Exhibit 10.4
ASSET PURCHASE AGREEMENT
     This Asset Purchase Agreement (the “Agreement”), is entered into as of
May 17, 2006, by and between Mentor Corporation, a Minnesota corporation
(“Seller”), and Rochester Medical Corporation, a Minnesota corporation
(“Purchaser”).
     WHEREAS, Seller has entered into that certain purchase agreement with
Coloplast A/S, a Danish Corporation (“Coloplast”), dated May 17, 2006 pursuant
to which Seller will sell certain of its assets to Coloplast, and Coloplast will
assume certain liabilities, in each case relating to Seller’s surgical urology
and consumer and clinical healthcare operating segments (the “Coloplast Purchase
Agreement”);
     WHEREAS, the Parties are parties to an arbitration proceeding, filed by
Purchaser with the American Arbitration Association (the “AAA”) on November 29,
2005, case No. AAA 65 133 M 00317 05 (the “Arbitration”);
     WHEREAS, the Parties have executed a binding Memorandum of Understanding
dated as of April 2, 2006 (the “MOU”) pursuant to which, the Parties agreed,
among other things, that, subject to the satisfaction of certain conditions, the
Arbitration would be dismissed with prejudice, the Parties would execute a
mutual settlement and release and Seller would sell, and Purchaser would
purchase, the Assets;
     WHEREAS, the MOU provides that the Parties shall use all reasonable efforts
to negotiate definitive agreements containing the terms set forth in the MOU and
other commercially reasonable terms; and
     WHEREAS, this Agreement is being executed by the Parties to supersede the
MOU in its entirety and effect the sale by Seller, and purchase by Purchaser, of
the Assets upon the terms and conditions hereinafter set forth;
     NOW, THEREFORE, in consideration of the foregoing premises and the mutual
promises herein made, and in consideration of the covenants, representations,
warranties, conditions and agreements contained herein, the Parties hereto agree
as follows:
ARTICLE 1.
DEFINITIONS
     The following terms shall have the following respective meanings for all
purposes of this Agreement:
     “Business Day” means a day, other than Saturday, Sunday or other day on
which commercial banks in New York, New York are authorized or required by Law
to close.

 

--------------------------------------------------------------------------------

 

     “Cause” means (a) a Transferred Employee’s breach of any trade secret or
any confidential information agreement with Purchaser (or a Subsidiary thereof),
or written policy of Purchaser or a Subsidiary thereof, (b) willful misconduct
by a Transferred Employee, which is injurious to the business of Purchaser,
(c) the conviction of, or entry of a guilty plea by, a Transferred Employee for
the commitment of, a crime of moral turpitude, (d) substance abuse, including
alcohol, (e) taking an action for the purpose of harming the Purchaser or its
business, (f) noncompliance with applicable Law in a manner that is injurious to
the business of Purchaser, (g) fraud or intentional misrepresentation, or
(h) continual, significant absenteeism.
     “Change of Control” means, with respect to a Party, a transaction or series
of related transactions that would directly or indirectly: (a) result in or have
the effect of a third Person obtaining legal or beneficial ownership of more
than 50% of the voting shares (or other voting interests) of such Party (even if
such Party is the surviving entity, such as in the case of a reverse triangular
merger); or (b) result in the sale, transfer, assignment, exclusive license or
other disposition of all or substantially all of the Party’s assets; other than,
in the case of (a), a transaction pursuant to which the shareholders of such
Party immediately prior to the relevant transaction continue to beneficially own
at least 50% of the voting shares (or other voting interests) of such Party or
its direct or indirect parent entity immediately following such transaction.
     “COBRA” shall mean the Consolidated Omnibus Budget Reconciliation Act of
1985.
     “Code” means the Internal Revenue Code of 1986 and the Treasury Regulations
promulgated thereunder.
     “Confidentiality Agreement” means the Confidentiality Agreement between
Purchaser and Seller, dated January 25, 2006.
     “Constructive Termination” shall mean only a resignation of a Transferred
Employee’s employment submitted within forty-five (45) days after the occurrence
of any of the following events: (i) a material reduction in the Transferred
Employee’s responsibilities, provided that a change of title shall not
constitute such a material reduction; (ii) a reduction in the Transferred
Employee’s base salary, other than a one-time reduction that applies to
substantially all other employees of Purchaser; or (iii) a relocation of the
Transferred Employee’s principal office to a location more than fifty (50) miles
from the Anoka Facility; and provided in all the above cases the Purchaser has
failed to cure the facts and circumstances giving rise to the Constructive
Termination within fifteen (15) days after receipt of notice of such
resignation.
     “Contracts” means all contracts, binding agreements, options, leases,
licenses, sales, binding commitments and other similar instruments.
     “Covenant Breach” means with respect to a Party, a breach of,
nonfulfillment or failure to comply with a covenant or agreement made or to be
performed pursuant to this Agreement by such Party or a Subsidiary thereof.

-2-

--------------------------------------------------------------------------------

 

     “Derivative Works” shall have the meaning ascribed to it under the United
States Copyright Law, Title 17 U.S.C. Sec. 101 et. seq.
     “Employee Benefits Plan” means, whether written or oral: (a) any plan,
fund, agreement or program which provides health, medical, surgical, hospital,
vision or dental care or other welfare benefits, or benefits in the event of
sickness, accident or disability, or death benefits, apprenticeship or other
training programs, or day care centers, scholarship funds, or prepaid legal
services; (b) any plan, fund, agreement or program which provides retirement
income to employees or results in a deferral of income by employees for periods
extending to the termination of covered employment or beyond; (c) any plan,
fund, agreement, practice or program which provides severance, unemployment,
vacation or fringe benefits (including dependent and health care accounts);
(d) any incentive compensation plan, deferred compensation plan, stock option or
stock-based incentive or compensation plan, or stock purchase plan; (e) any
other “employee pension benefit plan” (as defined in Section 3(2) of ERISA), any
other “employee welfare benefit plan” (as defined in Section 3(1) of ERISA); and
(f) any other written or oral plan, agreement or arrangement involving direct or
indirect compensation including insurance coverage, severance benefits,
disability benefits, fringe benefits, pension or retirement plans, profit
sharing, deferred compensation, bonuses (including any sale bonuses), stock
options, stock purchase, phantom stock, stock appreciation or other forms of
incentive compensation or post-retirement compensation, as well as any change in
control agreements, managing director agreements and other retention
arrangements.
     “ERISA” means the Employee Retirement Income Security Act of 1974 and the
regulations thereunder.
     “Encumbrance” means any lien, claim, charge, license, security interest,
mortgage, pledge, easement, conditional sale or other title retention agreement,
defect in title, covenant or other restrictions of any kind, other than a
Permitted Encumbrance.
     “End Date” shall mean the End Date as defined in the Coloplast Purchase
Agreement, as the same may be extended pursuant to the terms thereof.
     “Governmental Authority” means any national, supranational, local or
foreign court, governmental or administrative agency or commission or other
governmental agency, authority, instrumentality, notified body, competent
authority, third party governmental designate or regulatory body having
appropriate jurisdiction worldwide.
     “HIPAA” means the Health Insurance Portability and Accountability Act of
1996 and any regulations promulgated thereunder.
     “Intellectual Property Rights” or “IPR” means all rights associated with
any of the following: (a) United States and foreign patents and applications
therefor, including any patent or application that is a provisional application,
reissue, re-examination, renewal, extension or continuation of a patent or
patent application (“Patents”); (b) know-how, trade secret rights and all other
rights in or to confidential business or technical information (“Trade
Secrets”); (c) copyrights,

-3-

--------------------------------------------------------------------------------

 

copyright registrations and applications therefor and all other rights
corresponding thereto throughout the world (“Copyrights”); (d) trademarks,
service marks, logos, trade dress rights and similar designation of origin and
rights therein, registrations and applications for registration therefor
(“Marks”); (e) industrial design rights and any registrations and applications
therefor; (f) URLs, WWW address, and domain names (“Internet Properties”);
(g) databases and data collections, (including knowledge databases, customer
lists and customer databases (such customer lists and customer databases, the
“Customer Information”); and (h) any similar, corresponding or equivalent rights
to any of the foregoing anywhere in the world. Intellectual Property Rights
specifically excludes contractual rights, including license grants, and the
tangible embodiment of any of the foregoing.
     “Knowledge” means the actual knowledge of a Party’s executive officers.
     “Laws” means any applicable laws, statutes, ordinances, regulations, rules,
interpretations, or orders of any Governmental Authority anywhere in the world.
     “Liabilities” means any and all debts, liabilities, obligations and duties
(whether known or unknown, whether asserted or unasserted, whether absolute or
contingent, whether accrued or unaccrued, whether liquidated or unliquidated,
whether latent or patent, whether determined or undetermined, and whether due or
to become due).
     “Licensed Field” means the manufacture of SMECs.
     “Licensed IPR” means all IPR owned or licensable by Seller as of the
Closing that absent a license would be infringed by the manufacture of SMECs by
Purchaser immediately after the Closing; provided however that “Licensed IPR”
shall not include any Patents, Marks, Internet Properties or Customer
Information.
     “Losses” means any and all losses, costs, obligations, Liabilities,
settlement payments, awards, judgments, fines, penalties, damages, expenses,
deficiencies or other charges.
     “Operative Agreements” means the Bill of Sale, the Release, the Lease, the
Dismissal and the Termination.
“Parties” means Seller and Purchaser, and each individually a “Party.”
     “Permitted Encumbrance” means any or all of the following: (a) licenses or
other non-exclusive Intellectual Property Rights granted prior to the date of
this Agreement by Seller to any third Person; and (b) Encumbrances which do not
materially detract from the use of the Assets other than liens recorded pursuant
to UCC-1 financing statements filed in the State of Minnesota.
     “Person” means any individual, corporation, partnership, limited liability
company, trust, unincorporated organization, association, firm, joint venture,
joint stock company, Governmental Authority or other entity.

