Table of Contents

 

1.	Definitions			1
2.	Basic Transactions			5
		(a)	Transactions	5
		(b)	Assumption/Exclusion of Liabilities	5
		(c)	Consideration Provided by Buyer for Acquired Assets	5
		(d)	Allocation of Purchase Price	6
		(e)	The Closing	6
		(f)	Deliveries at the Closing	6
3.	Representations and Warranties of Sellers			6
		(a)	Organization of Seller	6
		(b)	Authorization of Transaction	6
		(c)	Noncontravention	7
		(d)	Title to Assets; Sufficiency of Assets	7
		(e)	No Adverse Change	7
		(f)	Legal Compliance	7
		(g)	Intellectual Property	8
		(h)	Environmental, Health, and Safety Matters	10
		(i)	Contracts	11
		(j)	Litigation	12
		(k)	Product Warranty	12
		(l)	Product Liability	12
		(m)	Customers and Suppliers	12
		(n)	Pre-Closing Representations	12
		(o)	Broker Fees	13
		(p)	Disclaimer	13
4.	Representations and Warranties of Buyer			13
		(a)	Organization of Buyer	13
		(b)	Authorization of Transaction	13
		(c)	Noncontravention	13
		(d)	Brokers’ Fees	13
		(e)	Financial Status	13

 

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5.	Conditions to Closing			13
		(a)	Conditions to Obligation of Buyer	13
		(b)	Conditions to Obligation of Sellers	15
6.	Pre-Closing Covenants			16
		(a)	General	16
		(b)	Notices and Consents	16
		(c)	Operation of Business	16
		(d)	Full Access	17
		(e)	Notice of Developments	17
		(f)	No Participation or Solicitation of Competing Transaction	17
		(g)	Completion of Non-assignable Agreements	17
		(h)	Royalty Payments	17
7.	Post-Closing Covenants			18
		(a)	General	18
		(b)	Litigation Support	18
		(c)	Confidentiality	18
		(d)	Transfer of Assets	19
8.	Remedies for Breaches of this Agreement			20
		(a)	Survival of Representations and Warranties	20
		(b)	Indemnification Provisions for Benefit of Buyer and Sellers	20
		(c)	Matters Involving Third Parties	21
		(d)	Characterization of Payments	22
		(e)	Limitations	22
		(f)	Exclusive	23
9.	Termination			23
		(a)	Termination of Agreement	23
		(b)	Effect of Termination	23
10.	Miscellaneous			23
		(a)	Press Releases and Public Announcements	23
		(b)	No Third-Party Beneficiaries	23
		(c)	Entire Agreement	23
		(d)	Succession and Assignment	23
		(e)	Counterparts	24

 

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	(f)	Headings	24
	(g)	Notices	24
	(h)	Governing Law; Jurisdiction	25
	(i)	Amendments and Waivers	25
	(j)	Severability	25
	(k)	Expenses	25
	(l)	Construction	25
	(m)	Incorporation of Exhibits and Schedules	26
	(n)	Specific Performance	26
	(o)	Waiver of Trial By Jury	26
	(p)	Transfer Taxes	26

 

Exhibit A		Allocation of the Purchase Price
Exhibit B		Bill of Sale
Exhibit C		Assignment and Assumption of Acquired Contracts
Exhibit D		Intellectual Property Transfer Documents
Exhibit E		Non-Competition Agreement
Exhibit F		Form of Opinion of Seller’s Counsel
Exhibit G		Form of Opinion of Buyer’s Counsel
Disclosure Schedule		Exceptions to Representations and Warranties of Seller

 

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ASSET PURCHASE AGREEMENT

 

This Asset Purchase Agreement (this “Agreement”) is entered into as of June 2, 2009, by and between Merit Medical Systems, Inc., a Utah corporation (“Buyer”) and Hatch Medical, L.L.C., a Georgia limited liability company (“Seller”).  Buyer and Seller are referred to collectively herein as the “Parties” and individually as a “Party.”

 

RECITALS

 

A.                                    Seller owns the intellectual property and other assets related to a certain medical device described as a “Foreign Body Retrieval System” and known as the EnSnare® device (the “Device”).

 

B.                                      Seller desires to sell the Device and other assets related thereto to Buyer, and Buyer desires to purchase such assets from Seller, in exchange for the consideration set forth herein, all upon the terms and subject to the conditions of this Agreement.

