ASSIGNMENT AND ASSUMPTION AGREEMENT
This ASSIGNMENT AND ASSUMPTION AGREEMENT, dated as of July 1, 1997, is by
and between DRUG GUILD DISTRIBUTORS, INC., a New Jersey corporation (the
"Assignor") and XXXXXX DISTRIBUTORS, INC., a New Jersey corporation (the
"Assignee"). Capitalized terms used and not defined herein shall have their
respective meanings set forth in the Asset Purchase Agreement, dated as of July
1, 1997 by and among Assignor, Assignee and Xxxxxx Health Services, Inc.
("Xxxxxx"), a New Jersey corporation (the "Asset Purchase Agreement").
W I T N E S S E T H:
WHEREAS, Assignor, Assignee and Xxxxxx have entered into the Asset Purchase
Agreement; and
WHEREAS, pursuant to the Asset Purchase Agreement, Assignor is to assign to
Assignee (i) all of Assignor's contracts and agreements which by their terms or
are otherwise expected to result in the payment or receipt of less than $100,000
or which have terms of less than one year, (ii) all of the contracts set forth
on Schedule 4.01(i) to the Asset Purchase Agreement and (iii) the Collective
Agreement (collectively, the "Contracts") and certain transferable permits and
licenses (the "Permits") set forth on Schedule 4.01(v) to the Asset Purchase
Agreement relating to the Assets and the Business and Assignee is to assume
certain liabilities and obligations of Assignor.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Assignor and Assignee do hereby
agree as follows:
1. Assignment.
(a) Assignor hereby assigns, transfers, grants and conveys all of
Assignor's right, title and interest in and to, and the performance of the
duties and obligations of Assignor under, the Contracts and Permits to the
Assignee, its successors and assigns.
(b) Assignee hereby accepts such assignment, transfer, grant and
conveyance, assumes the performance of the duties and obligations of Assignor
under the Contracts and Permits, and agrees to discharge in due course all such
duties and obligations.
(c) The assignment of all Contracts and Permits hereunder which require
consent for assignment is conditioned upon the absence of any objection to such
assignment by the respective third parties thereto. In the event that a third
party objects to the assignment of any Contracts or Permits, or in the event
that the assignment is prohibited
by its terms ,the assignment of such Contracts or Permits hereunder shall be
deemed voided.
2. Assumption. Assignee agrees to (a) perform, pay and discharge (i) all
those trade accounts payable and (ii) all those accrued expenses and
withholdings (A) reflected in the Closing Balance Sheet as "Current
Liabilities," except to the extent performed, paid or discharged prior to the
date hereof, or (B) which are outstanding on the date hereof and which were
incurred in the ordinary course of business or with the express written consent
of the Chief Financial Officer of Assignee (collectively, the "Assumed Current
Liabilities"), (b) perform and discharge in accordance with their terms those
(A) obligations outstanding on the date hereof under the Contracts, including
but not limited to the Collective Agreement, and (B) issued, outstanding but
uncleared checks of Assignor (the "Checks") to the extent the Checks are
classified and reflected as trade accounts payable on the Closing Balance Sheet
and perform, pay or discharge any other Assumed Liability, (c) perform,
discharge and pay in accordance with their terms those liabilities directly
arising after the date hereof from any agreement, commitment, purchase, order,
contract, license, lease, right or other contract document which Assignee has
requested be transferred to it pursuant to the Asset Purchase Agreement but
which has not been so transferred due to the failure of Assignor to obtain the
consent or approval required for transfer, provided that Assignee has requested
and received the same economic benefit of such contract pursuant to the Asset
Purchase Agreement and such liability shall not have arisen as a result of
Assignor's actions or inactions, (d) perform, pay and discharge any other
liabilities of Assignor included in the Closing Balance Sheet other than any
such liabilities which are specifically excluded herein and (e) perform, pay and
discharge any liability of Assignor incurred with the express written consent of
the Chief Financial Officer of Assignee since the Balance Sheet Date.
