Exhibit 2.1
ASSET PURCHASE AND SALE AGREEMENT
AMONG
TREX MEDICAL SYSTEMS CORPORATION, TREX MEDICAL CORPORATION
THERMOTREX CORPORATION AND THERMO ELECTRON CORPORATION
AND
HOLOGIC, INC.
AUGUST 13, 2000
<PAGE>
TABLE OF CONTENTS
ARTICLE I ASSET PURCHASE.................................................2
1.1 Purchase and Sale of Assets; Assumption of Liabilities..............2
1.2 Purchase Price and Related Matters.................................12
1.3 The Closing........................................................18
1.4 Deferred Transfers.................................................20
ARTICLE II REPRESENTATIONS AND WARRANTIES OF SELLER......................21
2.1 Organization, Qualification and Corporate Power....................22
2.2 Authority..........................................................22
2.3 Noncontravention...................................................23
2.4 Subsidiaries.......................................................24
2.5 Financial Information..............................................25
2.6 Absence of Certain Changes.........................................25
2.7 Undisclosed Liabilities............................................26
2.8 Tax Matters........................................................27
2.9 Tangible Personal Property.........................................27
2.10 Facilities and Owned and Leased Real Property......................28
2.11 Intellectual Property..............................................30
2.12 Contracts..........................................................31
2.13 Litigation.........................................................35
2.14 Labor Matters......................................................35
2.15 Employee Benefits..................................................35
2.16 Environmental Matters..............................................38
2.17 Legal Compliance...................................................40
2.18 Permits. ..........................................................41
2.19 Entire Business....................................................41
2.20 Broker's Fees......................................................42
2.21 Insurance..........................................................42
2.22 Business Relationships with Affiliates.............................42
2.23 Certain Definitions................................................42
2.24 Conduct of Business................................................43
2.25 Compliance with Laws; No Notices of Violation; No Flood Hazard;
Issuance of Permits................................................43
2.26 No Condemnation....................................................43
2.27 No Litigation......................................................44
2.28 Payment for Work; No Mechanics' Liens..............................44
2.29 Leases, Leasing, Commissions, Management Agreement.................44
2.30 Separate Tax Parcel................................................44
2.31 Condominium or Cooperative.........................................44
2.32 Utilities Are Available to the Owned Real Property.................44
2.33 Proper Drainage....................................................45
-i-
<PAGE>
ARTICLE II A REPRESENTATIONS AND WARRANTIES OF THE PARENTS.................45
2.1A Organization.......................................................45
2.2A Authority..........................................................45
2.3A Noncontravention...................................................46
ARTICLE III REPRESENTATIONS AND WARRANTIES OF BUYER.......................47
3.1 Organization.......................................................47
3.2 Authorization of Transaction.......................................47
3.3 Noncontravention...................................................47
3.4 Broker's Fees......................................................48
3.5 Litigation.........................................................49
3.6 Financing..........................................................49
3.7 Solvency ..........................................................49
3.8 Commission Filings.................................................49
3.9 Absence of Certain Changes.........................................51
3.10 Certain Definitions................................................51
3.11 Conduct of Business................................................53
3.12 Payment of Taxes...................................................53
3.13 Authority to Enter into Transaction; No Conflict; Authority and
Enforceability.....................................................53
3.14 Title to the Mortgaged Property; Compliance with Laws; No Notices of
Violation; No Flood Hazard; Issuance of Permits....................53
3.15 No Condemnation....................................................54
3.16 No Litigation......................................................55
3.17 Payment for Work; No Mechanics' Liens..............................55
3.18 [Intentionally Omitted.]...........................................55
3.19 Leases ..........................................................55
3.20 Leasing Commissions: Management Agreements.........................55
3.21 Separate Tax Parcel................................................55
3.22 Condominium or Cooperative.........................................56
3.23 Buyer Not "Foreign Person".........................................56
3.24 Payment of Real Estate Taxes and Impositions.......................56
3.25 [Intentionally Omitted.]...........................................56
3.26 Utilities Are Available to the Mortgaged Property..................56
3.27 Proper Drainage....................................................56
3.28 Environmental Matters..............................................56
ARTICLE IV PRE-CLOSING COVENANTS.........................................59
4.1 Efforts. ..........................................................59
4.2 Hart-Scott-Rodino Act..............................................59
4.3 Replacement of Guarantees and Letters of Comfort...................60
4.4 Operation of Business..............................................60
4.5 Access ..........................................................63
4.6 Consents and Approvals.............................................64
-ii-
<PAGE>
ARTICLE V CONDITIONS PRECEDENT TO CLOSING...............................65
5.1 Conditions to Obligations of Buyer.................................65
5.2 Conditions to Obligations of Seller................................67
ARTICLE VI INDEMNIFICATION...............................................68
6.1 Indemnification by Seller..........................................68
6.2 Indemnification by Buyer...........................................69
6.3 Claims for Indemnification.........................................70
6.4 Survival...........................................................75
6.5 Limitations........................................................76
6.6 Treatment of Indemnification Payments..............................78
6.7 Parent Guaranty....................................................78
ARTICLE VII TERMINATION...................................................80
7.1 Termination of Agreement...........................................80
7.2 Effect of Termination..............................................81
ARTICLE VIII ENVIRONMENTAL MATTERS.........................................81
8.1 Definitions........................................................81
8.2 Environmental Indemnification by Seller............................82
8.3 Limitations........................................................84
8.4 Environmental Indemnification by Buyer.............................86
ARTICLE IX TAX MATTERS...................................................87
9.1 Preparation and Filing of Tax Returns; Payment of Taxes............87
9.2 Allocation of Certain Taxes........................................88
9.3 Refunds and Carrybacks.............................................89
9.4 Cooperation on Tax Matters; Tax Audits.............................89
9.5 Termination of Tax Sharing Agreements..............................91
ARTICLE X FURTHER AGREEMENTS............................................91
10.1 Access to Information; Record Retention; Cooperation...............91
10.2 Restrictive Covenants..............................................93
10.3 Enforceability in Jurisdictions....................................97
10.4 Disclosure Generally...............................................97
10.5 [Intentionally Omitted.]...........................................98
10.6 Certain Insurance Matters..........................................98
10.7 Certain Employee Benefits Matters..................................99
10.8 Further Assurances................................................103
10.9 Use of Name for Transition Period.................................104
10.10 Dowlatshahi License...............................................104
-iii-
<PAGE>
ARTICLE XI MISCELLANEOUS................................................104
11.1 Press Releases and Announcements..................................104
11.2 No Third Party Beneficiaries......................................105
11.3 Action to be Taken by Affiliates..................................105
11.4 Entire Agreement..................................................105
11.5 Succession and Assignment.........................................105
11.6 Counterparts......................................................107
11.7 Headings .........................................................107
11.8 Notices .........................................................107
11.9 Governing Law.....................................................108
11.10 Amendments and Waivers............................................108
11.11 Severability......................................................109
11.12 Expenses .........................................................109
11.13 Specific Performance..............................................109
11.14 Submission to Jurisdiction........................................110
11.15 Bulk Transfer Laws................................................110
11.16 Construction......................................................110
11.17 Incorporation of Exhibits and Schedules...........................111
11.18 Facsimile Signature...............................................111
-iv-
<PAGE>
ANNEXES
Annex 1.1(a)(i) Facilities included in Acquired Assets
Annex 1.1(b)(i) Excluded Contracts, Agreements, Commitments and Leases
Annex 4.3 Letters of Credit
Annex 10.7(b) Non-Offered Employees
-v-
<PAGE>
Disclosure Schedule
Schedule 5.1(a) Required Consents
Exhibits:
Exhibit A - Form of Bill of Sale
Exhibit B - Form of Intellectual Property Assignment
Exhibit C -Form of Assumption Agreement
Exhibit D - Form of Mortgage Note
Exhibit E - Form of Danbury Mortgage
Exhibit F - Form of Bedford Mortgage
Exhibit G - Form of Guaranty
Exhibit H - Tecomet Agreements
Exhibit I - CMOS Letter Agreement
-vi-
<PAGE>
