Exhibit 10.2
ASSET
PURCHASE AGREEMENT
By and
Among
SYMMETRY MEDICAL NEW BEDFORD,
LLC
and
SYMMETRY NEW BEDFORD REAL
ESTATE, LLC
(Collectively the
Purchaser)
and
DEPUY
ORTHOPAEDICS, INC.
(Seller)
DATED:
December 14, 2007
ASSET
PURCHASE AGREEMENT
ASSET PURCHASE
AGREEMENT (“Agreement”), dated as of
December 14, 2007, between Symmetry Medical New Bedford, LLC,
a Delaware limited liability company and Symmetry New Bedford Real
Estate, LLC, a Delaware limited liability company (collectively,
the “Purchaser”), and DePuy Orthopaedics, Inc., an
Indiana corporation (“Seller”).
WITNESSETH:
WHEREAS, Seller is
in the business of developing, designing, manufacturing, marketing,
distributing and selling orthopaedic implants, instruments and
related accessories and products in the United States and worldwide
through itself, its subsidiaries and affiliates;
WHEREAS, Purchaser
wishes to purchase or acquire from Seller, and Seller wishes to
convey, sell, assign and transfer or cause to be conveyed, sold,
assigned and transferred to Purchaser, all of the assets (excluding
assets in the GIC area), real estate and properties solely related
to Seller’s New Bedford, Massachusetts facility (the
“Division”), all for the purchase price and upon the
term and subject to the conditions hereinafter set forth;
NOW, THEREFORE, in
consideration of the mutual covenants, representations and
warranties made herein, and of the mutual benefits to be derived
hereby, the parties hereto agree as follows:
ARTICLE 1
DEFINITIONS
The terms defined
in this Article 1, whenever used in this Agreement (including
in the Schedules), shall have the respective meanings indicated
below for all purposes of this Agreement unless otherwise
indicated. All references herein to a Section, Article or Schedule
are to a Section, Article or Schedule of or to this Agreement,
unless otherwise indicated.
“Affiliate” means, with respect to
a given party, any entity that, directly or indirectly, controls,
is controlled by or is under common control with such party. For
purposes of this paragraph, “control” shall mean the
ownership or interest in 50% or more of such entity or possession
of the power to direct or cause the direction of management or
policies of such entity whether through ownership of voting
securities, by contract or otherwise.
“Applicable
Law” means all applicable provisions of all (i)
constitutions, treaties, statutes, laws (including the common law
and Real Property Laws), rules, regulations, ordinances, codes or
orders of any Governmental Authority, (ii) Governmental Approvals
and (iii) orders, decisions, injunctions, judgments, awards and
decrees of or agreements with any Governmental
Authority.
“Assets” shall mean collectively
the equipment and other items as defined in Section 2.1 as
well as the Real Property as defined below and described on
Schedule 2.1.
“Business
Day” shall mean a day other than a Saturday, Sunday or other
day on which commercial banks in New York City are authorized or
required to close.
“Closing” as defined in
Section 3.1.
“Closing
Date” as defined in Section 3.1.
“Code”
means the Internal Revenue Code of 1986, as amended from time to
time and the regulations promulgated thereunder.
“Collateral
Agreements” mean the agreements and other documents and
instruments described in Section 6.4.
“Commercial
Software” means the Software utilized by Seller in connection
with the Division that is not owned by Seller.
“Comparable
Employment” means a position that has a substantially similar
job description and substantially similar base rate of
pay.
“Confidentiality Agreement” means
the confidentiality agreement entered into between Seller and
Symmetry Medical Inc. dated March 16, 2007.
“Consent” means any consent,
approval, authorization, waiver, permit, grant, franchise,
concession, agreement, license, exemption or order of,
registration, certificate, declaration or filing with, or report or
notice to, any Person, including but not limited to any
Governmental Authority.
“Contract” as defined in
Section 4.1.10(a).
“Continuing
Employee” shall mean any individual identified pursuant to
Section 7.1.
“Damages” shall mean losses,
Liabilities, deficiencies, costs and expenses directly incurred by
a party (and if applicable, reasonable attorneys’ fees
associated therewith).
“Division” means that certain
manufacturing plant located on the Real Property.
“Dollars” or “$” means
lawful money of the United States of America.
“Employee” means a full time
employee of the Seller who is located at the Division.
“Environmental Assessment” as
defined in Section 5.2.4.
“Environmental Laws” means all
Applicable Laws relating to the protection of the environment, to
human health and safety, or to the preservation or reclamation of
natural resources or to the management, handling, use, generation,
treatment, storage, transportation, disposal, manufacture,
distribution, formulation, packaging, labeling, whether now
existing or subsequently amended or enacted,
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“Environmental Liabilities” means
all (i) losses arising out of the ownership or operation of the
Division by the Seller on, under, above, or about the Real
Property; and (ii) expenditures necessary to cause the Real
Property to be in compliance with any and all material
Environmental Laws as of the Closing Date as a result of any act or
omission of Seller.
