EXHIBIT 10.5
------------
EXECUTION COPY
--------------
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT is made and entered into as of January
24, 1997, by and among Xxxxxx-Xxxxxx Corporation, a Delaware corporation, ("W-
J"), PBH, Inc., a Delaware corporation and a wholly-owned subsidiary of X-X
("PBH," and together with X-X, the "Seller") and The Xxxxxx Companies, Inc., a
--- ------
Delaware corporation ("Buyer"). The Buyer and the Seller are sometimes referred
-----
to herein collectively as the "Parties" and individually as a "Party." Unless
------- -----
otherwise indicated, capitalized terms used but not otherwise defined herein
shall have the meaning given to such terms in Section 8.1 hereof.
The Seller operates PBH's Opaque Lens Business (as defined in Section
1.1 below). Pursuant to that certain Agreement Containing Consent Order dated
September 24, 1996, Federal Trade Commission File No. 961-0060 (the "Consent
-------
Order"), by and between X-X and the United States Federal Trade Commission (the
-----
"FTC"), X-X has agreed to divest of PBH's Opaque Lens Business.
---
The Buyer wishes to purchase and acquire from the Seller, and the
Seller wishes to sell, assign and transfer to the Buyer, PBH's Opaque Lens
Business, upon the terms and subject to the conditions hereinafter set forth.
NOW, THEREFORE, the Parties agree as follows:
ARTICLE I
PURCHASED ASSETS
1.1 PURCHASED ASSETS. Subject to and upon the terms and conditions set
----------------
forth in this Agreement, at the Closing, the Seller will sell, transfer, convey,
assign and deliver to the Buyer, and the Buyer will purchase and acquire from
Seller, all of Seller's right, title, and interest in and to all of the
following rights and assets (other than assets that are part of the Seller's
physical facilities, including without limitation, all property, plant and
equipment) used in or relating to the research, development, distribution or
sale of PBH's Opaque Lens Products by Seller as of the Closing Date
(collectively, "PBH's Opaque Lens Business"):
--------------------------
(a) all books, records, manuals, reports, lists, advertising and
promotional materials, computer records and other documents relating to PBH's
Opaque Lens Products;
(b) Natural Touch(TM) product line profit and loss statements
relating to each of PBH's Opaque Lens Products for the United States;
(c) all legal or equitable rights in the following trademarks: (A)
"Natural Touch," U.S. Trademark Registration Number 1758144 and (B) "The
Definition of Beautiful Eyes," U.S. Trademark Registration Number 1945993; (the
foregoing collectively referred to as the "Assigned Trademarks");
(d) all lists of stock keeping units ("SKUs") (i.e., all forms,
----
package sizes and other units in which PBH's Opaque Lens Products are sold and
which are used in records of sales and inventories);
(e) all bills of materials for each of PBH's Opaque Lens Products,
consisting of full manufacturing standards and procedures, quality control
specifications, specifications for raw materials and components, including all
lists of authorized sources for materials and components;
(f) all artwork and mechanical drawings currently in use relating to
each of PBH's Opaque Lens Products;
(g) all customer lists, including but not limited to, lists of
distributors, opticians, ophthalmologists, optometrists, and eye-care chains who
have bought PBH's Opaque Lens Products, including, but not limited to, all files
of names, addresses, and telephone numbers of the individual customer contacts,
and the unit and dollar amounts of sales monthly, by product, for each customer
in the United States;
(h) all marketing information, literature and materials relating to
PBH's Opaque Lens Products, including but not limited to Seller's consumer and
trade promotion, marketing and business programs;
(i) all documents containing or relating to product testing and
laboratory research data relating to PBH's Opaque Lens Products, including but
not limited to, all regulatory registrations and correspondence;
(j) all consumer correspondence and documents relating to PBH's
Opaque Lens Business;
-2-
(k) all documents constituting or relating to price lists for PBH's
Opaque Lens Products;
(l) all documents and information relating to costs of production for
each of PBH's Opaque Lens Products, including, but not limited to, raw material
costs, packaging costs, and advertising and promotional costs;
(m) all documents containing sales data relating to PBH's Opaque Lens
Products;
(n) a license under the patents set forth in the license agreement
attached as Exhibit 1 hereto, all in accordance with the terms and conditions
---------
set forth therein (the "Color Patent License Agreement");
------------------------------
(o) a license under the patents set forth in the license agreement
attached as Exhibit 2 hereto, all in accordance with the terms and conditions
---------
set forth therein (the "Molding Patent License Agreement");
--------------------------------
(p) a license under the patents set forth in the license agreement
attached as Exhibit 3 hereto, all in accordance with the terms and conditions
---------
set forth therein (the "Xxxxx Patent License Agreement", and together with the
------------------------------
Color Patent License Agreement and the Molding Patent License Agreement, the
"License Agreements");
-------------------
(q) all trade secrets, technology and know-how of PBH relating to
researching, developing, manufacturing, distributing and selling PBH's Opaque
Lens Products, including, but not limited to, books and records, documents
containing the results of research and development efforts, filings with the
United States Food and Drug Administration ("FDA"), scientific and clinical
---
reports, designs, manuals, drawings, and design, material and equipment
specifications;
(r) all permits, franchises, licenses, approvals and authorizations
of governmental authorities exclusively related to PBH's Opaque Lens Business;
(s) all goodwill associated with the Assigned Trademarks; and
(t) all of PBH's consigned inventory in the field which is
exclusively related to PBH's Opaque Lens Business.
1.2 RESERVED AND EXCLUDED ASSETS. Seller expressly reserves the right to
----------------------------
retain and use in its business copies of all
-3-
documents, information and rights (except exclusive rights granted to Buyer
pursuant to the Color Patent License Agreement) relating to PBH's Opaque Lens
Business to the extent such documents, information or rights also relate to
products other than PBH's Opaque Lens Products, including without limiting the
foregoing, Opaque Contact Lenses researched, developed, manufactured,
distributed, used or sold by Seller outside of the United States.
Notwithstanding any provision to the contrary contained herein (including,
without limitation, Section 1.1 hereof), the Seller will retain and not
transfer, and the Buyer will not purchase or acquire, any properties, assets or
rights that are not expressly described in Section 1.1 hereof (the "Excluded
--------
Assets"). Excluded Assets, by way of example and not by way of limitation,
------
include accounts receivable, cash and cash equivalents, prepayment credits, the
PBH trade name, equipment, machinery and other assets not expressly identified
in Section 1.1 hereof. If the Buyer obtains any properties, assets or rights
that, instead of or in addition to relating to PBH's Opaque Lens Business,
relate to the Seller's or its Affiliates' operations or businesses, the Buyer
shall (i) promptly notify the Seller of that fact, (ii) promptly reassign,
transfer or convey such properties, assets or rights to the Seller, (iii) if the
reassignment, transfer or conveyance referred to in the foregoing clause (ii) is
impractical because of the mixed nature of such properties, assets or rights,
promptly grant Seller a non-exclusive, perpetual, transferable, worldwide,
royalty-free license to use such properties, assets or rights, and (iv) not use
such properties, assets or rights other than in connection with PBH's Opaque
Lens Business. If the Seller retains any properties, assets or rights that are
primarily related to PBH's Opaque Lens Business, the Seller shall (i) promptly
notify the Buyer of that fact, (ii) promptly assign, transfer or convey such
properties, assets or rights to the Buyer, (iii) if the assignment, transfer or
conveyance referred to in the foregoing clause (ii) is impractical because of
the mixed nature of such properties, assets or rights, promptly grant Buyer a
non-exclusive, perpetual, transferable, worldwide, royalty-free license to use
such properties, assets or rights, and (iv) not use such properties, assets or
rights other than in connection with Seller's contact lens business.