-4-

--------------------------------------------------------------------------------

 

     “Purchase Price” has the meaning set forth on Schedule 1.1.
     “Purchaser Benefits Plans” means the Employee Benefits Plans of Purchaser
(or a Subsidiary thereof).
     “Purchaser Material Adverse Effect” means any change that is materially
adverse to the net assets or financial condition of Purchaser and its
Subsidiaries taken as a whole or to the ability of Purchaser to consummate the
transactions contemplated hereby and by the Operative Agreements.
     “Purchaser SMECs” means all inventory of SMECs, including unpackaged SMECs,
owned by the Seller as of the Closing that were produced by Purchaser at its
facility located at 1 Rochester Medical Drive, Stewartville, Minnesota and that
are in substantially the same condition as when received by the Seller from
Purchaser (the “Purchaser SMECs”).
     “Registered IPR” means (i) issued Patents and Patent applications,
(ii) registered Copyrights and applications to register Copyrights,
(iii) registered Marks and applications to register Marks, and (iv) other formal
registrations or applications to register Intellectual Property Rights with any
Governmental Authority.
     “Seller Benefits Plans” means the Employee Benefits Plans of Seller (or a
Subsidiary thereof) under which some or all of the Transferred Employees are
eligible to participate immediately prior to the date of this Agreement.
     “Seller Material Adverse Effect” means any change that is materially
adverse to the net assets or financial condition of Seller and its Subsidiaries
taken as a whole or to the ability of Seller to consummate the transactions
contemplated hereby and by the Operative Agreements.
     “Seller SMEC” means an SMEC produced by Seller at the Anoka Facility.
     “SMEC” means a Silicone Male External Catheter.
     “Subsidiary” means with respect to a Party, any other corporation, limited
liability company, general or limited partnership, unincorporated association or
other business entity of which (a) if a corporation, a majority of the total
voting power of shares of stock entitled (without regard to the occurrence of
any contingency) to vote in the election of directors, managers or trustees
thereof is at the time owned or controlled, directly or indirectly, by such
Party, or one or more of the other Subsidiaries of such Party or a combination
thereof, or (b) if a limited liability company, partnership, association or
other business entity, a majority of the partnership or other similar ownership
interest thereof is at the time owned or controlled, directly or indirectly, by
such Party, or one or more Subsidiaries of such Party or a combination thereof.
     “Warranty Breach” means with respect to a Party, an inaccuracy or breach of
a representation or warranty expressly made by such Party in the Agreement.

-5-

--------------------------------------------------------------------------------

 

     “Years of Service” means, with respect to any Transferred Employee’s prior
service as an employee of either Seller or a Subsidiary of Seller, fully
completed calendar years plus the pro rated time described in the following
sentence. Not fully completed calendar years shall be counted towards Years of
Service at the rate of 1/12th for each full calendar month of service.
     1.1 Other Definitions. The following terms are defined in the sections
indicated:

      Term   Section
AAA
  Recitals
Agreement
  Preamble
Anoka Facility
  Section 2.2
Arbitration
  Recitals
Assets
  Section 2.1(f)
Bill of Sale
  Section 3.2(a)
Cash Consideration
  Section 3.3(b)
Closing
  Section 3.1
Closing Date
  Section 3.1
Coloplast
  Recitals
Coloplast Purchase Agreement
  Recitals
Copyrights
  Definitions
Dismissal
  Section 3.2(c)
Evaluation Material
  Section 9.5(a)
Finished Goods
  Section 2.1(d)
Internet Properties
  Definitions
Lease
  Section 3.2(d)
Licensee Party
  Section 4.3
Licensor Party
  Section 4.3
Marks
  Definitions
MEC Agreement
  Section 3.2(e)
MOU
  Recitals
Offered Employee
  Section 8.1
Patents
  Definitions
Purchaser
  Preamble
Purchaser Employment Liabilities
  Section 8.8
Raw Materials
  Section 2.1(b)
Release
  Section 3.2(b)
Residuals
  Section 4.2
Seller
  Preamble
Seller Employment Liabilities
  Section 8.9
Selling Subsidiary
  Section 5.1
Tangible Assets
  Section 2.1(a)
Trade Secrets
  Definitions

-6-

--------------------------------------------------------------------------------

 

      Term   Section
Transferred Employee
  Section 8.1
Transferred IPR
  Section 2.1(f)
Transfer Taxes
  Section 3.4
Transition Marks
  Section 4.7(e)
Transition Products
  Section 4.7(e)
WIP
  Section 2.1(c)

ARTICLE 2.
PURCHASE AND SALE OF THE ASSETS
     2.1 Purchase and Sale of the Assets. At the Closing, upon the terms and
subject to the conditions contained herein, Seller shall sell to Purchaser,
effective as of the Closing, free and clear of all Encumbrances, and Purchaser
shall purchase and acquire from Seller, all of Seller’s and its Subsidiaries
right, title and interest in and to the following:
          (a) The tangible assets listed on Schedule 2.1(a) (the “Tangible
Assets”);
          (b) All reasonably useable raw materials owned by Seller as of the
Closing held for use in, and that are useable for, the production of Seller
SMECs that are practicably capable of becoming SMECs that will be useable and
acceptable to Coloplast (the “Raw Materials”);
          (c) All work-in-progress Seller SMECs (the “WIP”) owned by the Seller
as of the Closing, that are practicably capable of becoming SMECs that are
useable and acceptable to Coloplast;
          (d) All finished goods inventory of Seller SMECs (the “Finished
Goods”), owned by the Seller as of the Closing, that are useable and acceptable
to Coloplast;
          (e) The Purchaser SMECs; and
          (f) The IPR owned by Seller that: (i) is not (A) Registered IPR,
(B) IPR transferred to Coloplast pursuant to the Coloplast Purchase Agreement,
or (C) Patents, Marks, Internet Properties or Customer Information; and (ii) is
used exclusively, as of the Closing, in connection with the manufacture of SMECs
(the “Transferred IPR” and, collectively with the Tangible Assets, the Raw
Materials, the WIP, the Finished Goods and the Purchaser SMECs, the “Assets”).
     2.2 Excluded Assets. Notwithstanding anything contained in this Agreement
to the contrary, for the avoidance of doubt, the Parties agree that Seller is
not selling and Purchaser is not purchasing the real property with all
improvements now or hereafter located thereon commonly

-7-

--------------------------------------------------------------------------------

 

known as 800 Lund Boulevard, Anoka, Minnesota, including the land and the
building located thereon (collectively, the “Anoka Facility”) or any other
assets (including IPR) of Seller other than the Assets.
     2.3 Bulk Sales. Purchaser hereby waives compliance with the provisions of
any applicable laws which relate to the sale of property in bulk in connection
with the sale of the Assets to the Purchaser.
     2.4 Retained Liabilities. The parties specifically acknowledge that
Purchaser is not agreeing to assume any Liabilities of Seller, whether related
to the Assets or otherwise, other than the Purchaser Employment Liabilities, and
that nothing in this Agreement, including this Section 2.4, will be construed as
an agreement otherwise.
ARTICLE 3.
CLOSING
     3.1 Closing. The transactions contemplated by this Agreement shall be
consummated (the “Closing”) at the offices of Wilson Sonsini Goodrich & Rosati,
Professional Corporation, at 650 Page Mill Road, Palo Alto, California, no later
than two Business Days after all of the conditions set forth in Article 7 shall
have been satisfied or waived (other than those conditions that by their terms
are not capable of being satisfied or waived until the Closing), or such other
time, place or date as Seller and Purchaser may mutually agree in writing. The
time and date on which the Closing is actually held is sometimes referred to
herein as the “Closing Date.”
     3.2 Deliveries by Seller. At the Closing, Seller will deliver or cause to
be delivered to Purchaser (unless previously delivered) the following:
          (a) a duly executed counterpart of the Bill of Sale for the Tangible
Assets, the Raw Materials, the WIP, the Finished Goods and the Purchaser SMECs
in the form attached hereto as Exhibit A (the “Bill of Sale”);
          (b) a duly executed counterpart of the Mutual Settlement and Release
in the form attached hereto as Exhibit B (the “Release”);
          (c) a duly executed counterpart of the Stipulation of Dismissal to be
filed by Purchaser with the AAA in the form attached hereto a Exhibit C (the
“Dismissal”);
          (d) a duly executed counterpart of the lease for the Anoka Facility in
the form attached as Exhibit D (the “Lease”); and
          (e) A duly executed counterpart of the termination in the form
attached as Exhibit E (the “Termination”) which provides for the termination of
(i) the Male External Catheter License,

-8-

--------------------------------------------------------------------------------

 

Sales and Distribution Agreement (including the Patent License, the Technology
License and the Confidential Information thereunder), between Purchaser and
Seller dated as of April 24, 1991, as amended by the Settlement Agreement
between Purchaser and Seller with an effective date of September 8, 1995 (the
“MEC Agreement”), pursuant to which termination, among other things, Seller will
relinquish its right to use any IPR or confidential information of Purchaser
licensed thereunder; (ii) the Supply Agreement between Purchaser and Seller
dated October 1, 2001; and (iii) the Foley Catheter Sales and Distribution
Agreement between Purchaser and Seller dated as of April 24, 1991.
Notwithstanding the foregoing, and for the avoidance of doubt, the Termination
shall not restrict or limit in any way the covenants made and licenses granted
pursuant to Article 4 hereof.
     3.3 Deliveries by Purchaser. At the Closing, Purchaser will deliver or
cause to deliver to Seller (unless previously delivered) the following:
          (a) $750,000 in cash representing the aggregate purchase price for the
Tangible Assets and the Transferred IPR by wire transfer of immediately
available federal funds to an account specified by Seller;
          (b) an amount of cash equal to the aggregate Purchase Price for the
Purchaser SMECs, the Raw Materials, the WIP and the Finished Goods by wire
transfer of immediately available federal funds to an account specified by
Seller (together with (a) above, the “Cash Consideration”);
          (c) a duly executed counterpart of the Bill of Sale;
          (d) a duly executed counterpart of the Release;
          (e) a duly executed counterpart of the Dismissal;
          (f) a duly executed counterpart of the Lease; and
          (g) a duly executed counterpart of the Termination.
     3.4 Transfer Taxes. Purchaser shall be responsible for and shall pay when
due any sales, use, value-added, gross receipts, excise, registration, stamp
duty, transfer or other similar taxes or governmental fees (including any
interest or penalties related thereto) that may be payable in connection with
the transactions contemplated by this Agreement (the “Transfer Taxes”). The
Parties hereto shall cooperate, to the extent reasonably requested and permitted
by applicable law, in minimizing any such Transfer Taxes. The Party required by
law to file a tax return with respect to such Transfer Taxes shall do so within
the time period prescribed by law, and Purchaser shall promptly pay Seller for
any Transfer Taxes so payable by Seller upon receipt of notice that such
Transfer Taxes have become payable.
     3.5 Delivery; Further Assurances.