“Environmental Permits” means any
federal, state and local permit, license, registration, consent,
order, administrative consent order, certificate, approval or other
authorization of Seller exclusively related to the
Division.
“ERISA” means the Employee
Retirement Income Security Act of 1974, as amended.
“Excluded
Assets” as defined in Section 2.2.
“Excluded
Liabilities” shall have the meaning set forth in Section
3.5.
“Financial
Statements” means those statements set forth at Schedule
4.1.22(a).
“GAAP”
means generally accepted accounting principles as in effect in the
United States.
“GIC”
means Global Instrument Center of Seller, which support
Seller’s product development at the Division.
“GIC
Employees” means the group of Seller employees at the
Division who support the Global Instrument Center product
development efforts.
“Governmental Approval” means any
Consent of, with or to any Governmental Authority.
“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.
“Indemnified
Party” as defined in Section 9.2.
“Indemnifying Party” as defined in
Section 9.2.
“Intellectual Property” means all
United States and foreign (a) copyrights and similar rights, (b)
the United States and foreign letters patent (including docketed
patent disclosures awaiting filing, provisionals, reissues,
revisions, divisions, continuations, continuations-in-part,
extensions and re-examinations), patent disclosures awaiting filing
determination, and improvements thereto, inventions (whether
patentable or unpatentable and whether or not reduced to practice),
and improvements thereto, processes, designs, formulae, trade
secrets, know-how ideas, research and development, manufacturing
and production processes and techniques, technical data,
copyrightable works, engineering notebooks, databases, customer
lists, confidential information, (c) Software, firmware, Internet
Web sites (including the content thereof), (d) mask works and other
semiconductor chip rights and applications, registrations and
renewals thereof, (e) all similar intellectual property rights and
know-how (including moral rights), (f) all rights to sue for and
remedies against past, present and future infringements of
any
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or all of the
foregoing, (g) rights of priority and protection of interests
therein under the laws of any jurisdiction, and tangible
embodiments of any of the foregoing (in any medium including
electronic media), and (h) licenses of any of the
foregoing.
“Intellectual Property Know How”
means the manufacturing process know how to enable Purchaser to
manufacture products under the Supply Agreement after the
Closing.
“Inventories” shall mean finished
goods inventory located at the Division, work-in-process inventory
and raw material(s) inventory and all other inventory located at
the Division.
“IRS”
means the Internal Revenue Service.
“Key
Employee” shall mean a member of the current management group
located on site at the Division.
“Leased
Property” means all leased personal property, including
office equipment and machinery, located at the Division.
“Leases” means the real property
lease between the Purchaser and the Seller related to the GIC
area.
“Liability” or
“Liabilities” means any and all debts, liabilities
and/or obligations of any type, nature or description (whether
known or unknown, asserted or unasserted, secured or unsecured,
absolute or contingent, accrued or unaccrued, liquidated or
unliquidated and whether due or to become due).
“Lien”
means any mortgage, pledge, hypothecation, right of others, claim,
security interest, encumbrance, lease, sublease, license, occupancy
agreement, adverse claim or interest, easement, covenant,
encroachment, burden, title defect, title retention agreement,
voting trust agreement, conditional sale or other title retention
agreement, interest, equity, option, lien, right of first refusal,
charge or other restrictions or limitations of any nature
whatsoever, whether caused or permitted by act, failure to act,
operation of law or otherwise, including but not limited to such as
may arise under any Contracts.
“Material
Adverse Effect” means any event, occurrence, fact, condition,
change or effect that has a materially adverse change or effect,
respectively, on the Division, Assets, Assumed Liabilities,
operations or results of operations of the Division, prospects, or
condition (financial or otherwise) of the Division, taken as a
whole, except any such change or effect resulting from or arising
in connection with (i) this Agreement or the transactions
contemplated hereby, (ii) changes in economic, regulatory or
political conditions generally; or (iii) changes or conditions
affecting the medical device industry or market for such medical
device products generally; or (iv) changes or effects that are the
result of actions taken by Purchaser that have an effect on the
Division.
“Material
Contracts” shall mean each written contract, agreement or
commitment of Seller currently in effect which is related to the
operation of the Division, which (i) has an unexpired term greater
than twelve (12) months or (ii) requires aggregate future payments
in
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excess of $50,000
by Seller or the other party thereto or (iii) a license agreement
in effect with respect to any portion of the Intellectual Property
Know How that is material to the Division.
“Ordinary
Course” means an action taken by a Person only if:
(i)
such action is consistent with the past practices of such Person or
is taken in the ordinary course of the normal day-to-day operations
of such Person; and
(ii)
such action is not required to be authorized by the board of
directors of such Person (or by any Person or group of Persons
constituting a governing body of a Person exercising similar
authority).
