Form 8-K Current Report
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report June 7, 1996
(Date of earliest event reported)
Molecular Devices Corporation
(exact name of registrant as specified in its charter)
DELAWARE
(State or other jurisdiction of incorporation)
0-27316 94-2914362
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(Commission File Number) (IRS Employer Identification Number)
1311 Orleans Drive, Sunnyvale, California 94089
(Address of principal executive offices) (Zip Code)
(408) 747-1700
(Registrant's telephone number, including area code)
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Item 2. Acquisition or Disposition of Assets
On June 7, 1996 Molecular Devices Corporation (the "Company") acquired all of
the outstanding shares of common stock of NovelTech Systems, Inc. ("NovelTech")
for an aggregate purchase price of $4,500,000 in cash and stock pursuant to the
terms and conditions of a Stock Purchase Agreement dated June 7, 1996 (the
"Agreement") among the Company, NovelTech, and Brad Neagle and Kirk Schroeder
(the "Selling Shareholders"). The Agreement is filed herewith as Exhibit 2.1.
The Company issued a press release announcing the acquisition, which is filed
herewith as Exhibit 99.1.
The Selling Shareholders had no material relationship with the Company or any of
its respective officers, directors, associates of such officers or directors, or
affiliates prior to the transaction. Except for the historical information
contained herein, the material herein contains forward-looking statements that
involve risks and uncertainties as well as the other risks detailed from time to
time in the Company's SEC reports, including the Registration Statement on Form
S-1 (File No. 33-98926), as amended, the report on Form 10-K for the year ended
December 31, 1995 and the report on Form 10-Q for the quarter ended March 31,
1996.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
a) Financial Statements. At the time of this filing it is impracticable to
provide the required financial statements for NovelTech. The required
financial statements will be filed as an amendment to this report on Form
8-K as soon as practicable, but not later than 60 days after the date of
filing of this report with the Securities and Exchange Commission.
b) Pro Forma Financial Information. At the time of this filing it is
impracticable to file the required pro forma financial information. The
Company will file the required pro forma financial information as an
amendment to this report on Form 8-K as soon as practicable, but not
later than 60 days after the date of filing of this report with the
Securities and Exchange Commission.
c) Exhibits.
2.1 Stock Purchase Agreement dated June 7, 1996, among Molecular
Devices Corporation, NovelTech Systems, Inc., and Brad Neagle
and Kirk Schroeder (with Exhibit A, Certain Definitions)(1)
99.1 Press release dated June 10, 1996
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned duly authorized.
Molecular Devices Corporation
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(Registrant)
By Andrew Galligan
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Signature
Date June 21, 1996
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(1) Remaining exhibits omitted pursuant to Item 601(b)(2) of Regulation S-K. The
Company hereby undertakes to furnish supplementary copies of any of the omitted
exhibits upon request of the Commission.
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INDEX TO FINANCIAL STATEMENTS AND EXHIBITS
Exhibit
Sequential
Number Description
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2.1 Stock Purchase Agreement dated June 7, 1996, among Molecular
Devices Corporation, NovelTech Systems, Inc., and Brad Neagle
and Kirk Schroeder (with Exhibit A, Certain Definitions)(1)
99.1 Press release dated June 10, 1996
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(1) Remaining exhibits omitted pursuant to Item 601(b)(2) of Regulation S-K. The
Company hereby undertakes to furnish supplementary copies of any of the omitted
exhibits upon request of the Commission.
Exhibit 2.1 Stock Purchase Agreement, dated June 7, 1996
================================================================================
STOCK PURCHASE AGREEMENT
among:
MOLECULAR DEVICES CORPORATION,
a Delaware corporation,
NOVELTECH SYSTEMS, INC.,
a Michigan corporation,
BRAD NEAGLE
and
KIRK SCHROEDER
Dated as of June 7, 1996
================================================================================
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TABLE OF CONTENTS
Page
Section 1. SALE AND PURCHASE OF SHARES; RELATED TRANSACTIONS........... 1
1.1 Sale and Purchase of Shares................................. 1
1.2 Purchase Price.............................................. 1
1.3 Closing..................................................... 2
Section 2. REPRESENTATIONS AND WARRANTIES OF NOVELTECH AND THE SELLING
SHAREHOLDERS........................................... 3
2.1 Due Organization; No Subsidiaries; Etc...................... 3
2.2 Articles of Incorporation and Bylaws; Records............... 4
2.3 Capitalization, Etc......................................... 4
2.4 Financial Statements........................................ 5
2.5 Real Property............................................... 6
2.6 Proprietary Assets.......................................... 6
2.7 Contracts................................................... 7
2.8 Compliance with Legal Requirements.......................... 8
2.9 Governmental Authorizations................................. 9
2.10 Tax Matters................................................. 9
2.11 Benefit Plans; ERISA........................................ 9
2.12 Environmental Matters....................................... 10
2.13 Proceedings; Orders......................................... 10
2.14 Authority; Binding Nature of Agreements..................... 11
2.15 Non-Contravention; Consents................................. 11
2.16 Brokers..................................................... 12
2.17 Selling Shareholders........................................ 12
2.18 Full Disclosure............................................. 14
Section 3. REPRESENTATIONS AND WARRANTIES OF PURCHASER................. 14
3.1 Due Organization............................................ 14
3.2 SEC Filings. ............................................... 14
3.3 Authority; Binding Nature of Agreement...................... 15
3.4 1933 Act.................................................... 15
Section 4. COVENANTS OF THE PARTIEs.................................... 15
4.1 Filings and Consents........................................ 15
4.2 Noncompetition Agreement.................................... 15
4.3 General Release............................................. 17
4.4 Cooperation with Termination of Pension Plan................ 18
4.5 Registration of Shares.......................................18
Section 5. MISCELLANEOUS PROVISIONS.................................... 19
5.1 Survival of Representations and Covenants; Indemnification.. 19
5.2 Further Assurances.......................................... 20
5.3 Fees and Expenses........................................... 20
5.4 Attorneys' Fees............................................. 21
5.5 Notices..................................................... 21
5.6 Headings.................................................... 22
5.7 Counterparts................................................ 22
5.8 Governing Law............................................... 22
5.9 Successors and Assigns...................................... 22
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5.10 Remedies Cumulative......................................... 22
5.11 Waiver...................................................... 22
5.12 Amendments.................................................. 23
5.13 Severability................................................ 23
5.14 Parties in Interest......................................... 23
5.15 Entire Agreement............................................ 23
5.16 Construction................................................ 23
EXHIBITS
Exhibit A: Certain Definitions
Exhibit B: Promissory Note
Exhibit C: Selling Shareholders Closing Certificate
Exhibit D: Form of Employment Agreement
Exhibit E: Form of opinion letter of Seyburn, Kahn, Ginn, Bess, Deitch &
Serlin
Exhibit F: Form of opinion letter of Cooley Godward Castro Huddleson & Tatum
Exhibit G: Territory (Non-competition)
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STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (the "Agreement") is entered
into as of June 7, 1996, by and among MOLECULAR DEVICES CORPORATION, a Delaware
corporation (the "Purchaser"), NOVELTECH SYSTEMS, INC., a Michigan corporation
("NovelTech"), and BRAD NEAGLE and KIRK SCHROEDER, individuals (individually a
"Selling Shareholder" and together the "Selling Shareholders"). Certain
capitalized terms used in this Agreement are defined in Exhibit A.
RECITALS
A. The Selling Shareholders own all of the outstanding shares of the
common stock of NovelTech (the "Shares").
B. The Selling Shareholders wish to sell the Shares to the Purchaser on
the terms set forth in this Agreement and the Purchaser desires to acquire the
Shares on such terms and conditions.
AGREEMENT
The Purchaser, NovelTech and the Selling Shareholders,
intending to be legally bound, agree as follows:
1. SALE AND PURCHASE OF SHARES; RELATED TRANSACTIONS.
1.1 Sale and Purchase of Shares. At the Closing, the Selling
Shareholders shall sell, assign, transfer and deliver the Shares to the
Purchaser, and the Purchaser shall purchase the Shares from the Selling
Shareholders, on the terms and subject to the conditions set forth in this
Agreement.
1.2 Purchase Price. The aggregate purchase price payable by the
Purchaser for the Shares (the "Purchase Price") shall be as follows:
(a) A One Million Five Hundred Thousand Dollar ($1,500,000)
cash payment to be made at Closing.
(b) A One Million Five Hundred Thousand Dollar ($1,500,000)
cash payment on January 2, 1997 or upon completion of the Technology Transfer
and the documentation of the Trade Secrets pursuant to Section 2.6(g) below,
whichever is later (the "Second Payment Date") as evidenced by a Promissory Note
attached hereto as Exhibit B. This payment is subject to adjustment for any
breaches of representations and warranties occurring between the Closing and the
Second Payment Date and any other adjustments made pursuant to Section 5.1
below. The Selling Shareholders and the Purchaser covenant with each other to
use their best efforts to complete the Technology Transfer on or about November
1, 1996. In the event that Purchaser does not deem the Technology Transfer and
the documentation of the Trade Secrets pursuant to Section 2.6(g) below
completed by November 1, 1996,
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Purchaser shall notify in writing the Selling Shareholders advising them of the
shortfall or the necessary steps required to complete said Technology Transfer
and Trade Secret documentation, and a similar written notice shall be provided
on or about the first day of each subsequent calendar month until said
Technology Transfer and Trade Secret documentation are complete. The Purchaser
shall provide the Selling Shareholders with written notice of any breaches or
adjustments hereunder, and the Selling Shareholders shall have two weeks to cure
such breaches to the reasonable satisfaction of Purchaser (which may be extended
to four weeks in the event that the cure cannot be reasonably completed within
such two week period, as long as the cure has been diligently commenced promptly
upon receipt of notice).
(c) An aggregate of 146,342 shares of Common Stock of
Purchaser authorized for issuance at Closing (the "Purchaser Shares") as
evidenced by an irrevocable instruction from the Purchaser to its transfer agent
to issue promptly such Purchaser Shares.
(d) The aggregate purchase price, and each component thereof
including the Purchaser Shares, shall be allocated equally between the Selling
Shareholders.
1.3 Closing.
(a) The closing of the sale of the Shares to the Purchaser
(the "Closing") shall take place at the offices of the Cooley Godward Castro
Huddleson Castro & Tatum, 5 Palo Alto Square, Palo Alto, California at 3:00 p.m.