1.3 ASSUMPTION OF LIABILITIES. Subject to and upon the terms and
-------------------------
conditions set forth in this Agreement, from and after the Closing Date, the
Buyer will assume and agree to pay and discharge, and the Seller will not be
liable and Buyer will hold Seller harmless against, all liabilities, obligations
and commitments of any nature, whether known or unknown, absolute, accrued,
contingent or otherwise and whether due or to become due, to the extent they
relate to or arise out of the operation of PBH's Opaque Lens
-4-
Business on or after the Closing Date (collectively, the "Assumed Liabilities").
-------------------
1.4 RETAINED LIABILITIES. The Seller agrees to pay and discharge, and
will hold the Buyer harmless against, all liabilities, obligations and
commitments of any nature, whether known or unknown, absolute, accrued,
contingent or otherwise and whether due or to become due, to the extent they
relate to or arise out of (i) the operation of PBH's Opaque Lens Business prior
to the Closing Date or (ii) the operation of Seller's other businesses, whether
prior to, on or after the Closing Date (collectively, the "Retained
Liabilities").
ARTICLE II
PURCHASE PRICE; CLOSING
2.1 PURCHASE PRICE. The purchase price for PBH's Opaque Lens Business
--------------
will consist of (a) $3,000,000 in cash, $1,000,000 of which has been delivered
(pursuant to the terms and conditions of the escrow agreement attached hereto as
Exhibit 6 (the "Escrow Agreement")) simultaneously with the execution of this
--------- ----------------
Agreement as a cash deposit (refundable as set forth below) to guarantee
performance of Buyer's obligations under this Agreement, and (b) a $4,500,000
promissory note of Buyer, which promissory note shall be in the form of Exhibit
-------
4 attached hereto (the "Note"). Notwithstanding the foregoing, the $1,000,000
- ----
cash deposit shall be refunded to the Buyer within 24 hours of any termination
of this Agreement pursuant to Section 6.1, except for a termination resulting
from a breach of this Agreement by the Buyer.
2.2 PLACE AND DATE OF CLOSING. The closing of the purchase and sale of
-------------------------
PBH's Opaque Lens Business, the assumption of the Assumed Liabilities and the
transactions relating thereto (collectively, the "Closing") will take place at a
-------
site mutually agreed upon by Seller and Buyer commencing at 10:00 a.m. local
time one (1) business day following the date as of which the conditions to each
Party's obligations (as set forth in Article V hereof) have been satisfied or
such other date and time as may be mutually agreed upon by the Parties. The
date and time of the Closing are herein referred to as the "Closing Date." At
------------
the Closing:
(a) the Seller will sell, transfer, convey, assign and deliver to the
Buyer all of PBH's Opaque Lens Business and deliver to the Buyer bills of sale
and other instruments of conveyance which are necessary to effect the transfer
of PBH's Opaque Lens Business and such other instruments and certificates as
Buyer may reasonably request;
-5-
(b) the Buyer will assume all of the Assumed Liabilities and deliver
to the Seller such instruments of assumption as are necessary in order for the
Buyer to assume the Assumed Liabilities;
(c) the Buyer will deliver the remaining $2,000,000 cash portion of
the purchase price to X-X by wire transfer of immediately available funds;
(d) the Buyer will deliver the executed Note; and
(e) the Parties will execute and deliver the License Agreements and
the Supply Agreement (as described in Section 2.5 hereof).
2.3 ALLOCATION OF PURCHASE PRICE.
----------------------------
(a) The Parties agree to allocate the purchase price in accordance
with an allocation schedule to be prepared by Seller in accordance with Section
1060 of the Internal Revenue Code of 1986, as amended (the "Code"), such
----
schedule to be subject to Buyer's approval (not to be unreasonably withheld).
The Seller shall deliver such allocation schedule to Buyer within 90 days after
the Closing Date.
(b) In connection with the determination of the foregoing allocation
schedule, the Parties shall cooperate with each other and provide such
information as any of them shall reasonably request. The Parties will file all
tax returns (including but not limited to the filing of Internal Revenue Service
Form 8594) in a manner consistent with such allocation schedule.
2.4 TRANSITION PERIOD. Buyer and Seller hereby agree to cooperate and use
-----------------
reasonable efforts to deliver as soon as reasonably practicable the tangible
assets which are part of PBH's Opaque Lens Business to Buyer's facility in
Pleasanton, California. Each of the Seller and Buyer will bear equally the cost
and expense of the aforementioned delivery.
2.5 SUPPLY AGREEMENT. In order to implement the transition of PBH's
----------------
Opaque Lens Business, on the Closing Date, Buyer and PBH shall enter into an
agreement providing for the supply of PBH's Opaque Lens Products (the "Supplied
--------
Product") to Buyer in accordance with the terms and conditions set forth in the
-------
technical services and supply agreement attached as Exhibit 5 hereto (the
---------
"Supply Agreement"). Notwithstanding any provision to the contrary contained in
-----------------
this Agreement, the License Agreements or the Supply
-6-
Agreement, Seller and its Affiliates shall have the right to produce and/or sell
for themselves and to produce and/or sell for or to any other Person any Opaque
Contact Lenses using polymacon or any other product developed by Seller, its
Affiliates or any other Person, including without limitation, any Opaque Contact
Lenses similar to the Supplied Product, so long as such products do not infringe
any patent or other proprietary right of the Buyer (including the patents to be
licensed and the Assigned Trademarks to be transferred to Buyer by Seller
pursuant to this Agreement). Notwithstanding the foregoing nor any term of the
Color Patent License Agreement, Seller shall have the right to sell or offer for
sale disposable (30 day or less wear before recommended replacement) Opaque
Contact Lenses in the Licensed Territory utilizing a limbal ring as described
and claimed in U.S. Patent No. 5,302,978 on the earlier of: (i) 42 months after
the Closing Date and (ii) the date on which Buyer obtains an alternative
supplier or commences manufacture of the Supplied Products or the Licensed
Products (as such term is defined in the License Agreements).
ARTICLE III
REPRESENTATIONS AND WARRANTIES
3.1 REPRESENTATIONS AND WARRANTIES OF THE SELLER. The Seller represents
--------------------------------------------
and warrants to the Buyer as follows:
3.1.1 Corporate Status. Each of X-X and PBH is a corporation duly
----------------
organized, validly existing and in good standing under the laws of the State of
Delaware.
3.1.2 Authorization. Each of X-X and PBH has the corporate power and
-------------
authority to execute and deliver this Agreement, the License Agreements, the
Escrow Agreement and the Supply Agreement and to perform fully its obligations
hereunder and thereunder. The execution and delivery by each of X-X and PBH of
this Agreement, the License Agreements, the Escrow Agreement and the Supply
Agreement, and the consummation of the transactions contemplated hereby and
thereby, have been duly authorized by all requisite corporate action on the part
of each of X-X and PBH. Each of X-X and PBH has duly executed and delivered this
Agreement. This Agreement is a legal, valid and binding obligation of each of W-
J and PBH, enforceable against each of them in accordance with its terms, except
as such enforceability may be limited by (a) applicable insolvency, bankruptcy,
reorganization, moratorium or other similar laws affecting creditors' rights
generally and (b) applicable equitable principles (whether considered in a
proceeding at law or in equity).
-7-
3.1.3 No Conflicts. The execution, delivery and performance by each
------------
of X-X and PBH of this Agreement, the License Agreements, the Escrow Agreement
and the Supply Agreement, and the consummation of the transactions contemplated
hereby and thereby, do not and will not conflict with or result in a violation
of or a default under (with or without the giving of notice or the lapse of time
or both) (a) any Applicable Law applicable to PBH's Opaque Lens Business or (b)
the certificate of incorporation or by-laws or other organizational documents of
either X-X or PBH.