“Permitted
Encumbrances” shall mean (i) easements, encroachments, rights
of way and other such restrictions of record which are disclosed by
the Title Commitment (as hereinafter defined) and the Survey (as
hereinafter defined); provided that such matters, if any, do not
individually or in the aggregate, (a) materially detract from the
value or interfere with the current use of the Assets in a
significant manner, (b) substantially interfere with or impair the
operation or value of the Division or current use or occupancy of
the Real Property; or (c) render title unmarketable; and (ii)
building, zoning or subdivision laws or ordinances and other
similar laws or governmental rules and regulations applicable to
and having jurisdiction over the Real Property.
“Permitted
Liens” shall mean (i) all statutory liens for current
Taxes or assessments not yet due and payable or delinquent or the
validity of which are being contested in good faith and by
appropriate proceedings, (ii) mechanics’,
materialsmen’s, warehousemen’s’ and similar liens
attaching by operation of law, incurred in the Ordinary Course of
business and securing payments not delinquent or payments which are
being contested in good faith; (iii) such other liens incurred or
deposits made in the Ordinary Course of business in connection with
worker’s compensation, unemployment insurance, social
security and other similar laws where the underlying obligations
are not yet delinquent; or (iii) such other liens, which
individually and in the aggregate, are not material to the
Division.
“Person” means any natural person,
firm, partnership, association, corporation, company, trust,
business trust, joint venture, limited liability company, or other
entity whether incorporated or not.
“Plan”
or “Plans” as defined in Section 4.1.18.
“Purchase
Price” as defined in Section 3.2.
“Purchase
Price Adjustment” as defined in Section 3.3.
“Purchaser” as defined in the first
paragraph of this Agreement.
“Purchaser
Indemnities” as defined in Section 9.1(a).
“Purchaser’s Accountants”
means Ernst & Young LLP.
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“Purchaser’s Knowledge” means
the actual knowledge of Purchaser, Purchaser’s Affiliates,
Purchaser’s employees and/or Affiliate’s employees
involved directly in the transaction contemplated by this
Agreement.
“Real
Property” means the real property located at 61 John Vertente
Boulevard, New Bedford, Massachusetts, as more particularly
described on Schedule 2.1, owned by Seller or Seller’s
Affiliate Codman & Shurtleff, Inc., together with all other
structures, facilities, improvements, signage, fixtures and systems
and all easements, licenses, options, permits, rights and
appurtenances relating to the foregoing.
“Real
Property Laws” as defined in Section 4.1.15(e).
“Release” means any releasing,
disposing, discharging, injecting, spilling, leaking, leaching,
pumping, dumping, emitting, escaping, emptying, seeping, dispersal,
migration, transporting, placing or other releasing into the
environment, whether intentional or unintentional.
“Remedial
Action” means all actions required to (i) clean up, remove,
treat or in any other way remediate any failure to comply with any
Environmental Laws.
“Salaried
Employee” means an employee who receives a predetermined
amount of pay per pay period regardless of the number of hours
worked or the amount of work performed.
“Seller” as defined in the first
paragraph of this Agreement.
“Seller’s Knowledge” means
the actual knowledge of the Worldwide Vice President of Operations,
Edward Mackey, US Director of Purchasing, Rod Wilson, and
does not include any other directors, officer, employee, agent or
representative of Seller or any Affiliate of Seller.
“Software” means all computer
software, including but no limited to, application software and
system software, including all source code and object code versions
thereof, in any and all forms and media, whether recorded on paper,
magnetic media or other electronic or non-electronic media
(including data and related documentation, user manuals, training
materials, flow charts, diagrams, descriptive tests and programs,
computer print-outs, underlying tapes, computer databases and
similar terms), integrated circuits, embedded systems, and other
electro-mechanical or processor based systems.
“Subsidiaries” means each
corporation or other Person in which a Person owns or controls,
directly or indirectly, capital stock or other equity interests
representing at least 50% of the outstanding voting stock or other
equity interests.
“Supply
Agreement” as defined in Section 6.4(a).
“Taxes” means, all present or
future (i) real and personal property taxes, (ii) value added,
sales or use taxes, and (iii) payroll, withholding and/or social
security taxes, imposed by any federal, state, county, or local
government, or a subdivision, agency or taxing district thereof and
is limited to Taxes associated with the Assets sold under this
Agreement.
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“Treasury
Regulations” means the regulations prescribed pursuant to the
Code.
ARTICLE 2
SALE
AND PURCHASE OF THE ASSETS
2.1.
Assets.
(a)
On the Closing Date and subject to and upon the terms and
conditions set forth in this Agreement, Seller will sell, transfer,
convey, assign and deliver or will cause to be sold, assigned,
transferred or delivered to Purchaser all of the right, title and
interest in and to the assets solely related to the Division (the
“Assets”), a list of which Assets is set forth on
Schedule 2.1. Such Assets shall not include Excluded Assets as set
forth in Schedule 2.2.