(California time) on June 7, 1996 (or at such other place or time as the
Purchaser and the Selling Shareholders may jointly designate). For purposes of
this Agreement, "Scheduled Closing Time" shall mean the time and date as of
which the Closing is required to take place pursuant to this Section 1.3(a); and
"Closing Date" shall mean the time and date as of which the Closing actually
takes place.
(b) At the Closing (i) the Selling Shareholders shall deliver
to the Purchaser the stock certificate(s) representing the Shares, duly endorsed
(or accompanied by duly executed stock powers), and the Purchaser shall pay the
portion of Purchase Price to the Selling Shareholder as contemplated by Section
1.2(a) and cause the issuance by the transfer agent of Purchaser's Common Stock
of the Purchaser Shares pursuant to Section 1.2(c); (ii) the Selling
Shareholders shall execute and deliver to the Purchaser a certificate in the
form of the Exhibit C attached hereto (the "Selling Shareholders' Closing
Certificate") setting forth the Selling Shareholders' representations and
warranties that (A) each of the representations and warranties made by NovelTech
and the Selling Shareholders in this Agreement was accurate and complete in all
respects as of the Closing Date as if made on the Closing Date, (B) each of the
covenants and obligations that NovelTech and the Selling Shareholders are
required to have complied with or performed pursuant to this Agreement at or
prior to the Closing has been duly complied with and performed in all respects,
(C) each of the conditions for Closing set forth in this Agreement has been
satisfied in all respects, and (D) each of the documents attached thereto,
including the resolutions of the Board of Directors and Shareholders of
NovelTech required to approve the Agreement and terminate the Pension Plan and
the articles of incorporation and bylaws, are true and correct; (iii) each
Selling
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Shareholder shall enter into an Employment Agreement (the "Employment
Agreement") as set forth in Exhibit D; and (iv) each Selling Shareholder shall
resign as a director and officer of NovelTech.
(c) At the Closing, Purchaser shall receive (i) an opinion
letter from Seyburn, Kahn, Ginn, Bess, Deitch & Serlin dated the Closing Date,
in the form of Exhibit E; and (ii) such other documents as the Purchaser may
request in good faith for the purpose of (A) evidencing the accuracy of any
representation or warranty made by NovelTech or the Selling Shareholders, (B)
evidencing the compliance by NovelTech or the Selling Shareholders with or the
performance by NovelTech or the Selling Shareholders of, any covenant or
obligation set forth in this Agreement, or (C) otherwise facilitating the
consummation or performance of any of the Transactions.
(d) At the Closing, Purchaser shall provide the Selling
Shareholders (i) an opinion letter from Cooley Godward Castro Huddleson & Tatum,
dated the Closing Date, in the form of Exhibit F; and (ii) such other documents
as the Selling Shareholders may request in good faith for the purpose of (A)
evidencing the accuracy of any representation or warranty made by Purchaser, (B)
evidencing the compliance by Purchaser with, or the performance by Purchaser of,
any covenant or obligation set forth in this Agreement, or (C) otherwise
facilitating the consummation or performance of any of the Transactions.
2. REPRESENTATIONS AND WARRANTIES OF NOVELTECH AND THE SELLING
SHAREHOLDERS.
NovelTech and each of the Selling Shareholders jointly and
severally represent and warrant, except as contained in the NovelTech Disclosure
Schedule separately delivered to the Purchaser by NovelTech and the Selling
Shareholders, referenced herein, to and for the benefit of the Purchaser, as
follows:
2.1 Due Organization; No Subsidiaries; Etc.
(a) NovelTech is a corporation duly organized, validly
existing and in good standing under the laws of the State of Michigan and has
all necessary power and authority (i) to conduct its business in the manner in
which its business is currently being conducted and in the manner in which its
business is proposed to be conducted; (ii) to own and use its assets and
properties in the manner in which its assets and properties are currently owned
and used and in the manner in which its assets and properties are proposed to be
owned and used; and (iii) to perform its obligations under all NovelTech
Contracts.
(b) NovelTech has never conducted any business under or
otherwise used, for any purpose or in any jurisdiction, any fictitious name,
assumed name, trade name or other name, other than the name "NovelTech Systems,
Inc."
(c) To the best Knowledge of NovelTech and the Selling
Shareholders, NovelTech has not, nor has ever been, required to be qualified,
authorized, registered or licensed to do business as a foreign corporation in
any
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jurisdiction except where the failure to so qualify would not have a material
adverse effect on NovelTech.
(d) Part 2.1 of the NovelTech Disclosure Schedule accurately
sets forth (i) the names of the members of NovelTech's board of directors, (ii)
the names of the members of each committee of NovelTech's board of directors,
and (iii) the names and titles of NovelTech's officers.
(e) Except as contemplated by this Agreement, NovelTech has
not ever approved, or commenced any proceeding or made any election
contemplating, the dissolution or liquidation of NovelTech or the winding up or
cessation of NovelTech's business or affairs.
(f) NovelTech has no subsidiaries, and NovelTech has never
owned, beneficially or otherwise, any shares or other securities of, or any
direct or indirect interest of any nature in, any Entity. NovelTech has never
been a party or bound by any joint venture agreement, partnership agreement,
profit-sharing agreement, cost-sharing agreement, loss-sharing agreement or
similar Contract.
2.2 Articles of Incorporation and Bylaws; Records.
(a) NovelTech has delivered to the Purchaser or its counsel
accurate and complete copies of (i) NovelTech's articles of incorporation and
bylaws, including all amendments thereto; (ii) NovelTech's stock records; and
(iii) the minutes and other records of the meetings and other proceedings
(including any actions taken by written consent or otherwise without a meeting)
of the stockholders of NovelTech, the board of directors of NovelTech and all
committees of the board of directors of NovelTech. There have been no meetings
or other proceedings of the stockholders of NovelTech, the board of directors of
NovelTech or any committee of the board of directors of NovelTech that are not
fully reflected in such minutes or other records.
(b) To the best Knowledge of NovelTech and the Selling
Shareholders, (i) there has not been any violation of any of the provisions of
NovelTech's certificate of incorporation or bylaws or of any resolution adopted
by NovelTech's stockholders, NovelTech's board of directors or any committee of
NovelTech's board of directors; and (ii) no event has occurred, and no condition
or circumstance exists, that might (with or without notice or lapse of time)
constitute or result directly or indirectly in such a violation.
(c) The books of account, stock records, minute books and
other records of NovelTech are accurate, up-to-date and complete, and have been
maintained in accordance with sound and prudent business practices. All of the
records of NovelTech are or as of the Closing will be in the actual possession
and direct control of NovelTech.
2.3 Capitalization, Etc.
(a) The authorized capital stock of NovelTech consists of
60,000 shares of common stock, of which 10,000 shares (constituting all of the
Shares) have
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been issued, are outstanding and are held of record and beneficially owned by
the Selling Shareholders, in the following amounts: Brad Neagle, 5,000 shares
and Kirk Schroeder, 5,000 shares. Except for the foregoing, there is no (i)
outstanding subscription, option, call, warrant or right (whether or not
currently exercisable) to acquire any shares of the capital stock or other
securities of NovelTech; (ii) outstanding security, instrument or obligation
that is or may become convertible into or exchangeable for any shares of the
capital stock or other securities of NovelTech; (iii) Contract under which
NovelTech is or may become obligated to sell or otherwise issue any shares of
its capital stock or any other securities or that creates or grants to any
Person, or provides for the creation or grant of, any stock appreciation right,
phantom stock right or similar right or interest; or (iv) condition or
circumstance that may directly or indirectly give rise to or provide a basis for
the assertion of a claim by any Person to the effect that such Person is
entitled to acquire or receive any shares of capital stock or other securities
of NovelTech. NovelTech has never repurchased, redeemed or otherwise reacquired
any shares of capital stock or other securities.
(b) The Selling Shareholders have, and the Purchaser will
acquire at the Closing, good and valid title to the Shares free and clear of any
Encumbrances.
(c) All of the Shares (i) have been duly authorized and
validly issued, (ii) are fully paid and non-assessable, and (iii) have been
issued in full compliance with all applicable securities laws and other
applicable Legal Requirements. The Selling Shareholders have delivered to the
Purchaser accurate and complete copies of the stock certificates evidencing the
Shares.
2.4 Financial Statements.
(a) NovelTech has delivered to the Purchaser the following
financial statements (collectively, the "NovelTech Financial Statements"): (i)
the unaudited balance sheet of NovelTech as of March 31, 1996, and the related
unaudited statement of operations of NovelTech for the year then ended; and (ii)
the unaudited balance sheet of NovelTech as of May 23, 1996 (the "Unaudited
Interim Balance Sheet"), and the related unaudited statements of operations and
cash flows of NovelTech for the partial two months then ended.
(b) All of the NovelTech Financial Statements are accurate and
complete in all material respects. The financial statements referred to in
Section 2.4(a) present fairly the financial position of NovelTech as of the
respective dates thereof and the results of operations of NovelTech for the
periods covered thereby. NovelTech owns, and has good, valid and marketable
title to, all assets purported to be owned by it reflected on the NovelTech
Financial Statements. Except as set forth in Part 2.4 of the NovelTech
Disclosure Schedule, all existing accounts receivable of NovelTech (including
those accounts receivable reflected on the Unaudited Interim Balance Sheet that
have not yet been collected) (i) represent valid obligations of customers of
NovelTech arising from bona fide transactions entered into in the Ordinary
Course of Business, and (ii) are current and to the best Knowledge of NovelTech
and the Selling Shareholders are collectible in full in the Ordinary Course of
Business.
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(c) Since NovelTech's formation, (i) there has not been any
loss, damage or destruction to, or any interruption in the use of, any of
NovelTech's assets (whether or not covered by insurance), except for such
losses, damage, interruptions that are not material in the aggregate; (ii)
NovelTech has not (A) declared, accrued, set aside or paid any dividend or made
any other distribution in respect of any shares of capital stock, (B)
repurchased, redeemed or otherwise reacquired any shares of capital stock or
other securities or (C) made any other payment to or on behalf of any of the
Selling Shareholders except as set forth in Part 2.4 of the NovelTech Disclosure
Schedule; (iii) NovelTech has not incurred, assumed or otherwise become subject
to any Liability, other than those identified on the NovelTech Financial
Statements or the NovelTech Disclosure Schedule; (iv) NovelTech has not entered
into any transaction, become a party to any Contract or taken any other action
outside the Ordinary Course of Business; and (v) NovelTech has not agreed,
committed or offered (in writing or otherwise), and has not attempted, to take
any of the actions referred to in clauses (i) through (iv) above.