TABLE OF DEFINED TERMS
Defined Term Section
------------ -------
1060 Forms 1.2(c)
Acquired Assets 1.1(a)
Adjusted Purchase Price 1.2(b)(iii)(B)(IV)
Affiliates 2.6(a)
Agreed Amount 6.3(c)
Agreement Preliminary Statement
Approval 1.4(a)
Asset Allocation Schedule 1.2(c)
Assumed Liabilities 1.1(d)
Assumption Agreement 1.1(d)
Basket Amount 6.5(b)(iii)
Bedford Mortgage 1.2(a)(ii)
BioMedical Subsidiary 10.2(b)
Business Introduction
Business Day 1.3(a)
Business Employees 10.7(a)
Business Material Adverse Effect 2.1
Business Benefit Plans 2.15(a)
Business Policies 2.21
Business Properties 2.16(a)(viii)
Buyer Preliminary Statement
Buyer Commission Filings 3.8
Buyer Designated Transferee 11.5
Buyer Indemnified Parties 6.1
Buyer Material Adverse Effect 3.3(b)
Buyer's 401(k) Plan 10.7(c)
Buyer's Environmental Disclosure
Documents 3.28
CERCLA 2.16(a)(i)
Claim Notice 6.3(c)
Claimed Amount 6.3(c)
Claims-Made Business Policies 10.6
Closing 1.3(a)
Closing Date 1.3(a)
CMOS Letter Agreement 5.1(i)
COBRA 10.7(i)
Code 1.2(c)
Commission 3.8
Competitive Business 10.2(b)
Confidentiality Agreement 4.5
Controlled Subsidiary 10.2(b)
Current Title Policy 3.14
Damages 6.1; 6.3(a); 6.3(b); 8.1(b)
Danbury Mortgage 1.2(a)(ii)
-vii-
<PAGE>
Defined Term Section
------------ -------
Deferred Items 1.4(a)
Deferred Transfer 1.4(b)
Designated Contracts 2.12(b)
Designated Intellectual Property 2.11(a)
Develop 8.1(c)
Disclosure Schedule Article II
Disputes Auditor 1.2(b)(ii)(A)
Employee Benefit Plan 2.15(a)
Environment 2.16(a)(iii)
Environmental Law 2.16(a)(v); 3.10
Environmental Matters 2.16(a)(vi)
Equipment 1.1(a)(ii)
ERISA 2.15(a)
ERISA Affiliate 2.15(a)
Excluded Assets 1.1(b)
Excluded Liabilities 1.1(e)
Facility 1.1(a)(i)
Fischer 6.3(b)(i)
Fischer Litigation 6.3(b)(i)
Final Closing Statement 1.2(b)(ii)(B)
Governmental Authority 2.23
Governmental Entity 2.3(b)
Guaranty 1.2(a)(ii)
Hart-Scott-Rodino Act 2.3
Hazardous Materials 3.10
Indemnified Party 6.3(a)
Indemnifying Party 6.3(a)
Information 10.1(a)
Intellectual Property 1.1(a)(vi)
Inventory 1.1(a)(iii)
Knowledge 10.4(a)
Leased Real Property 1.1(a)(i)
Leases 2.10; 3.19
Legal Requirements 2.23; 3.10
Material Permits 2.18(a)
Materials of Environmental Concern 2.16(a)(iv)
Mortgages 1.2(a)(ii)
Mortgage Loan Documents 1.2(a)(ii)
Mortgage Note 1.2(a)(ii)
Mortgaged Property 3.10
Most Recent Balance Sheet 2.5
Natural Resources Damages 8.1(d)
Net Working Capital 1.2(b)(i)(A)
Non-Competition Party 10.2(b)
Non-Competition Period 10.2(b)
-viii-
<PAGE>
Defined Term Section
------------ -------
Non-Offered Employees 10.7(b)
Non-Solicitation Period 10.2(c)
Occurrence-Based Business Policies 10.6
Off-Site Liabilities 2.16(a)(vii)
Ordinary Course of Business 2.3(c)
Original Litigation 6.3(b)(i)
Owned Real Property 1.1(a)(i)
Parent Preliminary Statement
Parent Material Adverse Effect 2.3A(b)
Party Preliminary Statement
Patents in Suit 6.3(b)(i)
Permits 2.23; 3.10
Preliminary Closing Statement 1.2(b)(i)(A)
Prepaid Assets 1.1(a)(ix)
Prime Rate 1.2(b)(iii)(B)(III)
Product 2.12(a)(xiv)
PS Policies 10.7(g)
Purchase Price 1.2(a)
Purchase Price Adjustment 1.2(b)(iii)(B)
Reference Net Working Capital 1.2(b)(iii)(A)
Release 2.16(a)(ii)
Response Costs 8.1(a)
Restrictive Covenants 10.2(d)
Security Interest 2.3(c)
Seller Preliminary Statement
Seller's 401(k) Plan 10.7(c)
Seller Designated Transferee 11.5
Seller Indemnified Parties 6.2
Spin-Off 10.2(b)
Table Products 6.3(b)(i)
Tax Audit 9.4(b)
Tax Returns 2.8
Taxes 2.8
Taxing Authority 9.4(a)
Tax Reserves 9.1(a)
Tecomet Agreements 5.1(h)
Transferred Employees 10.7(b)
U.S. GAAP 1.1(d)(i)
WARN 10.7(h)
-ix-
<PAGE>
ASSET PURCHASE AND SALE AGREEMENT
This ASSET PURCHASE AND SALE AGREEMENT (the "Agreement") is entered into as
of August 13, 2000 among Trex Medical Systems Corporation, a Delaware
corporation ("Seller"), Trex Medical Corporation, ThermoTrex Corporation and
Thermo Electron Corporation, each a Delaware corporation (each, a "Parent"), and
Hologic, Inc., a Delaware corporation ("Buyer"). Seller, Parents and Buyer are
referred to together herein as the "Parties" and individually as a "Party."
INTRODUCTION
A. Seller is engaged, among other activities, in the business of
developing, manufacturing and selling mammography and breast biopsy systems,
mobile X-ray systems, X-ray systems for non-destructive testing, specialized
medical X-ray imaging equipment for cardiac catheterization laboratories,
digital radiographic/fluoroscopic (R/F) systems, electrophysiology products and
general radiography products (such business, as conducted by Seller or any
direct or indirect majority-owned subsidiary of Seller, the "Business");
B. Each Parent directly or indirectly holds a significant amount of the
outstanding common stock of Seller and will benefit from the transactions
contemplated by this Agreement; and
C. Buyer desires to purchase from Seller, and Seller desires to sell to
Buyer, the assets of Seller relating primarily to the Business (other than
assets excluded pursuant hereto), subject to the assumption of certain related
liabilities, all upon the terms and subject to the conditions set forth herein.
NOW, THEREFORE, in consideration of the representations, warranties,
covenants and agreements contained in this Agreement and other good and valuable
consideration, the receipt of which is hereby acknowledged, the Parties agree as
follows:
<PAGE>
ARTICLE I
ASSET PURCHASE
1.1 Purchase and Sale of Assets; Assumption of Liabilities.
(a) Transfer of Assets. On the basis of the representations, warranties,
covenants and agreements and subject to the satisfaction or waiver of the
conditions set forth in this Agreement, on the Closing Date, Seller shall sell,
convey, assign, transfer and deliver to Buyer, and Buyer shall purchase and
acquire from Seller, all of the assets, rights, properties, claims, contracts
and business of Seller at the Closing Date which are primarily utilized in the
Business, of every kind, nature, character and description, tangible and
intangible, real, personal or mixed, wherever located, other than the Excluded
Assets (as defined below) (collectively, the "Acquired Assets"), including,
without limitation, the following assets, in each case to the extent utilized
primarily in the Business:
(i) The fee simple title to the real property described as owned on Annex
1.1(a)(i) (the "Owned Real Property"), together with Seller's right,
title and interest in and to the buildings, other improvements and
fixtures thereon (including premise wiring), and the leasehold
interests in real property described on Annex 1.1(a)(i) as leased by
Seller under the Leases (as defined below), together with Seller's
right, title and interest in and to the leasehold improvements and
fixtures thereon (including premise wiring) (the "Leased Real
Property" and, together with the Owned Real Property and Seller's
right, title and interest in and to the buildings, other improvements
and fixtures thereon, the "Facilities");
(ii) Seller's right, title and interest in and to the equipment, furniture,
furnishings, fixtures, machinery, vehicles, tools, personal computers
of Transferred Employees, test equipment related to maintaining
2
<PAGE>
equipment in the field or to second level tactical support centers,
diagnostic software for testing, repair or ongoing maintenance,
servers and routers on which transactional or communications databases
are run, telephone switching equipment and other tangible personal
property pertaining to the operation of the Business and located at
the Facilities or at other locations, including at suppliers
(collectively, the "Equipment"), and all warranties and guarantees, if
any, express or implied, existing for the benefit of Seller or, to the
extent acquired by Seller, its predecessors-in-interest in connection
with the Equipment to the extent transferable;
(iii)The inventory of raw materials, work in process, finished goods,
office supplies, maintenance supplies and packaging materials of the
Business on hand at the Facilities or elsewhere, in transit or in the
distribution system of Seller on the Closing Date, together with
Seller's right, title and interest in and to the spare parts, supplies
and promotional materials and inventory (collectively, the
"Inventory");
(iv) All management information systems, including hardware and software,
to the extent that such systems and software are transferable by
Seller, and all customer lists, vendor lists, catalogs, research
material, technical information, trade secrets, technology, know-how,
specifications, designs, drawings and processes, and quality control
data, if any;
(v) Seller's right, title and interest in and to contracts, maintenance
and service agreements, joint venture agreements, purchase commitments
for materials and other services, advertising and promotional
agreements, leases, confidentiality agreements, non-competition
agreements and other agreements (including but not limited to any
agreements of Seller with customers, suppliers, dealers, distributors,
sales representatives, agents, personal property lessors, personal
property lessees, licensors, licensees, consignors and consignees
3
<PAGE>
specified therein), whether or not entered into in the Ordinary Course
of Business (as defined below), except for those contracts,
agreements, commitments or leases designated as Excluded Assets on
Annex 1.1(b)(i);
(vi) Seller's right, title and interest in and to the patents, patent
registrations and patent applications, trademarks, trademark
registrations and trademark applications, trade names (together with
the goodwill associated therewith), copyrights, copyright applications
and copyright registrations, including those listed on Section 2.11 of
the Disclosure Schedule (as defined below), including all rights to
sue for past infringement ("Intellectual Property");
(vii)Seller's licenses, permits and franchises, approvals, consents,
product registrations or authorizations issued by any Governmental
Entity (as defined below) or any third party test house, registrar or
certification body, relating to the development, use, maintenance or
occupation of the Facilities or the operation of the Business,
including without limitation product registrations or applications,
approvals or submissions, including all of Seller's rights in 510(k)
pre-clearances, to the United States Federal Food and Drug
Administration or any regulatory body of any foreign government, but
excluding in each case any of the foregoing that are non-transferable;
(viii) Accounts receivable and other receivables of Seller in existence at
the Closing Date (whether or not billed);
(ix) Seller's right to goods and services and all other economic benefits
to be received subsequent to the Closing Date arising out of
prepayments and payments by Seller prior to the Closing Date
(collectively, the "Prepaid Assets");
4
<PAGE>
(x) All books (other than minute books and stock record books), records,
accounts, ledgers, files, documents, correspondence, employment
records, studies, reports and other printed or written materials; and
(xi) All goodwill of the Business.