(b)
Such transfers, except as provided herein, will be effected by
transferring to Purchaser such good and sufficient instruments of
conveyance, transfer and assignment (the “Asset Transfer
Documents”) as shall be necessary to transfer to Purchaser
good and valid title to the Assets, free and clear of all Liens
except Permitted Encumbrances and Permitted Liens. Purchaser and
Seller shall execute on or prior to the Closing Date, such Asset
Transfer Documents and other documents as may be necessary to
affect the transfer of the Assets.
2.2.
Excluded Assets. Seller will retain and not transfer the
following assets of the Division;
(a)
the assets listed on Schedule 2.2;
(b)
the name, marks and logos “DePuy Orthopaedics” and all
variations thereof;
(c)
Seller’s and Seller’s Affiliates’ names, logos,
trade names and trademarks;
(d)
all Intellectual Property associated with specific DePuy product
designs;
(e)
all Intellectual Property including know-how relating to the
Codman Cranial Perforator manufacturing process;
(f)
all Intellectual Property including know-how relating to the Type
II Anodization process for Trauma Screws and Orthopaedic bone
screws;
(g)
all Intellectual Property including know-how relating to
Di-electric insulating Kynar coating for bi-polar forceps; and
(h)
all cash and tax refunds; and
(i)
Software licenses used by Seller in connection with the Assets or
Division that cannot be transferred to a third party (collectively,
the “Excluded Assets”).
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ARTICLE 3
THE
CLOSING
3.1.
Place and Date. The closing of the sale and the purchase of the
Assets (the “Closing”) shall take place at
9:00 A.M. on the 25 th day of January, 2008 at the
offices of Barrett & McNagny, LLP, 215 East Berry
Street, Fort Wayne, Indiana, or such other time and place upon
which the parties may agree in writing prior to the scheduled
Closing Date. The day on which the Closing actually occurs is
herein sometimes referred to as the “Closing Date.”
3.2.
Purchase Price. On the terms and subject to the conditions set
forth in this Agreement, Purchaser agrees to pay Seller an
aggregate of $45,000,000 in cash, subject to any adjustment
required by Section 3.3 (the “Purchase Price”).
The Purchase Price shall be payable by wire transfer to such bank
account or accounts per written instructions of Seller and given to
Purchaser at least five (5) business days prior to the Closing to
which such payment relates.
3.3.
Purchase Price Adjustment. The Purchase Price will be adjusted,
dollar for dollar, for any difference exceeding the amount of
$25,000 between the value of the Inventory at Closing, as
determined in accordance with Seller’s accounting practices
at the Division, consistently applied, and the average monthly sum
of such Inventory for the twelve (12) months ending immediately
preceding the month that includes the Closing Date using the same
practices. If the Closing Inventory discloses a positive net
change, then the amount of such positive change shall be added on a
dollar-for-dollar basis to the Purchase Price. If the Closing
Inventory discloses a negative net change, then the Purchase Price
shall be reduced on a dollar-for-dollar basis by the amount of such
negative net change.
3.4.
Allocation of Purchase Price.
(a)
The parties will make reasonable efforts, prior to Closing, to
agree on an allocation of the Purchase Price (“the
Allocation”) among the Assets based upon an initial proposal
submitted by Purchaser. If an initial agreement is reached, the
final allocation will take into account any purchase price
adjustment. The final allocation will be submitted by Purchaser to
Seller for Seller’s review within 60 days after the Closing.
If a final agreement is reached, Purchaser and Seller will (i) act
in accordance with the Allocation in the preparation of financial
statements and the filing of all Tax returns (including, without
limitation, filing Form 8594 with its federal income Tax return for
the taxable year that includes the date of the Closing) and (ii)
take no position inconsistent with the Allocation for all Tax
purposes.
(b)
In connection with the determination of the foregoing Allocation,
the parties shall cooperate with each other and provide such
information as any of them shall reasonably request. In the event
of any disagreement between the parties as to such allocation, the
parties will seek the advice of a third party regional or national
accounting firm to assist in resolution of the disagreement. The
parties will each report the federal, state and local and other Tax
consequences of the purchase and sale contemplated hereby
(including the filing of Internal Revenue Service Form 8594)
in a manner consistent with such Allocation.
3.5.
Excluded Liabilities. Notwithstanding any provision hereof or
any Schedule or Exhibit hereto to the contrary, and regardless of
any disclosure to Purchaser, Purchaser shall not
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assume any Liabilities,
obligations or commitments of the Seller relating to or arising out
of the operation of the Division or the ownership of the Assets
prior to the Closing, provided that Purchaser shall assume all
liability including product liability claim arising from products
sold by Purchaser after the Closing Date (regardless of whether
such products are finished goods or work in process) or components
of products manufactured by or at the Division prior to the Closing
Date (the “Excluded Liabilities”).
