer or director of the Company or Arrow Precision and no subsidiary,
affiliate or related entity thereof, has any ownership or stock interest
in any other enterprise, firm, corporation, trust or
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any other entity (other than AI) which is engaged in any line or lines of
business which are the same as, or similar to, or competitive with, the
Products. For purposes of this representation, ownership of not more than
five percent (5%) of the voting stock of any publicly held company whose
stock is listed on any recognized securities exchange or traded over the
counter shall be disregarded.
4.13 Human Resources.
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(a) Neither the execution and delivery of this Agreement
nor the consummation of the transactions contemplated hereby will violate,
or conflict with, or require any consent under, or result in a breach of any
provision of, or constitute a default (or an event which, with notice or
lapse of time or both, would constitute a default) under, or violate any of
the conditions of any labor contract or collective bargaining agreement
to which the Company or Arrow Precision is a party, or by which the
Company or Arrow Precision may be bound or affected. No consent or
approval by, or notice to any labor union is required in connection with
the execution and delivery by the Company of this Agreement or the
performance by the Company and Arrow Precision of any of the
transactions contemplated hereby.
(b) Any labor contract or collective bargaining agreement
which the Company or Arrow Precision is a party does not contain any
provisions which could be construed as imposing on AI any successor
liability for obligations thereunder of the Company or Arrow Precision.
(c) The Company is not in default with respect to its
payment or benefit obligations to its employees.
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4.14 Contracts.
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(a) The Disclosure Schedule lists and describes any and
all contracts, agreements, commitment and engagements material to the
Company and its business of manufacturing and selling the Products (the
"Contracts"), but not including agreements between the Company and its
dealers and representatives, including, without limitation, all (i) supply
and service contracts pertaining to the Products to which the Company
is a party as vendor or vendee, (ii) consulting contracts and agreements
pertaining to the Products, (iii) leases of personal property pertaining to
the Products, as lessor or lessee, (iv) all contracts and agreements
regarding Licenses and Intellectual Properties pertaining to the Products.
(b) All such Contracts are valid and binding and in full
force and effect as of the date hereof, and no breach or default (or event
or condition, which after notice or lapse or time, or both, would constitute
a breach or default) by the Company or Arrow Precision or, to the knowledge
of the Company, by any other party thereto exists with respect thereto, and
this Agreement and the transactions contemplated hereby will not cause any
breach or default thereof.
4.15 Legal Proceedings. Except as set forth on the Disclosure
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Schedule, there is no action, dispute, claim ((including any counterclaim or
cross claim), litigation, arbitration, hearing or other proceedings, at law
or in equity, pending or to the best of the Company's knowledge, threatened,
against or affecting the Company or its business, Assets, or the transactions
contemplated by this Agreement, and the Company and Arrow Precision do not
know or have reasonable grounds to know of the basis for any such action.
The Company is not subject to or in default under any judicial,
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governmental or administrative judgment, decree, order, writ or injunction
which would affect the transactions contemplated by this Agreement.
4.16 Compliance with Laws, Etc. The Company is not in violation of,
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and to the best knowledge of the Company, the Company is not under
investigation with respect to, and the Company has not been charged
with and given any notice of any violation of any applicable law, statute,
order, rule, regulation, policy, guideline or judgment of any federal, state,
local or foreign court or governmental or administrative body or agency
relating to the Company, its business, operations, agreements or policies.
4.17 Risk Management. The Disclosure Schedule also sets forth a
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list of all claims for any insured loss in excess of $5,000 per occurrence
between July 1, 1994 and the date of this Agreement relating to the Company
including, but not limited to, workers compensation, automobile and
general and product liability claims. All such policies are in full force
and effect. The Company has not been denied any insurance or
indemnity bond and no insurance carrier has cancelled or reduced any
insurance coverage of the Company. The Company has not received
any notice from any insurer or agent or any intent to cancel or reduce
any insurance coverage or that any substantial improvement or other
expenditure with respect to any insured property is necessary in order to
continue such insurance.
4.18 Fees or Commissions. The Company and Arrow Precision (including
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their officers, directors and employees) have not employed any broker,
agent or finder or incurred any liability for any brokerage fees, agent's
commissions or finder's fees or other similar obligations in connection with
the transactions contemplated hereby.
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4.19 Powers of Attorney. The Company has not granted any powers of
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attorney to any entity or person.
4.20 Product Complaints. Except as set forth in the Disclosure
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Schedule, the Company has not received any material complaint or injury
report regarding the Products, from July 1, 1994 to the date of this
Agreement.