(b) Excluded Assets. It is expressly understood and agreed that,
notwithstanding anything to the contrary set forth herein, the Acquired Assets
shall not include the following (each, an "Excluded Asset"):
(i) The assets (including, without limitation, all rights, properties,
claims, contracts, business, real property, leasehold interests in
real property, equipment, machinery, vehicles, tools and other
tangible personal property) of all businesses conducted by Seller
other than the Business (including all capital stock of Trophy
Radiologie S.A., and the contracts, agreements, commitments and leases
and other items designated as Excluded Assets on Annex 1.1(b)(i);
(ii) All right, title and interest of Seller in any insurance policies
relating to the Business and all rights of Seller to insurance claims,
related refunds and proceeds arising from or related to (A) the
operations of the Business prior to the Closing (as defined below) and
(B) the Excluded Assets and Excluded Liabilities (as defined below);
(iii)The rights which accrue or will accrue to Seller under this
Agreement;
(iv) All refunds of Taxes (as defined below) relating to Tax Returns (as
defined below) filed or to be filed relating to all periods ending on
or prior to the Closing Date to the extent provided in Section 9.3;
5
<PAGE>
(v) All actions, claims, causes of action, rights of recovery, choses in
action and rights of setoff of any kind arising before, on or after
the Closing Date relating to the items set forth above in this Section
1.1(b) or to any Excluded Liabilities;
(vi) Except as set forth in Section 10.9, all rights, title and interest of
Seller in the name "Trex Medical" and any similar names and logos and
names and logos that incorporate the name "Trex Medical";
(vii)All cash and cash equivalents and similar types of investments,
certificates of deposit, Treasury bills and other marketable
securities of Seller, whether or not related to the Business; and
(viii) All accounts receivable and other amounts payable to Seller from any
Affiliate of Seller.
(c) Instruments of Conveyance and Transfer. On the Closing Date, Seller
shall:
(i) deliver or cause to be delivered to Buyer:
(A) a Bill of Sale in substantially the form attached hereto as
Exhibit A,
(B) an Intellectual Property Assignment in substantially the
form attached hereto as Exhibit B, and
(C) such other deeds, bills of sale, endorsements, consents,
assignments and other good and sufficient instruments of
conveyance and assignment as the Parties and their
respective counsel shall deem necessary or appropriate or as
may be required by the jurisdiction of organization of
Seller or any other jurisdiction in which Seller conducts
6
<PAGE>
the Business or in which the Acquired Assets are located to
vest in Buyer all right, title and interest of Seller in and
to the Acquired Assets; and
(ii) transfer to Buyer all the books, records, files and other data (or
copies thereof) within the possession of Seller relating to the
Acquired Assets; provided, however, that Seller and Parents may retain
duplicate copies of all tax, financial, employment and other similar
materials however maintained.
(d) Assumed Liabilities. On the Closing Date, Buyer shall deliver to Seller
an undertaking (the "Assumption Agreement"), in the form attached hereto as
Exhibit C, pursuant to which Buyer, on and as of the Closing Date, shall assume
and agree to pay, perform and discharge when due, upon the terms and subject to
the conditions of this Agreement, all debts, liabilities and obligations
whatsoever, other than Excluded Liabilities (as defined below), relating
primarily to the Business or the Acquired Assets, whether arising before or
after the Closing Date, including, but not limited to, the following
liabilities, in each case, to the extent related primarily to the Business or
the Acquired Assets:
(i) All liabilities of Seller to the extent reflected on the Most Recent
Balance Sheet (as defined below) and any other liabilities of Seller
arising out of or pertaining to the Business or the Acquired Assets as
of the date of the Most Recent Balance Sheet incurred in the Ordinary
Course of Business which are not required to be reflected thereon
according to United States generally accepted accounting principles
applied consistently with Seller's past practices ("U.S. GAAP"),
except to the extent that any such liabilities are satisfied prior to
the Closing Date;
(ii) All liabilities of Seller arising out of or pertaining to the Business
or the Acquired Assets incurred in the Ordinary Course of Business
subsequent to the date of the Most Recent Balance Sheet to the extent
7
<PAGE>
that such liabilities either (A) would be required to be reflected on
a balance sheet prepared in accordance with U.S. GAAP or (B) would not
be required to be reflected on a balance sheet prepared in accordance
with U.S. GAAP, but which were incurred in the Ordinary Course of
Business, except in either case to the extent satisfied prior to the
Closing;
(iii)All debts, obligations and liabilities of the Business or Seller
which arise on account of Buyer's operation of the Business, the use
or ownership of the Acquired Assets and/or the sale of any products
manufactured and/or sold by Buyer on and after the Closing Date;
(iv) All obligations relating to the Business or the Acquired Assets under
the contracts, agreements, commitments and leases transferred to Buyer
pursuant to Section 1.1(a)(v);
(v) All liabilities and obligations under the licenses, permits and
franchises transferred pursuant to Section 1.1(a)(vii);
(vi) All liabilities and obligations arising out of the ownership, leasing
and/or operation of the Facilities whether prior to or following the
Closing Date;
(vii)All liabilities and obligations with respect to employees and their
benefits to the extent expressly assumed by Buyer pursuant to Section
10.7;
(viii) All liabilities and obligations for any Taxes and expenses expressly
assumed by Buyer pursuant to Article IX and Section 1.4(b);
(ix) All liabilities and obligations for Environmental Matters (as defined
below) assumed by Buyer pursuant to Article VIII;
8
<PAGE>
(x) Subject to the provisions of Section 6.1(c) with respect to the
Fischer Litigation (as defined below), all liabilities with respect to
all actions, suits, proceedings, disputes, claims or investigations
arising out of or related to the Business or that otherwise arise out
of or are related to the Acquired Assets to the extent expressly set
forth in the Disclosure Schedule;
(xi) All liabilities related to the recall of products sold or manufactured
by the Business whether prior to or following the Closing Date, or
with respect to any claim for personal injury, bodily injury or
property damage, including any such claim based on any alleged failure
to warn, relating to or resulting from any product manufactured and
sold by Seller prior to the Closing Date to the extent that a claim is
asserted with respect to such injury or damage on or after the
six-month anniversary of the Closing Date, but only to the extent that
Seller does not actually receive recovery therefor under its
Occurrence-Based Business Policies (as defined below) (it being
understood that Buyer shall, in the event that Seller does receive any
such recovery, be responsible for any deductibles with respect
thereto);
(xii)All liabilities related to the recall of products sold or
manufactured by the Business whether prior to or following the Closing
Date, or with respect to any claim for personal injury, bodily injury
or property damage, including any such claim based on any alleged
failure to warn, relating to or resulting from any product that
constituted, on the Closing Date, finished goods in inventory to the
extent that a claim is asserted with respect to such injury or damage
on or after the six-month anniversary of the Closing Date, but only to
the extent that Seller does not actually receive recovery therefor
under its Occurrence-Based Business Policies (it being understood that
9
<PAGE>
Buyer shall, in the event that Seller does receive any such recovery,
be responsible for any deductibles with respect thereto); and
(xiii) All liabilities related to the recall of products sold or
manufactured by the Business whether prior to or following the Closing
Date, or with respect to any claim for personal injury, bodily injury
or property damage, including any such claim based on any alleged
failure to warn, relating to or resulting from any product
manufactured or, except as provided in Section 1.1(e)(ii)(B) below,
sold by Buyer on or after the Closing Date, but only to the extent
that Seller does not actually receive recovery therefor under its
Occurrence-Based Business Policies (it being understood that Buyer
shall, in the event that Seller does receive any such recovery, be
responsible for any deductibles with respect thereto).
The debts, liabilities and obligations assumed by Buyer in
accordance with this Section 1.1(d) are sometimes hereinafter referred to as the
"Assumed Liabilities."