 

C.                                      Seller and Buyer are willing to make certain representations, warranties, covenants and agreements in connection with such sale and purchase.

 

AGREEMENT

 

NOW, THEREFORE, in consideration of the premises and the mutual promises herein made, and in consideration of the representations, warranties, and covenants herein contained, the Parties agree as follows:

 

1.                                       Definitions .  For purposes of this Agreement, the following terms have the meanings set forth below:

 

“Acquired Assets” means each of the following, as of the Closing Date (a) all Acquired Intellectual Property; (b) the EnSnare In-Vivo Evaluation — Final Report dated May 1, 2002 (the “Animal Study”); (c) plans, drawings and specifications, and all books, records and files, related to the Acquired Intellectual Property which Seller either owns or both possesses and has the right to assign to Buyer, Seller; (d) to the extent in the possession of Seller, any vendor and supplier lists related to the Device; (e) all goodwill of Seller related exclusively to the Acquired Assets; (f) the Acquired Contracts; (g) all tangible and intangible property received by Seller from Angiotech (as defined in the definition of License Agreement), which Seller either owns or both possesses and has the right to assign to Buyer, whether pursuant to the terms of the License Agreement or otherwise related to the Device, at any time before or after the Closing (and if received after Closing, to be delivered to Buyer promptly following Seller’s receipt thereof); and (h) any plans, drawings and specifications, and all books, records and files, related to the Neuro line extension or the clot capturing line extension which Seller either owns or both possesses and has the right to assign to Buyer.

 

“Acquired Contracts” means the contracts, leases, licenses and other agreements or arrangements of Seller related exclusively to the Device which are listed on Schedule 1(a) attached hereto.

 

“Acquisition Proposal” shall mean any proposal or offer made by any Person other than the Buyer or any Affiliate thereof to acquire, license, distribute, market, manufacture, lease or transfer all or any part of, the Device or any of the Acquired Assets (or any of Seller’s interest in the Device or any of the Acquired Assets), or to enter into a transaction outside of the Ordinary Course of Business affecting the Device or any of the Acquired Assets.

 

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“Adverse Consequences” means all damages, dues, penalties, fines, costs, amounts paid in settlement, obligations, taxes, Encumbrances, losses or fees, together with all reasonable expenses and fees, including without limitation court costs and attorneys’ fees and expenses, arising out of any actions, suits, proceedings, hearings, official inquiries, investigations, charges, complaints, claims, demands, injunctions, judgments, orders, decrees or rulings.

 

“Acquired Intellectual Property” means the following Intellectual Property:

 

(a)                                   all inventions (whether patentable or unpatentable, whether or not reduced to practice, and whether or not the subject of any patent applications) and any additions and improvements thereto which Seller either owns or both possesses and has the right to assign to Buyer, comprising or related to the Device and necessary in the manufacture or distribution of the Device;

 

(b)                                  all patents, patent rights, patent disclosures, utility models, certificates of invention, statutory invention registrations, and applications for any of the foregoing, together with any reissuances, continuations, continuations in part, revisions, extensions, divisions, renewals, or reexaminations of any of the foregoing, all as listed on Section 3(g)(iii) of the Disclosure Schedule (each a “Patent”);

 

(c)                                   all trademarks, service marks, trade dress, logos, trade names listed on Section 3(g)(iii) of the Disclosure Schedule, together with any translations, adaptations, derivations, and combinations thereof and including all goodwill associated therewith, and any applications, registrations, and renewals in connection therewith (each, a “Trademark”);

 

(d)                                  all works of authorship which Seller either owns or both possesses and has the right to assign to Buyer listed on Section 3(g)(iii) of the Disclosure Schedule in whatever form or medium, any copyrights therein (whether registered or unregistered), and any applications, registrations, and renewals relating thereto (each, a “Copyright”);

 

(e)                                   all trade secrets and Confidential Information which Seller either owns or both possesses and has the right to assign to Buyer related to the Device and necessary or desirable in the manufacture or distribution of the Device, including but not limited to ideas, research and development, know-how, formulas, processes, protocol, compositions, manufacturing and production processes and techniques, procedures, devices, technical data, designs, drawings, specifications and supplier lists;

 

(f)                                     all other proprietary rights in information and technology which Seller either owns or both possesses and has the right to assign to Buyer related to the Device and necessary in the manufacture or distribution of the Device, including without limitation the Animal Study;

 

(g)                                  all copies and tangible embodiments of any of the foregoing in whatever form or medium;

 

(h)                                  all legal and equitable remedies for past, present, and future infringements, misappropriations, misuses, dilutions, and other violations of any of the foregoing, subject to the rights of Angiotech under the License Agreement;

 

(i)                                      all other Intellectual Property related to the Neuro line extension or the clot capturing line extension which Seller either owns or both possesses and has the right to assign to Buyer; and

 

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(j)                                      all rights, title, and interests in and to any of the foregoing provided by any treaty, statute, convention, common law, regulation, or any other Law.