-9-

--------------------------------------------------------------------------------

 

          (a) On the Closing Date, Seller shall deliver to Purchaser at the
Anoka Facility, all of the Assets with the exception of Assets delivered by
electronic means. All Assets capable of being delivered by electronic means
shall be delivered by electronic means as mutually agreed upon by Purchaser and
Seller.
          (b) Seller shall, at any time and from time to time after the Closing,
upon the request of Purchaser and at the expense of Purchaser, do, execute,
acknowledge and deliver, and cause to be done, executed, acknowledged or
delivered, all such further acts, deeds, assignments, transfers, conveyances,
powers of attorney or assurances as may be reasonably required, or to vest in
Purchaser all of the Seller’s right, title and interest in the Assets. Each of
the Parties hereto will cooperate with the other and execute and deliver to the
other such other instruments and documents and take such other actions as may be
reasonably requested from time to time by the other Party hereto as necessary to
carry out, evidence and confirm the intended purposes of this Agreement.
Purchaser shall be solely responsible for the filing and recordation of any
transfer documents following the Closing.
ARTICLE 4.
INTELLECTUAL PROPERTY LICENSES
     4.1 Seller License. Subject to the terms and conditions of this Agreement,
effective as of the Closing, Seller and its Subsidiaries hereby grant to
Purchaser and its Subsidiaries a worldwide, perpetual, irrevocable, fully
paid-up, non-exclusive right and license under all of Seller’s rights in the
Licensed IPR, to use, copy, create Derivative Works from, sell, and distribute
the Assets, or any products and provide any services, in the Licensed Field.
     4.2 Purchaser License and Covenant.
          (a) Subject to the terms and conditions of this Agreement, effective
as of the Closing, Purchaser and its Subsidiaries hereby grant Seller and its
Subsidiaries, and Seller and its Subsidiaries retain, under the Transferred IPR,
a worldwide, perpetual, fully paid-up, non-exclusive right and license to use,
copy, create Derivative Works from, sell and distribute products, and provide
services, based upon the Residuals. “Residuals” means any IPR provided under or
relating to the MEC Agreement (including Confidential Information as defined
thereunder) or any Transferred IPR that is retained in the unaided memory of
employees of Seller or its Subsidiaries following the Closing.
          (b) Without limiting Section 4.2(a), Purchaser agrees, effective
commencing as of the Closing, that neither it nor any of its Subsidiaries will
bring any action or assert any claim against Seller, its Subsidiaries, their
successors, or Coloplast based upon or alleging that any trade secrets or other
information or materials in the possession of, known to, or used by Seller, as
of the date hereof or transferred or disclosed by Seller to Coloplast in
connection with the Coloplast Purchase Agreement was or is misappropriated by
Seller (or Coloplast) from Purchaser, violates

-10-

--------------------------------------------------------------------------------

 

Purchaser’s trade secret rights, or infringes Purchaser’s copyrights, in each
case outside the Licensed Field. Coloplast shall be deemed an express third
party beneficiary with rights of enforcement under this Section 4.2(b) to the
extent this Section 4.2(b) relates to any assets acquired by Coloplast from
Seller.
     4.3 Existing Licenses. All licenses granted by a Party (“Licensor Party”)
to the other Party or its Subsidiaries, as applicable (“Licensee Party”) under
this Article 4 are subject to any and all Contracts between the Licensor Party
and any third Person entered into prior to the Closing.
     4.4 Reservation of Rights. Each of the Licensor Parties hereby reserves all
rights not expressly granted hereunder. No implied licenses are granted by
Seller or Purchaser with respect to any of the Assets or pursuant to any term of
this Agreement.
     4.5 Trade Secret Protection and Use. Notwithstanding the retention of
ownership of any Trade Secrets by Seller (and the license granted thereto to
Purchaser), or transfer of ownership of Trade Secrets to Purchaser (with a
license retained thereto by Seller) hereunder, each Party agrees (i) nothing set
forth herein shall limit either Party’s rights to enforce its rights with
respect to any misappropriation following the Closing by third parties of such
Trade Secrets or to protect the confidentiality of such Trade Secrets regardless
of whether such Trade Secrets are licensed to, or owned by such Party, and (ii)
each Party shall treat the Trade Secrets of the other with at least the same
degree of care, as its does its own like Trade Secrets, but in no event with
less than reasonable care; provided that each Party may use and disclose the
Trade Secrets of the other within the scope of the licenses granted hereunder.
     4.6 Transfer and Sublicensing. Except with respect to the license granted
to Purchaser pursuant to Section 4.7, the Licensee Party may transfer, assign or
sublicense the licenses granted to it hereunder; provided, however, that with
respect to the license to Residuals granted to Seller pursuant to Section 4.2(a)
hereof, such license may not be transferred, assigned or sublicensed by Seller
(i) to Coloplast or (ii) to any other person except pursuant to a Change of
Control of Seller.
     4.7 License to Transition Marks.
          (a) Seller hereby grants to Purchaser, effective as of the Closing, a
non-exclusive, non-transferable license under the Transition Marks (as defined
below) to use such Transition Marks in connection with the sale and distribution
of Transition Products (as defined below) in the U.K. in substantially the same
manner that such Transition Marks were used by Seller or Mentor Medical Limited
in the U.K. prior to the Closing. All goodwill associated with the use of such
Transition Marks shall inure to the benefit of Seller.
          (b) Purchaser shall maintain the quality of the goods with which such
Transition Marks are used at least at the same level maintained by Seller prior
to the Closing. Without limiting the foregoing, Purchaser shall not (i) use the
Transition Marks in a manner that detracts from the goodwill associated with
such Transition Marks or in a manner contrary to the reasonable instructions of
Seller, (ii) co-brand the Transition Products with any other Marks without the
prior

-11-

--------------------------------------------------------------------------------

 

written consent of Seller, or (iii) sell any Transition Product beyond its shelf
life or in any other improper manner. Purchaser shall not make any warranty,
express or implied, to any third party on behalf of Seller with respect to the
Transition Products and except as may be otherwise provided under this Agreement
shall be solely responsible for all Transition Products sold by it.
          (c) Purchaser will use reasonable commercial efforts, subject to
regulatory requirements, to cease using the Transition Marks as promptly as
practicable following the Closing, and replace such Transition Marks with new
Marks owned by Purchaser. Without limiting the generality of the foregoing, in
no event may Purchaser market, package, sell or promote any product under or
bearing a Transition Mark after the last day of the ninth (9th) month following
the Closing Date.
          (d) Purchaser will sell Transition Products in inventory on a
first-in-first-out (FIFO) basis in advance of any other products that are
reasonable substitutes for the Transaction Products but which other products do
not bear the Transition Marks.
          (e) For the purposes of this Section 4.7, (i) “Transition Products”
means all SMECs in Mentor Medical Limited’s inventory that are purchased by
Purchaser from Coloplast under the MML Purchase Agreement, and (ii) “Transition
Marks” means all Marks used by Seller or Mentor Medical Limited in the U.K. that
use or contain the letter string “MENTOR” prior to the Closing in connection
with the distribution and sale of SMECs by Mentor Medical Limited which are
affixed as of the Closing to the Transition Products.
ARTICLE 5.
REPRESENTATIONS AND WARRANTIES OF SELLER
     Seller hereby represents and warrants to Purchaser that:
     5.1 Organization and Qualification/Ownership of Seller. Seller is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Minnesota and has all requisite corporate power and authority to
own, lease and operate the Assets. Each of Seller’s Subsidiaries which owns
Assets (each, a “Selling Subsidiary”) is an entity duly organized, validly
existing and in good standing (where applicable) under the laws of its
jurisdiction of organization and has all requisite corporate (or similar) power
and authority to own, lease and operate the Assets. Seller and the Selling
Subsidiaries are each duly qualified to do business as a foreign corporation and
are in good standing in each jurisdiction where such qualification is necessary,
except for those jurisdictions where failure to be so qualified would not,
individually or in the aggregate, have a Seller Material Adverse Effect.
     5.2 Due Authorization. Seller has all requisite corporate power and
authority to execute and deliver this Agreement and the Operative Agreements to
which it is a party, to perform its obligations hereunder and thereunder and to
consummate the transactions contemplated hereby and thereby. The execution and
delivery by Seller of this Agreement and the Operative Agreements, the