(e) Excluded Liabilities. It is expressly understood and agreed that,
notwithstanding anything to the contrary in this Agreement, Assumed Liabilities
shall not include the following (collectively, the "Excluded Liabilities"):
(i) All liabilities arising out of or relating to the Excluded Assets;
(ii) All liabilities with respect to any claim for personal injury, bodily
injury or property damage, including any such claim based on any
alleged failure to warn, related to or resulting from any product (A)
manufactured and sold by Seller prior to the Closing Date, but only to
the extent that a claim with respect to such injury or damage is
asserted prior to the six-month anniversary of the Closing Date, or
(B) that constituted, on the Closing Date, finished goods in
inventory, but only to the extent that a claim with respect to such
10
<PAGE>
injury or damage is asserted prior to the six-month anniversary of the
Closing Date;
(iii)All liabilities and obligations for which Seller has expressly
assumed responsibility pursuant to this Agreement in accordance with
Articles VIII and IX;
(iv) All debts, liabilities or obligations of Seller that do not primarily
arise out of or are not primarily related to the Business or that do
not otherwise primarily arise out of or are not otherwise primarily
related to the Acquired Assets;
(v) All liabilities and obligations of Seller for costs and expenses
incurred in connection with this Agreement or the consummation of the
transactions contemplated by this Agreement;
(vi) All obligations for borrowed money;
(vii)All debts, liabilities and obligations of Seller to its Affiliates
arising prior to the Closing Date;
(viii) Except to the extent relating to or arising out of any Assumed
Liability and except as otherwise provided in clauses (x), (xi), (xii)
and (xiii) of Section 1.1(d) above, all liabilities with respect to
all actions, suits, proceedings, disputes, claims or investigations to
the extent arising out of or relating to the ownership or operation of
the Acquired Assets prior to the Closing Date;
(ix) All liabilities and obligations for any Taxes and expenses expressly
retained by Seller pursuant to Article IX and Section 1.4(b);
(x) All liabilities and obligations for Environmental Matters expressly
retained by Seller pursuant to Article VIII;
11
<PAGE>
(xi) All liabilities and obligations for any matter covered by
Occurrence-Based Business Policies with respect to any events,
occurrences or matters occurring prior to the Closing, but only if and
to the extent that Seller actually receives recoveries thereunder with
respect thereto;
(xii)Except to the extent constituting an Assumed Liability pursuant to
clauses (i), (ii) or (vii) of Section 1.1(d), all liabilities for
employment-related matters which relate to the conduct of the Business
prior to the Closing or any liability with respect to any Business
Benefit Plans, except to the extent explicitly assumed by Buyer
pursuant to Section 10.7; and
(xiii) All costs and expenses incurred prior to the Closing Date in
connection with the defense of the Fischer Litigation.
1.2 Purchase Price and Related Matters.
(a) Purchase Price. Regardless of whether the transfer of any Acquired
Asset has been deferred pursuant to the provisions of Section 1.4, in
consideration of the sale and transfer of the Acquired Assets, and subject to
the terms and conditions of this Agreement, Buyer shall on the Closing Date
assume the Assumed Liabilities as provided in Section 1.1(d) hereof and shall
pay to Seller a total purchase price of U.S. $55,000,000 (the "Purchase Price")
payable as follows:
(i) by wire transfer to Seller in immediately available funds U.S.
$30,000,000 into an account designated by Seller; and
(ii) by the delivery to Seller of Buyer's Secured Promissory Note in the
original principal amount of $25,000,000, in the form attached hereto
as Exhibit D (the "Mortgage Note"), secured by both a first mortgage
12
<PAGE>
lien on the property located at 36 Apple Ridge Road, Danbury,
Connecticut, pursuant to a Mortgage, Security Agreement and Assignment
of Leases and Rents in the form attached hereto as Exhibit E (the
"Danbury Mortgage"), and a first mortgage lien on the property located
at 35 Crosby Drive, Bedford, Massachusetts, pursuant to a Mortgage,
Security Agreement and Assignment of Leases and Rents in the form
attached hereto as Exhibit F (individually, the "Bedford Mortgage" and
together with the Danbury Mortgage, the "Mortgages") and guaranteed by
each United States subsidiary of Buyer pursuant to a Guaranty in the
form attached hereto as Exhibit G (individually, the "Guaranty" and
collectively with the Mortgages and the Mortgage Note, the "Mortgage
Loan Documents").
(b) Purchase Price Adjustment.
(i) Preliminary Closing Statement.
(A) As soon as reasonably practical after the Closing but in any
event within forty-five (45) days thereafter, Seller shall
prepare and deliver to Buyer an unaudited Statement of Net
Working Capital for the Business as of the Closing Date (the
"Preliminary Closing Statement"). For purposes of this section,
"Net Working Capital" shall mean all current assets that
constitute Acquired Assets less all current liabilities that
constitute Assumed Liabilities. The Preliminary Closing Statement
shall be prepared in accordance with U.S. GAAP, as reflected in
the Most Recent Balance Sheet, and shall not give effect to the
transactions contemplated by this Agreement.
(B) Buyer and its independent certified public accountants may review
the Preliminary Closing Statement and the books of account of the
Business and may make inquiry of the representatives of Seller's
accountants and Seller. Buyer will make available to Seller and
13
<PAGE>
its representatives, as reasonably requested by Seller, all
books, records and other documents pertaining to the Business
deemed necessary or desirable by Seller in preparing the
Preliminary Closing Statement.
(C) The Preliminary Closing Statement shall be binding and conclusive
upon, and deemed accepted by, Buyer unless Buyer shall have
notified Seller in writing within thirty (30) days after receipt
of the Preliminary Closing Statement of any objections thereto. A
notice under this Section 1.2(b)(i)(C) shall specify in
reasonable detail the items in the Preliminary Closing Statement
which are being disputed, and a summary of the reasons for such
dispute.
(ii) Disputes; Final Closing Statement.
(A) Buyer and Seller shall use reasonable efforts to resolve any
objections on the Preliminary Closing Statement. At the request
of Buyer or Seller, any dispute between Buyer and Seller relating
to objections made to the Preliminary Closing Statement which
cannot be resolved by them within thirty (30) days after notice
of any objections to such Preliminary Closing Statement pursuant
to Section 1.2 shall be referred to the Boston, Massachusetts
office of PricewaterhouseCoopers LLP (the "Disputes Auditor") for
decision, which shall be final and binding on all Parties, absent
fraud or manifest error. Buyer and Seller agree that they will
require the Disputes Auditor to render its decision within thirty
(30) days after referral of the dispute to the Disputes Auditor
for decision hereunder. Before referring a matter to the Disputes
Auditor, Buyer and Seller shall agree on procedures to be
followed by the Disputes Auditor (including procedures for
14
<PAGE>
presentation of evidence). If Buyer and Seller are unable to
agree upon procedures before the end of thirty (30) days after
notice of any objections pursuant to Section 1.2, the Disputes
Auditor shall establish procedures giving due regard to the
provisions of this Agreement and the intention of Buyer and
Seller to resolve disputes as quickly, efficiently and
inexpensively as possible. The Disputes Auditor's procedures may
be, but need not be, those proposed by either Buyer or Seller. In
resolving any objection, the Disputes Auditor shall adjust the
Preliminary Closing Statement only as needed to conform with the
requirements of Section 1.2(b)(i)(A). Nothing herein shall be
construed to authorize or permit the Disputes Auditor to
determine (i) any questions or matter whatsoever under or in
connection with this Agreement except the determination of what
adjustments, if any, must be made in one or more of the items
reflected in the Preliminary Closing Statement in response to
objections thereto made by the Party that submitted the statement
of objections or (ii) an adjustment to an item on the Preliminary
Closing Statement that is outside of the range defined by amounts
as finally proposed by Seller and Buyer, respectively. The fees
and expenses of the Disputes Auditor for, and relating to, the
making of any such decision shall be borne by Buyer and Seller
equally; provided, however, that if the Disputes Auditor
determines that either Buyer or Seller has adopted a position or
positions with respect to the Preliminary Closing Statement that
is frivolous or clearly without merit, the Disputes Auditor may,
in its discretion, assign a greater portion of any such fees and
expenses to such Party.
15
<PAGE>
(B) The Preliminary Closing Statement shall become final and binding
on both Buyer and Seller upon the earliest of (I) if no such
notice has been given, the expiration of the period within which
Buyer may notify Seller of any objections thereto pursuant to
Section 1.2(b)(i)(C), (II) agreement by Seller and Buyer that
such Preliminary Closing Statement, together with any
modifications thereto agreed by Seller and Buyer, shall be final
and binding, and (III) the date on which the Disputes Auditor
shall issue its decision with respect to any dispute relating to
such Preliminary Closing Statement. The Preliminary Closing
Statement, as adjusted pursuant to any agreement between Buyer
and Seller or pursuant to the decision of the Disputes Auditor,
when final and binding on both such Parties in accordance with
this paragraph, is herein referred to as the
"Final Closing Statement."
(iii) Adjustment.
(A) For purposes of this Section 1.2, the "Reference Net Working
Capital" shall be $23,537,000.