 

“Affiliate” has the meaning set forth in Rule 12b-2 of Regulation 12B promulgated under the Securities Exchange Act.

 

“Assumed Liabilities” shall have the meaning set forth in Section 2(b)(i) below.

 

“Closing” has the meaning set forth in Section 2(f) below.

 

“Closing Date” has the meaning set forth in Section 2(f) below.

 

“Confidential Information” means any information regarding the business and affairs of Seller or Buyer that is not generally available to the public on the date hereto.  Information that may be included in Confidential Information includes, but is not limited to, matters of a technical nature (including Intellectual Property, know-how, computer programs, software, patented and unpatented technology, source-code, accounting methods, and documentation), matters of a business nature (such as information regarding contract forms, costs, profits, employees, promotional methods, markets, market or marketing plans, sales, and client accounts), plans for further development, and any other information meeting the definition of Confidential Information set forth above.

 

“Disclosure Schedule” has the meaning set forth in Section 3 below.

 

“Encumbrance” shall mean any mortgage, pledge, assessment, security interest, deed of trust, lease, lien, adverse claim, levy, charge or other encumbrance of any kind, or any conditional sale or title retention agreement or other agreement to give any of the foregoing in the future.

 

“Excluded Liabilities” shall have the meaning set forth in Section 2(b)(ii) below.

 

“Governmental Authority” means any government, state, commonwealth or any subdivision thereof, whether domestic, foreign or multinational, or any agency, authority, bureau, commission, department or similar body or instrumentality thereof, or any governmental court or tribunal, and any self-regulatory agency, industry group or other governing body or authority.

 

“Indemnified Party” has the meaning set forth in Section 8(c) below.

 

“Indemnifying Party” has the meaning set forth in Section 8(c) below.

 

“Intellectual Property” means  (a) inventions (whether patentable or unpatentable, whether or not reduced to practice, and whether or not the subject of any patent applications) and any additions and improvements thereto; (b) patents, patent rights, patent disclosures, utility models, certificates of invention, statutory invention registrations, and applications for any of the foregoing, together with any reissuances, continuations, continuations in part, revisions, extensions, divisions, renewals, or reexaminations of any of the foregoing (each a “Patent”), (c) trademarks, service marks, trade dress, logos, trade names, Internet domain names and URLs, and corporate names, together with any translations, adaptations, derivations, and combinations thereof and including all goodwill associated therewith, and any applications, registrations, and renewals in connection therewith (each, a “Trademark”); (d) works of authorship in whatever form or medium, any copyrights therein (whether registered or unregistered), and any applications, registrations, and renewals relating thereto (each, a “Copyright”); (e) trade secrets and Confidential Information, including but not limited to ideas, research and development, know-how, formulas, processes, protocol, compositions, manufacturing and production

 

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processes and techniques, sterilization processes and validation information, procedures, devices, technical data, designs, drawings, specifications, customer and supplier lists, pricing and cost information, and business and marketing plans and proposals; (f) mask works; (g) any other proprietary rights in information and technology, including without limitation any pre-clinical and clinical data and information; (h) copies and tangible embodiments of any of the foregoing in whatever form or medium; (i) legal and equitable remedies for past, present, and future infringements, misappropriations, misuses, dilutions, and other violations of any of the foregoing; and (j) rights, title, and interests in and to any of the foregoing provided by any treaty, statute, convention, common law, regulation, or any other Law.

 

“Laws” means all federal, state, municipal, foreign, and international laws, rules, regulations, codes, statutes, constitutions, ordinances, directives, treaties, proclamations, conventions, and orders, and all judicial, quasi-judicial and administrative and other official interpretations of any of the foregoing.