2.5 Real Property. NovelTech does not own any real property or
any interest in real property, except for the leaseholds created under the real
property leases identified in Part 2.5 of the NovelTech Disclosure Schedule.
NovelTech enjoys peaceful and undisturbed possession of such premises.
2.6 Proprietary Assets.
(a) Part 2.6(a) of the NovelTech Disclosure Schedule contains
a complete and accurate list and summary description, including any royalties
paid or received by NovelTech, of all agreements relating to the Proprietary
Assets to which NovelTech is a party or by which NovelTech is bound, except for
any license implied by the sale of a product and common software programs with a
value of less than $500 each. There are no outstanding and, to the best
Knowledge of NovelTech and the Selling Shareholders, no threatened disputes or
disagreements with respect to any such agreement.
(b) Except for those Proprietary Assets identified as
in-licensed, NovelTech is the owner of all right, title, and interest in and to
each of the Proprietary Assets, free and clear of any Encumbrances, and has the
right to use without payment to a third party all such Proprietary Assets.
NovelTech owns or has valid licenses (identified in paragraph (a) above) to all
of the Proprietary Assets (including patents and Trade Secrets, as hereinafter
defined) necessary or used to enable NovelTech to conduct its business in the
manner in which its business is currently being conducted and it is proposed to
be conducted, free and clear of any Encumbrances.
(c) NovelTech and the Selling Shareholders have taken all
reasonable measures and precautions necessary to protect the confidentiality and
value of each Proprietary Asset identified or required to be identified in Part
2.6(a) of the NovelTech Disclosure Schedule.
(d) Except as described in Part 2.6(d) of the NovelTech
Disclosure Schedule, NovelTech is not infringing, causing the infringement or
aiding the infringement, and has not at any time infringed, caused the
infringement, or aided
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the infringement, or received any notice or other communication (in writing or
otherwise) of any actual, alleged, possible or potential infringement of, any
Proprietary Asset owned or used by any other Person. To the best Knowledge of
NovelTech and the Selling Shareholders, no other Person is infringing, and no
Proprietary Asset owned or used by any other Person infringes or conflicts with,
any Proprietary Asset owned or used by NovelTech.
(e) The Selling Shareholders are now, and have always been,
the only employees of NovelTech. Except as disclosed on Part 2.6(e) of the
NovelTech Disclosure Schedule, NovelTech has not employed any other employee,
consultant or agent for the development or manufacture of its products or the
Proprietary Rights (including the Patents and the Trade Secrets). All employees,
consultants and other agents of NovelTech, including the Selling Shareholders,
having any claim of inventorship or ownership in the Proprietary Assets
(including Patents and Trade Secrets), have executed written agreements with
NovelTech that assign to NovelTech all rights and full and complete title to any
and all Proprietary Assets and any and all inventions, improvements,
discoveries, or information relating to the business of NovelTech and have
released all claims of ownership in and rights to practice or license the same.
To the best Knowledge of NovelTech and the Selling Shareholders, no employee of
NovelTech, including the Selling Stockholders, has entered into any agreement
that restricts or limits in any way the scope or type of work in which the
employee may be engaged or requires the employee to transfer, assign, or
disclose information concerning his work to anyone other than NovelTech.
(f) Part 2.6(f) of the NovelTech Disclosure Schedule contains
a complete and accurate list of all patents and patent applications owned by or
licensed to NovelTech (collectively, "Patents"). Except as disclosed in Part
2.6(f) of the NovelTech Disclosure Schedule, all of the Patents are currently in
compliance with formal legal requirements (including payment of filing,
examination, and maintenance fees and proofs of working or use), are valid and
enforceable, and are not subject to any maintenance fees or taxes or actions
falling due within ninety days after the Closing Date. No Patents have been or
are now involved in any interference, reissue, reexamination, or opposing
proceeding. To the best of Selling Shareholders' Knowledge, there is no
potentially interfering patent or patent application of any third party.
(g) With respect to all know-how, trade secrets, confidential
information, software, technical information, process technology, plans,
drawings, and blue prints owned or licensed to NovelTech (collectively, "Trade
Secrets"), the documentation, if any, relating to each Trade Secret is or will,
no later than the Second Payment Date be, current, accurate, and sufficient in
detail and content to identify and explain it and to allow its full and proper
use without reliance on the special Knowledge or memory of others. NovelTech and
the Selling Shareholders have taken all reasonable precautions to protect the
secrecy, confidentiality, and value of the Trade Secrets.
2.7 Contracts. Part 2.7 of the NovelTech Disclosure Schedule identifies
and provides an accurate and complete description of each NovelTech Contract
that requires payment by or to NovelTech of more than $10,000, except for any
Excluded Contract. NovelTech has delivered to the Purchaser accurate and
complete copies of
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all NovelTech Contracts identified in Part 2.7 of the NovelTech Disclosure
Schedule, including all amendments thereto. To the best Knowledge of NovelTech
and the Selling Shareholders, each NovelTech Contract is valid and in full force
and effect, and is enforceable by NovelTech in accordance with its terms. To the
best of Knowledge of NovelTech and the Selling Shareholders, except as set forth
in Part 2.7 of the NovelTech Disclosure Schedule, (i) no Person has violated or
breached, or declared or committed any default under, or indicate an inability
to perform or a desire to renegotiate, any NovelTech Contract; (ii) no event has
occurred, and no circumstance or condition exists, that would (with or without
notice or lapse of time) (A) result in a violation or breach of any of the
provisions of any NovelTech Contract by NovelTech, (B) give any Person the right
to declare a default or exercise any remedy under any NovelTech Contract, (C)
give any Person the right to accelerate the maturity or performance of any
NovelTech Contract, or (D) give any Person the right to cancel, terminate or
modify any NovelTech Contract; (iii) NovelTech has not received any notice or
other communication (in writing or otherwise) regarding any actual, alleged,
possible or potential violation or breach of, or default under, any NovelTech
Contract; and (iv) NovelTech has not waived any of its rights under any
NovelTech Contract. To the best Knowledge of NovelTech and the Selling
Shareholders, the performance of the NovelTech Contracts will not result in any
violation of or failure to comply with any Legal Requirement, except where such
violation or noncompliance would not have a material adverse effect on
NovelTech. The Contracts identified in Part 2.7 of the NovelTech Disclosure
Schedule and the Excluded Contracts collectively constitute all of the Contracts
necessary to enable NovelTech to conduct its business in the manner in which its
business is currently being conducted and is proposed to be conducted. Except as
set forth in Part 2.7 of the NovelTech Disclosure Schedule, NovelTech is not a
party to or bound by, and NovelTech has never been a party to or bound by, any
employment agreement or any union contract, collective bargaining agreement or
similar Contract. To the best Knowledge of NovelTech and the Selling
Shareholders, no officer or employee of NovelTech is subject to any Order that
prohibits such officer or employee from engaging in or continuing any conduct,
activity or practice relating to NovelTech's business.
2.8 Compliance with Legal Requirements. To the best Knowledge of
NovelTech and the Selling Shareholders, except as set forth in Part 2.8 of the
NovelTech Disclosure Schedule, (i) NovelTech is in full compliance with each
Legal Requirement that is applicable to it or to the conduct of its business or
the ownership or use of any of its assets; (ii) NovelTech has at all times been
in full compliance with each Legal Requirement that is or was applicable to it
or to the conduct of its business or the ownership or use of any of its assets;
(iii) no event has occurred, and no condition or circumstance exists, that would
(with or without notice or lapse of time) constitute or result directly or
indirectly in a violation by NovelTech of, or a failure on the part of NovelTech
to comply with, any Legal Requirement; and (iv) NovelTech has never received, at
any time, any notice or other communication (in writing or otherwise) from any
Governmental Body or any other Person regarding (A) any actual, alleged,
possible or potential violation of, or failure to comply with, any Legal
Requirement, or (B) any actual, alleged, possible or potential obligation on the
part of NovelTech to undertake, or to bear all or any portion of the cost of,
any cleanup or any remedial, corrective or response action of any nature; in
each case, except for
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such non-compliance or violation that would not have a material adverse effect
on NovelTech.
2.9 Governmental Authorizations. NovelTech has delivered to the
Purchaser accurate and complete copies of all of the Governmental Authorizations
identified in Part 2.9 of the NovelTech Disclosure Schedule, including all
renewals thereof and all amendments thereto and, to the best Knowledge of
NovelTech and the Selling Shareholders, they constitute all of the Governmental
Authorizations necessary (x) to enable NovelTech to conduct its business in the
manner in which its business is currently being conducted, and (y) to permit
NovelTech to own and use its assets in the manner in which they are currently
owned and used. To the best Knowledge of NovelTech and the Selling Shareholders,
each Governmental Authorization identified or required to be identified in Part
2.9 of the NovelTech Disclosure Schedule is valid and in full force and effect.
To the best Knowledge of NovelTech and the Selling Shareholders, except as set
forth in Part 2.9 of the NovelTech Disclosure Schedule, (i) NovelTech and its
employees are, and have at all times been, in full compliance with all of the
terms and requirements of each Governmental Authorization, except for
noncompliance that would not have a material adverse effect on NovelTech; (ii)
no event has occurred, and no condition or circumstance exists, that might (with
or without notice or lapse of time) (A) constitute or result directly or
indirectly in a violation of or a failure to comply with any term or requirement
of any Governmental Authorization identified or required to be identified in
Part 2.16 of the NovelTech Disclosure Schedule, or (B) result directly or
indirectly in the revocation, withdrawal, suspension, cancellation, termination
or modification of any Governmental Authorization, except for noncompliance that
would not have a material adverse effect on NovelTech; (iii) neither NovelTech
nor any of its employees has ever received any notice or other communication (in
writing or otherwise) from any Governmental Body or any other Person regarding
(A) any actual, alleged, possible or potential violation of or failure to comply
with any term or requirement of any Governmental Authorization or (B) any
actual, proposed, possible or potential revocation, withdrawal, suspension,
cancellation, termination or modification of any Governmental Authorization; and
(iv) all applications required to have been filed for the renewal of the
Governmental Authorizations have been duly filed on a timely basis with the
appropriate Governmental Bodies, and each other notice or filing required to
have been given or made with respect to such Governmental Authorizations has
been duly given or made on a timely basis with the appropriate Governmental
Body.