3.1.4 Litigation. There is no material action, claim, suit,
----------
judgment, injunction, order (other than the Consent Order), investigation,
proceeding or decree pending or, to Seller's Knowledge, threatened against X-X
or PBH which relates to PBH's Opaque Lens Business or the transactions
contemplated by this Agreement nor, to Seller's Knowledge, is there any
reasonable basis for any such action, proceeding or investigation.
3.1.5 Title to Purchased Assets. Seller has good title to, or a
-------------------------
valid license to use, all of the assets to be conveyed as part of PBH's Opaque
Lens Business, free and clear of any and all Liens other than Permitted Liens.
3.1.6 Compliance with Laws. Since April 1, 1996, to Seller's
--------------------
Knowledge, Seller has not received any notice with respect to PBH's Opaque Lens
Business alleging any violation of Applicable Law.
3.1.7 Intellectual Property Rights. To Seller's Knowledge, Section
----------------------------
1.1(c) and Exhibit A to each of the License Agreements contains a complete and
correct list of all of the intellectual property rights used in connection with
PBH's Opaque Lens Business (other than trade names or corporate names, none of
which are being conveyed to Buyer) and all licenses and other rights granted to
any third party with respect to such intellectual property rights. To Seller's
Knowledge, (i) the Seller owns and possesses, and upon consummation of the
transactions contemplated hereby the Buyer will own and possess, all right,
title and interest in and to, or has (or will have) a valid license to use, all
of the intellectual property rights necessary for the operation of PBH's Opaque
Lens Business as currently conducted; (ii) no claim by any third party
contesting the validity, enforceability, use or ownership of any such
intellectual property rights has been made since October 1, 1996, is currently
outstanding or is threatened; (iii) neither the Seller nor any registered agent
thereof has received any written notices of an allegation of, any infringement
or misappropriation by, or conflict with, any intellectual property rights of
any third party; and (iv) no infringement,
-8-
misappropriation or conflict will occur as a result of the transactions
contemplated by this Agreement.
3.1.8 No Knowledge of Material Facts. To Seller's Knowledge, there
------------------------------
is no material fact, circumstance or condition existing as of the date hereof
(other than the consents and approvals contemplated by this Agreement) that
would prohibit or interfere with the performance by Seller of the transactions
contemplated by this Agreement or which would be reasonably likely to have a
Material Adverse Effect on PBH's Opaque Lens Business.
3.2 REPRESENTATIONS AND WARRANTIES OF THE BUYER. The Buyer represents and
-------------------------------------------
warrants to the Seller as follows:
3.2.1 Corporate Status. The Buyer is a corporation duly organized,
----------------
validly existing and in good standing under the laws of the State of Delaware.
3.2.2 Authorization. The Buyer has the corporate power and authority
-------------
to execute and deliver this Agreement and the other agreements contemplated
hereby, to perform fully its obligations hereunder and thereunder, and to
consummate the transactions contemplated hereby and thereby. The execution and
delivery by the Buyer of this Agreement and the other agreements contemplated
hereby, and the consummation of the transactions contemplated hereby and
thereby, have been duly authorized by all requisite corporate action of the
Buyer. The Buyer has duly executed and delivered this Agreement and the other
agreements contemplated hereby. This Agreement and each of the other agreements
contemplated hereby is a legal, valid and binding obligation of the Buyer,
enforceable against it in accordance with its respective terms, except as such
enforceability may be limited by (a) applicable insolvency, bankruptcy,
reorganization, moratorium or other similar laws affecting creditors' rights
generally and (b) applicable equitable principles (whether considered in a
proceeding at law or in equity).
3.2.3 No Conflicts. The execution, delivery and performance by the
------------
Buyer of this Agreement and the other agreements contemplated hereby, and the
consummation of the transactions contemplated hereby and thereby, do not and
will not conflict with or result in a violation of or a default under (with or
without the giving of notice or the lapse of time or both) (a) any Applicable
Law applicable to the Buyer or (b) the certificate of incorporation or by-laws
or other organizational documents of the Buyer.
3.2.4 Litigation. There is no action, claim, suit, judgment,
----------
injunction, order or decree pending, or to the Buyer's
-9-
Knowledge threatened, against Buyer which relates to the transactions
contemplated by this Agreement.
3.2.5 Available Funds. The Buyer has, or will have on the Closing
---------------
Date, sufficient funds available to pay the purchase price on the Closing Date.
ARTICLE IV
COVENANTS
4.1 COVENANTS OF THE SELLER.
-----------------------
4.1.1 Pre-Closing Access and Information. From the date hereof to
----------------------------------
the Closing Date, the Seller will give the Buyer and its accounting and legal
representatives, reasonable access, during normal business hours and upon
reasonable notice, to all documents, records, work papers and information with
respect to all of the Seller's properties, assets, books, contracts,
commitments, reports and records which are reasonably related to PBH's Opaque
Lens Business (except for confidential or privileged documents), as the Buyer
shall from time to time reasonably request. In addition, the Seller will permit
the Buyer and its accounting and legal representatives reasonable access to such
personnel of the Seller during normal business hours and upon reasonable notice
as may be reasonably related to the Buyer's review of PBH's Opaque Lens
Business.
4.1.2 Further Actions.
---------------
(a) The Seller agrees to use best efforts to take all actions and to
do all things necessary, proper or advisable to consummate the transactions
contemplated hereby as soon as practicable after the date hereof.
(b) The Seller will, as promptly as practicable, file or supply, or
cause to be filed or supplied, all applications, notifications and information
required to be filed or supplied by the Seller pursuant to Applicable Law in
connection with this Agreement and the consummation of the other transactions
contemplated hereby including, without limitation, using its best efforts to
diligently and expeditiously submit to the FTC all filings, applications,
notifications and information required in order for the FTC to designate Buyer
as the approved divestiture candidate pursuant to the Consent Order or as
otherwise required in order to obtain the approvals referred to in Section
5.1.1. hereof.
-10-
4.1.3 Conduct of Business. From the date hereof through the Closing
-------------------
Date, the Seller covenants and agrees that:
(a) the Seller will conduct PBH's Opaque Lens Business in the
ordinary course of business;
(b) notwithstanding anything herein to the contrary, Seller shall not
enter into any "dealing" or "dating" arrangements with customers outside the
ordinary course of business (as such terms are used in the industry) in order to
increase sales or increase customer inventory levels beyond their normal
requirements;
(c) the Seller will use its reasonable efforts in good faith to
preserve the goodwill, reputation and present relationships of PBH's Opaque Lens
Business with suppliers, customers, lessors, licensors and others having
business relations with PBH's Opaque Lens Business;
(d) the Seller will (i) maintain and keep in full force all insurance
currently in place relating to PBH's Opaque Lens Business, (ii) cause the books
and records of PBH's Opaque Lens Business to be maintained in the ordinary
course of business on a basis consistent with past practices, (iii) perform and
comply in all material respects with its obligations under all material
contracts related to PBH's Opaque Lens Business, (iv) maintain levels and types
of inventory of PBH's Opaque Lens Business in the ordinary course of business;
and
(e) the Seller will not (i) sell, lease, transfer or otherwise
dispose of any of the assets comprising PBH's Opaque Lens Business, other than
the use or sale or other transfer or disposal of such assets in the ordinary
course of PBH's Opaque Lens Business, (ii) enter into any joint venture,
partnership or other similar arrangement for the operation of the assets
comprising PBH's Opaque Lens Business, (iii) modify, amend or supplement the
Consent Order, if such modification, amendment or supplement could reasonably be
expected to have a Material Adverse Effect on PBH's Opaque Lens Business or (iv)
without Buyer's prior consent, enter into any material contract which is
primarily related to PBH's Opaque Lens Business.
4.1.4 Announcement. Promptly following the Closing Date, Seller
------------
shall send an announcement, in form and substance reasonably satisfactory to
Buyer, to all of the current customers of PBH's Opaque Lens Business informing
such customers of the sale of PBH's Opaque Lens Business to Buyer.