(B) Within ten (10) business days after the Final Closing Statement
has been determined to be binding on Seller and Buyer pursuant to
Section 1.2(b)(ii)(B), the Purchase Price shall be adjusted
("Purchase Price Adjustment") and any adjustment paid as follows:
(I) If the Net Working Capital as reflected on the Final Closing
Statement exceeds the Reference Net Working Capital, the
Purchase Price shall be increased in an amount equal to such
excess and such amount shall be paid by Buyer to Seller by
16
<PAGE>
wire transfer of immediately available U.S. funds in
accordance with wire instructions provided by Buyer to
Seller in writing, or
(II) If the Net Working Capital as reflected on the Final Closing
Statement is less than the Reference Net Working Capital,
the Purchase Price shall be reduced by an amount equal to
such deficit and such amount shall be paid by Seller to
Buyer by wire transfer of immediately available U.S. funds
in accordance with wire instructions provided by Buyer to
Seller in writing.
(III)If any amount payable pursuant to this Section 1.2(b)(iii)
is not paid when due hereunder, such amount shall thereafter
bear interest (calculated based on a year consisting of 365
days) from the due date until the date of payment in full,
at a rate which is the prime rate of interest (as published
in The Wall Street Journal) (the "Prime Rate") in effect
from time to time, with any changes in such Prime Rate being
effective on the date of publication thereof in the New York
City version of The Wall Street Journal.
(IV) The Purchase Price, as adjusted in accordance with the
Purchase Price Adjustment, if any, shall hereinafter be
referred to as the "Adjusted Purchase Price."
(c) Allocation. As soon as practicable following the Closing Date, Seller
and Buyer shall agree to an allocation schedule (the "Asset Allocation
Schedule") allocating the Purchase Price and the Assumed Liabilities among the
Acquired Assets of Seller as of the Closing Date. Such Asset Allocation Schedule
shall be prepared in accordance with the rules under Section 1060 of the
17
<PAGE>
Internal Revenue Code of 1986, as amended (the "Code"), and the Treasury
Regulations promulgated thereunder. The Parties recognize that the Purchase
Price and Assumed Liabilities do not include Buyer's acquisition expenses and
that Buyer will allocate such expenses appropriately. Seller and Buyer agree to
act in accordance with the computations and allocations contained in the Asset
Allocation Schedule in any relevant Tax Returns or filings (including any forms
or reports required to be filed pursuant to Section 1060 of the Code, the
Treasury Regulations promulgated thereunder or any provisions of local, state
and foreign law ("1060 Forms")), and to cooperate in the preparation of any 1060
Forms and to file such 1060 Forms in the manner required by applicable law. If
the Purchase Price is adjusted under Section 1.2(b), then, after the adjustment
has become final in accordance with Section 1.2(b)(ii)(B), Seller and Buyer
shall agree to a revised Asset Allocation Schedule based upon the Adjusted
Purchase Price and the revised Assumed Liabilities.
1.3 The Closing.
(a) Time and Location. If this Agreement has not been earlier terminated in
accordance with Section 7.1 hereof, the closing of the transactions contemplated
by this Agreement ("Closing") shall take place at the offices of Hale and Dorr
LLP in Boston, Massachusetts, commencing at 10:00 a.m., local time, on September
15, 2000 or, provided that all of the conditions to the obligations of Seller
and Buyer to consummate the transactions contemplated hereby have been satisfied
in full or waived, such earlier time and date as Seller and Buyer may agree, or,
if all of the conditions to the obligations of Seller and Buyer to consummate
the transactions contemplated hereby have not been satisfied in full or waived
by September 15, 2000, on such mutually agreeable later date as soon as
practicable (but in no event more than three Business Days (as defined below))
18
<PAGE>
after the date on which all such conditions to the obligations of Seller and
Buyer to consummate the transactions contemplated hereby first become
susceptible of being satisfied or waived) (the "Closing Date"). "Business Day"
shall mean any day other than a Saturday or Sunday or a day on which banking
institutions located in New York, New York are permitted or required by law,
executive order or governmental decree to remain closed.
(b) Actions at the Closing.
At the Closing:
(i) Seller shall deliver (or cause to be delivered) to Buyer the
various certificates, instruments and documents required to be
delivered under Section 5.1;
(ii) Buyer shall deliver (or cause to be delivered) to Seller the
various certificates, instruments and documents required to be
delivered under Section 5.2;
(iii)Seller shall deliver (or cause to be delivered) to Buyer an
executed Bill of Sale and Intellectual Property Assignment and
such other deeds and instruments of conveyance as Buyer may
reasonably request in order to effect the sale, transfer,
conveyance and assignment to Buyer of valid ownership of the
Acquired Assets;
(iv) Buyer shall deliver to Seller an executed Assumption Agreement
and such other instruments as Seller may reasonably request in
order to effect the assumption by Buyer of the Assumed
Liabilities;
(v) Buyer shall deliver to Seller the Purchase Price in the manner
set forth in Section 1.2(a);
(vi) Seller shall deliver to Buyer, or otherwise put Buyer in
possession and control of, all of the Acquired Assets of a
tangible nature; and
19
<PAGE>
(vii)Buyer and Seller shall execute and deliver to each other a
cross-receipt evidencing the transactions referred to above.
1.4 Deferred Transfers.
(a) If, on the Closing Date, Seller has not obtained any authorization,
approval, order, license, permit, franchise or consent from any Governmental
Entity or any counterparty to a contract (an "Approval"), (i) which is necessary
in order to effect the transfer of any of the Acquired Assets to Buyer pursuant
to the terms and conditions of this Agreement or (ii) the absence of which would
render such transfer void or voidable, then, in each such case, such Acquired
Assets (the "Deferred Items") shall be withheld from sale pursuant to the
Agreement without any reduction in the Purchase Price. From and after the
Closing, Seller and Buyer shall continue to use commercially reasonable efforts
to obtain all Approvals relating to the Deferred Items or the transfer thereof;
provided that Seller shall not be required to make any payments or agree to any
material undertakings in connection therewith. Upon receipt of such Approval
with respect to any Deferred Item, such Deferred Item shall be transferred to
Buyer and constitute an "Acquired Asset" for purpose of the Agreement.
(b) Until such time as any Deferred Items have been transferred to Buyer
pursuant to this Section 1.4 (each, a "Deferred Transfer"), the Deferred Items
shall be held for Buyer's benefit and the Acquired Assets comprising Deferred
Items shall be managed and operated by Seller for Buyer's benefit and account in
the manner hereinafter provided from the Closing to the time of the respective
Deferred Transfers, with all gains, income, losses, Taxes or other items
generated thereby to be for Buyer's account. Seller shall not have any liability
to Buyer arising out of the management or operation by Seller of any Acquired
Asset comprising Deferred Items, other than for gross negligence or willful
misconduct.
20
<PAGE>
Buyer shall reimburse Seller and shall hold Seller harmless from and
against all liabilities incurred or asserted as a result of Seller's
post-Closing direct or indirect ownership, management, operation or sale (other
than to Buyer) of the Deferred Items, including, without limitation, the amount
of any additional Taxes payable by Seller (whether currently or in the future)
in excess of the amount of Taxes which would have been payable by Seller, after
application of the terms of this Agreement, if the Deferred Items had been
transferred to Buyer or any of its Affiliates on the Closing Date. Such
reimbursement shall be made by Buyer and received by Seller within five (5)
Business Days of Buyer's receipt of any bill, claim, invoice or other request
for payment from Seller. Subject to applicable law and regulations Seller shall,
in respect of any Deferred Items, use all commercially reasonable efforts to
follow and implement the reasonable written instructions and policies of Buyer
relating to the holding of the Deferred Items.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to Buyer that the statements contained in
this Article II are true and correct, except as set forth in the disclosure
schedule attached hereto (the "Disclosure Schedule"). The Disclosure Schedule
shall be arranged in sections and paragraphs corresponding to the numbered and
lettered sections and paragraphs contained in this Article II, and the
disclosures in any section or paragraph of the Disclosure Schedule shall qualify
(a) the corresponding section or paragraph in this Article II and (b) other
sections or paragraphs in this Agreement, including without limitation Article
II, to the extent that it is reasonably apparent (notwithstanding the absence of
a specific cross-reference) from a reading of the disclosure that such
disclosure also qualifies or applies to such other sections or paragraphs.
21
<PAGE>
2.1 Organization, Qualification and Corporate Power. Seller is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware and is duly qualified to conduct business under the
laws of each jurisdiction, listed on Section 2.1 of the Disclosure Schedule,
where the character of the properties owned, leased or operated by it or the
nature of its activities, in each case as they relate exclusively to the
Business, makes such qualification necessary, except for any such failures to be
qualified that would not reasonably be expected to have a Business Material
Adverse Effect (as defined below). Seller has all requisite corporate power and
authority to carry on the business in which it is now engaged and to own and use
the properties now owned and used by it. For purposes of this Agreement,
"Business Material Adverse Effect" means any change, effect or circumstance that
(i) is materially adverse to the assets, business, financial condition or
results of operations of the Business (other than changes that are the result of
economic factors affecting the economy as a whole or changes that are the result
of factors generally affecting the industry or specific markets in which the
Business competes), or (ii) materially impairs the ability of Seller to
consummate the transactions contemplated by this Agreement; provided, however,
that a "Business Material Adverse Effect" shall not include any adverse change,
effect or circumstance (I) primarily arising out of or resulting primarily from
actions contemplated by the Parties in connection with this Agreement, or (II)
that is primarily attributable to the announcement or performance of this
Agreement or the transactions contemplated by this Agreement.