-12-

--------------------------------------------------------------------------------

 

performance by Seller of its obligations hereunder and thereunder and the
consummation of the transactions contemplated hereby and thereby have been duly
and validly authorized by all necessary corporate action on the part of Seller.
This Agreement has been duly and validly executed by Seller, and this Agreement
and each Operative Agreement to which Seller is a party are, upon execution and
delivery hereof and thereof by Seller, valid and binding obligations of Seller,
enforceable against it in accordance with the terms hereof and thereof (except
as the enforceability hereof and thereof may be limited by any applicable
bankruptcy, insolvency or other laws affecting creditors’ rights generally or by
general principles of equity, regardless of whether such enforceability is
considered in equity or at law).
     5.3 No Conflict. Except as set forth in Schedule 5.3, neither the execution
and delivery by Seller of this Agreement or any of the Operative Agreements, nor
the consummation by Seller of the transactions contemplated hereby or thereby,
nor compliance by Seller with any of the provisions hereof or thereof, will:
(a) conflict with, result in a breach or violation of or constitute (or with
notice or lapse of time or both constitute) a default under, (i) the Articles of
Incorporation or Bylaws of Seller or the like organizational documents of each
Selling Subsidiary, (ii) any order, judgment, decree, writ or injunction
expressly applicable by its terms to any of the Assets (but not including an
order, judgment, decree, writ or injunction of general applicability), (iii) to
the Knowledge of Seller, any Law or other order, judgment, decree, writ or
injunction applicable to any of the Assets, or (iv) any of the terms, conditions
or provisions of any Contract to which Seller or its Subsidiaries is a party or
by which Seller or its Subsidiaries (or any of the Assets) is subject or bound
which conflict, breach, violation or default would have a Seller Material
Adverse Effect; or (b) require Seller or, to the Knowledge of Seller, Purchaser
to obtain any authorization, consent, approval or waiver from, or to notify or
to make any filing with, any Governmental Authority.
     5.4 Title to Assets. Seller has good and marketable title to the Assets
(other than the Transferred IPR), free and clear of all Encumbrances. Seller
owns all right, title and interest in and to all of the Transferred IPR and/or
has the right and authority to transfer such Transferred IPR to Purchaser in
accordance with the terms hereof free and clear of all Encumbrances.
     5.5 Brokers. Seller and its Subsidiaries has not paid or become obligated
to pay any fee or commission to any broker, finder, investment banker or other
intermediary in connection with the transactions contemplated by this Agreement
that is not the sole obligation of Seller.
     5.6 Employees. As of the date hereof, none of the Offered Employees are on
an approved leave of absence from work with Seller nor as of the date hereof has
any such Offered Employee provided written notice to Seller’s human resources
department in accordance with Seller’s human resource policies that he or she
intends to take an approved leave of absence from work after the date hereof.
     5.7 Exclusive Warranties. Except as set forth in this Article 5, Seller
does not make any representations or warranties, expressly or impliedly, with
respect to the Assets, which are being sold “AS IS” in all respects with all
faults and without any other warranties of any kind. EXCEPT AS SPECIFICALLY
CONTAINED IN THIS ARTICLE 5, SELLER EXPRESSLY DISCLAIMS

-13-

--------------------------------------------------------------------------------

 

ALL OTHER EXPRESS, STATUTORY AND IMPLIED WARRANTIES AND CONDITIONS, INCLUDING
THE IMPLIED WARRANTY OR CONDITION OF MERCHANTABILITY, SATISFACTORY QUALITY,
NON-INFRINGEMENT, VALIDITY, ENFORCEABILITY OR SUITABILITY OR FITNESS FOR ANY
PARTICULAR PURPOSE OF PURCHASER’S, WHETHER OR NOT SELLER HAS BEEN MADE AWARE OF
ANY SUCH PURPOSE.
ARTICLE 6.
REPRESENTATIONS AND WARRANTIES OF PURCHASER
     Purchaser hereby represents and warrants to Seller as follows:
     6.1 Organization. Purchaser is a corporation, duly organized, validly
existing and in good standing under the laws of the State of Minnesota and has
all requisite corporate power and authority to purchase the Assets in accordance
with the terms of this Agreement.
     6.2 Due Authorization. Purchaser has all requisite corporate power and
authority to execute and deliver this Agreement and the Operative Agreements to
which it is a party, to perform its obligations hereunder and thereunder and to
consummate the transactions contemplated hereby and thereby. The execution and
delivery by Purchaser of this Agreement and the Operative Agreements, the
performance by Purchaser of its obligations hereunder and thereunder and the
consummation of the transactions contemplated hereby and thereby have been duly
and validly authorized by all necessary corporate action on the part of
Purchaser. This Agreement has been duly and validly executed by Purchaser, and
this Agreement and each Operative Agreement to which Purchaser is a party are,
upon execution and delivery hereof and thereof by Purchaser, valid and binding
obligations of Purchaser, enforceable against Purchaser in accordance with the
terms hereof and thereof (except as the enforceability hereof and thereof may be
limited by any applicable bankruptcy, insolvency or other laws affecting
creditors’ rights generally or by general principles of equity, regardless of
whether such enforceability is considered in equity or at law).
     6.3 No Conflict. Neither the execution and delivery by Purchaser of this
Agreement or any of the other documents contemplated hereby, nor the
consummation by Purchaser of the transactions contemplated hereby or thereby,
nor compliance by Purchaser with any of the provisions hereof or thereof, will:
(a) conflict with, result in a breach or violation of or constitute (or with
notice or lapse of time or both constitute) a default under, (i) the Articles of
Incorporation or Bylaws of Purchaser, (ii) any order, judgment, decree, writ or
injunction expressly applicable by its terms to Purchaser (but not including an
order, judgment, decree, writ or injunction of general applicability), (iii) to
the Knowledge of Purchaser, any Law or other order, judgment, decree, writ or
injunction of general applicability that is applicable to the Purchaser or
(iv) any of the terms, conditions or provisions of any Contract to which
Purchaser is a party or by which Purchaser is bound which conflict, breach,
violation or default would have a Purchaser Material Adverse Effect; or (b)
require Purchaser, or to the Knowledge of Purchaser, Seller, to obtain any
authorization,

-14-

--------------------------------------------------------------------------------

 

consent, approval or waiver from, or to notify or to make any filing with, any
Governmental Authority.
     6.4 Sufficiency of Funds. The Purchaser has available, and will have
available at the Closing, sufficient funds to enable it to consummate the
transactions contemplated hereby and by the other Operative Agreements.
     6.5 Brokers. Purchaser has not paid or become obligated to pay any fee or
commission to any broker, finder, investment banker or other intermediary in
connection with the transactions contemplated by this Agreement that is not the
sole obligation of Purchaser.
     6.6 Exclusive Warranties. Purchaser acknowledges that, except for the
express representations and warranties set forth in Article 5, Seller does not
make any representations or warranties, expressly or impliedly, with respect to
the Assets, which are being sold “AS IS” in all respects with all faults and
without any other warranties of any kind. PURCHASER ACKNOWLEDGES THAT EXCEPT AS
SPECIFICALLY CONTAINED IN ARTICLE 5, SELLER EXPRESSLY DISCLAIMS ALL OTHER
EXPRESS, STATUTORY AND IMPLIED WARRANTIES AND CONDITIONS, INCLUDING THE IMPLIED
WARRANTY OR CONDITION OF MERCHANTABILITY, SATISFACTORY QUALITY,
NON-INFRINGEMENT, VALIDITY, ENFORCEABILITY OR SUITABILITY OR FITNESS FOR ANY
PARTICULAR PURPOSE OF PURCHASER’S, WHETHER OR NOT SELLER HAS BEEN MADE AWARE OF
ANY SUCH PURPOSE.
ARTICLE 7.
CONDITIONS
     7.1 Conditions to Obligations of Purchaser and Seller. All obligations of
Purchaser and Seller to effect the Closing hereunder are subject to the
satisfaction at or prior to the Closing of the conditions precedent that follow,
any one or more of which may be waived in writing, in whole or in part, by
Seller and Purchaser acting jointly:
          (a) No Injunction or Restraints; Illegality. No provision of any
applicable Law shall have been enacted, entered, promulgated or enforced by any
Governmental Authority that prohibits, restrains, enjoins, or restricts the
consummation of the transactions contemplated hereby in any material respect and
no litigation or proceeding shall be pending by any Governmental Authority
seeking to prohibit, restrain, enjoin or restrict the consummation of the
transactions contemplated hereby in any material respect which would reasonably
be expected to succeed.
          (b) Governmental Approvals. All material consents, approvals and
actions of, filings with and notice to any Governmental Authority necessary to
permit Purchaser and Seller to perform their obligations under this Agreement
and to consummate the transactions contemplated hereby shall have been duly
obtained, made or given, and all terminations or expirations of waiting

-15-

--------------------------------------------------------------------------------

 

periods imposed by any Governmental Authority necessary for the consummation of
the transactions contemplated by this Agreement shall have occurred.
          (c) Coloplast Closing. The “Closing” as defined in the Coloplast
Purchase Agreement shall have occurred or shall occur simultaneously with the
Closing.
          (d) Purchaser-Coloplast Agreements. Purchaser and Coloplast shall have
entered into: (i) that certain Agreement by and among Purchaser, Coloplast,
Mentor Medical Limited, Coloplast Limited and Rochester Medical Limited dated as
of the date hereof pursuant to which, among other things, Purchaser will
purchase from Coloplast, and Coloplast will sell to Purchaser, certain assets
and liabilities pertaining to the sale of SMECs in the United Kingdom (the “MML
Purchase Agreement”); (ii) that certain Private Label Distribution Agreement
dated as of the date hereof; and (iii) that certain Patent Cross-License
Agreement dated as of the date hereof.
     7.2 Conditions to Obligations of Purchaser. All obligations of Purchaser to
effect the Closing hereunder are subject to the satisfaction at or prior to the
Closing of the conditions precedent that follow, any one or more of which may be
waived in writing, in whole or in part, exclusively by Purchaser in its sole
discretion:
          (a) Closing Deliverables. Seller shall have made all the deliveries
required to be made by Seller pursuant to Section 3.2.
          (b) Representations and Warranties. The representations and warranties
set forth in Article 5 shall be true and correct in all material respects on
date hereof and as of the Closing Date as though such representations and
warranties were made on and as of the Closing Date.
          (c) Performance. Seller and/or its Subsidiaries shall have performed
and complied in all materials respects with each of the agreements, covenants
and conditions contained in this Agreement that are required to be performed or
complied with by Seller and/or its Subsidiaries at or prior to the Closing.
          (d) Officer’s Certificate. Purchaser shall have received at the
Closing, with respect to Seller, a certificate, dated as of the Closing Date, of
an appropriate officer of Seller certifying that the conditions set forth in
Section 7.2(b) and Section 7.2(c) have been satisfied.
     7.3 Conditions to Seller’s Obligations. All obligations of Seller to effect
the Closing hereunder are subject to the satisfaction at or prior to the Closing
of the conditions precedent that follow, any one or more of which may be waived
in writing, in whole or in part, exclusively by Seller in its sole discretion:
          (a) Closing Deliverables. Purchaser shall have made all the deliveries
required to be made by Purchaser pursuant to Section 3.3.