-11-
4.2 COVENANTS OF THE BUYER.
----------------------
4.2.1 Further Actions.
---------------
(a) The Buyer agrees to use best efforts to take all actions and to
do all things necessary, proper or advisable to consummate the transactions
contemplated hereby as soon as practicable after the date hereof.
(b) The Buyer will, as promptly as practicable, file or supply, or
cause to be filed or supplied, all applications, notifications and information
required to be filed or supplied by the Buyer pursuant to Applicable Law in
connection with this Agreement and the consummation of the other transactions
contemplated hereby including, without limitation, using its best efforts to
diligently and expeditiously submit to the FTC all filings, applications,
notifications and information required in order for the FTC to designate Buyer
as the approved divestiture candidate pursuant to the Consent Order or as
otherwise required in order to obtain the approvals referred to in Section
5.1.1. hereof.
4.2.2 Use of Business Names by the Buyer. Except with respect to the
----------------------------------
trademarks, service marks or brand names being conveyed as part of PBH's Opaque
Lens Business, to the extent the trademarks, service marks, trade, corporate or
business names of the Seller or of any of the Seller's Affiliates are used by
PBH's Opaque Lens Business on stationery, invoices, receipts, forms, packaging,
advertising and promotional materials, products, training and service literature
and materials constituting part of PBH's Opaque Lens Business ("Marked
------
Materials"), the Buyer may use such Marked Materials after the Closing Date for
---------
a period of one (1) year without altering or modifying such Marked Materials, or
removing or rendering illegible all such trademarks, service marks, or trade,
corporate or business names, but the Buyer shall not thereafter use such
trademarks, service marks, brand names or trade, corporate or business names in
any other manner without the prior written consent of the Seller. Except with
respect to the trademarks, service marks or brand names being conveyed as part
of PBH's Opaque Lens Business, immediately upon the expiration of such one (1)
year period, the Buyer shall remove or render illegible such trademarks, service
marks, brand names or trade, corporate or business names therefrom or clearly
and prominently xxxx the name of the Buyer thereon and indicate that the Buyer
is not affiliated with the Seller or any Affiliate thereof. Notwithstanding the
foregoing, Buyer shall be under no obligation to remove or render illegible any
such trademarks, service marks, brand names or trade, corporate or business
names from any product information, instructions or materials which are included
in product manufactured by Seller.
-12-
4.2.3 Post-Closing Access and Information.
-----------------------------------
(a) After the Closing Date, the Buyer will (and will cause each of
its Affiliates and its Affiliates' respective accountants, counsel, consultants,
employees and agents to) give the Seller's accountants and consultants,
reasonable access, during normal business hours and upon reasonable notice, to
all employees, documents, records, work papers and information with respect to
all of such Person's properties, assets, books, contracts, commitments, reports
and records relating to PBH's Opaque Lens Business, as the Seller shall from
time to time reasonably request (to the extent necessary to comply with any
request of any competent governmental authority or to verify compliance pursuant
to this Agreement of any of the agreements contemplated hereby). In addition,
the Buyer shall permit the Seller to make copies at its own expense of any of
the above-mentioned documents, records and information. In addition, the Buyer
will permit the Seller and its accountants, counsel, consultants, employees and
agents, reasonable access to such personnel of the Buyer during normal business
hours and upon reasonable notice as may be necessary or useful to the Seller in
its review of the properties, assets and business affairs of PBH's Opaque Lens
Business and the above-mentioned documents, records and information.
(b) The Buyer will retain all books and records relating to PBH's
Opaque Lens Business for at least five years.
(c) Notwithstanding any provision to the contrary in this Section
4.2.3, Seller shall not be required to provide, disclose or otherwise make
available to any department of Seller other than the accounting and legal
departments any Information Relating to Licensing of Patents. Further, Seller
shall use any Information Relating to Licensing of Patents obtained by Seller
only in Seller's capacity a licensor of the patents described in the Xxxxx
License Agreement, in order to collect royalties due and owing pursuant to the
Xxxxx License Agreement.
4.2.4 Employees. No employees of Seller nor any of its Affiliates
---------
shall be transferred to Buyer or any of its Affiliates in connection with the
transactions contemplated by this Agreement. In addition, for a period of
eighteen (18) months after the date of this Agreement, without the prior written
approval of Seller, neither Buyer nor any of its Affiliates will directly or
indirectly, solicit, encourage, entice or induce any person who is or was
employed by the Seller or any of its Affiliates as of the date hereof or at any
time hereafter during such eighteen (18) month period and with whom Buyer has
had contact in connection with the assessment of the technologies, patents and
other know-how during Buyer's consideration of the purchase of PBH's Opaque Lens
-13-
Business or the administration of this Agreement, the Supply Agreement or the
License Agreements, to terminate his or her employment with Seller or any of its
Affiliates or hire any such person. Buyer agrees that any remedy at law for any
breach by it of this Section 4.2.4 would be inadequate, and Seller would be
entitled to injunctive relief in such a case. If it is ever held that the
restrictions placed on Buyer by this Section 4.2.4 are too onerous and are not
necessary for the protection of Seller, the Parties hereto agree that any court
of competent jurisdiction may reduce the duration or scope hereof, or delete
specific words or phrases, and in its reduced form such provision will then be
enforceable and will be enforced.
4.2.5 FTC Compliance.
--------------
(a) Buyer shall submit to the trustee to be appointed pursuant to the
Consent Order (including any successor thereto, the "Trustee"), periodic
-------
verified written reports setting forth in detail the efforts of Buyer to sell in
the United States PBH's Opaque Lens Products supplied by PBH and to obtain all
FDA approvals necessary to manufacture or have manufactured on its behalf PBH's
Opaque Lens Products for sale in the United States. Such reports shall be
submitted 60 days after the date this Agreement is approved by the FTC and every
90 days thereafter until all necessary FDA approvals are obtained by the Buyer
to manufacture PBH's Opaque Contact Lenses for sale in the United States. In
addition, the Buyer shall report to the FTC and the Trustee at least thirty (30)
days prior to its ceasing the manufacture or sale of PBH's Opaque Lens Products
in the United States for any time period exceeding sixty (60) days or abandoning
its efforts to obtain all necessary FDA approvals to manufacture on its own
PBH's Opaque Lens Products for sale in the United States.
(b) In furtherance of the terms and conditions of the Consent Order
(i) with respect to the Trustee's powers, duties, authorities and
responsibilities, the Buyer shall cooperate with and permit the Trustee to
monitor Buyer's compliance under this Agreement, the License Agreements and the
Supply Agreement and (ii) the Buyer shall cooperate with each of the FTC and the
Trustee in order to fully achieve the purposes thereof (including, without
limitation, entering into a trust agreement with the trustee, if the trustee or
the FTC so requests).
(c) As soon as reasonably practicable after the date hereof, Buyer
will use its best efforts to submit to the FTC, along with its application to be
the approved divestiture candidate pursuant to the Consent Order, (i) a
certification attesting to Buyer's good faith intention and including an actual
plan by Buyer to obtain in an expeditious manner all necessary FDA approvals to
-14-
manufacture or have manufactured PBH's Opaque Lens Products for sale in the
United States and (ii) any other documents or other information requested of
Buyer by the FTC in order to obtain the approvals referred to in Section 5.1.1
hereof.