4.21 Marketing and Sales.
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(a) The Disclosure Schedule lists all of the dealers (and
their addresses and telephone numbers) for the Company's Products.
(b) The Disclosure Schedule lists all of the hospitals
(including addresses and telephone numbers) which currently use the
Company's Products, identifying which Products are used by that hospital, and
showing the dollar amount of purchases of Products by each such hospital by
Product category in fiscal years 1994 and 1995, and in at least the first half
of fiscal year 1996.
4.22 Disclosure. No representation or warranty made by the Company
----------
or Arrow Precision in this Agreement and neither the Disclosure Schedule nor
any schedule, exhibit or certificate furnished or to be furnished by the
Company or Arrow Precision pursuant hereto contains or will contain any
untrue statement of a material fact or omits or will omit any material
fact necessary in order to make the statements contained therein not
misleading.
ARTICLE V.
REPRESENTATIONS AND WARRANTIES OF AI
As a material inducement to the Company's willingness to enter into and
perform this Agreement, AI hereby represents and warrants to the Company and
Arrow Precision that:
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5.1 Organization. AI is a corporation duly organized, validly
------------
existing and in good standing under the laws of the State of Pennsylvania,
with all requisite power and authority to own, lease and operate its
properties and to carry on its business as it is now being conducted and is
duly licensed, authorized and qualified to do business and in good standing
in Pennsylvania.
5.2 Authority. The execution, delivery and performance of this
---------
Agreement have been duly and effectively authorized by the Board of Directors
of AI and this Agreement has been duly executed and delivered by AI. No
other corporate proceedings on the part of AI are necessary to authorize this
Agreement or to consummate the transactions contemplated hereby. This
Agreement is a valid and binding obligations of AI, enforceable against AI
in accordance with its terms, except as may be affected by bankruptcy,
insolvency, reorganization, moratorium or similar laws relating to or
affecting creditors' rights generally or by rules of law governing specific
performance, injunctive relief or by other equitable principles (regardless
of whether such principles are considered in a proceeding at law or in
equity). Neither the execution and delivery of this Agreement nor the
consummation of the transactions contemplated hereby will (a) violate, or
conflict with, or require any consent under, or result in a breach of any
provisions of, or constitute a default (or an event which, with notice or
lapse of time or both, would constitute a default) under, or result in the
termination of, or accelerate the performance required by, or result in the
creation of any lien, security interest, charge or encumbrance upon any of
the properties of AI, or violate any of the conditions or provisions of the
Articles of Incorporation or By-Laws of AI or of any note, bond, mortgage,
indenture, deed of trust, license, agreement or other instrument or
obligation to which AI is a party, or by which AI or any of the Assets may
be bound or affected, or (b) to the knowledge of AI violate any order, writ,
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injunction, decree, statute, rule or regulation applicable to AI. To the
knowledge of AI, no consent or approval by, notice to or registration with
any governmental or administrative authority or board or third party is
required on the part of AI in connection with the execution and delivery by
AI of this Agreement or the performance by AI of any of the transactions
contemplated hereby.
5.3 Fees or Commissions. AI (including its officers, directors and
-------------------
employees) has not employed any broker, agent or finder or incurred any
liability for any brokerage fees, agent's commissions or finder's fee or
similar obligation in connection with the transactions contemplated hereby.
5.4 Legal Proceedings. There is no material action, dispute, claim
-----------------
(including any counterclaim or cross claim), litigation, arbitration, hearing
or other proceeding, at law or in equity, pending or, to the best of AI's
knowledge threatened against or affecting AI, its business, its property, or
the transactions contemplated by this Agreement and AI does not know
or have reasonable grounds to know of the basis for any such action. AI
is not subject to or in default under any judicial, governmental or
administrative judgment, decree, order, writ or injunction, which would
affect the transactions contemplated by this Agreement.
5.5 Compliance with Laws, Etc. AI is not in violation of, and to
-------------------------
the best knowledge of AI, AI is not under investigation with respect to, and
AI has not been charged with and given any notice of any violation of any
applicable law, statute, order, rule, regulation, policy, guideline or
judgment of any federal, state, local or foreign court or governmental or
administrative body or agency relating to the transactions contemplated by
this Agreement.
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5.6 Disclosure. No representation or warranty made by AI in this
----------
Agreement or to be furnished by AI pursuant hereto contains or will contain
any untrue statement of a material fact or omits or will omit any material
fact necessary in order to make the statements contained therein not
misleading.
ARTICLE VI.