2.10 Tax Matters. Except as set forth in Section 2.10 of the NovelTech
Disclosure Statement, each Tax required to have been paid, or claimed by any
Governmental Body to be payable, by NovelTech (whether pursuant to any Tax
Return or otherwise) has been duly paid in full or on a timely basis. Any Tax
required to have been withheld or collected by NovelTech has been duly withheld
and collected; and (to the extent required) each such Tax has been paid to the
appropriate Governmental Body.
2.11 Benefit Plans; ERISA. Part 2.11 of the NovelTech Disclosure
Schedule provides a complete list of each Current Benefit Plan. NovelTech has
never established, adopted, maintained, sponsored, contributed to, participated
in or incurred any Liability with respect to any Employee Benefit Plan, except
for the
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NovelTech Plans identified in Part 2.11 of the NovelTech Disclosure Schedule;
and NovelTech does not currently provide any other benefit that may not be
discontinued without further liability upon not more than thirty (30) days
notice, except as set forth in Part 2.11 of the NovelTech Disclosure Schedule.
No NovelTech Plan (i) provides or provided any benefit guaranteed by the Pension
Benefit Guaranty Corporation; (ii) is or was a "multiemployer plan" as defined
in Section 4001(a)(3) of ERISA; or (iii) is or was subject to the minimum
funding standards of Section 412 of the Code or Section 302 of ERISA. To the
best Knowledge of NovelTech and the Selling Shareholders, each Current Benefit
Plan has been and is being operated and administered in full compliance with the
provisions thereof and of ERISA, except where failure to do so would not have a
material adverse effect upon NovelTech, and each NovelTech Plan has at all times
been substantially operated and administered in full compliance with the
provisions thereof and of ERISA. To the best Knowledge of NovelTech and the
Selling Shareholders, each contribution or other payment that is required to
have been accrued or made under or with respect to any NovelTech Plan has been
duly accrued or made on a timely basis. Except as set forth in Part 2.11 of the
NovelTech Disclosure Schedule, NovelTech has not knowingly advised any of its
employees (in writing or otherwise) that it intends or expects to establish or
sponsor any Employee Benefit Plan or to provide or make available any fringe
benefit or other benefit of any nature in the future.
2.12 Environmental Matters. To the best Knowledge of NovelTech and the
Selling Shareholders, NovelTech is not liable or potentially liable for any
response cost or natural resource damages under Section 107(a) of CERCLA, or
under any other similar Legal Requirement, at or with respect to any site. To
the best Knowledge of NovelTech and the Selling Shareholders, NovelTech has
never received any notice or other communication (in writing or otherwise) from
any Governmental Body or other Person regarding any actual, alleged, possible or
potential Liability arising from or relating to the presence, generation,
manufacture, production, transportation, importation, use, treatment,
refinement, processing, handling, storage, discharge, release, emission or
disposal of any Hazardous Material. Except as set forth in Part 2.12 of the
NovelTech Disclosure Schedule, to the best Knowledge of NovelTech and the
Selling Shareholders, NovelTech has never generated, manufactured, produced,
transported, imported, used, treated, refined, processed, handled, stored,
discharged, released or disposed of any Hazardous Material (whether lawfully or
unlawfully).
2.13 Proceedings; Orders. Except as set forth in Part 2.13 of the
NovelTech Disclosure Schedule, there is no pending Proceeding, and no Person
has, to the best Knowledge of NovelTech and the Selling Shareholders, threatened
to commence any Proceeding (i) that involves NovelTech or that otherwise relates
to or would affect NovelTech's business or any of the assets owned or used by
NovelTech (whether or not NovelTech is named as a party thereto); or (ii) that
challenges, or that may have the effect of preventing, delaying, making illegal
or otherwise interfering with, any of the Transactions. Except as set forth in
Part 2.13 of the NovelTech Disclosure Schedule, to the best Knowledge of
NovelTech and the Selling Shareholders, no event has occurred, and no claim,
dispute or other condition or circumstance exists, that would directly or
indirectly give rise to or serve as a basis for the commencement of any such
Proceeding. There is no Order to which NovelTech, or any of the assets owned or
used by NovelTech (including the Proprietary Assets, Patents and Trade
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Secrets), is subject; and the Selling Shareholders are not subject to any Order
that relates to NovelTech's business or to any of the assets owned or used by
NovelTech (including the Proprietary Assets, Patents and Trade Secrets). To the
best Knowledge of NovelTech and the Selling Shareholders, there is no proposed
Order that, if issued or otherwise put into effect, (x) may have an adverse
effect on NovelTech's business, condition, assets, liabilities, operations,
financial performance, net income or prospects (or on any aspect or portion
thereof) or on the ability of NovelTech or the Selling Shareholders to comply
with or perform any covenant or obligation under any of the Transactional
Agreements, or (y) may have the effect of preventing, delaying, making illegal
or otherwise interfering with any of the Transactions.
2.14 Authority; Binding Nature of Agreements. NovelTech has the
absolute and unrestricted right, power and authority to enter into and to
perform its obligations under this Agreement; and the execution, delivery and
performance by NovelTech of this Agreement have been duly authorized by all
necessary action on the part of NovelTech and its shareholders, board of
directors and officers. This Agreement constitutes the legal, valid and binding
obligation of NovelTech, enforceable against NovelTech in accordance with its
terms. Each of the Selling Shareholders has the absolute and unrestricted right,
power and capacity to enter into and to perform his obligations under this
Agreement and each of the Transactional Agreements to which such Selling
Shareholder is or may become a party. This Agreement constitutes the legal,
valid and binding obligation of the Selling Shareholders, enforceable against
the Selling Shareholders in accordance with its terms. Upon the execution of
each of the other Transactional Agreements at the Closing, each of such other
Transactional Agreements will constitute the legal, valid and binding obligation
of Selling Shareholders, and will be enforceable against such Selling
Shareholders in accordance with its terms.
2.15 Non-Contravention; Consents. Except as set forth in Part 2.15 of
the NovelTech Disclosure Schedule, neither the execution and delivery of any of
the Transactional Agreements, nor the consummation or performance of any of the
Transactions, will directly or indirectly (with or without notice or lapse of
time) contravene, conflict with or result in a violation of (i) any of the
provisions of NovelTech's certificate of incorporation or bylaws, or (ii) any
resolution adopted by NovelTech's stockholders, NovelTech's board of directors
or any committee of NovelTech's board of directors; to the best Knowledge of
NovelTech and the Selling Shareholders, contravene, conflict with or result in a
violation of, or give any Governmental Body or other Person the right to
challenge any of the Transactions or to exercise any remedy or obtain any relief
under, any Legal Requirement or any Order to which NovelTech or Selling
Shareholder, or any of the assets owned or used by NovelTech, is subject; cause
NovelTech, the Purchaser or any affiliate of the Purchaser to become subject to,
or to become liable for the payment of, any Tax; cause any of the assets owned
or used by NovelTech to be reassessed or revalued by any taxing authority or
other Governmental Body; to the best Knowledge of NovelTech and the Selling
Shareholders, contravene, conflict
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with or result in a violation of any of the terms or requirements of, or give
any Governmental Body the right to revoke, withdraw, suspend, cancel, terminate
or modify, any Governmental Authorization that is held by NovelTech or any of
its employees or that otherwise relates to NovelTech's business or to any of the
assets owned or used by NovelTech; to the best Knowledge of NovelTech and the
Selling Shareholders, contravene, conflict with or result in a violation or
breach of, or result in a default under, any provision of any material NovelTech
Contract; to the best Knowledge of NovelTech and the Selling Shareholders, give
any Person the right to (i) declare a default or exercise any remedy under any
NovelTech Contract, (ii) accelerate the maturity or performance of any NovelTech
Contract, or (iii) cancel, terminate or modify any material NovelTech Contract;
to the best Knowledge of NovelTech and the Selling Shareholders, contravene,
conflict with or result in a violation or breach of or a default under any
provision of, or give any Person the right to declare a default under, any
material Contract to which NovelTech or Selling Shareholders is a party or by
which NovelTech or Selling Shareholder is bound; or, to the best Knowledge of
NovelTech and the Selling Shareholders, result in the imposition or creation of
any Encumbrance upon or with respect to any asset owned or used by NovelTech
(including the Proprietary Assets, Patents and Trade Secrets). Except as set
forth in Part 2.15 of the NovelTech Disclosure Schedule, neither NovelTech nor
the Selling Shareholders were, are or will be required to make any filing with
or give any notice to, or to obtain any Consent from, any Person in connection
with the execution and delivery of any of the Transactional Agreements or the
consummation or performance of any of the Transactions.
2.16 Brokers. Neither NovelTech nor any of the Selling Shareholders has
agreed or become obligated to pay, or has taken any action that might result in
any Person claiming to be entitled to receive, any brokerage commission,
finder's fee or similar commission or fee in connection with any of the
Transactions.
2.17 Selling Shareholders.
(a) The Selling Shareholders have the capacity and financial
capability to comply with and perform all of such Selling Shareholders'
covenants and obligations under each of the Transactional Agreements to which
such Selling Shareholders are or may become a party.
(b) Each Selling Shareholder (i) has not, at any time, (A)
made a general assignment for the benefit of creditors, (B) filed, or had filed
against such Selling Shareholder, any bankruptcy petition or similar filing, (C)
suffered the attachment or other judicial seizure of all or a substantial
portion of such Selling Shareholder's assets, (D) admitted in writing such
Selling Shareholder's inability to pay such Selling Shareholder's debts as they
become due, (E) been convicted of, or pleaded guilty to, any felony, or (F)
taken or been the subject of any action that may have an adverse effect on such
Selling Shareholder's ability to comply with or perform any of such Selling
Shareholder's covenants or obligations under any of the Transactional
Agreements; or (ii) is not subject to any Order that may have an adverse effect
on such Selling Shareholder's ability to comply with or perform such Selling
Shareholder's covenants or obligations under any of the Transactional
Agreements.
(c) There is no Proceeding pending, and no Person has
threatened to commence any Proceeding, that may have an adverse effect on the
ability of each Selling Shareholder to comply with or perform any of such
Selling Shareholder's covenants or obligations under any of the Transactional
Agreements. To the best Knowledge of NovelTech and the Selling Shareholders, no
event has occurred, and no
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claim, dispute or other condition or circumstance exists, that would directly or
indirectly give rise to or serve as a basis for the commencement of any such
Proceeding.