4.3 MUTUAL COVENANTS OF THE PARTIES.
-------------------------------
4.3.1 Confidentiality.
---------------
(a) Each of the Parties hereto, on behalf of itself and its
Affiliates, agrees to refrain from using in any manner and to keep confidential
in the same manner as it protects the confidentiality of similar information and
data of its own, any and all confidential information and confidential data
which it has received as a result of this Agreement (whether prior to, on or
after the Closing Date) or any investigation made in connection herewith, except
to the extent that such Party can demonstrate that the information and/or data
(i) was already known to it or in its possession on a non-confidential basis on
the date of receipt, (ii) is subsequently disclosed to it on a non-confidential
basis by a third party which does not have an obligation of confidentiality with
the non-disclosing Party with respect to such information or (iii) is otherwise
publicly available on a nonconfidential basis. Notwithstanding the foregoing,
each of the Parties and their respective Affiliates shall be free (A) to
disclose any such information or data to the extent (i) required by law, (ii)
required by a Governmental Authority in a duly authorized investigation or (iii)
during the course of a proceeding or other legally required filing (including,
without limitation, with respect to taxes or regulatory compliance) and (B) to
use all information and data in their possession on the Closing Date hereof (and
not received from the other Party) and all information and data developed by
them during the term of this Agreement following any termination of this
Agreement. Prior to any disclosure by either Party pursuant to the preceding
sentence, the Party proposing such disclosure shall be required to give the non-
disclosing Party reasonable prior notice of such intended disclosure and, if
requested by the non-disclosing Party, use reasonable best efforts to assist the
non-disclosing Party's efforts to obtain a protective order or similar
protection.
(b) If this Agreement is terminated for any reason whatsoever, Buyer
will return (or, if requested by Seller, destroy) to the Seller all tangible
embodiments (and all copies) of all confidential information and data which are
in Buyer's possession and Buyer will not, nor will it permit any of its
employees, agents or representatives to, use or disclose to any third party any
such confidential information or data (except to the extent such information
becomes publicly available through no fault of Buyer,
-15-
its affiliates or representatives or disclosure thereof is required by law).
(c) In addition, neither Buyer nor Seller shall disclose the
existence or terms of this Agreement to any Person without prior written consent
of the other Party, except that each of the Parties and their respective
Affiliates shall be free to disclose any such information or data to the extent
(i) required by law, (ii) required by a Governmental Authority in a duly
authorized investigation or (iii) that during the course of a proceeding or
other legally required filing (including, without limitation, with respect to
taxes or regulatory compliance). Notwithstanding the foregoing, Seller shall be
permitted (subject to a customary confidentiality agreement) to disclose the
existence and terms of this Agreement to a prospective purchaser of all or any
part of Seller's or its Affiliates' contact lens business to which this
Agreement relates. Buyer may disclose (subject to a customary confidentiality
agreement to be supplied to Buyer by Seller) the existence and terms of this
Agreement to a third party only in the course of negotiations for the potential
sale or transfer of Buyer's contact lens business which would be permitted under
Section 7.15 hereof.
4.3.2 Further Assurances. Following the Closing, the Parties shall,
------------------
and shall cause their Affiliates to, from time to time, execute and deliver such
additional instruments, documents, conveyances or assurances and take such other
actions as shall be necessary, or otherwise reasonably requested by any other
Party, to confirm and assure the rights and obligations provided for in this
Agreement and render effective the consummation of the transactions contemplated
hereby.
4.3.3 FDA Reporting. So long as Buyer is selling Supplied Product,
-------------
each Party agrees to notify the other Party within forty-eight (48) hours of
learning of an MDR reportable event (as defined in the FDA Medical Device
Reporting regulation) relating to the Supplied Product or the failure of any
Supplied Product to meet standards found in said Supplied Product's PMA ("PMA
---
Standards"), unless earlier notification is required pursuant to Applicable Law,
---------
including applicable FDA regulations.
4.3.4 Compliance with Consent Order. Subject to the terms of the
Supply Agreement and the License Agreements, after the Closing Date, each of
Buyer and Seller shall make all reasonable efforts to comply with the terms and
provisions of the Consent Order.
-16-
ARTICLE V
CONDITIONS PRECEDENT
5.1 CONDITIONS TO OBLIGATIONS OF EACH PARTY. The obligations of the
---------------------------------------
Parties to consummate the transactions contemplated hereby shall be subject to
the fulfillment on or prior to the Closing Date of the following conditions:
5.1.1 FTC Approval. (i) The Parties shall have received the final
------------
approval and consent of the FTC to Buyer as an independent competitor in the
research, development, manufacture, distribution and sale of Opaque Contact
Lenses; and (ii) the Parties shall have received the final approval and consent
of the FTC to the terms and conditions of this Agreement, the License Agreements
and the Supply Agreement.
5.1.2 No Injunction, etc. Consummation of the transactions
------------------
contemplated hereby shall not have been restrained, enjoined or otherwise
prohibited by any order, injunction, decree or judgment of any court or other
Governmental Authority.
5.1.3 No Litigation. No suit, action, investigation, inquiry or
other proceeding by any Person shall have been instituted or threatened which
questions the validity or legality of the transactions contemplated hereby or
which would materially and adversely affect the operation by Buyer of PBH's
Opaque Lens Business after the Closing Date.
ARTICLE VI
TERMINATION
6.1 ABILITY TO TERMINATE PRIOR TO CLOSING. (a) The Parties may
-------------------------------------
terminate this Agreement as follows:
(i) the Buyer and the Seller may terminate this Agreement by mutual
written consent at any time prior to the Closing; or
(ii) either the Seller or Buyer may terminate this Agreement by giving
written notice to the other if the Closing shall not have occurred on or prior
to March 17, 1997, by reason of the failure of any condition precedent under
Section 5.1. Notwithstanding the foregoing, neither Party may terminate this
Agreement pursuant to Section 6.1(ii) if such Party is in material default
hereunder, or if a delay in any decision or determination by the FTC with
respect to the approvals contemplated by Section
-17-
5.1.1 has been caused or materially contributed to by such Party's action or
inaction.
6.2 ABILITY TO TERMINATE POST-CLOSING. The FTC may require Buyer to
---------------------------------
divest of PBH's Opaque Lens Business upon the occurrence of any of the
following:
(i) if the Buyer ceases for sixty (60) days or more the sale of PBH's
Opaque Lens Products in the United States prior to obtaining all necessary FDA
approvals to manufacture on its own PBH's Opaque Lens Products for sale in the
United States;
(ii) if the Buyer abandons its efforts to obtain all necessary FDA
approvals to manufacture on its own PBH's Opaque Lens Products for sale in the
United States; or
(iii) if the Buyer fails to obtain all necessary FDA approvals to
manufacture on its own PBH's Opaque Lens Products for sale in the United States
within eighteen (18) months from the date the FTC approves this Agreement with
the Buyer; provided that the aforementioned eighteen (18) month period may be
extended for a period not to exceed twenty-four (24) months (computed as from
the date the FTC approves this Agreement with the Buyer) if the FTC determines
that the Buyer has made good faith efforts to obtain all necessary FDA approvals
for manufacturing PBH's Opaque Contact Lens Products for sale in the United
States and that such FDA approvals appear likely to be obtained within the
extended time period.
Upon the occurrence of any such divestiture required by the FTC, Buyer
shall seek a New Acquirer (as such term is defined in the Consent Order) and the
proceeds and liabilities of such divestiture shall be for Buyer's account.
6.3 EFFECT OF PRE-CLOSING TERMINATION. If this Agreement is
---------------------------------
terminated pursuant to Section 6.1, all rights and obligations of the Parties
hereunder shall terminate without any liability of any Party to the other Party;
provided that the provisions contained in Sections 4.2.4, 4.3.1 and 7.4 hereof
shall survive such termination.
ARTICLE VII
MISCELLANEOUS
7.1 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The representations and
------------------------------------------
warranties made by Buyer and Seller in this Agreement shall survive the Closing
Date until the first
-18-
anniversary of this Agreement; provided that Seller's representation and
warranty as to title to the purchased assets shall survive until the expiration
of the relevant statute of limitations applicable to such representation and
warranty; provided further that neither Buyer nor Seller will be liable for any
breach of any of the representations or warranties contained in this Agreement
unless written notice of a possible claim for indemnification with respect to
such breach is given by either Party to the other on or before the first
anniversary of the date of this Agreement; provided further that neither Buyer
nor Seller will have any liability for any breach of any representation or
warranty contained in this Agreement until Buyer or Seller, as the case may be,
and their respective Affiliates, have suffered Losses by reason of all such
breaches (or alleged breaches) in excess of $100,000, and then only to the
extent that such Losses exceed such amount. Notwithstanding any provision to the
contrary contained herein, in no event will Seller or Buyer be liable for any
Losses of the other Party or its Affiliates in excess of $7,500,000.