MISCELLANEOUS COVENANTS
6.1 Covenant Not to Compete.
-----------------------
(a) For the period ending on the third anniversary of the
Closing Date or for whatever time within that period found by a court of
competent jurisdiction to be reasonably necessary for the protection of AI,
the Company and Arrow Precision will not, themselves or together with other
persons, directly or indirectly, own, manage, operate, join, control,
consult in or participate in the ownership, management, operation or
control of any business that engages in the business of developing,
manufacturing, distributing, or selling any of the Products.
This restriction will apply throughout the continental United States and
in all foreign countries or whatever geographical scope within that area
described above found by a court of competent jurisdiction to be reasonably
necessary for the protection of AI or any of its assignees.
(b) The Company and Arrow Precision hereby agree (i) that
the restrictions set forth in the paragraph immediately above are founded on
valuable consideration and are reasonable in duration and geographic
extent in view of the circumstances in which this Agreement is executed
and are necessary to protect the legitimate interests of AI, and (ii) that
the remedy at law for any breach of the foregoing covenant will be
inadequate and that AI will be entitled to injunctive relief
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in the event of any such breach. Nothing herein stated shall be construed as
prohibiting AI from pursuing any other remedies available to it for any such
breach or threatened breach or for any other breach of this Agreement.
(c) The consideration for the above-described covenant not
to compete is $25,000 ($25,000 applicable to the covenant not to compete of
each of the Company and Arrow Precision), and the Company and Arrow
acknowledge and agree that such consideration is fair and adequate payment
for said covenant and that they will be estopped from claiming at any time
in the future that such consideration is inadequate.
6.3 Tax Returns and Payments. After the Closing, the Company will
------------------------
timely file all Tax (as defined in Section 4.11) returns, reports and forms
required to be filed and will make timely payment of all such Taxes when due
and payable, including all interest, penalties, deficiencies, and assessments
owned, if any. The Company will use its best efforts to obtain from the
Pennsylvania Department of Revenue a clearance certificate (as contemplated
by 69 P.S. Section 529 and 72 P.S. Section 7240 Pennsylvania Statutes) and
will, upon receipt of such certificate, promptly deliver a copy thereof to AI.
ARTICLE VII
INDEMNIFICATION
7.1 Indemnification by the Company and Arrow Precision. The Company
--------------------------------------------------
and Arrow Precision shall be individually (and not jointly) liability to AI
to indemnify, defend and hold harmless AI from and against and in respect of
any and all demands, claims, actions, causes of action, assessments, fines,
losses, damages, liabilities, interest, penalties, costs, and expenses
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(including, without limitation, reasonable legal fees and disbursements
incurred in connection therewith) (any and all of which are sometimes referred
to herein as a "Loss" or "Losses") resulting from, arising out of, or incurred
by reason of any breach of any representation, warranty, covenant or agreement
by any one or more of the Company or Arrow Precision contained in this
Agreement or any agreement, certificate or document executed and delivered
by the Company or Arrow Precision pursuant hereto. It is the intent of this
Agreement that the indemnification by the Company shall apply only to Losses
resulting from a breach of any representation, warranty, covenant or
agreement made by the Company, and that the indemnification of Arrow
Precision shall apply only to Losses resulting from a breach of any
representation, warranty, covenant, or agreement made by Arrow Precision.
7.2 Assertion of Claims by AI.
-------------------------
(a) If AI shall have any claim for indemnification pursuant
to Section 7.1 above, it shall promptly give written notice thereof to
the Company and Arrow Precision (a "Claim Notice"), including in such notice
the dollar amount (if known) of the claim and a brief description of the
facts upon which such claim is based.
(b) The Company and Arrow Precision shall have thirty (30)
days following receipt of such Claim Notice to cure the default or breach
giving rise to such claim; PROVIDED, HOWEVER, that if thirty (30) days do
not provide a sufficient period of time for the Company and Arrow Precision
to cure such default or breach, this cure period shall be extended for a
reasonable period of time so long as a substantial effort is commenced by
the Company or Arrow Precision during the thirty (30) day period to effect a
cure and reasonable efforts are maintained thereafter by the Company
or Arrow to effect a cure.
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(c) If the Company and Arrow Precision do not effect such
cure within said thirty (30) day period or, if applicable under paragraph
(b) above, the extended cure period, AI shall have the right to pursue its
rights and remedies at law and/or in equity.
7.3 Infringement Claims.
-------------------
(a) The Company and Arrow Precision shall be jointly and
severally liable to AI to indemnify, defend, reimburse and hold harmless AI
from and against and in respect of one-half (1/2) of all Defense Costs
incurred by AI in connection with a claim, demand, lawsuit, or other
proceeding in which a third party alleges that any of the Products infringes
a patent of said third party (including, without limitation, against AI or a
declaratory judgment action filed by AI with respect to a demand or claim
against AI.