(d) Each Selling Shareholder:
(i) is acquiring the Purchaser Shares for his own
account, not as nominee or agent, for investment and not with a view
to, or for resale in connection with, any distribution or public
offering thereof within the meaning of the Securities Act of 1933, as
amended (the "1933 Act");
(ii) understands that (A) the Purchaser Shares have
not been registered under the 1933 Act or pursuant to Michigan
securities laws by reason of specific exemptions therefrom, that such
Purchaser Shares must be held by him indefinitely, and that he must,
therefore, bear the economic risk of such investment indefinitely,
unless a subsequent disposition thereof is registered under the 1933
Act and the Michigan securities laws or is exempt from such
registrations; (B) the certificate representing the shares will be
endorsed with legends in substantially the following forms (and may be
endorsed with any other legend that may be required by any applicable
securities law):
"THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933. NO SALE OR DISPOSITION OF THESE
SECURITIES MAY BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION
STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT
REQUIRED UNDER THE ACT OR RECEIPT OF A NO ACTION LETTER FROM
THE SECURITIES AND EXCHANGE COMMISSION."
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE MICHIGAN UNIFORM SECURITIES ACT, FEDERAL
SECURITIES LAWS, OR THE SECURITIES LAWS OF ANY OTHER STATE,
AND SUCH SHARES MAY NOT BE TRANSFERRED WITHOUT COMPLIANCE WITH
THE MICHIGAN UNIFORM SECURITIES ACT, APPLICABLE SECURITIES
LAWS OF OTHER STATES, AND THE FEDERAL SECURITIES LAWS."
and (C) the Purchaser will instruct any transfer agent not to register
the transfer of any of the shares unless the conditions specified in
the foregoing legend are satisfied;
(iii) has been furnished with such materials and
has been given access to such information relating to the Purchaser as
he or his qualified representative has requested and he has been
afforded the opportunity to ask questions regarding the Purchaser, all
as he has found necessary to make an informed investment decision;
(iv) by reason of his business or financial
experience, or the business or financial experience of his professional
advisor, has the capacity to protect his own interests in connection
with this transaction.
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2.18 Full Disclosure. None of the Transactional Agreements contains at
Closing any untrue statement of material fact; and none of the Transactional
Agreements omits or will omit to state any material fact necessary to make any
of the representations, warranties or other statements or information contained
therein not misleading. Except as set forth in Part 2.18 of the NovelTech
Disclosure Schedule, there is no fact within the Knowledge of NovelTech or the
Selling Shareholders (other than publicly known facts relating exclusively to
political or economic matters of general applicability that will adversely
affect all Comparable Entities) that (i) may have a material adverse effect on
NovelTech's business, condition, assets, liabilities, operations, financial
performance, net income or prospects (or on any aspect or portion thereof) or on
the ability of NovelTech or the Selling Shareholders to comply with or perform
any covenant or obligation under any of the Transactional Agreements, or (ii)
may have the effect of preventing, delaying, making illegal or otherwise
interfering with any of the Transactions. All of the information set forth in
the NovelTech Disclosure Schedule, and all other information related to the
Transactions, as well as information related to NovelTech's business, condition,
assets, liabilities, operations, financial performance, net income and
prospects, that has been furnished pursuant to this Agreement to the Purchaser
or any of its Representatives by or on behalf of NovelTech or the Selling
Shareholders or any of their Representatives, is accurate and complete in all
material respects. NovelTech and the Selling Shareholders have provided the
Purchaser and the Purchaser's Representatives with full and complete access to
all of NovelTech's records and other documents and data.
3. Representations and Warranties of Purchaser.
The Purchaser represents and warrants, to and for the benefit of the
Selling Shareholders, as follows:
3.1 Due Organization. Purchaser is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware
and has all necessary power and authority to conduct its business in the manner
in which its business is currently being conducted and in the manner in which
its business is proposed to be conducted; to own and use its assets in the
manner in which its assets are currently owned and used and in the manner in
which its assets are proposed to be owned and used; and to perform its
obligations under this Agreement.
3.2 SEC Filings. Since December 12, 1995, Purchaser has filed with the
Securities and Exchange Commission all reports, statements, registration
statements and other filings (including all notes, exhibits and schedules
thereto and documents incorporated by reference therein) ("Purchaser's SEC
Filings") that Purchaser was and is required to file under the 1933 Act and the
Securities Exchange Act of 1934, as amended, and Purchaser is current in all
such filings. The Purchaser's SEC Filings did not contain, at the time of filing
thereof, any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading, and,
to the extent required such filings have been appropriately updated to keep the
information therein current.
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3.3 Authority; Binding Nature of Agreement. The execution, delivery and
performance of this Agreement by the Purchaser has been duly authorized by all
necessary action on the part of the Purchaser and its board of directors; and
this Agreement constitutes the legal, valid and binding obligation of the
Purchaser, enforceable against the Purchaser in accordance with its terms. The
Purchaser Shares to be issued to the Selling Shareholders at the Closing have
been duly authorized for issuance and, when issued in accordance with the terms
of this Agreement, will be fully paid and non-assessable.
3.4 1933 Act. Purchaser is acquiring the Shares for its own account,
not as nominee or agent, for investment and not with a view to, or the resale in
connection with, any distribution or public offering thereof within the meaning
of the 1933 Act.
4. COVENANTS OF THE PARTIES.
4.1 Filings and Consents. Purchaser, NovelTech and the Selling
Shareholders shall ensure that each filing or notice required to be made or
given (pursuant to any applicable Legal Requirement, Order or Contract, or
otherwise) by them in connection with the execution and delivery of any of the
Transactional Agreements or in connection with the consummation or performance
of any of the Transactions (including each of the filings and notices identified
in the NovelTech Disclosure Schedule) is made or given as soon as possible after
the date of this Agreement.
4.2 Noncompetition Agreement.
(a) Each Selling Shareholder has agreed pursuant to and to the
extent permitted by Section 16601 of the Business and Professions Code of the
State of California and any corresponding provision of the laws of the State of
Michigan not to compete with NovelTech or Purchaser in the manner and to the
extent herein set forth. Each Selling Shareholder is entering into this
Agreement as an inducement to Purchaser to consummate the Transactions, with all
of the attendant financial benefits to the Selling Shareholders as shareholders
of NovelTech. The Selling Shareholders understand that where reference is made
to a "Selling Shareholder" below, such reference is to obligate not only each
Selling Shareholder, but also his assigns and successors.
(b) Acknowledgements by the Selling Shareholders. The Selling
Shareholders acknowledge that, by virtue of their position as the sole founders,
shareholders and employees of NovelTech, they have developed considerable
expertise in the technology and business operations of NovelTech and have had
access to extensive confidential information with respect to NovelTech. The
Selling Shareholders recognize that Purchaser would be irreparably damaged, and
its substantial investment in NovelTech materially impaired, if the Selling
Shareholders were to enter into an activity competing with NovelTech's business
in violation of the terms of this Agreement or if the Selling Shareholders were
to disclose or make unauthorized use of any confidential information concerning
the business of NovelTech. Accordingly, the Selling Shareholders expressly
acknowledge that they
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are voluntarily entering into this Agreement and that the terms and conditions
of this Agreement are fair and reasonable to the Selling Shareholders in all
respects.
(c) Confidentiality. The Selling Shareholders hereby expressly
agree that any and all Proprietary Assets, Patents and Trade Secrets that the
Selling Shareholders came to know as a result of their positions as the
founders, sole shareholders and employees of NovelTech shall remain strictly
confidential and shall not be revealed, except under order of a court of law of
the United States of America. To the extent that any such material becomes
generally known or is already generally known to the public through no fault or
action on the part of the Selling Shareholders, the Selling Shareholders shall
be relieved of the obligation to maintain its confidentiality.
(d) Non-competition. Until the later of (i) two (2) years
after the Closing or (ii) termination of a Selling Shareholder's employment with
the Purchaser or NovelTech, such Selling Shareholder shall not, directly or
indirectly, without the prior written consent of Purchaser, (A) own, manage,
operate, join, control, finance or participate in the ownership, management,
operation, control or financing of any business or enterprise engaged in any
business which is competitive with the business of NovelTech or Purchaser,
within each of the geographical units which are listed in Exhibit G hereto (the
"Territory"), or (B) engage in any other manner, within the Territory, in any
business that is competitive with the business of NovelTech or Purchaser. For
the purposes of this Section 4.2, the "business of NovelTech or Purchaser" shall
be defined as the design, development, manufacture and sale of life sciences,
biological and pharmaceutical laboratory equipment and supplies.
(e) Non-interference. Each Selling Shareholder further agrees
that until five (5) years following completion of the Transactions, he will not,
without the prior written consent of Purchaser, (i) interfere with the business
of NovelTech or Purchaser, by soliciting, attempting to solicit, inducing, or
otherwise causing any employee or consultant of NovelTech or Purchaser to
terminate his or her employment as such in order to become an employee,
consultant or independent contractor to or for any competitor of NovelTech or
Purchaser or to or for any company with which the Selling Shareholder is
associated in any way; or (ii) induce or attempt to induce any customers,
suppliers, distributors, resellers, or independent contractor of NovelTech or
Purchaser to terminate its relationship with, or to take any action that would
be disadvantageous to the business of, NovelTech or Purchaser.
(f) Equitable Relief. Each Selling Shareholder expressly
acknowledges that damages alone will not be an adequate remedy for any breach by
a Selling Shareholder of the ovenants set forth in this Section 4.2 and that the
other parties hereto, in addition to any other remedies that they may have,
shall be entitled, as a matter of right, to injunctive relief, including
specific performance, in any court of competent jurisdiction with respect to any
actual or threatened breach by the Selling Shareholder of any of said covenants.
(g) Severability, etc. For the purposes of this Section 4.2:
(i) if any provision of this Agreement shall be held by a court of competent
jurisdiction to be excessively broad as to duration, activity or subject, it
shall be deemed to extend
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only over the maximum duration, activity and/or subject as to which such
provision shall be valid and enforceable under applicable law. If any provisions
shall, for any reason, be held by a court of competent jurisdiction to be
invalid, illegal or unenforceable, such invalidity, illegality or
unenforceability shall not affect any other provision of this Agreement, but
this Agreement shall be construed as if such invalid, illegal or unenforceable
provision had never been contained herein; and (ii) the parties intend that the
covenant contained in this Section 4.2 shall be construed as a series of
separate covenants, one for each geographical unit specified. Except for
geographical coverage, each such separate covenant shall be deemed identical in
terms to the covenant contained in this Section 4.2. If, in any judicial
proceeding, a court shall refuse to enforce any of the separate covenants deemed
included in this Agreement, then the unenforceable covenant shall be deemed
eliminated from these provisions for the purpose of those proceedings to the
extent necessary to permit the remaining separate covenants to be enforced.