3.6.
Consent of Third Parties. Notwithstanding anything to the
contrary in this Agreement, this Agreement shall not constitute an
agreement to assign or transfer any interest in any Governmental
Approval, instrument, contract, lease, permit or other agreement or
arrangement or any claim, right or benefit arising thereunder or
resulting therefrom if an assignment or transfer or an attempt to
make such an assignment or transfer without the consent of a third
party would constitute a breach or violation thereof or affect
adversely the rights of Purchaser or Seller thereunder; and any
transfer or assignment to Purchaser by Seller of any interest under
any such instrument, contract, lease, permit or other agreement or
arrangement that requires the consent of a third party shall be
made subject to such consent or approval being obtained. In the
event any such Consent or approval is not obtained on or prior to
the Closing Date, each party shall continue to use all reasonable
efforts to obtain any such approval or Consent after the Closing
Date until such time as such Consent or approval has been obtained
in a lawful and economically feasible arrangement so as to provide
that Purchaser shall receive the interest of Seller, as the case
may be, in the benefits under any such instrument, contract, lease
or permit or other agreement or arrangement, including performance
by Seller, as the case may be, as agent, if economically feasible,
provided that to the extent the foregoing shall require any action
by Seller that would, or would continue to, affect the Division
after the Closing, such action shall require the prior written
consent of the Purchaser, which consent shall not be unreasonably
withheld and provided Purchaser shall undertake to pay or satisfy
the corresponding Liabilities for the enjoyment of such benefit to
the extent Purchaser would have been responsible therefore
hereunder if such Consent or approval had been obtained.
3.7.
Real Property Prorations. The following provisions shall govern
the apportionment of income and expenses with respect to the Real
Property:
3.7.1.
Utilities . Seller shall attempt to arrange for final meter
readings on all utilities at the Real Property to be taken prior to
the Closing Date. Seller shall be responsible for the payment of
utilities used through the day preceding the Closing Date and
Purchaser shall be responsible for the payment of utilities used on
or after the Closing Date. With respect to any utility for which
there is no meter, the expenses for such utility shall be prorated
between Seller and Purchaser at Closing based upon the most current
bill for such utility. Purchaser shall use commercially reasonable
efforts to cause the transfer of utility company accounts from
Seller to Purchaser as of the Closing Date. All deposits with
utility companies will be returned to Seller upon Purchaser’s
receipt of the same. Should Seller receive any bills or statements
for utility services provided on or after the Closing Date, it
shall promptly inform the utility it has sold the Division and give
the bill or statement to the Purchaser.
3.7.2.
Taxes . Real Property taxes and special assessments (and
charges in the nature of or in lieu of such assessments) on the
Real Property for all fiscal years prior to
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the year of Closing
shall be assumed and paid by Seller at or prior to Closing. The
Real Property taxes and special assessments (and charges in the
nature of or in lieu of such assessments) for and due in the 2008
fiscal year(1) on the Real Property shall be prorated through the
Closing Date based on the last available tax bill records, and
Purchaser shall receive a credit at Closing for all unpaid amounts
owed by Seller for the time period beginning July 1, 2007 and
ending on and including the Closing Date. Purchaser shall be
responsible for all taxes and special assessments (and charges in
the nature of or in lieu of such assessments) attributable to the
Real Property after the Closing Date. If Seller has prepaid any
taxes and special assessments (and charges in the nature of or in
lieu of such assessments) attributable to the Real Property for a
period extending beyond the Closing Date, Seller shall be
reimbursed by Purchaser at Closing or promptly thereafter if
Purchaser later becomes aware of such prepaid tax or
assessment.
3.7.3.
Timing . The prorations described in this Section 3.7 shall be
made on the Closing Date, as if Purchaser were vested with title to
the Real Property during the entire day upon which Closing occurs.
All prorations described in this Section shall be effectuated by
increasing or decreasing, as the case may be, the amount of cash to
be paid by Purchaser to Seller at Closing.
3.7.4.
Survival . The provisions of this Section 3.7 shall expressly
survive Closing.
ARTICLE 4
REPRESENTATIONS AND
WARRANTIES
4.1.
Seller’s Representations and Warranties. Buyer
acknowledges and agrees that the Assets are sold on an “as
is, where is” basis and Buyer agrees to accept the Assets in
the condition they are in at the place they are located on the
Closing Date based on its own inspection, examination and
determination with respect to all matters and without reliance upon
any express or implied representations or warranties of any nature,
except as expressly set forth in this Agreement. Without limiting
the generality of the foregoing and except for the Minimum
Purchases as defined in the Supply Agreement, Seller makes no
representation or warranty with respect to any forecasts,
projections, estimates or budgets delivered or made available to
buyer of future revenues, future results of operations, future cash
flows or future financial conditions of the Division. Subject to
the foregoing Seller represents and warrants to Purchaser as the
date hereof as follows:
4.1.1.