-16-

--------------------------------------------------------------------------------

 

          (b) Representations and Warranties. The representations and warranties
set forth in Article 6 shall be true and correct in all material respects on
date hereof and as of the Closing as though such representations and warranties
were made on and as of the Closing.
          (c) Performance. Purchaser and/or its Subsidiaries shall have
performed and complied in all materials respects with each of the agreements,
covenants and conditions contained in this Agreement that are required to be
performed or complied with by Purchaser and/or its Subsidiaries at or prior to
the Closing.
          (d) Officer’s Certificate. Seller shall have received at the Closing,
with respect to Purchaser, a certificate, dated as of the Closing Date, of an
appropriate officer of Purchaser certifying that the conditions set forth in
Section 7.3(b) and Section 7.3(c) have been satisfied.
ARTICLE 8.
EMPLOYEE MATTERS
     8.1 Employee Offers. On a date or dates to be mutually agreed upon by
Purchaser and Seller, which shall be no later than the tenth (10th) Business Day
after the date Seller delivers Schedule 8.1 to Purchaser, Purchaser will extend
an offer of employment to each employee of Seller listed on Schedule 8.1 (each,
an “Offered Employee”), which schedule will provide with respect to each Offered
Employee his or her current position/title, base salary, benefits and time of
service.. Each such offer shall provide for employment by Purchaser effective
only as of and after the Closing Date and at a job responsibility level and
title that is substantially similar to or higher than such Offered Employee’s
employment with Seller for the year prior to the date of the offer. Effective
only as of the Closing and after the Closing Date, Purchaser will hire each
Offered Employee who accepts the offer of employment extended to such individual
by Purchaser (each, a “Transferred Employee”). Notwithstanding the foregoing,
any Offered Employee who is, at the time an offer of employment is required
under this Section 8.1 to be made, on a Seller’s (or a Subsidiary’s thereof)
approved leave of absence from work, shall not become an employee of Purchaser
(and shall not be considered a Transferred Employee) unless and until such
employee becomes eligible to return to active employment within one year after
the Closing Date in accordance with Seller’s human resource policies and
applicable Laws and actually commences employment with Purchaser.
     8.2 Service Credit; Waivers; Credits. Provided Seller provides Purchaser at
the Closing with a certificate of credible coverage under HIPAA for all
Transferred Employees, Purchaser shall provide each Transferred Employee with
credit for purposes of eligibility, vesting and benefit accrual under the
Purchaser Benefits Plans for Years of Service on and prior to the Closing Date
with Seller and its Subsidiaries credited under the comparable Seller Benefits
Plans, including recognition of such service for purposes of determining
Transferred Employees’ amount of paid time off or vacation and severance
benefits; provided, however, that, except as provided in Section 8.6 or
Section 8.7, in no event shall Purchaser be required to provide any service
credit to any Transferred Employee to the extent the provision of such credit
would result in any duplication of benefits or

-17-

--------------------------------------------------------------------------------

 

would cause one of the Purchaser Benefit Plans to fail to satisfy the
nondiscrimination requirements under federal law (including the Code). Purchaser
shall cause any pre-existing conditions or limitations and eligibility waiting
periods (to the extent that such waiting periods would be inapplicable under
Seller Benefits Plans) under any Purchaser Benefits Plans to be waived with
respect to Transferred Employees and their eligible dependents, provided that if
required by Purchaser such employees present a certificate of creditable
coverage. Purchaser shall provide the Transferred Employees and their eligible
dependents with credit for any deductibles and annual out-of-pocket limits for
medical, dental and vision expenses paid during the applicable period under any
Purchaser Benefits Plans in satisfying any deductibles and annual out-of-pocket
limits for medical, dental and vision expenses for the corresponding period
under the Purchaser Benefits Plans.
     8.3 401(k) Plan. To the extent permitted under Section 401(k) of the Code
and regulations issued thereunder, Transferred Employees who participate in
Seller’s 401(k) plan shall be eligible to receive, at their election, a
distribution of their account balance from Seller’s 401(k) plan after the
Closing Date. Purchaser shall use reasonable efforts to cause its 401(k) plan to
accept eligible rollovers of such distributions, provided that Purchaser
determines that receipt of any such rollover will not result in a
disqualification of Purchaser’s 401(k) plan. Rollovers relating to any
Transferred Employee may include participant loans, provided that it is
permitted by Purchaser’s 401(k) plan (it being expressly understood that
Purchaser is not obligated to amend Purchaser’s 401(k) plan to accept
rollovers).
     8.4 FSA. Promptly after the Closing Date, Seller shall transfer and
Purchaser shall accept the flexible spending account elections, liabilities and
accounts (maintained pursuant to Code Sections 105 and 129) of the Transferred
Employees under Seller’s Section 125 plan flexible spending arrangement.
Promptly after the Closing Date, Seller shall cause to be transferred to
Purchaser the aggregate net cash amount (determined immediately prior to the
Closing) for contributions paid (but not yet reimbursed) by or on behalf of the
Transferred Employees under Seller’s Section 125 plan flexible spending
arrangement.
     8.5 Vacation. Seller shall allow Transferred Employees to transfer any
accrued but unused vacation time (which vacation time was accrued in accordance
with Seller’s policies consistent with past practice) to Purchaser. Only
Transferred Employees who submit a vacation consent form, prior to the Closing
Date, are eligible to transfer vacation time to Purchaser. To the extent
permitted by law, Purchaser shall assume such accrued but unused vacation time
and allow each Transferred Employee to use such accrued vacation time after the
Closing Date. The transfer of vacation time shall not affect each Transferred
Employee’s accrual of vacation under Purchaser’s vacation policies. Seller shall
be liable for and pay in cash an amount equal to any accrued but unused vacation
time to any (i) Transferred Employee who has not executed a vacation consent
form or (ii) any Offered Employee who declines to accept Purchaser’s offer of
employment made in accordance with Section 8.1, and whose employment terminates
prior to the Closing.
     8.6 Compensation and Benefits. Purchaser will compensate each Transferred
Employee (so long as any such Transferred Employee remains employed by Purchaser
or any Subsidiary

-18-

--------------------------------------------------------------------------------

 

thereof, and subject to Purchaser’s termination rights and resulting severance
obligations under Section 8.7) for at least one year after the Closing as
follows:
          (a) Each Transferred Employee shall receive a rate of total cash
compensation, including base salary rate and target bonus opportunity, which
shall be at least substantially similar to the total cash compensation
opportunity provided to the Transferred Employee by Seller immediately prior to
the date of this Agreement;
          (b) Each Transferred Employee shall participate in Purchaser’s health
and welfare benefit plans, which shall provide for benefits that are at least
substantially similar to the health and welfare benefits provided under those
Seller Benefits Plans in effect immediately prior to the Closing, or if a
Transferred Employee is not eligible to participate in Purchaser’s health plans
and the Transferred Employee elects COBRA under Seller’s health plan, then
Purchaser shall pay the Transferred Employee’s COBRA premiums for up to
12 months; and
          (c) Each Transferred Employee shall participate in Purchaser’s other
benefit plans provided to employees of Purchaser of a similar level of job
responsibility as the Transferred Employee.
     Following the 12-month period immediately after the Closing Date and
thereafter, Transferred Employees shall participate in the Purchaser’s severance
program provided to similarly situated Purchaser employees and be provided
credit for years of service under such severance program for their service with
Seller and Purchaser.
     8.7 Severance. Purchaser shall provide any Transferred Employee whose
employment is terminated by Purchaser (other than employees terminated for
Cause) or who resigns as a result of a Constructive Termination, in each case
within the 12-month period immediately following the Closing Date, with
severance payments and benefits, such Transferred Employee shall be provided the
following exclusive severance benefits: (i) 2 weeks pay for each full year of
service at Seller and Purchaser, subject to a minimum of 8 weeks pay,
(ii) 30 days notice of termination, or if less than 30 days notice is provided,
payment for each scheduled working day during the period from the time of
termination until the 30th day after notice was given, and (iii) COBRA benefits
as required by Law.
     8.8 Employment-Related Assumed Liabilities. Purchaser, to the exclusion of
Seller, assumes, accepts and shall be fully responsible for any and all Losses,
Liabilities or claims to the extent arising out of or relating to: (a)
Purchaser’s alleged failure to make, or failure to make, offers of employment to
Offered Employees in keeping with its obligations under Section 8.1; (b) the
employer-employee relationship, or Purchaser’s employment or termination of
employment, of any Transferred Employee, in each case, on or after the Closing
Date; (c) any Purchaser Benefits Plans; and (d) workers’ compensation claims of
any Transferred Employee arising out of conditions with a date of injury (or, in
the case of a claim relating to occupational illness or disease, the last
significant exposure) that begins prior to but continues after the Closing Date
(collectively referred to herein as “Purchaser Employment Liabilities”).
Notwithstanding the preceding sentence, Purchaser shall retain responsibility
for and continue to pay all medical, life insurance, disability and other
welfare