7.2 INDEMNIFICATION.
---------------
7.2.1 Indemnification of the Seller. Subject to the limitations set
-----------------------------
forth in this Section 7.1, 7.2 and 7.3, Buyer shall indemnify and hold harmless
Seller and its Affiliates and their respective directors, shareholders,
officers, employees, agents, consultants, representatives, successors and
permitted assigns (collectively, "Seller Indemnified Parties") from and against
any and all Losses caused by, arising out of, or resulting from (i) Buyer's
failure to perform any of its covenants, obligations or agreements hereunder,
including, without limitation, any failure to pay and discharge the Assumed
Liabilities and (ii) Buyer's ownership, use or operation of PBH's Opaque Lens
Business on or after the Closing Date.
7.2.2 Indemnification of the Buyer. Subject to the limitations set
----------------------------
forth in Sections 7.1, 7.2 and 7.3, Seller shall indemnify and hold harmless
Buyer and its Affiliates and their respective directors, shareholders, officers,
employees, agents, consultants, representatives, successors and permitted
assigns (collectively, "Buyer Indemnified Parties") from and against any and all
Losses caused by, arising out of, or resulting from (i) Seller's failure to
perform any of its covenants, obligations or agreements hereunder, including
without limitation any failure to pay and discharge the Retained Liabilities and
(ii) the Seller's ownership, use or operation of PBH's Opaque Lens Business
prior to the Closing Date.
-19-
7.2.3 Notice of Claims.
----------------
(a) Any Buyer Indemnified Party or Seller Indemnified Party (the
"Indemnified Party") seeking indemnification hereunder shall, within the
relevant limitation period provided for in Section 7.1 above, give to the party
obligated to provide indemnification to such Indemnified Party (the
"Indemnitor") a notice (a "Claim Notice") describing in reasonable detail the
facts giving rise to any claims for indemnification hereunder and shall include
in such Claim Notice (if then known) the amount or the method of computation of
the amount of such claim, and a reference to the provision of this Agreement or
any agreement, document or instrument executed pursuant hereto or in connection
herewith upon which such claim is based; provided, that a Claim Notice in
respect of any action at law or suit in equity by or against a third Person as
to which indemnification will be sought shall be given promptly after the action
or suit is commenced; and provided further, that failure to give such notice
shall not relieve the Indemnitor of its obligations hereunder except to the
extent that Indemnitor shall have been prejudiced by such failure.
(b) The Indemnitor shall have thirty (30) days after the giving of
any Claim Notice pursuant hereto to (i) agree to the amount or method of
determination set forth in the Claim Notice and to pay such amount to such
Indemnified Party in immediately available funds or (ii) to provide such
Indemnified Party with notice that it disagrees with the amount or method of
determination set forth in the Claim Notice (the "Dispute Notice"). Within
thirty (30) days after the giving of the Dispute Notice, a representative of
Indemnitor and such Indemnified Party shall negotiate in a bona fide attempt to
resolve the matter. In the event that the controversy is not resolved within
sixty (60) days of the giving of the Dispute Notice, the parties shall proceed
to binding arbitration administered by the American Arbitration Association in
accordance with such association's rules and procedures.
7.2.4 Third Person Claims. If a claim by a third Person is made
-------------------
against an Indemnified Party, and if such Party intends to seek indemnity with
respect thereto under this Article VII (subject to the limitations contained
herein), such Indemnified Party shall promptly notify the Indemnitor in writing
of such claims, setting forth such claims in reasonable detail. The Indemnitor
shall have thirty (30) days after receipt of such notice to commence to
undertake, conduct and control, through counsel of its own choosing and at its
own expense, the settlement or defense thereof, and the Indemnified Party shall
cooperate with it in connection therewith; provided that the Indemnified Party
may participate in such settlement or defense through counsel chosen by
-20-
such Indemnified Party and paid at its own expense. So long as the Indemnitor is
reasonably contesting any such claim in good faith, the Indemnified Party shall
not pay or settle any such claim without the consent of the Indemnitor. If the
Indemnitor does not notify the Indemnified Party within thirty (30) days after
receipt of the Indemnified Party's notice of a claim of indemnity hereunder that
it elects to undertake the defense thereof, the Indemnified Party shall have the
right to contest, settle or compromise the claim but shall not thereby waive any
right to indemnity therefore pursuant to this Agreement. The Indemnitor shall
not, except with the consent of the Indemnified Party, enter into any settlement
that does not include as an unconditional term thereof the giving by the person
or persons asserting such claim to all Indemnified Parties (i.e. the Seller
Indemnified Parties or the Buyer Indemnified Parties, as the case may be) of an
unconditional release from all liability with respect to such claim or consent
to entry of any judgment.
7.3 LIMITATIONS ON DAMAGES.
----------------------
7.3.1 Waiver of Non-Compensatory Damages. No Party shall be entitled
----------------------------------
to recover from the other Party for any Losses under this Agreement any amount
in excess of the actual compensatory damages, court costs and reasonable
attorney fees suffered by such Party; and the Buyer and the Seller waive any
right to recover consequential damages arising in connection with or with
respect to Losses under this Agreement.
7.3.2 Mitigation Obligation. Each Person entitled to recover any
---------------------
Losses pursuant to this Agreement shall take all reasonable steps to mitigate
all Losses after becoming aware of any event which could reasonably be expected
to give rise to any Losses that are recoverable hereunder or in connection
herewith.
7.3.3 Post-Closing Actions. Notwithstanding anything in this
--------------------
Agreement to the contrary, the Seller shall not be responsible for any liability
or obligation resulting from the failure of the Buyer to comply with Applicable
Law or the rights of third parties after the Closing even if PBH's Opaque Lens
Business is operated after the Closing in the same manner in which PBH's Opaque
Lens Business was operated prior to Closing.
7.4 EXPENSES.
--------
(a) Generally. Except as otherwise provided herein, the Seller, on
---------
the one hand, and the Buyer, on the other hand, shall bear their respective
expenses, costs and fees (including attorneys' and accountants' fees) in
connection with the
-21-
transactions contemplated hereby, including the preparation, execution and
delivery of this Agreement and compliance herewith, whether or not the
transactions contemplated hereby are consummated.
(b) Transfer Taxes. Buyer and Seller shall bear equally all sales,
--------------
use, value added, documentary, stamp, gross receipts, registration, transfer,
conveyance, excise, recording, license and other similar taxes and fees
("Transfer Taxes"), arising out of or in connection with or attributable to the
--------------
transactions effected pursuant to this Agreement. Seller shall be responsible
for the timely payment to Governmental Authorities of, and shall prepare and
timely file all tax returns required to be filed in respect of, all Transfer
Taxes.
7.5 SPECIFIC PERFORMANCE; NO LIQUIDATED DAMAGES. Because the assets of
-------------------------------------------
PBH's Opaque Lens Business are unique, the Parties agree that money damages
would not be an adequate remedy for any breach on the part of either Party to
this Agreement which could result in a failure of the transactions contemplated
herein to close. Therefore, in the event of a breach or threatened breach of
this Agreement which could result in a failure of the transactions contemplated
hereby to close, either Party may, in addition to other rights or remedies
existing in their favor, apply to any court of competent jurisdiction for
specific performance and/or other injunctive relief to enforce the provisions
herein (without posting a bond or other security). SELLER'S RIGHT TO RETAIN THE
$1,000,000 DEPOSIT DESCRIBED IN SECTION 2.1(a) ABOVE SHALL NOT BE CONSTRUED AS
LIQUIDATED DAMAGES OR IN ANY WAY LIMIT THE SELLER'S RIGHT TO SEEK MONETARY
DAMAGES AND/OR SPECIFIC PERFORMANCE OF THE TERMS OF THIS AGREEMENT.