Authorization. Seller has the corporate power and authority to
execute and deliver the Agreement, the Asset Transfer Documents and
the Collateral Agreements and other agreements related to this
transaction to which it is a party, to perform fully its
obligations thereunder, and to consummate the transactions
contemplated thereby. The execution and delivery by Seller of this
Agreement, and the consummation of the transactions contemplated
hereby, have been duly authorized by all requisite corporate
(1) Seller and
Purchaser acknowledge that the 2008 fiscal year for real estate tax
purposes commenced on July 1, 2007 and ends on June 30, 2008, and
that the real estate taxes owing for the 2008 fiscal year are
payable in four (4) equal installments in August of 2007, in
November of 2007, in February of 2008 and in May of
2008.
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action of Seller and
its parent company. Seller has duly executed and delivered this
Agreement and Seller will have duly executed and delivered each of
the Asset Transfer Documents and Collateral Agreements to which it
is a party. This Agreement is, and on the Closing Date each of the
Asset Transfer Documents and Collateral Agreements to which Seller
is a party will be, legal, valid and binding obligations of Seller,
enforceable against it in accordance with their respective terms.
On the Closing Date each of the Asset Transfer Documents and
Collateral Agreements to which Seller is a party will be legal,
valid and binding obligations of Seller executing such agreements,
enforceable against it in accordance with their respective
terms.
4.1.2.
Corporate Status.
(a)
Seller is a corporation duly organized, validly existing and in
good standing under the laws of the jurisdiction of its
incorporation or organization, with full corporate power and
authority to carry on its business and to own or lease and to
operate its properties as and in the places where such business is
conducted and such properties are owned, leased or operated.
(b)
Seller is duly qualified or licensed to do business and is in good
standing in Massachusetts.
4.1.3.
No Conflicts, etc. The execution, delivery and performance by
Seller of this Agreement and each of the Collateral Agreements to
which it is a party, and the consummation of the transactions
contemplated thereby, do not and will not conflict with,
contravene, result in a violation or breach of or default under
(with or without the giving of notice or the lapse of time or
both), give rise to a right or claim of termination, amendment,
modification, vesting, acceleration or cancellation of any right or
obligation or loss of any material benefit under, or result in the
creation of any Lien (or any obligation to create any Lien) upon
any of the Assets under (i) any Applicable Law applicable to
Seller thereof or any of the properties or assets of
Seller (including but not limited to the Assets), (ii) the
certificate of incorporation or bylaws or other organizational
documents of Seller or (iii) except as set forth in
Schedule 4.1.3, any Contract or other contract, agreement or
other instrument to which Seller thereof is a party or
by which Seller or any of their properties or assets,
including but not limited to the Assets, may be bound or affected;
provided, however, that no contravention detailed above shall be
deemed a conflict unless or until it would have Material Adverse
Effect on the Division. Except as specified in Schedule 4.1.3,
no Governmental Approval or other Consent is required to be
obtained or made by Seller in connection with the execution and
delivery of this Agreement and the Collateral Agreements or the
consummation or performance of the transactions contemplated
thereby.
4.1.4.
Absence of Undisclosed Liabilities. To Seller’s
Knowledge, Seller has no Liabilities, whether known or threatened,
arising out of or relating to the Division or the Assets, except
(a) as set forth in Schedule 4.1.4, and (b) for Liabilities
and obligations that (i) were incurred after the date of this
Agreement in the Ordinary Course of business consistent with prior
practice and (ii) will not have or result in, a Material Adverse
Effect.
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4.1.5.
Absence of Certain Changes and Events. Except as set forth in
Schedule 4.1.5, since the date of October 26, 2007 (the fiscal
month end for October 2007 in the Financial Statements), Seller has
conducted the Division only in the Ordinary Course of business
consistent with prior practice and has not, on behalf of, in
connection with or relating to the Division or the Assets:
(a)
suffered any Material Adverse Effect;
(b)
incurred any obligation or Liability, absolute, accrued, contingent
or otherwise, whether due or to become due, except current
Liabilities for trade or business obligations incurred in
connection with the purchase or goods or services in the Ordinary
Course of business consistent with prior practice, none of which
Liabilities, in any case or in the aggregate, could have a Material
Adverse Effect;
(c)
discharged or satisfied any Lien other than those then required to
be discharged or satisfied, or paid any obligation or Liability,
absolute, accrued, contingent or otherwise, whether due or to
become due, other than current Liabilities shown on the Balance
Sheet and current Liabilities incurred since the date thereof in
the Ordinary Course of business consistent with prior practice;
(d)
assigned, mortgaged, pledged or otherwise subjected to Lien, any
property, business or assets, tangible or intangible, of the
Division;
(e)
sold, transferred, leased to others or otherwise disposed of any of
the Assets, except for Inventory sold in the Ordinary Course of
business, or forgiven, canceled or compromised any debt or claim,
or waived or released any right of substantial value;
(f)
received any notice of termination of any contract, lease or other
agreement or suffered any damage, destruction or loss (whether or
not covered by insurance) which has had a Material Adverse
Effect;
(g)
except in the Ordinary Course, made any change in the rate of
compensation, commission, bonus or other direct or indirect
remuneration payable, or paid or agreed or orally promised to pay,
conditionally or otherwise, any bonus, incentive, retention or
other compensation, retirement, welfare, fringe or severance
benefit or vacation pay, to or in respect of any Employee;
(h)
failed to replenish the Division’s Inventories and supplies
in a normal and customary manner consistent with its prior practice
and prudent business practices prevailing in the industry, or made
any purchase commitment in excess of the normal, ordinary and usual
requirements of its business or at any price in excess of the then
current market price or upon terms and conditions more onerous than
those usual and customary in the industry.