-19-

--------------------------------------------------------------------------------

 

plan expenses and benefits for each Transferred Employee with respect to claims
incurred by such Transferred Employees or their covered dependents on or after
the Closing Date. Purchaser shall reimburse, indemnify and hold harmless Seller
and each of its Subsidiaries and their respective Employee Benefits Plans from
and against any and all Losses incurred by any of them in connection with any
Purchaser Employment Liabilities.
     8.9 Employment-Related Excluded Liabilities. Seller, to the exclusion of
Purchaser, assumes, accepts and shall be fully responsible for any and all
Losses, Liabilities or claims to the extent arising out of or relating to:
(a) the employer-employee relationship, or Seller’s employment of, or the
termination of employment of any Transferred Employee, in each case, on or
before the Closing Date; (b) any Seller Benefits Plans; and (c) workers
compensation claims of Transferred Employees arising out of conditions with a
date of injury, (or in the case of a claim relating to occupational illness or
disease, the last significant exposure) that begins and ends on or before the
Closing Date (collectively referred to herein as “Seller Employment
Liabilities”). Notwithstanding the preceding sentence, Seller shall retain
responsibility for and continue to pay all medical, life insurance, disability
and other welfare plan expenses and benefits for each Transferred Employee with
respect to claims incurred by such Transferred Employees or their covered
dependents prior to the Closing Date. Seller shall reimburse, indemnify and hold
harmless Purchaser and each of its Subsidiaries and their respective Employee
Benefits Plans from and against any and all Losses whenever asserted or incurred
by any of them in connection with any Seller Employment Liabilities.
     8.10 Timing of Claims Incurred. For purposes of Section 8.8 and
Section 8.9, a claim is deemed incurred when all facts and circumstances giving
rise to the claim have occurred and specifically: in the case of medical or
dental benefits, when the services that are the subject of the claim are
performed; in the case of life insurance, when the death occurs; in the case of
long term disability benefits, when the disability occurs; in the case of
workers compensation benefits, as described in Section 8.8 and Section 8.9
above; and otherwise, at the time the Transferred Employee or covered dependent
becomes entitled to payment of a benefit (assuming that all procedural
requirements are satisfied and claims applications properly and timely completed
and submitted).
     8.11 No Modification of At-Will Employment; Other Positions. Nothing
contained herein is intended as a guarantee of employment for any of the
Transferred Employees for any specified period of time or to limit in any way
(i) the Transferred Employees’ status as “at-will” employees or (ii) Purchaser’s
right to terminate the employment of any Transferred Employee (following the
offer of employment required pursuant to Section 8.1 and subject to the
severance provision in Section 8.7). Nothing contained herein is intended to
limit Purchaser and any Transferred Employee from mutually agreeing at any time
following the Closing to a new position at Purchaser, other than the position
offered by Purchaser to the Transferred Employee pursuant to this Article 8,
upon such terms and conditions as the Transferred Employee and Purchaser may
mutually agree, including at a level of compensation, benefits or responsibility
different from the initially offered employment pursuant to this Article 8.

-20-

--------------------------------------------------------------------------------

 

ARTICLE 9.
OTHER AGREEMENTS
     9.1 Conduct of Business. From the date hereof until the Closing Date,
Seller shall use commercially reasonable efforts to maintain the Assets in the
condition of such Assets as of the date hereof, normal wear and tear and
conversion of Raw Materials and WIP into Finished Goods in the ordinary course
excepted, and shall not transfer any of the Assets except for sales of finished
goods in the ordinary course of business.
     9.2 Stay of Arbitration. The Parties agree the Arbitration shall be stayed
until the earlier to occur of (i) the Closing and (ii) the termination of this
Agreement in accordance with its terms. The Parties shall take any action
necessary to notify the AAA of such stay and will not make any filing with the
AAA during the stay other than such notification.
     9.3 Purchase Requirements Under the Supply Agreement. The Parties hereby
acknowledge and agree that as of April 1, 2006 and thereafter, the Annual
Minimum Purchases requirements and provisions set forth in Section 1.2 of the
MEC Agreement shall not be applicable to or enforceable against Seller with
respect to all periods beginning on or after April 1, 2006; provided, however,
that if this Agreement terminates prior to Closing, Seller shall be obligated to
satisfy its Annual Minimum Purchases requirements set forth in Section 1.2 of
the MEC Agreement for the period on and after April 1, 2006 which would have
otherwise been required without reference to the foregoing for the entire period
beginning on April 1, 2006 and ending upon the expiration or termination of the
MEC Agreement, but without penalty to Seller for failure to timely make any
required minimum purchases during the period from April 1, 2006 until the
termination of this Agreement. Except as provided in the preceding sentence, the
remaining provisions of the MEC Agreement shall remain in effect until the
delivery of the Termination at Closing.
     9.4 Public Announcement. The Parties shall consult with each other before
issuing any press release or making any other public announcement with respect
to this Agreement or the transactions contemplated hereby and, except as
required by any applicable Laws, regulatory requirement or the rules of any
national stock exchange or over the counter trading market upon which their
respective securities are listed for trading, neither of them shall issue any
such press release or make any such public announcement without the prior
written consent of the other.
     9.5 Confidentiality
          (a) Confidentiality Agreement. The Confidentiality Agreement shall
continue in full force and effect and survive the execution of this Agreement,
the Closing, the consummation of the transactions contemplated hereby and by the
Operative Agreements and/or the termination of this Agreement for seven
(7) years. The Parties hereby agree that the term “Evaluation Material,” as used
in the Confidentiality Agreement shall be deemed to include (i) all exhibits,
schedules, certificates and other documents executed or delivered in connection
with this Agreement, the other

-21-

--------------------------------------------------------------------------------

 

Operative Agreements and the consummation of the transactions contemplated
hereby and thereby, (ii) all proprietary and confidential information concerning
Seller and its Subsidiaries, which includes all proprietary and confidential
information of Seller and its Subsidiaries with respect to SMECs, and (iii) all
documents and materials contained in Seller’s data room, or otherwise furnished
or made available (directly or indirectly) to Purchaser or its Subsidiaries;
provided, however, that after the Closing, with respect to Purchaser, the
foregoing shall not apply to such information that (1) is embodied exclusively
in the Assets and (2) is not also related to any business or assets of Seller
(or a Subsidiary thereof) not transferred to Purchaser under this Agreement. In
addition, notwithstanding any other provision of the Confidentiality Agreement,
and this Agreement, Purchaser and its Subsidiaries and Seller and its
Subsidiaries may include this Agreement (excluding schedules thereto) and the
other Operative Agreements in or as an exhibit to any report, form or
registration statement filed with or furnished to the SEC to the extent required
under the Securities Act of 1933 or the Securities Exchange Act of 1934 and the
rules and regulations of the Securities and Exchange Commission promulgated
thereunder. Seller agrees to treat and hold confidential any information
concerning the Assets that is not (other than by virtue of Seller’s violation of
this Section 9.5(a)) generally available to the public; provided, however, that
nothing in this Section 9.5(a) shall prohibit Seller or any of its Subsidiaries
from complying with applicable Laws or the rules and regulations of any national
or foreign stock exchange or over the counter trading market upon which their
respective securities are listed for trading.
          (b) Release of Certain Confidentiality Obligations. Effective as of
the Closing, Seller shall, or shall cause its applicable Subsidiary to, release
the Transferred Employees from any confidentiality obligations they may have to
Seller (or a Subsidiary thereof) with respect to trade secret, confidential and
other information that relates to the Assets, but only to the extent such
information does not also relate to any business or assets of Seller (or a
Subsidiary thereof) not transferred to Purchaser (or a Subsidiary thereof) under
this Agreement.
     9.6 Return of Non-Transferred Assets. If at any time within 12 months
following the Closing Date, Purchaser becomes aware of any assets that were
delivered to Purchaser in connection with this Agreement that are not Assets,
Purchaser shall promptly notify Seller of such assets in its possession, and
shall return (or at Seller’s discretion, destroy) such assets, including all
copies thereof. In any case, Purchaser agrees to keep and treat all such assets
as Evaluation Material in accordance with the terms of the Confidentiality
Agreement.
     9.7 Mail Handling. Following the Closing Date, to the extent that Purchaser
and/or any of its Subsidiaries receives any mail or packages addressed to Seller
or any of its Subsidiaries and delivered to Purchaser and/or any of its
Subsidiaries, Purchaser shall promptly deliver such mail or packages to Seller.
Following the Closing, to the extent Seller or any of its Subsidiaries receives
any mail or packages addressed and delivered to Seller but relating to the
Assets, Seller shall, or shall cause such Subsidiaries to, promptly deliver such
mail or packages to Purchaser.
     9.8 Commercially Reasonable Efforts. Subject to the terms and conditions
hereof, each of the Parties to this Agreement shall use commercially reasonable
efforts to effect the transactions