7.6 SEVERABILITY. If any covenant, agreement, provision or term of this
------------
Agreement is held to be invalid for any reason whatsoever, then such covenant,
agreement, provision or term will be deemed severable from the remaining
covenants, agreements, provisions and terms of this Agreement and will in no way
affect the validity or enforceability of any other provision of this Agreement.
7.7 NOTICES. All notices, requests, demands, waivers and other
-------
communications required or permitted to be given under this Agreement shall be
in writing and shall be deemed to have been duly given if (i) delivered
personally, (ii) mailed by registered or certified mail, return receipt
requested, postage prepaid, (iii) sent by reputable overnight courier or (iv)
sent by telecopy (with confirmation of receipt).
-22-
If to the Seller:
----------------
Xxxxxx-Xxxxxx Corporation
PBH, Inc.
000 Xxxx Xxxxxx Xxxxxx
Xxx Xxxxxxx, Xxxxxxxx 00000-0000
Attn: President
Fax No. (000) 000-0000
Confirm No. (000) 000-0000
with a copy, which will
-----------------------
not constitute notice to
------------------------
the Seller, to:
--------------
Xxxxxxx, Xxx & Xxxxxxxx
000 Xxxxxxxxxx Xxxxxx
Xxxxxxxxx, Xxx Xxxxxx 00000
Attn: Xxxxxx X. Xxxxxxx
Fax No. (000) 000-0000
Confirm No. (000) 000-0000
If to the Buyer:
---------------
The Xxxxxx Companies, Inc.
0000 Xxxxxxxxxx Xxxx Xxxx, Xxxxx 000
Xxxxxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxx/Xxxxx X. Xxxxxxx
Fax No. (000) 000-0000
Confirm. No. (000) 000-0000
and with a copy to:
------------------
CooperVision, Inc.
000 Xxxxxxxxxxx Xxxxxx Xxxx
Xxxxxxxx, Xxx Xxxx 00000
Attn: Xxxx Xxxxxxxx, Vice President General Manager
Fax No. (000) 000-0000
Confirm. No. (000) 000-0000
-23-
with a copy, which will
-----------------------
not constitute notice to
------------------------
the Buyer, to:
-------------
Xxxxxx & Xxxxxxx
000 Xxxxxxxxxx Xx.; Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxxxx
Fax No. (000) 000-0000
Confirm. No. (000) 000-0000
or, in each case, at such other address as may be specified in writing to the
other Parties.
All such notices, requests, demands, waivers and other communications shall be
deemed to have been received (i) if by personal delivery on the date after such
delivery, (ii) if by certified or registered mail, on the seventh business day
after the mailing thereof, (iii) if by overnight courier, on the day delivered,
(iv) if by telecopy, on the day on which such telecopy was sent and the
transmission thereof confirmed.
7.8 HEADINGS. The headings used in this Agreement are for the purpose of
--------
reference only and will not affect the meaning or interpretation of any
provision of this Agreement.
7.9 ENTIRE AGREEMENT. This Agreement (including the Schedules and
----------------
Exhibits hereto) and other agreements and documents contemplated hereby (when
executed and delivered) constitute the entire agreement and supersede all prior
agreements and understandings, both written and oral, between the Parties with
respect to the subject matter hereof. The representations and warranties made
by the Seller in this Agreement and the Schedules that accompany this Agreement,
supersede, replace and nullify in every respect the data set forth in any other
document, material or statement, whether written or oral, made available to the
Buyer (the "Other Material") and the Buyer shall not rely on any data contained
--------------
in the Other Material for any purpose whatsoever, including, without limitation,
as a promise, projection, guaranty, representation, warranty or covenant.
7.10 COUNTERPARTS. The Parties may execute this Agreement in separate
------------
counterparts (no one of which need contain the signatures of all Parties), each
of which will be an original and all of which together will constitute one and
the same instrument.
7.11 DISCLOSURE. Any information set forth in any Schedule attached to
----------
this Agreement or incorporated in any Section of this
-24-
Agreement shall be considered to have been set forth in each other Schedule to
this Agreement.
7.12 LIMITATION OF WARRANTIES. THE EXPRESS REPRESENTATIONS OF THE SELLER
------------------------
CONTAINED IN THIS AGREEMENT ARE EXCLUSIVE AND ARE IN LIEU OF, AND THE SELLER
EXPRESSLY DISCLAIMS AND NEGATES AND THE BUYER HEREBY WAIVES, ANY REPRESENTATION
OR WARRANTY WITH RESPECT TO THE QUALITY, QUANTITY OR CONDITION OF THE ASSETS
COMPRISING PBH'S OPAQUE LENS BUSINESS OR THE OWNERSHIP OR OPERATION OF PBH'S
OPAQUE LENS BUSINESS OR ANY PART THEREOF, EXCEPT AS OTHERWISE SET FORTH HEREIN.
THE SELLER DOES NOT MAKE OR PROVIDE, AND THE BUYER HEREBY WAIVES, ANY WARRANTY
OR REPRESENTATION, EXPRESS OR IMPLIED, AS TO THE QUALITY, MERCHANTABILITY,
FITNESS FOR A PARTICULAR PURPOSE, CONFORMITY TO SAMPLES, OR CONDITION OF ANY OF
THE ASSETS COMPRISING PBH'S OPAQUE LENS BUSINESS OR ANY PART THERETO, EXCEPT AS
OTHERWISE SET FORTH HEREIN. THE SELLER DISCLAIMS AND NEGATES, AND THE BUYER
HEREBY WAIVES, ALL OTHER REPRESENTATIONS AND WARRANTIES, EXPRESS, IMPLIED OR
STATUTORY. THE ITEMS OF PERSONAL PROPERTY, EQUIPMENT, IMPROVEMENTS, FIXTURES
AND APPURTENANCES CONVEYED AS PART OF THE ASSETS COMPRISING PBH'S OPAQUE LENS
BUSINESS ARE SOLD, AND THE BUYER ACCEPTS SUCH ITEMS "AS IS, WITH ALL FAULTS",
EXCEPT AS OTHERWISE SET FORTH HEREIN. THERE ARE NO WARRANTIES THAT EXTEND
BEYOND THE FACE OF THIS AGREEMENT.
7.13 GOVERNING LAW, ETC. This Agreement will be governed by and construed
------------------
in accordance with the domestic laws of the State of Illinois, without giving
effect to any choice of law or conflict provision or rule (whether of the State
of Illinois or any other jurisdiction) that would cause the laws of any
jurisdiction other than the State of Illinois to be applied.
7.14 BINDING EFFECT. This Agreement shall be binding upon and inure to
--------------
the benefit of the Parties and their respective successors and permitted
assigns.
7.15 ASSIGNMENT. Seller may assign its rights and delegate its duties
----------
under this Agreement. Buyer may not convey, assign, dispose or transfer
(whether directly or indirectly, by operation of law, change in control or
otherwise) its rights or delegate its duties under this Agreement without the
prior written consent of the Seller, which consent may be withheld in Seller's
sole discretion; provided that notwithstanding the foregoing, Buyer may assign
its rights or delegate its duties under this Agreement as part of a sale,
transfer or other disposition (whether by asset sale, stock sale, merger,
reorganization or otherwise) of all or any portion of Buyer's contact lens
business. Any conveyance, assignment, disposal or transfer (whether directly or
indirectly, by operation of law, change in control or otherwise) of Buyer's
-25-
rights or duties under this Agreement to any Person, except as otherwise
specifically permitted in this Section 7.15, shall cause this Agreement to
automatically and immediately terminate upon the occurrence of such event,
except for Buyer's obligations to pay any amounts due and owing or which later
become due and owing pursuant to this Agreement, the License Agreements or the
Supply Agreement.