(i)
except in the Ordinary Course of business, increased the
compensation or promoted any Key Employee; or
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(j)
made any capital expenditure or capital additions or improvements
regarding the Division or Assets in excess of $50,000, without the
prior written Consent of Purchaser; or
(k)
taken any action or omitted to take any action that would result in
the occurrence of any of the foregoing.
4.1.6.
Litigation. Except as set forth on Schedule 4.1.6, there
is no action, claim, demand, suit, proceeding, arbitration,
grievance, citation, summons, subpoena, inquiry or investigation of
any nature, civil, criminal, regulatory or otherwise, in law or in
equity, pending or to Seller’s Knowledge threatened against
Seller in connection with the Assets or the Division relating to or
arising out of the transactions contemplated by this Agreement, and
Seller knows of no reason to be aware of any basis for the
same.
4.1.7.
Compliance with Laws; Governmental Approvals and Consents;
Governmental Contracts.
(a)
Except as disclosed in Schedule 4.1.7(a) Seller has complied
in all material respects with all Applicable Laws applicable to the
Division and the Assets.
(b)
Schedule 4.1.7(b) sets forth all material Governmental
Approvals and other Consents necessary for, or otherwise material
to, the operation of the Division. Except as set forth in
Schedule 4.1.7(b), all such Governmental Approvals and
Consents have been duly obtained and are in full force and effect,
and Seller is in compliance with each of such Governmental
Approvals and Consents held by it with respect to the Assets and
the Division.
(c)
To Seller’s Knowledge, there are no proposed laws, rules,
regulations, ordinances, orders, judgments, decrees, governmental
takings, condemnations or other proceedings which would be
applicable to the Division or the Assets and which would have a
Material Adverse Effect before the Closing Date.
4.1.8. [Deliberately left
blank]
4.1.9. Assets.
Except as disclosed in Schedule 4.1.9, title to all the Assets
will be conveyed or transferred free and clear of any and all Liens
other than Permitted Liens and/or Permitted Encumbrances. The
Assets, other than the Excluded Assets and all Intellectual
Property Rights of Seller not used solely in the Division, together
with the services and arrangements described in Section 4.1.9,
comprise all assets and services primarily required for the
continued operation of the Division.
4.1.10.
Contracts.
(a)
Schedule 4.1.10(a) contains a complete and correct list of all
material written agreements, contracts, commitments and other
instruments and arrangements of Seller (x) by which any of the
Assets are bound or affected or (y) which are solely related to the
Division or the Assets other than purchase orders and other
agreements worth less than $100,000 (the
“Contracts”):
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(i)
leases, licenses, permits, franchises, insurance policies,
Governmental Approvals and other contracts concerning or relating
to the Real Property;
(ii)
employment, consulting, agency, collective bargaining or other
similar contracts, agreements, and other instruments and
arrangements relating to or for the benefit of current, future or
former employees, officers or directors;
(iii)
licenses, licensing arrangements and other contracts providing in
whole or in part for the use of, or limiting the use of, any
Intellectual Property Know How;
(iv)
any agreements relating to the acquisition, sale, lease or disposal
of the Division or any Assets (other than sales of inventory in the
Ordinary Course of business) or involving continuing indemnity or
other obligations;
(v)
orders and other contracts for the purchase or sale of materials,
supplies, products or services;
(vi)
lease agreements providing for the leasing of personal property
primarily used in, or held for use primarily in connection with,
the Division ;
(vii)
contracts, agreements or commitments with any employee of
Seller;
(viii)
As related to the Division, contracts containing covenants that in
any way purport to restrict Seller’s business authority or
limit the freedom of Seller to engage in any line of business or
compete with any Person; and
(ix)
any other contracts, agreements or commitments that are material to
the Division.
(b)
Seller has delivered to Purchaser complete and correct copies of
all written Contracts, together with all amendments thereto set
forth or required to be set forth in Schedule 4.1.10(a).