-22-

--------------------------------------------------------------------------------

 

contemplated hereby and to fulfill and cause to be fulfilled the conditions
precedent to this Agreement, set forth in Article 7.
     9.9 Raw Materials, WIP and Finished Goods.
          (a) Following the execution hereof, Seller shall allow Purchaser and
Coloplast reasonable access to inspect the Raw Materials, WIP and Finished
Goods. The inspection shall occur at a time mutually agreed by the Parties, and
in any event shall occur not later than the third Business Day prior to the
Closing Date. If prior to the Closing, Coloplast concludes and notifies Seller
or Purchaser that:
               (i) any of the Raw Materials or WIP proposed by Seller to be
transferred hereunder are not practicably capable of becoming SMECs that will be
useable and acceptable by Coloplast, or
               (ii) any of the Finished Goods proposed by Seller to be
transferred hereunder are not useable and acceptable to Coloplast, then
Purchaser shall not be obligated to purchase such Raw Materials, WIP or Finished
Goods, as the case may be, and the Cash Consideration will be adjusted
accordingly.
          (b) If on or before the 30th day after the Closing Date, Coloplast
concludes and notifies Purchaser or Seller in writing that
               (i) any of the Raw Materials transferred hereunder are not
practicably capable of becoming SMECs that will be useable and acceptable by
Coloplast and such Raw Materials are returned to Seller in substantially the
same condition as delivered to Purchaser by Seller pursuant to the terms hereof,
or
               (ii) any of the Finished Goods transferred hereunder are not
useable and acceptable to Coloplast and such Finished Goods are returned to
Seller in substantially the same condition as delivered to Purchaser by Seller
pursuant to the terms hereof,
then following the return thereof Seller will refund to Purchaser an amount of
Cash Consideration equal to the amount paid by Purchaser for such returned Raw
Materials or Finished Goods, as the case may be.
          (c) In the event Coloplast provides a written notice to either Party
pursuant to subsection (a) or (b) above, such Party shall promptly notify the
other of such notice from Coloplast.
     9.10 Access to Records. Following the Closing, each party will provide the
other party and such other party’s independent registered public accountants
reasonable access during normal business hours to (and use commercially
reasonable efforts to cause the party’s independent registered public
accountants to provide the other party and the other party’s registered
independent

-23-

--------------------------------------------------------------------------------

 

public accountants reasonable access to) such books, records, workpapers and
data as may be reasonably requested by such other party to allow such other
party and its independent registered public accountants to conduct an audit or
review of the Assets for such periods as such other party may require for their
financial reporting purposes required in connection with any report required to
be filed with the Securities and Exchange Commission under the Securities
Exchange Act of 1934. The parties mutually agree to reasonably assist each other
and their respective independent registered public accountants in conducting any
such audit or review; provided, that each party shall be responsible for the
cost of its own audit and shall pay to the other party the reasonable out of
pocket costs actually incurred by such party to provide the requested
assistance. The parties mutually agree to use their commercially reasonable
efforts to cause their independent registered public accountants to provide each
other with any consents of their independent registered public accountants
necessary for such party to satisfy the financial reporting requirements under
applicable accounting rules of the Securities and Exchange Commission.
     9.11 Payment of Outstanding Invoices The Parties agree that nothing herein
shall affect the obligation of Seller (or the Subsidiaries of Seller, if
applicable) to pay all outstanding invoices from Purchaser related to Purchaser
SMECs that have been shipped to Seller or its Subsidiaries prior to the date
hereof.
ARTICLE 10.
TERMINATION
     10.1 Term. Unless terminated pursuant to Section 10.2 or as otherwise
expressly set forth herein, this Agreement shall continue in full force and
effect until full and final performance of all of the terms herein.
     10.2 Termination. Anything contained in this Agreement to the contrary
notwithstanding, this Agreement may be terminated at any time prior to the
Closing Date:
          (a) by the mutual signed written consent of Purchaser and Seller;
          (b) by either Party if:
               (i) a Law is in effect having the effect of permanently
restraining, enjoining or otherwise prohibiting, in a material respect, the
consummation of the transactions contemplated by this Agreement, which Law is
final and nonappealable; or
               (ii) the Closing shall not have occurred on or before the End
Date; provided, however, that the failure of the Closing to occur is not due to
a material breach hereof by the Party seeking termination;

-24-

--------------------------------------------------------------------------------

 

          (c) by Purchaser: in the event of a Warranty Breach or Covenant Breach
by Seller such that the conditions set forth in Section 7.2(b) or
Section 7.2(c), as applicable, would not be satisfied; provided, however, that
Seller is given notice to cure such breach and does not cure such breach within
30 days after receipt of notice from Purchaser requesting such breach be cured;
or
          (d) by Seller: in the event of a Warranty Breach or Covenant Breach by
Purchaser such that the conditions set forth in Section 7.3(b) or
Section 7.3(c), as applicable, would not be satisfied; provided, however, that
Purchaser is given notice to cure such breach and does not cure such breach
within 30 days after receipt of notice from Seller requesting such breach be
cured.
     10.3 Notice of Termination. Any Party desiring to terminate this Agreement
pursuant to Section 10.2 shall give written notice of such termination to the
other Party.
     10.4 Effect of Termination. In the event that this Agreement shall be
validly terminated pursuant to Section 10.2, this Agreement shall forthwith
terminate and be of no further force and effect; provided, however, that (a) any
agreements contained herein that expressly provide for survival after
termination of this Agreement and Section 9.5(a) and Article 11 (other than
Section 11.1) shall survive the termination hereof unless otherwise agreed by
the Parties in writing, and (b) nothing herein shall relieve any Party from
Liability for any breach of this Agreement or fraud arising prior to such valid
termination. Termination of this Agreement will not be an election of remedies
and shall not limit the Liability of any Party for breach of this Agreement.
ARTICLE 11.
MISCELLANEOUS
     11.1 Survival of Representations. Other than the exclusive warranties
contained in Section 5.7 and Section 6.6, which shall survive indefinitely, the
representations and warranties of the Parties contained in this Agreement, or
any instrument delivered pursuant to this Agreement, shall terminate on the date
that is twelve (12) months after the Closing Date.
     11.2 Notices.
          (a) Any notice or other communication required or permitted to be
given hereunder shall be in writing and shall be delivered in person,
transmitted by facsimile (with acknowledgment of complete transmission together
with notice by telephone (either to a person or by voice mail message) to the
confirmatory telephone numbers below, provided that such confirmatory telephone
numbers shall allow for voice mail messages to be left 24 hours per day, seven
days per week) or sent by registered or certified mail, or recognized overnight
courier, charges prepaid, addressed as follows

     
     If to Seller:
  Mentor Corporation

-25-

--------------------------------------------------------------------------------

 

     
 
  201 Mentor Drive
 
  Santa Barbara, California 94311
 
  Attention: General Counsel
 
  Facsimile No.: (805) 879-6008
 
  Phone: (805) 879-6000 (for confirmation purposes only)
 
   
     with a copy to:
  Wilson Sonsini Goodrich & Rosati
 
  Professional Corporation
 
  650 Page Mill Road
 
  Palo Alto, California 94304
 
  Attention: Bradley L. Finkelstein, Esq.
 
  Facsimile No.: 650-493-6811
 
  Phone: (650) 493-9300 (for confirmation purposes only)
 
   
     If to Purchaser:
  Rochester Medical Corporation
 
  One Rochester Medical Drive
 
  Stewartville, Minnesota 55976
 
  Attention:Anthony J. Conway, President
 
  Facsimile No.: (507) 533-9725
 
  Phone: (507) 533-9600 (for confirmation purposes only)
 
   
     With a copy to:
  Dorsey & Whitney LLP
 
  50 South Sixth Street
 
  Minneapolis, Minnesota 55402
 
  Attention: Robert A. Kuhns, Esq.
 
  Facsimile No.: (612) 340-8738
 
  Phone: (612) 340-2600 (for confirmation purposes only)

          (b) Any such notice or other communication shall be deemed to have
been given and received on the day on which it was personally delivered or
transmitted by facsimile, receipt of complete transmission confirmed (or, if
such day is not a Business Day, on the next following Business Day) or, if
mailed, by registered or certified mail, on the third Business Day following the
date of mailing or, if couriered overnight, on the next following Business Day;
provided, however, that if at the time of mailing or within three Business Days
thereafter, there is or occurs a labor dispute or other event that might
reasonably be expected to disrupt the delivery of documents by mail, any notice
or other communication hereunder shall be delivered or transmitted by means of
overnight courier as set forth above.
          (c) Either Party may change its address for service and/or notice at
any time by giving notice to the other Party in accordance with this
Section 11.2.