 

“Liability” means any liability, obligation, debt, demand, claim, expense or commitment (whether known or unknown, whether asserted or unasserted, whether absolute or contingent, whether accrued or unaccrued, whether liquidated or unliquidated, and whether due or to become due).

 

“License Agreement” means that certain License Agreement, dated October 2, 2001 and as amended by that certain Amendment to License Agreement dated December 17, 2004, between Seller and Angiotech Pharmaceuticals, Inc., as successor or assignee to Medical Device Technologies, Inc. (“Angiotech”).

 

“Material Adverse Effect” means an effect or effects which, individually or in the aggregate, (i) with respect to Seller, materially affects the Seller’s ability to consummate the Transactions, or could reasonably have an adverse economic effect on the Acquired Assets or Device of $100,000 or more, or (ii) with respect to Buyer, an effect or effects which, individually or in the aggregate, materially affects Buyer’s ability to consummate the Transactions.

 

“Ordinary Course of Business” means the ordinary course of business consistent with past custom and practice (including with respect to quantity, frequency and price).

 

“Person” means an individual, a partnership, a limited liability company, limited partnership, a limited liability partnership, a corporation, an association, a joint stock company, a trust, a joint venture, an unincorporated organization, or a Governmental Authority.

 

“Purchase Price” has the meaning set forth in Section 2(c) below.

 

“Securities Exchange Act” means the Securities Exchange Act of 1934, as amended.

 

“Seller’s knowledge” is applicable to certain of those warranties and representations set forth in Section 3 of this Agreement or other provisions elsewhere in this Agreement, which are subject to the qualification “to Seller’s knowledge” or “to the knowledge of Seller,” or otherwise limited to matters “known” to Seller.  Seller will be deemed to have “knowledge” of a matter relating to Seller, the Device or the Acquired Assets if an executive officer of Seller had knowledge of such matter or would have acquired such knowledge had he or she inquired at or prior to that time as to such subject matter to those of Seller’s employees that would be expected to have knowledge of such subject matter in the course of performing their duties for Seller.  Seller will be deemed to have “knowledge” of a matter relating to a third party only if an executive officer of Seller had actual knowledge of such matter (except as otherwise set forth above in this definition).

 

“Third Party Claim” has the meaning set forth in Section 8(c)(i) below.

 

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“Transaction Documents” means this Agreement and the agreements, documents, schedules, letters or certificates attached hereto as an Exhibit or delivered pursuant to this Agreement or in connection with the Transactions.

 

“Transactions” means the transactions provided for or contemplated by this Agreement and the other Transaction Documents.

 

2.                                       Basic Transactions .

 

(a)                                   Transactions .  On and subject to the terms and conditions of this Agreement, Buyer agrees to purchase from Seller, and Seller agrees to sell, transfer, convey, assign and deliver to Buyer, title to and ownership of, all of the Acquired Assets at the Closing, for the consideration specified below in this Section 2.  Title to the Acquired Assets shall pass to Buyer at the Closing, and risk of loss shall pass to Buyer upon receipt by Buyer of the Acquired Assets.  The Parties intend for all of the Acquired Assets to be transferred to Buyer, whether owned by Seller, an Affiliate of Seller or otherwise, and Seller agrees to cause all of the Acquired Assets to be sold, transferred, conveyed, assigned and delivered to Buyer in accordance with the terms of this Agreement.  The parties acknowledge and agree that the Acquired Assets do not include the assets described on Schedule 2(a) (the “Excluded Assets”).

 

(b)                                  Assumption/Exclusion of Liabilities .

 

(i)                                      Assumed Liabilities .  Subject to the conditions specified in this Agreement, on the Closing Date, Buyer will assume and agree to pay, defend, discharge and perform as and when due only the liabilities and obligations under the Acquired Contracts (“Assumed Liabilities”) arising or accruing only after the Closing Date, but only to the extent that Seller’s rights and benefits under such Acquired Contracts are validly assigned to Buyer pursuant to this Agreement.  Buyer shall also be solely responsible for, and shall pay and perform, all obligations and liabilities resulting from or arising out of the ownership or use of the Acquired Assets solely after the Closing Date (“Post-Closing Liabilities”).

 

(ii)                                   Excluded Liabilities .  Notwithstanding anything to the contrary contained in this Agreement, Buyer will not assume or be liable for, and will have no responsibility related to, any Liabilities of Seller of any kind or nature, other than the Assumed Liabilities (all such Liabilities collectively, the “Excluded Liabilities”).  Seller retains sole liability for all Excluded Liabilities.