2.2 Authority. Seller has all requisite corporate power and authority to
execute and deliver this Agreement and to perform its obligations hereunder. The
execution and delivery of this Agreement by Seller and the performance by Seller
of its obligations hereunder and the consummation by Seller of the transactions
contemplated hereby have been duly and validly authorized by all necessary
22
<PAGE>
corporate action on the part of Seller. This Agreement has been duly and validly
executed and delivered by Seller and, assuming this Agreement constitutes the
valid and binding agreement of Buyer, constitutes a valid and binding obligation
of Seller, enforceable against Seller in accordance with its terms, except as
enforceability may be limited by bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium or other similar laws relating to or affecting the
rights of creditors generally and by equitable principles, including those
limiting the availability of specific performance, injunctive relief and other
equitable remedies and those providing for equitable defenses.
2.3 Noncontravention. Subject to compliance with the applicable
requirements of the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended (the "Hart-Scott-Rodino Act") and except as set forth on Section 2.3 of
the Disclosure Schedule, neither the execution and delivery of this Agreement by
Seller, nor the consummation by Seller of the transactions contemplated hereby,
will:
(a) conflict with or violate any provision of the charter or bylaws of
Seller;
(b) require on the part of Seller any filing with, or any permit,
authorization, consent or approval of, any court, arbitrational tribunal,
administrative agency or commission or other governmental or regulatory
authority or agency (a "Governmental Entity"), except for any filing, permit,
authorization, consent or approval which if not obtained or made would not
reasonably be expected to have a Business Material Adverse Effect;
(c) conflict with, result in a breach of, constitute (with or without due
notice or lapse of time or both) a default under, result in the acceleration of,
create in any party the right to accelerate, terminate, modify or cancel, or
require any notice, consent or waiver under, any contract, lease, sublease,
license, sublicense, franchise, permit, indenture, agreement or mortgage for
23
<PAGE>
borrowed money, instrument of indebtedness, Security Interest or other
arrangement to which Seller is a party or by which Seller is bound or to which
any of its assets are subject, except for any conflict, breach, default,
acceleration, right to accelerate, termination, modification, cancellation,
notice, consent or waiver that would not reasonably be expected to have a
Business Material Adverse Effect. For purposes of this Agreement, "Security
Interest" means any mortgage, pledge, security interest, encumbrance, charge or
other lien (whether arising by contract or by operation of law), other than (i)
mechanic's, materialmen's, landlord's and similar liens, (ii) liens arising
under worker's compensation, unemployment insurance, social security, retirement
and similar legislation, (iii) liens on goods in transit incurred pursuant to
documentary letters of credit, in each case arising in the ordinary course of
business consistent in all material respects with past custom and practice of
the Business ("Ordinary Course of Business"), (iv) liens for Taxes not yet due
and payable, (v) liens for Taxes which are being contested in good faith and by
appropriate proceedings, and (vi) liens relating to capitalized lease financings
or purchase money financings that have been entered into in the Ordinary Course
of Business, and (vii) liens arising solely by action of Buyer;
(d) result in the imposition of any Security Interest upon the Acquired
Assets;
or
(e) violate any order, writ, injunction, decree, statute, rule or
regulation applicable to Seller or any of its properties or assets, except for
any violation that would not reasonably be expected to have a Business Material
Adverse Effect.
2.4 Subsidiaries. Seller does not, with respect to the Business, control,
directly or indirectly, or have any direct or indirect equity participation in,
any corporation, limited liability company, partnership, trust or other business
association.
24
<PAGE>
2.5 Financial Information. Attached as Section 2.5 of the Disclosure
Schedule is the unaudited pro forma consolidated balance sheet prepared by
Seller (the "Most Recent Balance Sheet") for the Business as of July 1, 2000
which has been prepared in accordance with U.S. GAAP, except for the absence of
footnotes, and which fairly presents, in all material respects, the financial
condition, assets and liabilities of the Business as of the date thereof.
2.6 Absence of Certain Changes. Except as contemplated by this Agreement
and except as set forth in Section 2.6 of the Disclosure Schedule, since July 1,
2000, there have not been any adverse changes in the financial condition or
results of operations of the Business, except for any adverse changes that have
not had and would not reasonably be expected to have a Business Material Adverse
Effect. Except as contemplated by this Agreement and except as set forth in
Section 2.6 of the Disclosure Schedule, between July 1, 2000 and the date of
this Agreement, the Business, taken as a whole, has not taken any of the
following actions (or permitted any of the following events to occur):
(a) borrowed any amount, except for (i) accounts payable arising in the
Ordinary Course of Business and (ii) borrowings from "Affiliates" (as such term
is defined in Rule l2b-2 under the Securities Exchange Act of 1934) of Seller,
all of which borrowings in this paragraph (a) shall be paid in full or canceled
prior to the Closing;
(b) subjected any Acquired Assets to any Security Interest;
(c) sold, assigned, licensed or transferred any portion of the assets of
the Business in a single transaction or series of related transactions in an
amount in excess of $100,000, except for the sale, assignment, license or
transfer of assets from inventory in the Ordinary Course of Business;
25
<PAGE>
(d) suffered any extraordinary losses (whether or not covered by insurance)
material to the Business, or waived any rights of material value to the
Business;
(e) granted any rights to severance benefits, "stay pay" or termination pay
to any director, officer or other employee of the Business, increased benefits
payable or potentially payable to any such director, officer or other employee
of the Business under any previously existing severance benefits, "stay-pay" or
termination pay arrangements, or materially increased benefits payable or
potentially payable to any other employee of the Business under any previously
existing severance benefits, "stay pay" or termination pay arrangements (in each
case, other than grants, increases or terminations that are substantially
consistent with the past practice of the Business);
(f) except in accordance with Seller's budget for capital expenditures in
connection with the Business, made any capital expenditures or commitments
therefor in an amount in excess of $200,000 in the aggregate;
(g) materially amended the terms of any existing Business Benefit Plan (as
defined below);
(h) changed its accounting principles, methods or practices or the manner
in which it keeps its books and records or changed its practices with regard to
reserves, accruals, sales, receivables, payables or accrued expenses, except in
each case to conform to changes in U.S. GAAP; or
(i) entered into any agreement or commitment with respect to any of the
matters referred to in paragraphs (a) through (h) of this Section 2.6.
2.7 Undisclosed Liabilities. To Seller's knowledge, except as set forth in
Section 2.7 of the Disclosure Schedule, the Business does not have any liability
26
<PAGE>
which is material to the Business, except for (a) liabilities shown on the Most
Recent Balance Sheet, (b) liabilities which have arisen since July 1, 2000 in
the Ordinary Course of Business, (c) contractual liabilities incurred in the
Ordinary Course of Business, and (d) contractual liabilities pursuant to the
agreements listed in Sections 2.10, 2.11 and 2.12 of the Disclosure Schedule.
2.8 Tax Matters. Seller has filed all material Tax Returns (as defined
below) that it was required to file and all such Tax Returns were correct and
complete, except for any error or omission that would not reasonably be expected
to have a Business Material Adverse Effect. Seller has paid all Taxes (as
defined below) that are due with respect to all periods covered by any such Tax
Returns. All Taxes that Seller is or was required by law to withhold or collect
have been duly withheld or collected and, to the extent required, have been paid
to the proper Governmental Entity. For purposes of this Agreement, "Taxes" means
all taxes, including without limitation income, gross receipts, ad valorem,
value-added, excise, real property, personal property, sales, use, transfer,
withholding, payroll, employment and franchise taxes imposed by the United
States of America or any Governmental Entity, or any agency thereof, or other
political subdivision of the United States or any such government, and any
interest, penalties, assessments or additions to tax resulting from,
attributable to or incurred in connection with any tax or any contest or dispute
thereof. For purposes of this Agreement, "Tax Returns" means all reports,
returns, declarations, statements, forms or other information required to be
supplied to a taxing authority in connection with Taxes. Seller has no liens or
outstanding, unpaid assessments for Taxes against it and has filed no consents
to extend the statute of limitations with respect to any Taxes.
2.9 Tangible Personal Property. Except as set forth on Section 2.9 of the
Disclosure Schedule, Seller has good title to all of the tangible personal
property reflected on the Most Recent Balance Sheet (other than property sold,
27
<PAGE>
consumed or otherwise disposed of in the Ordinary Course of Business since the
date of the Most Recent Balance Sheet), free and clear of all Security
Interests. Except as set forth on Section 2.9 of the Disclosure Schedule, all of
the tangible personal property currently employed by Seller in the conduct of
the Business, whether owned or leased, is, in the aggregate, (a) in good
operating condition and repair, normal wear and tear excepted, and (b) adequate
for the conduct of the Business as presently conducted by Seller. Except as set
forth on Section 2.9 of the Disclosure Schedule, all inventory included in the
Most Recent Balance Sheet is raw material, work in process or finished goods for
products currently marketed and sold by the Business and which is, net of the
reserve for obsolete inventory set forth on the Most Recent Balance Sheet,
usable or salable in the Ordinary Course of Business and all such inventory is
located at the Facilities listed on Annex 1.1(a)(i).