(c)
Except as set forth in Schedule 4.1.10(c), all Contracts are
in full force and effect and enforceable against each party
thereto.
4.1.11.
Inventories. All Inventories are of good, usable and
merchantable quality in all material respects and, except as set
forth on Schedule 4.1.11, do not include obsolete or
discontinued items as determined by Seller’s accounting
practices at the Division. In addition,
a)
all Inventories are of such quality as to meet the quality control
standards of the Seller, and
b)
all Inventories are located at the division.
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4.1.12. Suppliers; Raw
Materials. Schedule 4.1.12 sets forth (a) the names
and addresses of all material suppliers from which the Division
ordered raw materials, supplies, merchandise and other goods and
services with an aggregate purchase price for each such supplier of
$25,000 or more during the twelve (12) month period ended
July 31, 2007 and (b) the amount for which each such supplier
invoiced the Seller relating to the Division during such period.
Seller has not received any notice or has any reason to believe
that there has been any material adverse change in the price of
such raw materials.
4.1.13. [Deliberately left
blank]
4.1.14. Intellectual
Property.
(a)
Title. For purposes of clarification only, no Intellectual Property
is being sold in connection with the Division.
(b)
Seller agrees to take any and all commercially reasonable actions
necessary under Applicable Law to ensure that Purchaser has use of
and rights to the Intellectual Property Know How in connection with
Purchaser’s obligations under the Supply Agreement. Seller
also agrees to perform such other acts as Purchaser may reasonably
require to enable Purchaser to perform its obligations pursuant to
the Supply Agreement.
4.1.15. Real
Property.
(a)
Real Property. Seller on the Closing Date will convey or cause to
be conveyed to Symmetry New Bedford Real Estate, LLC good and
marketable fee simple title to the Real Property described on
Schedule 4.1.15(a) as being owned by Seller or an Affiliate,
free and clear of any and all Liens other than Permitted Liens
and/or Permitted Encumbrances. There are no outstanding options or
rights of first refusal to purchase the Real Property, or any
portion thereof or interest therein.
(b)
Fee and Leasehold Interests, etc. The Real Property constitutes all
the fee interests in real property which will be transferred to
Purchaser pursuant to this Agreement.
(c)
No Proceedings. To Seller’s Knowledge, there are no
condemnation, eminent domain or other similar proceedings, suits or
actions, pending or threatened affecting any portion of the Real
Property. To Seller’s Knowledge, there is no writ,
injunction, decree, order or judgment outstanding, nor any action,
claim, suit or proceeding, pending or threatened, relating to the
ownership, lease, use, occupancy or operation by any Person of the
Real Property.
(d)
Current Use. The use and operation of the Real Property in the
conduct of the Division does not violate in any material respect
any instrument of record or agreement affecting the Real Property.
To Seller’s Knowledge, there is no violation of any covenant,
condition, restriction, easement or order of any Governmental
Authority having jurisdiction over such property or of any other
Person entitled to enforce the same
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affecting the Real
Property or the use or occupancy thereof. No damage or destruction
has occurred with respect to the Real Property that would,
individually or in the aggregate, have a Material Adverse
Effect.
(e)
Compliance with Real Property Laws. To Seller’s Knowledge,
the Real Property as presently used and operated complies in all
material respects with all applicable building, zoning, subdivision
and other land use and similar laws, requirements and conditions
affecting the Real Property (collectively, the “Real Property
Laws”), and Seller has not received any notice of violation
or claimed violation of any Real Property Law. To Seller’s
Knowledge, there is no pending or anticipated change in any Real
Property Law that will have or result in a Material Adverse Effect
upon the ownership, alteration, use, occupancy or operation of the
Real Property or any portion thereof.
4.1.16. Environmental
Matters.
(a)
Permits. All Environmental Permits are identified in
Schedule 4.1.16(a), and Seller currently holds, and at all
times has held, all such Environmental Permits necessary for the
Division. Except as set forth in Schedule 4.1.16(a), Seller has not
been notified by any relevant Governmental Authority that any
Environmental Permit will be modified, suspended, canceled or
revoked, or cannot be renewed in the Ordinary Course of
business.
(b)
No Violations. Seller has at all times complied, and Seller
is in compliance in all material respects, with all Environmental
Permits and all applicable Environmental Laws pertaining to the
Real Property (and the use, ownership or transferability thereof)
and the Division, except such violations as would not have a
Material Adverse Affect. Seller has not received any written notice
of, and to Seller’s Knowledge, no Person has otherwise
alleged, any violation by Seller of any Environmental Permits or
any applicable Environmental Law relating to the conduct of the
Division or the use, ownership or transferability of the Real
Property.
(c)
No Actions. Except as set forth in Schedule 4.1.16(c),
Seller has not caused or taken any action that has resulted or is
reasonably likely to result in, or
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