 

(c)                                   Consideration Provided by Buyer for the Acquired Assets .  Subject to the terms and conditions of this Agreement, including, without limitation, the provisions of Section 2(d) below, as total consideration for the Acquired Assets, Buyer shall pay Seller an aggregate of Twenty-One Million Dollars ($21,000,000) (the “Purchase Price”), as follows:

 

(i)                                      (A)  Buyer shall deliver to Seller at the Closing, by wire transfer in accordance with Seller’s wiring instructions, Fourteen Million Dollars ($14,000,000) less the escrowed amounts held pursuant to the Escrow Agreement among Buyer, Seller and Zions First National Bank, as escrow agent (“Zions”), and (B) Zions shall deliver to Seller at Closing, by wire transfer in accordance with Seller’s wiring instructions, all escrowed amounts held pursuant to such Escrow Agreement; and

 

(ii)                                   Buyer shall pay to Seller Seven Million Dollars ($7,000,000) upon the later of the following: (A) three (3) business days after the date upon which Buyer has completed manufacturing of the first unit of the Device for commercial sale (with respect to which Buyer shall use all commercially reasonable efforts in good faith to complete all matters necessary to be in a position to

 

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perform such manufacturing as soon as possible after the date set forth in the following clause (B)), or (B) the earlier of December 31, 2009 or the date upon which all third-party contractual rights (including, without limitation, under the License Agreement) with respect to manufacturing, marketing and distributing of the Device have finally expired or terminated.

 

(d)                                  Allocation of Purchase Price .  The Purchase Price shall be allocated among the Acquired Assets as set forth on Exhibit A attached hereto and made a part hereof.  Buyer will allocate the Purchase Price among the Acquired Assets in a reasonable manner in accordance with Section 1060 of the Internal Revenue Code and the regulations thereunder, based on the relative fair market values of the Acquired Assets, which Buyer shall complete and deliver to Seller within 90 days following the Closing.  In the event that Seller reasonably disagrees with the proposed allocation, the Parties will work and negotiate in good faith to resolve any disputes and finalize such allocation as soon as possible thereafter.  Buyer and Seller will file all of their tax returns consistent with the foregoing allocation and will not take any position inconsistent with such allocation on any tax return or in any tax audit or tax-related proceeding.

 

(e)                                   The Closing .  The closing of the transactions contemplated by this Agreement (the “Closing”) shall take place at the offices of the Buyer, commencing at 10:00 a.m. local time on the second business day following the satisfaction or waiver of all conditions to the obligations of the Parties to consummate the Transactions (other than conditions with respect to actions the respective Parties will take at the Closing itself) or such other date, time and place as Buyer and Seller may mutually determine (the “Closing Date”).  The Parties shall use commercially reasonable efforts to cause the Closing to occur within five (5) business days from the date hereof.

 

(f)                                     Deliveries at the Closing .  At the Closing, (i) Seller will deliver to Buyer (or cause its Affiliates to deliver to Buyer) the various certificates, instruments, and documents referred to in Section 5(a) below; (ii) Buyer will deliver to Seller the various certificates, instruments, and documents referred to in Section 5(b) below; and (iii) Buyer will deliver to Seller the consideration specified in Section 2(c)(i) above.  The Parties also acknowledge the obligations and matters set forth in Section 7 of this Agreement.

 

3.                                       Representations and Warranties of Seller .  Except as otherwise set forth in the disclosure schedule delivered by Seller to Buyer on the date hereof (the “Disclosure Schedule”), Seller represents and warrants to Buyer on the date hereof and on the Closing Date (as though made on the Closing Date and as though the Closing Date were substituted for the date of this Agreement throughout this Section 3) as follows:

 

(a)                                   Organization of Seller .  Seller is a limited liability company duly organized, validly existing and in good standing under the laws of Georgia.  Seller has full limited liability company power and authority to carry on the business in which it is engaged, and to own and use the properties owned and used by it.