7.16 NO THIRD PARTY BENEFICIARIES. Nothing in this Agreement shall confer
----------------------------
any rights upon any person or entity other than the Parties and their respective
successors and permitted assigns.
7.17 BULK TRANSFER LAWS. The Buyer acknowledges that the Seller will not
------------------
comply with the provisions of any bulk transfer laws of any jurisdiction in
connection with the transactions contemplated by this Agreement and,
notwithstanding anything to the contrary set forth herein, the failure to so
comply will not constitute a breach under any representation, warranty or of any
covenant of the Seller contained herein; provided, however, that Seller hereby
agrees to indemnify and hold Buyer and its Affiliates or assigns harmless from
any loss, liability, obligation or cost suffered by Buyer, its Affiliates or
assigns as a result of the failure by Seller to comply with any applicable bulk
sales laws (which indemnification shall not be subject to the indemnification
limitations set forth in Section 7.1 hereof).
7.18 PRESS RELEASES AND PUBLIC ANNOUNCEMENTS. No Party shall issue any
---------------------------------------
press release or make any public announcement relating to the subject matter of
this Agreement prior to the Closing without the prior written approval of the
other Party (unless such Party is legally required to do so on the advice of
counsel).
7.19 AMENDMENT, WAIVERS, ETC. No amendment, modification or discharge of
-----------------------
this Agreement, and no waiver hereunder, shall be valid or binding unless set
forth in writing and duly executed by the Party against whom enforcement of the
amendment, modification, discharge or waiver is sought (or the FTC or the
Trustee, as the case may be, in the case of any provision of this Agreement for
the benefit of the FTC or the Trustee). Any such waiver shall constitute a
waiver only with respect to the specific matter described in such writing and
shall in no way impair the rights of the Party (or the FTC or the Trustee, as
the case may be, in the case of any provision of this Agreement for the benefit
of the FTC or the Trustee) granting such waiver in any other respect or at any
other time. Neither the waiver by any of the Parties (or the FTC or the
Trustee, as the case may be, in the case of any provision of this Agreement for
the benefit of the FTC or the Trustee) of a breach of or a default under any of
the provisions of this Agreement, nor the failure by any of the Parties (or the
FTC or the
-26-
Trustee, as the case may be, in the case of any provision of this Agreement for
the benefit of the FTC or the Trustee), on one or more occasions, to enforce any
of the provisions of this Agreement or to exercise any right or privilege
hereunder, shall be construed as a waiver of any other breach or default of a
similar nature, or as a waiver of any of such provisions, rights or privileges
hereunder.
7.20 FORCE MAJEURE. Neither Party shall be responsible for any
-------------
failure to comply with the terms of this Agreement where such failure is due to
force majeure, which shall include, without limitation, fire, flood, explosion,
strike, labor disputes, labor shortages, picketing, lockout, transportation
embargo or failures or delays in transportation, strikes or labor disputes
affecting supplies, acts of God, civil riot or insurrection or acts of any
Governmental Authority.
ARTICLE VII
DEFINITIONS
8.1 DEFINITION OF CERTAIN TERMS. The terms defined in this Section 8.1,
---------------------------
whenever used in this Agreement (including in the Schedules), shall have the
respective meanings indicated below for all purposes of this Agreement:
"Affiliate" of a Person means a Person that directly or indirectly
---------
through one or more intermediaries, controls, is controlled by, or is under
common control with, the first Person. "Control" (including the terms
-------
"controlled by" and "under common control with") means the possession, directly
-------------- -------------------------
or indirectly, of the power to direct or cause the direction of the management
policies of a person, whether through the ownership of voting securities, by
contract or credit arrangement, as trustee or executor, or otherwise.
"Agreement" means this Asset Purchase Agreement, including the
---------
Schedules and Exhibits hereto.
"Applicable Law" means all applicable provisions of all (i)
--------------
constitutions, treaties, statutes, laws, regulations, ordinances or orders of
any Governmental Authority and (ii) Governmental Approvals.
"Governmental Approval" means any consent, approval, authorization,
---------------------
waiver or permit from any Governmental Authority.
-27-
"Governmental Authority" means any nation or government, any state or
----------------------
other political subdivision thereof, any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government.
"Information Relating to Licensing of Patents" means any information
--------------------------------------------
not in the public domain disclosed by the Buyer to Seller relating to the
license of the patents pursuant to the Xxxxx License Agreement.
"Known" or "Knowledge" means the actual personal knowledge, without
----- ---------
imputation of any other person and without independent investigation, of an
individual employed by a Party for whom a significant portion of his or her
duties relates to matters as to which the applicable representation or warranty
is made hereunder.
"Licensed Territory" means the United States and its territories and
------------------
possessions.
"Lien" means any mortgage, pledge, security interest or encumbrance.
----
"Loss" means any loss, liability, deficiency, damage or expense
----
(including reasonable legal fees and expenses) which either Party may suffer,
sustain or become subject to.
"Material Adverse Effect" means a material adverse effect on the
-----------------------
financial condition and operating results of PBH's Opaque Lens Business.
"Opaque Contact Lenses" means contact lenses containing opaque
---------------------
materials that cover the iris and that are designed to change the apparent color
of the eye.
"PBH's Opaque Lens Products" means Opaque Contact Lenses researched,
--------------------------
developed, manufactured, distributed, and sold by Seller in the United States,
including, but not limited to, those marketed and sold under the brand name
Natural Touch(TM).
"Permitted Liens" means (i) Liens for taxes not yet due and payable or
---------------
which are being contested in good faith and by appropriate proceedings, (ii)
recorded Liens, (iii) liens of carriers, warehousemen, mechanics and materialmen
and incurred in the ordinary course of business, that in the aggregate do not
have a material adverse effect upon the assets comprising PBH's Opaque Lens
Business, or (iv) Liens that, in the aggregate, do not materially detract from
the value of any of the property or assets
-28-
of PBH's Opaque Lens Business or materially interfere with the use thereof as
currently used or contemplated to be used.
"Person" means an individual, a partnership, a corporation, an
------
association, a limited liability company, a joint stock company, a trust, a
joint venture, an unincorporated organization and a governmental entity or any
department, agency or political subdivision thereof.
"reasonable efforts" means reasonable efforts which are commercially
------------------
reasonable under the circumstances, excluding the payment of any money or other
consideration to any third party or the commencement of any litigation.
8.2 OTHER DEFINITIONAL PROVISIONS.
-----------------------------
(a) "Hereof," etc. The terms "hereof," "herein" and "hereunder" and
-------------
terms of similar import are references to this Agreement as a whole and not to
any particular provision of this Agreement. Section, clause, Schedule and
Exhibit references contained in this Agreement are references to Sections,
clauses, Schedules and Exhibits in or to this Agreement, unless otherwise
specified.
(b) Successor Laws. Any reference to any particular law or
--------------
regulation will be interpreted to include any revision of or successor to that
section regardless of how it is numbered or classified.
* * * * *
-29-
IN WITNESS WHEREOF, the Parties have duly executed this Asset Purchase
Agreement as of the date first above written.
XXXXXX-XXXXXX CORPORATION
By: /s/ Xxxxx X. Xxxx
-------------------------------
Its: President & CEO
-------------------------------
PBH, INC.
By: /s/ Xxxxx X. Xxxx
--------------------------------
Its: President & CEO
-------------------------------
THE XXXXXX COMPANIES, INC.
By: /s/ Xxxxxx Xxxxx
-------------------------------
Its: EVP - CFO
-------------------------------
-30-