(b) For purposes of this Section, "Defense Costs" shall
mean all reasonable fees and expenses incurred by AI in connection with such
claim, demand, lawsuit, or other proceeding, including, without limitation,
attorneys fees, expert witness fees and costs, deposition charges, travel
and accommodation expenses.
7.4 Indemnification by AI. AI shall be liable to the Company and
---------------------
Arrow Precision to indemnify, defend and hold harmless the Company and Arrow
Precision from and against and in respect of any and all demands, claims,
actions, causes of action, assessments, fines, losses, damages, liabilities,
interest, penalties, costs and expenses (including, without limitation,
reasonable legal fees and disbursements incurred in connection therewith)
(any and all of which are sometimes referred to herein as a "Loss" or
"Losses") resulting from, arising out of or imposed upon or incurred by the
Company or Arrow Precision by reason of any breach of any representation,
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June 3, 1996 (9:52am) ::ODMA\SOFTSOL\311\SOFTSOL\11546\0
warranty, covenant oragreement of AI contained in this Agreement or any
agreement, certificate or document executed and delivered by AI pursuant
hereto. Arrow Precision is an intended third-party beneficiary of this
Agreement.
7.5 Assertion of Claims by the Company.
----------------------------------
(a) If the Company or Arrow Precision shall have any claim
for indemnification pursuant to Section 7.4 above, it shall promptly give
written notice thereof to AI (a "Claim Notice"), including in such notice
the dollar amount (if known) of the claim and a brief description of the
facts upon which such claim is based.
(b) AI shall have thirty (30) days following receipt of
such Claim Notice to cure the default or breach giving rise to such claim;
PROVIDED, HOWEVER, that if thirty (30) days do not provide a sufficient
period of time for AI to cure such default or breach, this cure period shall
be extended for a reasonable period of time so long as a substantial effort
is commenced by AI during the thirty (30) day period to effect a cure and
reasonable efforts are maintained thereafter by AI to effect a cure.
(c) If AI does not effect such cure within said thirty (30)
day period or, if applicable under paragraph (b) above, the extended cure
period, the Company and Arrow Precision shall each have the right to pursue
its rights and remedies at law and/or in equity.
7.6 Limitations. Notwithstanding any provision to the contrary in
-----------
this Agreement, the parties acknowledge and agree as follows:
(a) The aggregate indemnity liability of the Company and
Arrow Precision together to AI or AI to the Company and Arrow Precision
together under this Article VII shall not exceed the total purchase price
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June 3, 1996 (9:52am) ::ODMA\SOFTSOL\311\SOFTSOL\11546\0
of the Assets under Section 2.3 above. Arrow Precision's maximum liability
under the aforesaid aggregate indemnity liability shall be limited to
$50,000.00.
(b) No party shall be entitled to indemnification under
this Article VII for any given Loss unless the amount of the Loss exceeds
$1,000.
(c) The indemnity obligations set forth in this Article VII
shall survive for a period of three (3) years from the Closing Date. Upon
the expiration of such period, no indemnifying party hereunder shall have any
liability for Losses or for indemnification under Section 7.3 above unless
the party to be indemnified has within the three (3) year period given
written notice of a claim asserting liability in which case such period
shall be tolled with respect to such claim.
(d) AI may recover from the Company and/or Arrow Precision
only once for any given Loss with respect to which AI is entitled to
indemnification, i.e., AI may not seek a double recovery by alleging the
same Loss.
ARTICLE VIII.
MISCELLANEOUS
8.1 Amendment or Supplement. This Agreement may be amended or
-----------------------
supplemented at any time by mutual agreement of AI and the Company. Any
amendment or supplement must be in writing.
8.2 Survival. All representations, warranties and covenants of the
--------
Company, Arrow Precision or AI made in this Agreement (including the
Disclosure Schedule) shall survive the Closing Date for a period of three
(3) years after the Closing Date, and notwithstanding any investigation made
by or on behalf of any party hereto prior to the Closing Date.
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8.3 Expenses. Each party hereto shall bear and pay all costs and
--------
expenses incurred by it in connection with the transactions contemplated in
this Agreement, including fees and expenses of its own brokers, financial
consultants, accountants and counsel.