4.3 General Release.
(a) Effective at Closing (as defined in the Agreement), the
Selling Shareholders hereby release, hold harmless and forever discharge
NovelTech, its agents, employees, stockholders, officers, directors, affiliates,
subsidiaries and related companies (including Purchaser following the Closing)
and their respective heirs, personal representatives, successors and assigns
(the "Releasees"), of and from any and all actions, causes of action, claims,
demands, costs, liabilities, losses, and expenses, past, present or future,
known or unknown, which it ever had, now has or may have arising from actions,
omissions, circumstances or conditions that existed prior to the Closing and
relating to their ownership of or transactions with NovelTech, including without
limitation any actions, causes of action, claims, demands, costs, liabilities,
losses and expenses arising from or in any way related to the their ownership of
NovelTech and/or its holding of securities of NovelTech (but excluding any
claims arising directly from this Agreement or the Transactions and claims by
the Selling Shareholders for indemnity pursuant to NovelTech's Bylaws) (the
"Released Claims"). This release is binding on the Selling Shareholders and
their agents, employees, stockholders, officers, directors, affiliates,
subsidiaries and related companies and their respective heirs, personal
representatives, successors and assigns (the "Releasors").
(b) The Selling Shareholders hereby declare and represent that
in making this release they understand and agree that they rely wholly upon
their own judgment, belief and knowledge of the nature, extent and duration of
said Released Claims and that they have not been influenced to any extent
whatsoever in making this release by any representations or statements regarding
said Released Claims, or regarding any other matters, made by the Releasees or
by any person or persons representing any of them.
(c) The Selling Shareholders acknowledge that they are
familiar with the provisions of California Civil Code Section 1542, which
provides as follows:
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR
DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF
EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM
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MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR.
The Selling Shareholders, being aware of said Section, and having received
advice of independent counsel, hereby expressly waive any rights the Releasors
may have thereunder, as well as under any other statutes or common law
principles of similar effect (whether pursuant to the laws of the States of
Michigan or California or otherwise), with respect to the Released Claims. The
Selling Shareholders further acknowledge that they may hereafter discover facts
different from, or in addition to, those which it now knows or believes to be
true with respect to the Released Claims, and agree that, in such event, this
release shall nevertheless be and remain effective in all respects with respect
to the Released Claims, notwithstanding such different or additional facts, or
the discovery thereof.
(d) The Selling Shareholders represent and warrant that there
has been no assignment or other transfer of any interest in any Released Claim,
and that they have read this release, are aware of its contents and legal effect
and have had the opportunity to consult with counsel of their choice with
respect to this release.
(e) The Selling Shareholders covenant that they will not sue,
sue further, or otherwise prosecute any of the Releasees with respect to any
claim included within this release.
(f) Subject to the provisions of paragraph (c), this release
shall be construed in accordance with, and enforced pursuant to, the laws of the
State of California, except that this release shall be given a fair and
reasonable construction in accordance with the intention of the parties and
without regard to, or aid of, Section 1654 of the California Civil Code.
4.4 Cooperation with Termination of Pension Plan. The Selling
Shareholders agree to the termination of the existing Pension Plan of NovelTech
as soon as is practicable after Closing and to provide the necessary
cooperation, including but not limited to, executing any requested documents,
for termination of the Pension Plan.
4.5 Registration of Shares.
(a) The Purchaser will use its best efforts to file and cause
a registration statement on Form S-3 to be declared effective by the Securities
and Exchange Commission (the "SEC") on or before March 1, 1997, covering a
number of shares equal to the greater of thirty-two percent (32%) of the
Purchaser Shares or Shares having an aggregate value of $500,000 at the time of
filing of said registration statement, and the Selling Shareholders shall
provide all necessary information and otherwise cooperate with the Purchaser in
this endeavor. To the best Knowledge of Purchaser, there is no reason why
Purchaser should not be eligible to use Form S-3 commencing December 12, 1996.
(b) If the Purchaser files with the SEC a registration
statement for registration of its own shares in an underwritten public offering
on or before June 7, 1998, Purchaser shall use commercially reasonable efforts
to register the
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outstanding Purchaser Shares held by the Selling Shareholders concurrently with
such registration. The foregoing shall depend on the Selling Shareholders
executing the required underwriting agreement and market conditions permitting
resale of the Purchaser Shares in addition to the shares to be registered for
the account of the Company
5. MISCELLANEOUS PROVISIONS.
5.1 Survival of Representations and Covenants; Indemnification.
(a) The representations, warranties, covenants and obligations
of each party, including each statement made in each party's respective
disclosure schedules, shall survive any investigation made by any Person and the
Closing and the sale of the Shares to the Purchaser.
(b) Subject to the notice and cure provisions of Section
1.2(b) above, Purchaser shall be entitled to set off against the portion of the
purchase price payable on the Second Payment Date any and all amounts that
Purchaser is obligated to pay and any and all losses resulting from (i) any
breaches by NovelTech or the Selling Shareholders of any of their
representations and warranties or covenants made herein, (ii) excess fees and
expenses of the Selling Shareholders contemplated by Section 5.3 below or (iii)
the indemnification provisions set forth below.
(c) The Selling Shareholders shall hold harmless and indemnify
the Purchaser from and against, and shall compensate and reimburse the Purchaser
for, any Damages which are directly or indirectly suffered or incurred by the
Purchaser or to which the Purchaser may otherwise become subject at any time
(regardless of whether or not such Damages relate to any third-party claim) and
which arise directly or indirectly from or as a direct or indirect result of, or
are directly or indirectly connected with any claim by, or any Liability to
which Purchaser or NovelTech may become subject with respect to, any current or
former employee, consultant or agent of NovelTech that would constitute a breach
of Section 2.6(e) above, even if such claim or Liability or the possibility of
such claim or Liability was brought to Purchaser's attention in the NovelTech
Disclosure Schedule.
(d) The Selling Shareholders acknowledge and agree that, if
NovelTech becomes subject to any claim or Liability of the type referred to in
Section 5.1(c), then the Purchaser itself shall be deemed, by virtue of its
ownership of common stock of NovelTech, to have incurred Damages as a result of
such claim or Liability.
(e) The Selling Shareholders shall not be required to make any
indemnification pursuant to Section 5.1(c): (i) for Damages which aggregate more
than the sum of (A) the amount of the payment to be made to them pursuant to
Section 1.2(b) on the Second Payment Date (but only until such payment is
required to be made, and thereafter this clause (A) shall be disregarded) and
(B) the fair market value of the balance of the Purchaser Shares held by them at
the time of the claim for indemnification under this Section 5.1; provided,
however, that the Selling Shareholders shall be obligated to make
indemnification for up to such amounts and the Purchaser is provided a right of
offset with respect to the cash portion under Section 5.1(a) above and a right
to place a stop transfer on said balance of the
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Purchaser Shares or (ii) if the matters giving rise to the claim or Liability
occur or are discovered after June 7, 1998 or Purchaser fails to give Selling
Shareholder written notice of such claim or Liability on or prior to June 7,
1998.
(f) The Selling Shareholders waive, and acknowledge and agree
that such Selling Shareholders shall not have and shall not exercise or assert
or attempt to exercise or assert, any right of contribution or right of
indemnity or any other right or remedy against NovelTech in connection with any
indemnification obligation or any other Liability to which such Selling
Shareholders may become subject under any of the Transactional Agreements or
otherwise in connection with any of the Transactions.
(g) In the event of the assertion or commencement by any
Person of any claim or Proceeding (whether against NovelTech, against Purchaser
or against any other Person) with respect to which the Selling Shareholders may
become obligated to indemnify, hold harmless, compensate or reimburse the
Purchaser pursuant to Section 5.1(c), the Selling Shareholders shall have the
right, at their election to assume the defense of such claim or Proceeding at
their sole expense. If the Selling Shareholders so elect to assume the defense
of any such claim or Proceeding:
(i) the Selling Shareholders shall proceed to
defend such claim or Proceeding in a diligent manner;
(ii) the Purchaser shall make available to the
Selling Shareholders any non-privileged documents and materials in the
possession of Purchaser that may be necessary to the defense of such
claim or Proceeding;
(iii) the Selling Shareholders shall keep
Purchaser informed of all material developments and events relating to
such claim or Proceeding;
(iv) the Purchaser shall have the right to
participate in the defense of such claim or Proceeding at its own
expense; and
(v) the Selling Shareholders may settle, adjust or
compromise such claim or Proceeding without the prior written consent
of the Purchaser; provided, however, that such settlement, adjustment
or compromise involves only the payment of money damages.
5.2 Further Assurances. Each party hereto shall execute and/or cause to
be delivered to each other party hereto such instruments and other documents,
and shall take such other actions, as such other party may reasonably request
(prior to, at or after the Closing) for the purpose of carrying out or
evidencing any of the Transactions.
5.3 Fees and Expenses. The Selling Shareholders shall bear and pay all
fees, costs and expenses (including all legal fees and expenses payable to
Seyburn, Kahn, Ginn, Bess, Deitch & Serlin) in excess of $25,000 that have been
incurred after May 20, 1996 or that are in the future incurred by, on behalf of
or for the benefit of NovelTech or Selling Shareholder in connection with the
negotiation, preparation
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and review of any term sheet, agreement, schedule, certificate, opinion, filing,
notice, consent or similar document relating to any of the Transactions or the
consummation and performance of the Transactions. NovelTech shall not bear or
pay, and the Selling Shareholders shall not permit NovelTech to bear or pay, any
such fees, costs or expenses in excess of $25,000. Any excess amount paid or
payable by NovelTech in violation hereof shall be set off against the portion of
the purchase price payable on the Second Payment Date pursuant to Section 5.1
above.
5.4 Attorneys' Fees. If any legal action or other legal proceeding
relating to any of the Transactional Agreements or the enforcement of any
provision of any of the Transactional Agreements is brought against any party
hereto, the prevailing party shall be entitled to recover reasonable attorneys'
fees, costs and disbursements (in addition to any other relief to which the
prevailing party may be entitled).