-26-

--------------------------------------------------------------------------------

 

     11.3 Currency. All dollar amounts referred to in this Agreement are
expressed in United States dollars.
     11.4 Sections and Headings. Unless otherwise specified herein, any
reference in this Agreement to an Article, Section, paragraph, Schedule or
Exhibit refers to the specified Article, Section or paragraph of, or Schedule or
Exhibit to, this Agreement. In this Agreement, the terms “this Agreement”,
“hereof”, “herein”, “hereunder” and similar expressions refer to this Agreement
and not to any particular part, Article, Section, paragraph or other provision
hereof. The headings contained in this Agreement are intended solely for
convenience and shall not affect the rights of the Parties to this Agreement.
     11.5 Rules of Construction. Unless the context otherwise requires, in this
Agreement:
          (a) words importing the singular number only shall include the plural
and vice versa and words importing the masculine gender shall include the
feminine and neuter genders and vice versa;
          (b) the word “or” may be conjunctive or disjunctive, as the context
may require;
          (c) the words “include”, “includes”, “including” and “particularly”
means “include”, “includes” or “including”, in each case, “without limitation”;
          (d) reference to any agreement or other instrument referred to herein
shall mean such agreement or other instrument as amended, modified, replaced or
supplemented from time to time to the extent permitted by applicable provisions
thereof and by this Agreement;
          (e) reference to any statute shall be deemed to be a reference to such
statute as amended, re enacted or replaced from time to time;
          (f) if there is any conflict or inconsistency between the provisions
contained in the body of this Agreement and those of any Schedule hereto or the
Bill of Sale, the provisions contained in the body of this Agreement shall
prevail;
          (g) time periods within which a payment is to be made or any other
action is to be taken hereunder shall be calculated excluding the day on which
the period commences and including the day on which the period ends; and
          (h) whenever any payment to be made or action to be taken hereunder is
required to be made or taken on a day other than a Business Day, such payment
shall be made or action taken on the next following Business Day.
     11.6 Construction. The Parties acknowledge that their respective legal
counsel have reviewed and participated in settling the terms of this Agreement
and that any rule of construction to

-27-

--------------------------------------------------------------------------------

 

the effect that any ambiguity is to be resolved against the drafting party,
shall not be applicable in the interpretation of this Agreement.
     11.7 Entire Agreement. This Agreement, together with the Operative
Agreements and the schedules and exhibits hereto and thereto, constitutes the
entire agreement between the Parties with respect to the subject matter hereof
and supersedes all prior agreements and understandings, written and oral, with
respect to the subject matter hereof (including the MOU but excluding the
Confidentiality Agreement). There are no conditions, covenants, agreements,
representations, warranties or other provisions, express or implied, collateral,
statutory or otherwise, relating to the subject matter hereof except as herein
provided or as provided in the other documents executed and delivered by the
Parties in connection herewith.
     11.8 Governing Law. This Agreement shall be governed by, and construed in
accordance with, the Laws of the State of Minnesota, without regard to any
conflicts of law principles.
     11.9 Jurisdiction and Venue. Except with respect to the matters subject to
arbitration proceedings set forth in Section 11.12 hereof, the Parties hereto
irrevocably submit to the exclusive jurisdiction of any state or federal court
located in Minneapolis, Minnesota for the purposes of any suit, action or other
proceeding arising out of this Agreement or any transaction contemplated hereby.
Each of the Parties hereto, further agrees that service of any process, summons,
notice or document by U.S. registered mail to such Party’s respective address
set forth in Section 11.2 shall be effective service of process for any action,
suit or proceeding in Minneapolis, Minnesota with respect to any matters to
which it has submitted to jurisdiction as set forth above in the immediately
preceding sentence. Each of the Parties hereto irrevocably and unconditionally
waives any objection to the laying of venue of any action, suit or proceeding
set forth above arising out of this Agreement or the transactions contemplated
hereby, and hereby further irrevocably and unconditionally waives and agrees not
to plead or claim in any such court that any such action, suit or proceeding
brought in any such court has been brought in an inconvenient forum.
     11.10 Waiver of Jury Trial. EACH PARTY HEREBY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAWS, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY WITH
RESPECT TO ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN
CONNECTION WITH THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. Each
Party hereby (a) certifies that no representative, agent or counsel of the other
Party has represented, expressly or otherwise, that the other Party would not,
in the event of litigation, seek to enforce the foregoing waiver, and
(b) acknowledges that it and the other Party have been induced to enter into the
Agreement by, among other things, the mutual waivers and certifications
contained in this Section 11.10.
     11.11 Attorney’s Fees. Except with respect to the matters subject to
arbitration proceedings set forth in Section 11.12 hereof, in the event that
either Party institutes any litigation proceeding under Section 11.9 to
interpret or to enforce this Agreement or any of the Operative Agreements or the
rights of the Parties hereunder, the non-prevailing Party shall reimburse the
prevailing Party in

-28-

--------------------------------------------------------------------------------

 

any such proceeding for the prevailing Party’s attorneys’ fees and all other
reasonable costs and expenses incurred in such action or suit.
     11.12 Arbitration. Any controversy, dispute or claim between the Parties
arising out of a breach or alleged breach of the covenants and licenses granted
pursuant to Article 4 shall be submitted to mandatory binding arbitration. Such
arbitration proceedings shall be held in Minneapolis, Minnesota, in accordance
with the rules then obtaining of the American Arbitration Association, except
that: (i) the arbitrators shall furnish the parties with a written decision
setting forth findings of fact, conclusions of law and an order; (ii) the
arbitration panel shall be composed of persons who are knowledgeable in matters
of technology licensing; and (iii) a stenographic record shall be made of the
arbitration proceedings. Each arbitrator shall be neutral, impartial and
independent of the parties and others having any known interest in the outcome,
shall abide by the Canons of Ethics of the American Bar Association for neutral,
independent arbitrators, and shall have no ex parte communications about the
case. In addition to any monetary award that may be given, the arbitrators may
order or direct either party to do any act required of it by this Agreement or
to refrain from the doing of any act or practice that is contrary to this
Agreement. This Agreement to arbitrate shall be specifically enforceable. Each
Party shall bear its own costs and expense in any such proceedings, but the
arbitrators may, in their discretion and consistent with this Agreement without
regard to Section 11.11, award costs and attorneys’ fees to either or both of
the Parties. Any award rendered by the arbitrators shall be conclusive, final
and binding upon the Parties hereto, and nonappealable to any court or forum.
Judgment upon such award may be entered in any court of competent jurisdiction.
     11.13 Expenses. Except as otherwise provided herein, each Party shall be
responsible for all costs and expenses incurred by it and its Subsidiaries,
respectively, in connection with the negotiation of this Agreement and the
completion of the transactions contemplated hereby, whether or not the
transactions hereby shall have been consummated.
     11.14 Exclusion of Certain Damages. EXCEPT IN THE CASE OF FRAUD, NEITHER
PURCHASER (INCLUDING PURCHASER’S SUBSIDIARIES) NOR SELLER (INCLUDING SELLER’S
SUBSIDIARIES) SHALL BE RESPONSIBLE FOR ANY INCIDENTIAL, SPECIAL, PUNITIVE OR
CONSEQUENTIAL DAMAGES WHATSOEVER, INCLUDING LOSS OF PROFITS OR GOODWILL, IN
CONNECTION WITH ANY ASPECT OF THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY. IN NO EVENT SHALL SELLER’S OR PURCHASER’S AGGREGATE LIABILITY ARISING
OUT OF OR RELATED TO THIS AGREEMENT EXCEED THE AMOUNT OF THE CASH CONSIDERATION,
IT BEING EXPRESSLY UNDERSTOOD THAT LIABILITY FOR CLAIMS FOR INFRINGEMENT OF THE
IPR THAT IS THE SUBJECT OF THE LICENSES GRANTED PURSUANT TO ARTICLE 4 HEREOF
SHALL NOT BE SO LIMITED TO THE CASH CONSIDERATION.
     11.15 Severability. If any provision of this Agreement is determined by a
court of competent jurisdiction to be invalid, illegal or unenforceable in any
respect, such determination shall not impair or affect the validity, legality or
enforceability of the remaining provisions hereof, and

-29-

--------------------------------------------------------------------------------

 

each provision is hereby declared to be separate, severable and distinct. To the
extent that any such provision is found to be invalid, illegal or unenforceable,
the Parties shall act in good faith to substitute for such provision, to the
extent possible and as necessary, a new provision with content and purpose as
close as possible to the provision so determined to be invalid, illegal or
unenforceable.
     11.16 Successors and Assigns; No Third Party Beneficiaries. This Agreement
shall inure to the benefit of and shall be binding on and enforceable by the
Parties and their respective successors and permitted assigns. Neither Party may
assign any of its rights or obligations hereunder, by operation of law or
otherwise, without the prior written consent of the other Party; provided, that
either Party may assign any of its rights or obligations under this Agreement
pursuant to a Change of Control of such Party, provided that the assignee agrees
to be bound by the terms and provisions of this Agreement; provided further that
the covenants, licenses, rights and obligations set forth in Article 4 hereof
shall be assignable only as and to the extent specifically provided in
Section 4.6. Except with respect to the covenants, licenses, rights and
obligations set forth in Article 4 hereof which shall be assignable only as and
to the extent specifically provided in Section 4.6, each Party and its
Subsidiaries shall have the right without consent of the other Party to assign
their rights under this Agreement as collateral to their respective lenders
after reasonable prior notice to the other Party. Any purported assignment in
violation of this Section 11.16 shall be void and no assignment by Purchaser or
Seller will relieve Purchaser or Seller from any of their respective obligations
hereunder. Nothing herein expressed or implied is intended or should be
construed to confer upon or give to any Person other than the Parties hereto and
their respective successors and permitted assigns any rights or remedies under
or by reason of this Agreement; provided that Coloplast shall be deemed an
express third party beneficiary of Section 4.2(b) hereof with rights of
enforcement. Except with respect to Coloplast’s rights pursuant to
Section 4.2(b) hereof and with respect to the Parties’ respective successors and
permitted assigns, third party enforcement of this Agreement is barred.
     11.17 Amendments and Waiver. No amendment, modification or waiver of, or
supplement to, any provision of this Agreement shall be binding on any Party
unless consented to in writing by such Party. No waiver of any provision of this
Agreement shall constitute a waiver of any other provision, and no waiver shall
constitute a continuing waiver unless otherwise provided.
     11.18 Counterparts. This Agreement may be executed in counterparts, each of
which shall constitute an original and all and all such counterparts together
shall be deemed an original of this Agreement.
[The remainder of this page intentionally left blank.]

-30-

--------------------------------------------------------------------------------

 

     IN WITNESS WHEREOF, each of Purchaser and Seller has caused this Agreement
to be executed by its duly authorized representative as of the date and year
first written above.

                  MENTOR CORPORATION       ROCHESTER MEDICAL CORPORATION
 
               
By:
  /s/ Joshua H. Levine       By:   /s/ Anthony J. Conway
 
                Print name: Joshua H. Levine       Print name: Anthony J. Conway
Title: President & CEO       Title: CEO

Signature Page to Asset Purchase Agreement