 

(b)                                  Authorization of Transaction .  Seller has full limited liability company power and authority to execute and deliver this Agreement and the Transaction Documents to which it is a party and to perform its obligations hereunder and thereunder.  The execution, delivery and performance of this Agreement and the Transaction Documents by Seller and the consummation of the Transactions have been duly and validly authorized by all necessary limited liability company action on the part of Seller and no other proceedings on the part of Seller are necessary to authorize this Agreement or any of the Transaction Documents or to consummate any of the Transactions.  This Agreement and the other Transaction Documents to which Seller is a party, assuming the due authorization, execution and delivery hereof and thereof by Buyer hereto and thereto, constitute the valid and legally binding obligations of

 

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Seller, as applicable, enforceable against Seller in accordance with their terms and conditions, except as enforceability may be limited by applicable bankruptcy, insolvency or similar laws affecting or relating to the enforcement of creditors’ rights generally or by equitable principles relating to enforceability.

 

(c)                                   Non-contravention .  Neither the execution and delivery of this Agreement nor any of the other Transaction Documents to which Seller is a party, nor the consummation of the Transactions, will (i) violate any Law or other restriction of any Governmental Authority to which Seller is subject or any provision of the articles of organization or operating agreement (or any other governance document) of Seller or (ii) conflict with, result in a breach of, constitute a default under, result in the acceleration of, create in any party the right to accelerate, terminate, modify, or cancel, or require any notice under any agreement, contract, lease, license, instrument, or other arrangement to which Seller is a party or by which it is bound or to which any of the Acquired Assets is subject (or result in the imposition of any Encumbrance upon any of the Acquired Assets), or (iii) require Seller to obtain or make any waiver, consent, action, approval or authorization of, or registration, declaration, notice or filing with, any Governmental Authority or private non-governmental third-party.  Section 3(c) of the Disclosure Schedule sets forth each consent required from a third party (including any Governmental Authority) in order for Seller to consummate the Transactions (including to sell and assign the Acquired Assets to Buyer free and clear of any Encumbrance) or where such consent is required by the terms of an Assumed Contract or other Acquired Assets.

 

(d)                                  Title to Assets; Sufficiency of Assets .  Seller owns, and has good and marketable title to, all of the Acquired Assets, free and clear of any Encumbrance or other restriction on transfer, other than the Assumed Liabilities.  At the Closing, Seller will convey to Buyer good and marketable title to all of the Acquired Assets, free and clear of any Encumbrance or other restriction on transfer.  The Acquired Assets include all assets and rights necessary (other than regulatory approvals) for Buyer to build equipment to manufacture the Device, and, following such building, to then sell, distribute and market the Device commercially and exercise all rights of ownership of the Device (following expiration of Angiotech’s rights under Section 13(c) of the License Agreement).  Following the Closing, but subject to Angiotech’s rights under Section 13(c) of the License Agreement, Buyer will own and possess all rights necessary (other than regulatory approvals) to commercially manufacture, sell, distribute, market and license the Device.

 

(e)                                   No Adverse Change .  Except as set forth on Section 3(e) of the Disclosure Schedule, since January 1, 2008, there has not been any Material Adverse Effect on the business, financial condition, operations, results of operations, or future prospects of Seller with respect to the business of the Device or the Acquired Assets.  Without limiting the generality of the foregoing, since that date, with respect to the Device:

 

(i)                                      Seller has not sold, leased, transferred, or assigned any of the Acquired Assets;

 

(ii)                                   Seller has not granted any license or sublicense or any rights under or with respect to any Acquired Intellectual Property;

 

(iii)                                Seller has not committed to any of the foregoing; and

 

(iv)                               Seller has not experienced any damage, destruction, or loss (whether or not covered by insurance) to its tangible Acquired Assets.

 

(f)                                     Legal Compliance .  Seller and each of its predecessors and Affiliates has complied with all applicable Laws of any Governmental Authority related to the Acquired Assets, except

 

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for violations which, in the aggregate, could not reasonably be expected to have a Material Adverse Effect.  Seller has not received any written notice or other communication from any Governmental Authority regarding any actual or potential violation of, or failure to comply with, any applicable Laws, as the same related to the Acquired Assets, and no action, suit, proceeding, hearing, investigation, charge, complaint, claim, demand, or notice has been filed or commenced against Seller or any of its predecessors or Affiliates alleging any failure to so comply.

 

(g)                                  Intellectual Property .