2.10 Facilities and Owned and Leased Real Property. All of the Facilities
listed on Annex 1.1(a)(i) are used primarily with respect to the Business and
there is no other facility or location occupied by the Business. Seller has
good, record and marketable title to the Owned Real Property free and clear of
all mortgages, deeds of trust, liens or other encumbrances related to or
securing any Excluded Liability, and other encumbrances of any kind or nature
except, in the case of such other encumbrances only, encumbrances which would
not, individually or in the aggregate, reasonably be expected to have a Business
Material Adverse Effect. Section 2.10 of the Disclosure Schedule lists all of
the leases or subleases to Seller of the Leased Real Property and the actual
lease rate (basic rent plus any Taxes, common charges or other amounts due to or
on behalf of the landlord under the lease). Seller has made available to Buyer
correct and complete copies of all the leases and subleases, as amended to date,
listed therein (the "Leases"). With respect to each such Lease:
28
<PAGE>
(a) the Lease is a legal, valid, binding and enforceable obligation of
Seller and, to Seller's knowledge, each other party to such Lease, except as
enforceability may be limited by bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium or other similar laws relating to or affecting the
rights of creditors generally and by equitable principles, including those
limiting the availability of specific performance, injunctive relief and other
equitable remedies and those providing for equitable defenses;
(b) neither Seller nor, to Seller's knowledge, any other party to the Lease
is in breach or default and, to Seller's knowledge, no event has occurred which,
with notice or lapse of time or both, would constitute a breach or default by
Seller or permit termination, modification or acceleration thereunder by any
landlord;
(c) there are no disputes, oral agreements or forbearance programs in
effect as to the Lease;
(d) Seller has not assigned, transferred, conveyed, mortgaged, deeded in
trust or encumbered any interest in the leasehold or subleasehold to the Lease;
and
(e) to Seller's knowledge, there are no pending or overtly threatened
condemnation proceedings, lawsuits or administrative actions with respect to the
property subject to the Lease.
To Seller's knowledge, (i) the current use of the Facilities by the
Business are in compliance with all applicable zoning laws, building codes,
ordinances and regulations, (ii) all Facilities, and the current use and
operation thereof, comply in all material respects with all insurance
requirements applicable thereto, and (iii) the Owned Real Property is accessible
via public roadways or private easements.
29
<PAGE>
2.11 Intellectual Property.
(a) Section 2.11(a) of the Disclosure Schedule lists all Intellectual
Property that is material to the Business taken as a whole (the "Designated
Intellectual Property"). Seller owns, or is licensed or otherwise possesses
valid rights to use, the Designated Intellectual Property, except where any
failure to own, license or otherwise possess valid rights to use such Designated
Intellectual Property would not reasonably be expected to have a Business
Material Adverse Effect. Section 2.11(a) of the Disclosure Schedule sets forth
with reasonable specificity, as to each item of Designated Intellectual
Property, the nature of Seller's interest therein, whether ownership, license
(perpetual or limited, royalty-free or not) or otherwise.
(b) Except as set forth in Section 2.11(b) of the Disclosure Schedule,
Seller has not been named in any suit, action or proceeding, and has not
received any written communication from a third party, which involves a claim or
inquiry, relating to the Business, of infringement of any patents, trademarks,
trade names, service marks, copyrights, trade secrets or other intellectual
property rights of any third party. Except as set forth in Section 2.11(b) of
the Disclosure Schedule, the Business as presently conducted does not infringe
any patents, trade secrets, trademarks, trade names, service marks, copyrights
or other intellectual property rights of any third party, except for any such
infringement that would not reasonably be expected to have a Business Material
Adverse Effect.
(c) Except as set forth on Section 2.11(c) of the Disclosure Schedule,
Seller has performed the obligations required to be performed by it under the
terms of any agreement pursuant to which Seller has rights in any Designated
Intellectual Property, except where the failure to perform would not, alone or
with the giving of notice or the passage of time or both, give rise to a right
30
<PAGE>
by the other party thereto to cancel or terminate the agreement or to seek
damages, injunctive relief or specific performance with respect thereto.
(d) Except as set forth in Section 2.11(d) of the Disclosure Schedule,
Seller has not granted to any Affiliate or third party any license or right to
the use of any of the Designated Intellectual Property, other than in connection
with the sale of goods or services by Seller in the Ordinary Course of Business.
2.12 Contracts.
(a) Except as set forth in Section 2.12 of the Disclosure Schedule, Seller
(with respect to the operation or conduct of the Business) is not a party to,
and the Acquired Assets do not include, any:
(i) written agreement or otherwise enforceable arrangement (or group of
related arrangements with the same person or such person's Affiliates)
for the lease of personal property from or to third parties providing
for lease payments the remaining unpaid balance of which is in excess
of $100,000;
(ii) written agreement or otherwise enforceable arrangement (or group of
related arrangements with the same person or such person's Affiliates)
for the purchase or sale of products or services under which the
undelivered or unpaid balance of such products and services is in
excess of $250,000, other than (A) purchase orders relating to the
supply of goods and services to the Business in the Ordinary Course of
Business and (B) agreements relating to the purchase by Seller of
goods and services to the Business in the Ordinary Course of Business
which are cancelable by Seller without penalty (other than payment for
goods or services actually received or provided), upon six months or
shorter notice;
31
<PAGE>
(iii)written agreement or otherwise enforceable arrangement establishing a
partnership or joint venture or any other similar arrangement where
the liabilities of another person in excess of $100,000 individually
or $1,000,000 in the aggregate have been assumed by, or by operation
of law be or become, those of the Business;
(iv) written agreement or otherwise enforceable arrangement (or group of
related arrangements with the same person or such person's Affiliates)
under which it has created, incurred, assumed or guaranteed (or may
create, incur, assume or guarantee) indebtedness (including
capitalized lease obligations) the outstanding amount of which is more
than $250,000 or under which it has imposed (or may impose) a Security
Interest on any Acquired Asset, except for any Security Interests
relating to capitalized lease financing in an aggregate amount of less
than $250,000;
(v) written agreement or otherwise enforceable arrangement that prohibits
the Business from engaging in any business anywhere in the world,
other than exclusive distribution agreements or arrangements entered
into in the Ordinary Course of Business;
(vi) written agreement or otherwise enforceable arrangement under which the
consequences of a default or termination would reasonably be expected
to have a Business Material Adverse Effect;
(vii)written agreement or otherwise enforceable arrangement involving
(with respect to the Business) Seller's executive officers or
directors;
(viii) written agreement or otherwise enforceable arrangement for the
employment or compensation of any individual (whether as an employee
or an independent contractor) on a full-time or part-time basis
32
<PAGE>
providing base annual compensation in excess of $200,000 during fiscal
1999 or 2000;
(ix) written severance, "stay pay" or termination agreement or otherwise
enforceable arrangement with any officer or other employee of the
Business;
(x) written agreement or otherwise enforceable arrangement for the sale of
any assets or properties of (with respect to the Business) Seller,
other than goods and services in the Ordinary Course of Business,
which involves a payment to be made to Seller in excess of $250,000;
(xi) with respect to the Business, any written agreement or otherwise
enforceable arrangement for the acquisition by Seller of any operating
business or any capital stock or other equity interest of any other
person or asset purchase agreement, stock purchase agreement or any
other similar acquisition or divestiture agreement, in each case for
consideration in excess of $1,000,000;
(xii)with respect to the Business, any written agreement or otherwise
enforceable arrangement relating to borrowed money (other than
agreements or arrangements with Affiliates the liabilities or
obligations under which are Excluded Liabilities) or to any
obligation, covenant or indemnity of Seller with respect to which
Seller is a guarantor or surety or has provided any letter of comfort,
letter of credit, surety bond or other similar assurance to any third
party;
(xiii) written agreement or otherwise enforceable arrangement involving the
licensing of, or assignment or transfer of, to or by Seller of any
rights in Designated Intellectual Property, other than to customers in
33
<PAGE>
connection with the sale of goods or services in the Ordinary Course
of Business or in connection with advertising, product promotion or
other non-exclusive, short-term uses;
(xiv)guaranty, buy-back or repurchase obligation with respect to any
product of the Business now in production and sold or under warranty
by or serviced by the Business (each, a "Product"), other than
pursuant to customer warranties in the Ordinary Course of Business;
and
(xv) other written agreement or otherwise enforceable arrangement (or group
of related agreements with the same person or such person's
Affiliates) involving payments to be made or received after the date
of this Agreement in excess of $500,000; provided, however, that (x)
no agreement referred to in clauses (i) through (xv) above need be
disclosed unless Seller currently has, or may in the future have
(without taking into account the transactions contemplated by this
Agreement), any rights or obligations thereunder and (y) Leases are
not required to be disclosed in response to any provision of this
Section 2.12 and shall not constitute Designated Contracts (as defined
below).