Notwithstanding the foregoing, in no event shall Assignee be required to
assume, agree to perform, pay, or discharge and Assignor shall remain
unconditionally liable for, all obligations, liabilities and commitments, fixed
or contingent, of Assignor, including but not limited to: (i) with respect to
all periods prior to the date hereof, except as specifically set forth in
Section III of the Asset Purchase Agreement, severance, termination or other
payments or benefits (including but not limited to post-retirement benefits
including but not limited to those owing under Assignor's severance policy), any
union contract or any employment agreement to any employees (union or
non-union), sales agents or independent contractors employed by Assignor prior
to the date hereof, liabilities arising under any federal, state or local "plant
closing law", liabilities accruing under the Assignor's employee benefit plans,
vacation pay plans or programs, retirement plans, pension plans or savings or
profit sharing plans heretofore or presently maintained by Assignor; (ii)
worker's compensation claims; (iii) stock option or other stock-based awards
made to employees of Assignor or any subsidiary of Assignor, if any; (iv)
liabilities for any federal, state or local income, gross receipts, license,
payroll, excise, withholding, transfer, registration, value added, alternative,
add-on minimum, sales and/or compensating use tax taxes (including interest,
penalties and additions to such taxes) or any deferred income taxes of Assignor;
(v) liabilities incurred in connection with violations of occupational safety,
wage, health,
- 2 -
welfare, employee benefit or Environmental Laws or regulations, which violation
did not result from the action or inaction of Assignee subsequent to the date
hereof including, but not limited to, any claim arising from the violation of
any law, regulation or ordinance relating to environmental matters or disposal
of hazardous substances and liabilities relating to the remediation of
environmental conditions; (vi) liabilities to the extent related solely to the
Excluded Assets; (vii) any tax (including but not limited to any federal, state
or local income, franchise, single business, value added, excise, customs,
intangible, transfer, recording, documentary or other tax) imposed upon, or
incurred by, Assignor, if any, in connection with or related to the Asset
Purchase Agreement or the transactions contemplated thereby (but excluding any
sales and use tax imposed by any taxing authority with respect to the sale,
assignment and delivery of the Business and the Assets); (viii) other than the
Assumed Liabilities, any liabilities of Assignor to third parties arising out of
the failure of Assignor to obtain any necessary consents to the assignment to
Assignee of the Contracts or Permits (including damages asserted by third
parties for breach of such Contracts or Permits due to the failure to obtain
such consents); (ix) except to the extent reserved for on the Closing Balance
Sheet, liabilities which are undisclosed or contingent; (x) liabilities, other
than the Assumed Liabilities, to creditors of Assignor; (xi) liabilities for any
state franchise taxes or annual license or other fees relating to qualification
as a foreign corporation or authorization to do business in such states
(including interest, penalties and additions to such taxes and fees); (xii)
liabilities resulting from any investigations or inquiries by governmental
authorities relating to the Business; (xiii) liabilities with respect to the
operation of the Business prior to the date hereof that may be incurred by
Assignor as penalties, fines, charges or assessments by the DEA; (xiv)
liabilities or obligations in respect of preferred shares of capital stock of
Assignor or the holders thereof; (xv) liabilities (including without limitation
any liabilities under the federal Comprehensive Environmental Response,
Compensation, and Liability Act, 42 U.S.C xx.xx. 9601 et seq.) arising out of or
incurred in connection with any Hazardous Material located in, on, under, or
originating from the Real Estate, equipment of any type thereon and/or leasehold
improvements prior to the date hereof, whether the existence of such Hazardous
Materials is currently known or unknown, as well as any liabilities arising out
of or in connection with any Environmental Law relating in any way to the
conduct of the Business prior to the date hereof; (xvi) liabilities or
obligations in respect of Assignor's relationship with Meadow Trucking, Inc.;
(xvii) liabilities or obligations relating to any brokerage fees payable by
Assignor upon the consummation of the transaction contemplated by the Asset
Purchase Agreement; and (xviii) any other liabilities of any kind or nature
whether now in existence or arising hereafter not expressly assumed by Assignee.
3. This Assignment and Assumption Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective successors, legal
representatives and assigns.
4. This Assignment and Assumption Agreement shall be governed by and
construed in accordance with the laws of the State of New Jersey, without giving
effect to conflict of laws principles.
- 3 -
IN WITNESS WHEREOF, the parties hereto have executed this Assignment and
Assumption Agreement as of the date first above written.
ASSIGNOR
DRUG GUILD DISTRIBUTORS, INC.
By /s/ Xxxxxx Xxxxxxxxxxxx
----------------------------
Name: Xxxxxx Xxxxxxxxxxxx
Title: President
ASSIGNEE
XXXXXX DISTRIBUTORS, INC.
By /s/ Xxxxxx X. Xxxxxxx
----------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Executive Vice President
The undersigned hereby guarantees the performance and obligations of Xxxxxx
Distributors, Inc. under this Assignment and Assumption Agreement.
XXXXXX HEALTH SERVICES, INC.
By /s/ Xxxxxx X. Xxxxxxx
----------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Chief Financial Officer
- 4 -