5.5 Notices. Any notice or other communication required or permitted to
be delivered to any party under this Agreement shall be in writing and shall be
deemed properly delivered, given and received when delivered (by hand, by
registered mail, by courier or express delivery service or by telecopier) to the
address or telecopier number set forth beneath the name of such party below (or
to such other address or telecopier number as such party shall have specified in
a written notice given to the other parties hereto):
if to Selling Shareholders:
Brad Neagle
5068 Plymouth Road
Ann Arbor, MI 48105
Kirk Schroeder
1692 Miller
Ann Arbor, MI 48103
with a copy to:
Seyburn, Kahn, Ginn, Bess, Deitch & Serlin
Suite 1500
2000 Town Center
Southfield, MI 48075-1185
Attn: Kenneth Morgan
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if to the Purchaser:
Molecular Devices Corporation
1311 Orleans Drive
Sunnyvale, CA 94089
Attn: James Iuliano and Andrew Galligan
with a copy to:
Cooley Godward Castro Huddleson & Tatum
5 Palo Alto Square
Palo Alto, CA 94306
Attn: Andrei M. Manoliu
Addresses may be changed by providing written notice to the other parties.
5.6 Headings. The bolded headings contained in this Agreement are for
convenience of reference only, shall not be deemed to be a part of this
Agreement and shall not be referred to in connection with the construction or
interpretation of this Agreement.
5.7 Counterparts. This Agreement may be executed in several
counterparts, each of which shall constitute an original and all of which, when
taken together, shall constitute one agreement.
5.8 Governing Law. This Agreement shall be construed in accordance
with, and governed in all respects by, the internal laws of the State of
California (without giving effect to principles of conflicts of laws).
5.9 Successors and Assigns. This Agreement shall be binding upon:
NovelTech and its successors and assigns (if any); the Selling Shareholders, and
their successors and assigns (if any); and the Purchaser and its successors and
assigns (if any). This Agreement shall inure to the benefit of: NovelTech; the
Selling Shareholders; the Purchaser; and the respective successors and assigns
(if any) of the foregoing. After Closing, the Purchaser may freely assign any or
all of its rights under this Agreement, in whole or in part, to any other Person
without obtaining the consent or approval of any other party hereto or of any
other Person.
5.10 Remedies Cumulative. The rights and remedies of the parties
hereto shall be cumulative (and not alternative).
5.11 Waiver. No failure on the part of any Person to exercise any
power, right, privilege or remedy under this Agreement, and no delay on the part
of any Person in exercising any power, right, privilege or remedy under this
Agreement, shall operate as a waiver of such power, right, privilege or remedy;
and no single or partial exercise of any such power, right, privilege or remedy
shall preclude any other or further exercise thereof or of any other power,
right, privilege or remedy. No Person shall be deemed to have waived any claim
arising out of this Agreement, or any power, right, privilege or remedy under
this Agreement, unless the waiver of such claim, power, right, privilege or
remedy is expressly set forth in a written
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instrument duly executed and delivered on behalf of such Person; and any such
waiver shall not be applicable or have any effect except in the specific
instance in which it is given.
5.12 Amendments. This Agreement may not be amended, modified, altered
or supplemented other than by means of a written instrument duly executed and
delivered on behalf of the Purchaser and the Selling Shareholders.
5.13 Severability. In the event that any provision of this Agreement,
or the application of any such provision to any Person or set of circumstances,
shall be determined to be invalid, unlawful, void or unenforceable to any
extent, the remainder of this Agreement, and the application of such provision
to Persons or circumstances other than those as to which it is determined to be
invalid, unlawful, void or unenforceable, shall not be impaired or otherwise
affected and shall continue to be valid and enforceable to the fullest extent
permitted by law.
5.14 Parties in Interest. Except for the provisions of Section 5.9
hereof, none of the provisions of this Agreement is intended to provide any
rights or remedies to any Person other than the parties hereto and their
respective permitted successors and assigns (if any).
5.15 Entire Agreement. The Transactional Agreements set forth the
entire understanding of the parties relating to the subject matter thereof and
supersede all prior agreements and understandings among or between any of the
parties relating to the subject matter thereof.
5.16 Construction. For purposes of this Agreement, whenever the context
requires: the singular number shall include the plural, and vice versa; the
masculine gender shall include the feminine and neuter genders; the feminine
gender shall include the masculine and neuter genders; and the neuter gender
shall include the masculine and feminine genders. The parties hereto agree that
any rule of construction to the effect that ambiguities are to be resolved
against the drafting party shall not be applied in the construction or
interpretation of this Agreement. As used in this Agreement, the words "include"
and "including," and variations thereof, shall not be deemed to be terms of
limitation, but rather shall be deemed to be followed by the words "without
limitation" whether or not in fact so followed. Except as otherwise indicated,
all references in this Agreement to "Sections" and "Exhibits" are intended to
refer to Sections of this Agreement and Exhibits and other attachments to this
Agreement.
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The parties hereto have caused this Agreement to be executed and
delivered as of the date first written above.
"PURCHASER": MOLECULAR DEVICES CORPORATION
a Delaware corporation
By:_________________________________________
Its:________________________________________
"NOVELTECH": NOVELTECH SYSTEMS, INC.,
a Michigan corporation
By:_________________________________________
Its:________________________________________
"SELLING SHAREHOLDERS":
____________________________________________
Brad Neagle, an Individual
____________________________________________
Kirk Schroeder, an Individual
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EXHIBIT A
CERTAIN DEFINITIONS
For purposes of the Agreement (including this Exhibit A):
Breach. There shall be deemed to be a "breach" of a representation,
warranty, covenant, obligation or other provision if there is or has been (a)
any inaccuracy in or breach of, or any failure to comply with or perform, such
representation, warranty, covenant, obligation or other provision, or (b) any
claim (by any Person) or other circumstance that is inconsistent with such
representation, warranty, covenant, obligation or other provision; and the term
"breach" shall be deemed to refer to any such inaccuracy, breach, failure, claim
or circumstance.
CERCLA. "CERCLA" shall mean the Comprehensive Environmental Response,
Compensation and Liability Act.
Code. "Code" shall mean the Internal Revenue Code of 1986, as amended.
Comparable Entities. "Comparable Entities" shall mean Entities (other
than NovelTech) that are engaged in businesses similar to NovelTech's business.
Consent. "Consent" shall mean any approval, consent, ratification,
permission, waiver or authorization (including any Governmental Authorization).
Contract. "Contract" shall mean any written, oral, implied or other
agreement, contract, understanding, arrangement, instrument, note, guaranty,
indemnity, representation, warranty, deed, assignment, power of attorney,
certificate, purchase order, work order, insurance policy, benefit plan,
commitment, covenant, assurance or undertaking of any nature.
Current Benefit Plan. "Current Benefit Plan" shall mean any Employee
Benefit Plan that is currently in effect and that was established or adopted by
NovelTech or is maintained or sponsored by NovelTech; in which NovelTech
participates; and with respect to which NovelTech is or may be required or
permitted to make any contribution.
Damages. "Damages" shall include any loss, damage, injury, decline in
value, lost opportunity, Liability, claim, demand, settlement, judgment, award,
fine, penalty, Tax, fee (including any legal fee, expert fee, accounting fee or
advisory fee), charge, cost (including any cost of investigation) or expense of
any nature.
Employee Benefit Plan. "Employee Benefit Plan" shall have the meaning
specified in Section 3(3) of ERISA.
Encumbrance. "Encumbrance" shall mean any lien, pledge, hypothecation,
charge, mortgage, security interest, encumbrance, equity, trust, equitable
interest, claim, preference, right of possession, lease, tenancy, license,
encroachment, covenant, infringement, interference, Order, proxy, option, right
of first refusal,
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preemptive right, community property interest, legend (other than such legend
required by state or federal securities laws with reference to the registration
of such shares), defect, impediment, exception, reservation, limitation,
impairment, imperfection of title, condition or restriction of any nature
(including any restriction on the voting of any security, any restriction on the
transfer of any asset, any restriction on the receipt of any income derived from
any asset, any restriction on the use of any asset and any restriction on the
possession, exercise or transfer of any other attribute of ownership of any
asset. For purposes of this definition, "asset" shall exclude securities.).
Entity. "Entity" shall mean any corporation (including any non-profit
corporation), general partnership, limited partnership, limited liability
partnership, joint venture, estate, trust, cooperative, foundation, society,
political party, union, company (including any limited liability company or
joint stock company), firm or other enterprise, association, organization or
entity.
ERISA. "ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended.
Excluded Contract. "Excluded Contract" shall mean any NovelTech
Contract that: NovelTech has entered into in the Ordinary Course of Business;
does not contemplate or involve the transfer or licensing of any intellectual
property right; has a term of less than 90 days or may be terminated by
NovelTech (without penalty) within 90 days after the delivery of a termination
notice by NovelTech; and does not contemplate or involve the payment of cash or
other consideration in an amount or having a value in excess of $10,000.
GAAP. "GAAP" shall mean generally accepted accounting principles,
applied on a basis consistent with the basis on which the NovelTech Financial
Statements were prepared.
Governmental Authorization. "Governmental Authorization" shall mean
any: (i) permit, license, certificate, franchise, concession, approval, consent,
ratification, permission, clearance, confirmation, endorsement, waiver,
certification, designation, rating, registration, qualification or authorization
that is, has been or may in the future be issued, granted, given or otherwise
made available by or under the authority of any Governmental Body or pursuant to
any Legal Requirement; or (ii) right under any Contract with any Governmental
Body.
Governmental Body. "Governmental Body" shall mean any:
(a) nation, principality, state, commonwealth, province,
territory, county, municipality, district
or other jurisdiction of any nature;
(b) federal, state, local, municipal, foreign or other
government;
(c) governmental or quasi-governmental authority of any nature
(including any governmental division, subdivision, department, agency,
bureau, branch, office, commission, council, board, instrumentality,
officer, official, representative, organization, unit, body or Entity
and any court or other tribunal);
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(d) multi-national organization or body; or
(e) individual, Entity or body exercising, or entitled to
exercise, any executive, legislative, judicial, administrative,
regulatory, police, military or taxing authority or power of any
nature.
Hazardous Material. "Hazardous Material" shall include:
(a) any petroleum, waste oil, crude oil, asbestos, urea
formaldehyde or polychlorinated biphenyl;
(b) any waste, gas or other substance or material that is
explosive or radioactive;
(c) any "hazardous substance," "pollutant," "contaminant,"
"hazardous waste," "regulated substance," "hazardous chemical" or
"toxic chemical" as designated, listed or defined (whether expressly or
by reference) in any statute, regulation or other Legal Requirement
(including CERCLA, the Resource Conservation Recovery Act, the Federal
Water Pollution Control Act, the Toxic Substances Control Act, the
Emergency Planning and Community Right-to-Know Act and the respective
regulations promulgated thereunder); and
(d) any compound, mixture, solution, product or other
substance or material that contains any substance or material referred
to in clause "(a)", "(b)", "(c)" or "(d)" above.