 

(i)                                      Seller owns all Acquired Intellectual Property, subject to the rights licensed under the License Agreement.  Seller has taken all necessary action to maintain and protect its rights in each item of Acquired Intellectual Property, and the confidentiality of each such item, except where a failure to do so would not have a Material Adverse Effect.  Seller has no knowledge of any information, materials, facts or circumstances, including any information or fact that would constitute prior art, that would render any Acquired Intellectual Property invalid or unenforceable.

 

(ii)                                   The Device, as it has previously been or is currently being manufactured and sold, does not infringe upon, misappropriate, misuse, dilute or otherwise violate any Intellectual Property rights of any Person; the creation and development of the Device did not infringe upon, misappropriate, misuse, dilute or otherwise violate any Intellectual Property right of any Person; and none of the officers or directors (or employees with responsibility for Intellectual Property matters) of Seller has ever received, or has knowledge of, any charge, complaint, claim, allegation, demand, or notice, whether directed to Seller, MD Tech, or to any MD Tech subcontractor, sublicensee, subdistributor, or retailer, alleging any such infringement, misappropriation, misuse, dilution or other violation of any Person’s Intellectual Property (including any claim that Seller, MD Tech, or any MD Tech subcontractor, sublicensee, subdistributor, or retailer must license or refrain from using any Intellectual Property of any Person). None of the Acquired Intellectual Property infringes upon, misappropriates, misuses, dilutes, or otherwise violates any Intellectual Property rights of any Person.  The Seller has no knowledge that any Person is infringing upon, misappropriating, misusing, diluting, or otherwise violating any Acquired Intellectual Property.  Except for the Excluded Assets, the Acquired Intellectual Property includes all Intellectual Property necessary to manufacture, sell or license, distribute, or market the Device in the manner that the Device is currently being manufactured, sold or licensed, distributed, or marketed commercially.

 

(iii)                                Section 3(g)(iii) of the Disclosure Schedule identifies each Patent, Copyright registration, Trademark registration and other certificate and registration that has been issued to Seller or any Affiliate of Seller or any other Person with respect to any of the Acquired Intellectual Property, identifies each pending application for a Patent, Copyright registration, Trademark registration, and other certificate and registration that Seller or any other Person has made with respect to any of the Acquired Intellectual Property, and identifies each license, sublicense, agreement, and other permission which Seller has granted to any Person with respect to any of the Acquired Intellectual Property (together with any exceptions).  Seller has delivered to Buyer correct and complete copies of all such Patents, Copyright registrations, Trademark registrations, other certificates, registrations, applications, licenses, sublicenses, agreements, and permissions (as amended to date) and has made available to Buyer correct and complete copies of all other written documentation evidencing ownership and prosecution (if applicable) of each such item.  With respect to each item of Intellectual Property required to be identified in Section 3(g)(iii) of the Disclosure Schedule:

 

(A)                               Seller possesses all right, title, and interest in and to the item, free and clear of any Encumbrance, license, other restriction, or viable claims of ownership by any Person, except

 

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for such licenses, agreements, and other permissions that Seller has granted to any Person with respect to such item and that also are identified in Section 3(g)(iii) of the Disclosure Schedule;

 

(B)                                 the item is not subject to any binding outstanding injunction, judgment, order, decree, or other ruling of any Governmental Authority of competent jurisdiction;

 

(C)                                 the item was validly acquired under applicable Laws and remains valid, enforceable, and subsisting;

 

(D)                                no action, suit, proceeding, hearing, investigation, charge, complaint, claim, allegation or demand has been initiated is pending or, to Seller’s best knowledge, is threatened that challenges the legality, validity, enforceability, use, or ownership of the item;

 

(E)                                  Seller has no agreement or obligation to indemnify any Person for or against any infringement, misappropriation, misuse, dilution, or other violation with respect to the item, except for agreements entered into with suppliers or customers in the Ordinary Course of Business; and

 

(F)                                  Seller has not committed any act or omission that would result in the abandonment, cancellation, forfeiture, relinquishment, invalidation or unenforceability of the item, and no information, facts or circumstances would otherwise render the item invalid or unenforceable.