8.4 Entire Agreement. This Agreement, the Xxxx of Sale and related
----------------
closing documents being executed herewith contain the entire agreement among
the parties with respect to the transactions contemplated hereunder and
supersede all prior arrangements or understandings with respect thereto,
written or oral, other than documents referred to herein. The terms and
conditions of this Agreement shall inure to the benefit of and be binding
upon the parties hereto and their respective successors and their permitted
assigns. Nothing in this Agreement, expressed or implied, is intended to
confer upon any party, other than the parties hereto and their respective
successors and permitted assigns, any rights, remedies, obligations or
liabilities.
8.5 Assignment. None of the parties hereto may assign any of its
----------
rights or obligations under this Agreement to any other person or entity,
except that:
(a) AI can assign all its rights hereunder to any of its
subsidiaries without any other party's consent, but such assignment by AI
will not relieve it of its obligations for the ultimate performance thereof;
and
(b) The Company can assign all of its rights hereunder to
Arrow Precision without any other party's consent, but such assignment by the
Company will not relieve it of its obligations for the ultimate performance
thereof.
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8.6 Notices. All notices and other communications which are
-------
required or permitted hereunder shall be in writing and sufficient if
delivered personally or sent by overnight express or by registered or
certified mail, postage prepaid, addressed as follows:
If to Arrow: Arrow International, Inc.
Attention: Xxxx X. Xxxxxxxxx, Xx.,
Vice President-Finance
0000 Xxxxxxxxx Xxxx
X.X. Xxx 00000
Xxxxxxx, XX 00000
If to Company: Arrow Tray Products, Inc.
Attention: T. Xxxxxx Xxxxxxxx, President
Hill and Xxxxxx Xxxxxxx
X.X. Xxx 0000
Xxxxxxxxxx, XX 00000
If to Arrow Precision: Arrow Precision Products, Inc.
Attention: T. Xxxxxx Xxxxxxxx,
Vice President and Chief Operating Officer
Hill and Xxxxxx Xxxxxxx
X.X. Xxx 0000
Xxxxxxxxxx, XX 00000
8.7 Captions. The captions contained in this Agreement are for
--------
reference purposes only and are not part of this Agreement.
8.8 Counterparts. This Agreement may be executed in any number of
------------
counterparts, and each such counterpart shall be deemed to be an original
instrument, but all such counterparts together shall constitute but one
agreement.
8.9 Litigation Expenses. If any action, suit or proceeding is
-------------------
brought by a party hereto against another party hereto with respect to a
matter or matters covered by this Agreement, all costs
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June 3, 1996 (9:52am) ::ODMA\SOFTSOL\311\SOFTSOL\11546\0
and expenses of the prevailing party incident to such proceeding, including
reasonable attorneys' fees shall be paid by the other party.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the day and year first above written.
ARROW INTERNATIONAL, INC.
By: /s/ Xxxxxx Xxxxxx, Xx.
------------------------
President
ARROW TRAY PRODUCTS, INC.
BY: /s/ T. Xxxxxx Xxxxxxxx
------------------------
President
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June 3, 1996 (9:52am) ::ODMA\SOFTSOL\311\SOFTSOL\11546\0
JOINDER BY ARROW PRECISION PRODUCTS, INC.
-----------------------------------------
FOR VALUABLE CONSIDERATION, the receipt and sufficiency of which is
hereby acknowledged, ARROW PRECISION PRODUCTS, INC., a Pennsylvania
corporation ("Arrow Precision") hereby agrees as follows:
1. Arrow Precision, solely in its capacity as the sole shareholder
of the Company, consent to the Company's entering into and consummating the
transactions contemplated in the foregoing Purchase Agreement.
2. To the extent that the Agreement contains any covenants or
representations, warranties, and agreements to be provided by Arrow
Precision, Arrow Precision hereby makes, joins in and agrees to be bound by
all of the covenants, representations, warranties, and agreements contained
in the Agreement which refer to Arrow Precision, to the same extent as if
such covenants, representations, warranties, and agreements are included in
their entirety in this Joinder. By way of example and without limitation:
(a) Arrow Precision joins in the representations and
warranties made in Sections 4.8 (to the extent of Intellectual Properties
owned by Arrow Precision being transferred under this Agreement) and 4.10
(also to the extent of Intellectual Properties being transferred by Arrow
Precision under this Agreement);
(b) Arrow Precision agrees to be bound by the noncompete
provisions of Article VI; and
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June 3, 1996 (9:52am) ::ODMA\SOFTSOL\311\SOFTSOL\11546\0
(c) Arrow Precision agrees to be bound by the indemnification
provisions of Section 2.5(b) and Article VII.
ARROW PRECISION PRODUCTS, INC.
By: /s/ T. Xxxxxx Xxxxxxxx
-----------------------------
Vice President
Dated: June 3, 1996
33