Knowledge. An individual shall be deemed to have "Knowledge" of a
particular fact or other matter if:
(a) such individual is actually aware of such fact or other
matter; or
(b) a prudent individual could be expected to discover or
otherwise become aware of such fact or other matter in the course of
conducting a reasonably diligent investigation concerning the truth or
existence of such fact or other matter.
NovelTech shall be deemed to have "Knowledge" of a particular fact or other
matter if any officer of NovelTech or either or both of the Selling Shareholders
has Knowledge of such fact or other matter.
Legal Requirement. "Legal Requirement" shall mean any federal, state,
local, municipal, foreign or other law, statute, legislation, constitution,
principle of common law, resolution, ordinance, code, edict, decree,
proclamation, treaty, convention, rule, regulation, ruling, directive,
pronouncement, requirement, specification, determination, decision, opinion or
interpretation that is or has been issued, enacted, adopted, passed, approved,
promulgated, made, implemented or otherwise put into effect by or under the
authority of any Governmental Body.
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Liability. "Liability" shall mean any debt, obligation, duty or
liability of any nature (including any unknown, undisclosed, unmatured,
unaccrued, unasserted, contingent, indirect, conditional, implied, vicarious,
derivative, joint, several or secondary liability and with the exception of any
Liability created by any Legal Requirement), regardless of whether such debt,
obligation, duty or liability would be required to be disclosed on a balance
sheet prepared in accordance with generally accepted accounting principles and
regardless of whether such debt, obligation, duty or liability is immediately
due and payable. Without reducing the generality of the foregoing, Liability
shall also include any and all liabilities for Taxes.
NovelTech Contract. "NovelTech Contract" shall mean any Contract:
(a) to which NovelTech is a party;
(b) by which NovelTech or any of its assets is or may become
bound or under which NovelTech has, or may become subject to, any
obligation; or
(c) under which NovelTech has or may acquire any right or
interest.
NovelTech Disclosure Schedule. "NovelTech Disclosure Schedule" shall
mean the schedule (dated as of the date of the Agreement) delivered to the
Purchaser on behalf of NovelTech and each Selling Shareholder, a copy of which
is attached to the Agreement and incorporated in the Agreement by reference.
NovelTech Financial Statements. "NovelTech Financial Statements" shal
have the meaning specified in Section 2.4(a) of the Agreement.
NovelTech Plan. "NovelTech Plan" shall mean any Current Benefit Plan
or Past Benefit Plan.
Order. "Order" shall mean any:
(a) order, judgment, injunction, edict, decree, ruling,
pronouncement, determination, decision, opinion, verdict, sentence,
subpoena, writ or award that is, has been issued, made, entered,
rendered or otherwise put into effect by or under the authority of any
court, administrative agency or other Governmental Body or any
arbitrator or arbitration panel; or
(b) Contract with any Governmental Body that is or has been
entered into in connection with any Proceeding.
Ordinary Course of Business. An action taken by or on behalf of
NovelTech shall not be deemed to have been taken in the "Ordinary Course of
Business" unless:
(a) such action is recurring in nature, is consistent with
NovelTech's past practices and is taken in the ordinary course of
NovelTech's normal day-to-day operations;
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(b) such action is taken in accordance with sound and prudent
business practices;
(c) such action is not required to be authorized by
NovelTech's shareholders, NovelTech's board of directors or any
committee of NovelTech's board of directors and does not require any
other separate or special authorization of any nature;
(d) such action is similar in nature and magnitude to actions
customarily taken, without any separate or special authorization, in
the ordinary course of the normal day-to-day operations of other
Entities that are engaged in businesses similar to NovelTech's
business; and
(e) notwithstanding the foregoing, no transaction between
NovelTech and the Selling Shareholders, or either of them, which is not
listed on the Schedule of Intercompany Transfers, shall be considered
as having occurred in the "Ordinary Course of Business."
Past Benefit Plan. "Past Benefit Plan" shall mean any Employee Benefit
Plan (other than a Current Benefit Plan):
(a) that has at any time been established, adopted, maintained
or sponsored by NovelTech;
(b) in which NovelTech has ever participated; or
(c) with respect to which NovelTech has ever made, or has ever
been required or permitted to make, any contribution.
Pension Plan. "Pension Plan" shall mean that certain NovelTech Systems
Inc. Employee Pension Plan dated March 12, 1996.
Person. "Person" shall mean any individual, Entity or Governmental
Body.
Proceeding. "Proceeding" shall mean any action, suit, litigation,
arbitration, proceeding (including any civil, criminal, administrative,
investigative or appellate proceeding and any informal proceeding), prosecution,
contest, hearing, inquiry, inquest, audit, examination or investigation that is,
has been or may in the future be commenced, brought, conducted or heard by or
before, or that otherwise has involved or may involve, any Governmental Body or
any arbitrator or arbitration panel.
Proprietary Asset. "Proprietary Asset" shall mean any patent, patent
application, trademark (whether registered or unregistered and whether or not
relating to a published work), trademark application, trade name, fictitious
business name, service mark (whether registered or unregistered), service mark
application, copyright (whether registered or unregistered), copyright
application, maskwork, maskwork application, trade secret, know-how, franchise,
system, computer software, invention, design, blueprint, proprietary product,
technology, proprietary right or other intellectual property right or intangible
asset.
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Related Party. Each of the following shall be deemed to be a "Related
Party":
(a) Mr. Brad Neagle;
(b) Mr. Kirk Schroeder;
(c) each individual who is, or who has at any time been, an
officer or director of NovelTech;
(d) each member of the family of each of the individuals
referred to in clauses "(a)," "(b)" and "(c)" above; and
(e) any Entity (other than NovelTech) in which any one of the
individuals referred to in clauses "(a)", "(b)" and "(c)" above holds
(or in which more than one of such individuals collectively hold),
beneficially or otherwise, a material voting, proprietary or equity
interest.
Representatives. "Representatives" shall mean officers, directors,
employees, agents, attorneys, accountants, advisors and representatives. The
Selling Shareholders and all other Related Parties shall be deemed to be
"Representatives" of NovelTech
Tax. "Tax" shall mean any tax (including any income tax, franchise tax,
capital gains tax, estimated tax, gross receipts tax, value-added tax, surtax,
excise tax, ad valorem tax, transfer tax, stamp tax, sales tax, use tax,
property tax, business tax, occupation tax, inventory tax, occupancy tax,
withholding tax or payroll tax), levy, assessment, tariff, impost, imposition,
toll, duty (including any customs duty), deficiency or fee, and any related
charge or amount (including any fine, penalty or interest), that is, has been or
may in the future be (a) imposed, assessed or collected by or under the
authority of any Governmental Body, or (b) payable pursuant to any tax-sharing
agreement or similar Contract.
Tax Return. "Tax Return" shall mean any return (including any
information return), report, statement, declaration, estimate, schedule, notice,
notification, form, election, certificate or other document or information that
is, has been or may in the future be filed with or submitted to, or required to
be filed with or submitted to, any Governmental Body in connection with the
determination, assessment, collection or payment of any Tax or in connection
with the administration, implementation or enforcement of or compliance with any
Legal Requirement relating to any Tax.
Technology Transfer. "Technology Transfer" shall mean that at least one
Fluorescent Imaging Plate Reader (the "FLIPR") has been built and is operational
at the Purchaser facility at Sunnyvale, California, and that Purchaser personnel
(other than Kirk Schroeder and Brad Neagle) have been provided with adequate
materials, design, vendor, software code, and all other information and
licenses, to enable technical personnel reasonably skilled in the field to build
the current design FLIPR at the Purchaser's Sunnyvale facility without the aid
of Kirk Schroeder and/or Brad Neagle.
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Transactional Agreements. "Transactional Agreements" shall mean:
(a) the Agreement;
(b) the closing certificate; and
(c) the Employment Agreements.
Transactions. "Transactions" shall mean (a) the execution and delivery
of the respective Transactional Agreements, and (b) all of the transactions
contemplated by the respective Transactional Agreements, including:
(i) the sale of the Shares by the Selling Shareholders to th
Purchaser in accordance with the Agreement; and
(ii) the performance by NovelTech, the Selling Shareholders
and the Purchaser of their respective obligations under the
Transactional Agreements and the exercise by NovelTech, the Selling
Shareholders and the Purchaser of their respective rights under the
Transactional Agreements.
31
Exhibit 99.1. Press release dated June 10, 1996
- - --------------------------------------------------------------------------------
Press Release
June 10, 1996 Contact: Andrew Galligan
Molecular Devices Corporation
(408) 747 -3533
Release: Monday, June 10, 1996 at 5:30am Pacific Time
MOLECULAR DEVICES ANNOUNCES ACQUISITION OF NOVELTECH SYSTEMS
Sunnyvale, California - Molecular Devices Corporation (NASDAQ:MDCC) today
announced that it acquired NovelTech Systems, Inc., of Ann Arbor, Michigan.
NovelTech Systems, Inc. designs, develops, manufactures and markets
high-throughput drug screening products. NovelTech's unique FLuorescence Imaging
Plate Reader (FLIPR) is being introduced to the pharmaceutical industry as a
tool for high-throughput screening using live cell targets.
Commenting on the acquisition, Jim Iuliano, President and CEO of Molecular
Devices, said "Noveltech brings an innovative fluorescence capability to
Molecular Devices and will allow us to provide a more complete solution to our
life science customers, particularly in the areas of high-throughput screening
and cell analysis. With the advent of new methods, such as combinatorial
chemistry, for generating huge libraries of novel compounds and the increasing
availability through genomics of new membrane receptors and ion channels that
can be used as novel drug targets, tools for high-throughput screening at the
live cell level are in increasing demand."
The purchase price for NovelTech of approximately $4.5 million will be paid in a
combination of $3.0 million in cash and $1.5 million in Molecular Devices Common
Stock.
Molecular Devices Corporation designs, develops, manufactures and markets
proprietary, high-performance, bioanalytical measurement systems, and associated
consumable reagents. The Company's products are used by life scientists
worldwide for drug discovery and development, in a wide variety of pure and
applied research, and in a growing number of clinical research applications.
Molecular Device's product families, including MAXline Microplate Readers,
Threshold System, and Cytosensor System, are designed to provide greater speed,
sensitivity, and reproducibility than traditional instruments or methods. The
Company's products are based on its established expertise in chemistry,
molecular and cell biology, software design, and systems engineering.