 

(iv)                               Section 3(g)(iv) of the Disclosure Schedule identifies each item of Acquired Intellectual Property that any Person owns and that Seller uses pursuant to license, sublicense, agreement, or permission (other than off-the-shelf software with a purchase or license price of less than $10,000).  Seller has delivered to Buyer correct and complete copies of all such licenses, sublicenses, agreements, and permissions (as amended to date).  With respect to each item of Acquired Intellectual Property required to be identified in Section 3(g)(iv) of the Disclosure Schedule:

 

(A)                               the license, sublicense, agreement, or permission covering the item is legal, valid, binding, enforceable, and in full force and effect;

 

(B)                                 the consummation of the Transactions and the Parties’ performance as required under the Transaction Documents will not affect the respective license’s, sublicense’s, agreement’s, or permission’s legality, validity, binding nature, enforceability, or existence, and the same shall remain in full force and effect on identical terms once assigned to Buyer;

 

(C)                                 the Seller is not in breach or default of, and to the best knowledge of the Seller no other party is in breach or default of, any license, sublicense, agreement, or permission, and no event has occurred, relating to Seller or to Seller’s knowledge related to a third party, that with notice or lapse of time would constitute a breach or default or permit termination, modification, or acceleration thereunder;

 

(D)                                the Seller has no knowledge that any party to a license, sublicense, agreement, or permission has informed any other party thereto that it repudiates any provision thereof;

 

(E)                                  with respect to each sublicense, the representations and warranties set forth in subsections (A) through (D) above are true and correct with respect to the underlying license;

 

(F)                                  the underlying item of Intellectual Property is not subject to any outstanding injunction, judgment, order, decree, or other ruling of any Governmental Authority of competent jurisdiction;

 

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(G)                                 no action, suit, proceeding, hearing, investigation, charge, complaint, claim, or demand has been initiated to which Seller is a party, is pending, or is threatened against Seller that challenges the legality, validity, enforceability, use or ownership of the underlying item of Acquired Intellectual Property; to Seller’s knowledge, no action, suit, proceeding, hearing, investigation, charge, complaint, claim, or demand has been initiated, or is pending or has been threatened against any third party that challenges the legality, validity, enforceability, use or ownership of the underlying item of Acquired Intellectual Property;

 

(H)                                Seller has not granted any sublicense or similar right with respect to such license, sublicense, agreement, or permission; and

 

(I)                                     No information, facts, or circumstances exist that would render the underlying item of Intellectual Property invalid or unenforceable.

 

(v)                                  Except as set forth on Section 3(g)(v) of the Disclosure Schedule, all of the employees of Seller have entered into invention assignment and confidentiality agreements under which such employees have assigned to Seller all of their right, title and interest in and to Intellectual Property related to the Acquired Intellectual Property and agreed not to use or disclose, other than for the benefit of Seller or its successors or assigns, any Confidential Information of Seller that is included in the Acquired Intellectual Property.  Except as set forth on Section 3(g)(v) of the Disclosure Schedule, all independent contractors and consultants of Seller who participated in the conception, creation, reduction to practice, or other development of any Acquired Intellectual Property has entered into invention assignment and confidentiality agreements under which such contractors and consultants have assigned to Seller all of their right, title and interest in and to Intellectual Property related to the Acquired Intellectual Property and have agreed not to use or disclose, other than for the benefit of Seller or its successors or assigns, any Confidential Information of Seller that is included in the Acquired Intellectual Property.  To Seller’s knowledge, no such employee, independent contractor or consultant has breached any of the provisions of any such agreement.

 

(vi)                               Seller has undertaken its best efforts to protect and enforce its rights in all Acquired Intellectual Property and, to Seller’s knowledge, MD Tech has undertaken its best efforts to protect and enforce the Patents that are the subject of the License Agreement.

 

(vii)                            Except as set forth on Section 3(g)(vii) of the Disclosure Schedule, no filing, response, or payment must be made, within ninety (90) days after the Closing Date, for Seller to perfect, prosecute, protect, maintain, or renew its rights in or to any item of Acquired Intellectual Property.

 

(viii)                         Notwithstanding the foregoing, the parties agree that representations and warranties contained in this Section 3(g) shall not apply to the Intellectual Property related to the Neuro line extension or the clot capturing line extension.

 

(h)                                  Environmental, Health, and Safety Matters .  Seller and its predecessors and Affiliates have complied with all applicable environmental, health, and safety Laws the failure of which to comply with would have an adverse effect on the Acquired Assets or which could create any Encumbrance on the Acquired Assets.  Without limiting the generality of the foregoing, Seller and its predecessors and Affiliates has obtained and complied with all permits, certificates, licenses, filings, approvals and other authorizations of any Governmental Authority that are required pursuant to any applicable environmental, health, and safety