(b) Except as set forth in Section 2.12(b) of the Disclosure Schedule,
Seller has made available to Buyer a correct and complete copy of each
agreement, as amended to date, listed in Section 2.12 of the Disclosure Schedule
(the "Designated Contracts"). Each Designated Contract is a legal, valid,
binding and enforceable obligation of Seller and, to Seller's knowledge, of each
other party thereto, except as the foregoing may be limited by bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium or other similar
laws, rules or regulations relating to or affecting the rights of creditors
generally and by equitable principles, including those limiting the availability
of specific performance, injunctive relief, and other equitable remedies and
34
<PAGE>
those providing for equitable defenses and there exists no material defaults of
Seller or, to Seller's knowledge, any other party thereto. Seller has not
received written notice that any party to a Designated Contract intends to
terminate the Designated Contract to which it is a party.
2.13 Litigation. Section 2.13 of the Disclosure Schedule lists, as of the
date of this Agreement, each (a) judgment, order, decree, stipulation or
injunction binding upon Seller or its property or business and relating to the
Business, and (b) claim, complaint, action, suit, proceeding, hearing or
investigation relating to the Business or any of the Acquired Assets, of or in
any Governmental Entity or before any arbitrator to which Seller is a party or,
to Seller's knowledge, which has been overtly threatened against Seller that, in
the case of either clause (a) or (b), is reasonably likely, individually or in
the aggregate, to have a Business Material Adverse Effect.
2.14 Labor Matters. Seller is not a party to or bound by any collective
bargaining agreement relating to the Business, nor, except as set forth on
Section 2.14 of the Disclosure Schedule, has Seller experienced, since January
1, 1998, any material strikes, grievances, claims of unfair labor practices or
other collective bargaining disputes. Seller has no knowledge of any
organizational effort being made or threatened since January 1, 1998 by or on
behalf of any labor union with respect to employees of the Business.
2.15 Employee Benefits.
(a) Section 2.15 of the Disclosure Schedule contains a complete and
accurate list of all Employee Benefit Plans (as defined below) maintained, or
contributed to, by Seller or any ERISA Affiliate (as defined below) for the
benefit of employees of the Business in all countries (and their beneficiaries)
that are material to the Business (the "Business Benefit Plans"). For purposes
of this Agreement, "Employee Benefit Plan" means any "employee pension benefit
plan" (as defined in Section 3(2) of the Employee Retirement Income Security Act
of 1974, as amended ("ERISA")), any "employee welfare benefit plan" (as defined
in Section 3(l) of ERISA), and, to the extent applicable to more than one
employee, any other written or oral plan, agreement or arrangement involving
direct or indirect compensation or benefits, including without limitation
insurance coverage, severance benefits, disability benefits, deferred
compensation, bonuses, stock options, stock purchase, phantom stock, stock
appreciation or other forms of incentive compensation or post-retirement
35
<PAGE>
compensation, in any country. For purposes of this Agreement, "ERISA Affiliate"
means any entity which is a member of (i) a controlled group of corporations (as
defined in Section 414(b) of the Code), (ii) a group of trades or businesses
under common control (as defined in Section 414(c) of the Code), or (iii) an
affiliated service group (as defined under Section 414(m) of the Code or the
regulations under Section 414(o) of the Code), any of which includes Seller.
Complete and accurate copies of all Business Benefit Plans and all related trust
agreements, insurance contracts and summary plan descriptions have been made
available to Buyer. Each Business Benefit Plan has been administered in all
material respects in accordance with its terms and Seller has met its material
obligations with respect to each such Business Benefit Plan. Seller and the
Business Benefit Plans are in material compliance with the currently applicable
provisions of ERISA and the Code and the regulations thereunder.
(b) There are no termination proceedings or other claims (except claims for
benefits payable in the normal operation of the Employee Benefit Plans and
proceedings with respect to qualified domestic relations orders), suits or
proceedings against or involving any Business Benefit Plan or asserting any
rights or claims to benefits under any Business Benefit Plan, or, to Seller's
36
<PAGE>
knowledge, investigations by any Governmental Entity involving any Business
Benefit Plan, except for any such termination proceedings or other claims,
suits, proceedings or investigations that would not reasonably be expected to
have a Business Material Adverse Effect.
(c) The Business Benefit Plans that are intended to be qualified under
Section 401(a) of the Code have received determination letters from the Internal
Revenue Service to the effect that such Business Benefit Plans are qualified and
the plans and the trusts related thereto are exempt from federal income Taxes
under Sections 401(a) and 501(a), respectively, of the Code and conform in all
material respects to the Tax Reform Act of 1986.
(d) Neither Seller nor any ERISA Affiliate contributes or is obligated to
contribute to any multiemployer plan for the benefit of employees of the
Business. Neither Seller nor any ERISA Affiliate has withdrawn from any
multiemployer plan in a complete or partial withdrawal which has resulted in any
withdrawal liability which has not been satisfied in full.
(e) There are no unfunded obligations under any Business Benefit Plan and,
other than an Employee Benefit Plan intended to be qualified under Section
401(a) of the Code, there is no Business Benefit Plan providing welfare benefits
after termination of employment to any employee of the Business (or to any
beneficiary of any such employee), excluding continuation of health coverage
required to be continued under Section 4980B of the Code or other applicable
laws.
(f) No act or omission has occurred and no condition exists with respect to
any Business Benefit Plan maintained by Seller or any ERISA Affiliate that would
subject Seller or any ERISA Affiliate to any material fine, penalty, Tax or
37
<PAGE>
liability imposed under ERISA or the Code (other than liabilities for benefits
accrued under Business Benefit Plans for employees of Seller and their
beneficiaries).
2.16 Environmental Matters.
(a) When used in this Agreement, the following terms have the meanings
provided below.
(i) "CERCLA" shall mean the Federal Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended, and
in effect on the Closing Date.
(ii) "Release" shall have the meaning assigned to that term in CERCLA.
(iii)"Environment" shall have the meaning assigned to that term under
CERCLA.
(iv) "Materials of Environmental Concern" means any hazardous
substance, pollutant or contaminant, as those terms are defined
under CERCLA, solid waste and hazardous waste, as those terms are
defined in the Federal Resource Conservation and Recovery Act (as
in effect on the Closing Date), and oil, petroleum and petroleum
products.
(v) "Environmental Law" means any law, rule or regulation of any
Governmental Entity as in effect on the Closing Date relating to
the Environment or occupational health and safety, including,
without limitation, any statute or regulation pertaining to (A)
treatment, storage, disposal, transportation or generation of
Materials of Environmental Concern; (B) air, water and noise
pollution; (C) groundwater and soil contamination; or (D) the
38
<PAGE>
Release or threatened Release of Materials of Environmental
Concern.
(vi) "Environmental Matters" means any legal obligation or liability
arising under Environmental Law.
(vii)"Off-Site Liabilities" means, in all cases, Environmental
Matters or liability arising under common law resulting from any
transportation, treatment, storage, disposal or Release, or the
arrangement therefor, of any Materials of Environmental Concern
by the Business or any of their respective Affiliates, agents,
contractors or predecessors in interest, to or at any property,
location, site or facility other than a Business Property.
(viii) "Business Properties" means the Facilities and the real
property subject to the Leases.
(b) Except as described or identified in Section 2.16 of the Disclosure
Schedule or in a document listed in such Section 2.16 or as would not reasonably
be expected to have a Business Material Adverse Effect:
(i) the Business's operations at the Business Properties are in
compliance with applicable Environmental Laws;
(ii) there is no pending civil or criminal litigation, written notice
of violation or formal administrative proceeding, investigation
or information request relating to any Environmental Law
involving any of the Business Properties or, to Seller's
knowledge, any property formerly owned or operated by the
Business; and
39
<PAGE>
(iii)Seller has those permits, licenses and approvals required under
Environmental Law to operate the Business Properties as currently
operated by Seller, all of which are described in Section 2.16 of
the Disclosure Schedule.
(c) Except as described or identified in Section 2.16 of the Disclosure
Schedule or in a document listed in such Section 2.16 or as would not reasonably
be expected to have a Business Material Adverse Effect:
(i) with respect to the Business Properties and any property formerly
owned or operated by Seller with respect to the Business, there
is no existing or, to Seller's knowledge, threatened order or
claim requiring the investigation or remediation of a Release of
Materials of Environmental Concern and there has been no Release
by Seller or the Business of Materials of Environmental Concern;
and
(ii) with respect to Seller, there is no existing or, to Seller's knowledge,
threatened claim for Off-Site Liabilities relating to the Business.
(d) The Parties agree that the only representations and warranties of
Seller herein as to any Environmental Matters are those contained in this
Section 2.16. Without limiting the generality of the foregoing, the
representations and warranties contained in Sections 2.13, 2.17, 2.18 and 2.25
do not relate to Environmental Matters.
2.17 Legal Compliance. Except as set forth in Section 2.17 of the
Disclosure Schedule, with respect to the Business, Seller is in compliance with
all applicable laws (including rules and regulations thereunder) of any
Governmental Entity, currently in effect, except where the failure to comply
therewith would not reasonably be expected to have a Business Material Adverse
Effect. Seller has not received written notice of any pending action, suit,
proceeding, hearing, investigation, claim, demand or notice relating to the
40
<PAGE>
Business alleging any failure to so comply other than those not reasonably
expected to have a Business Material Adverse Effect.
2.18 Permits.
(a) Section 2.18 of the Disclosure Schedule sets forth a true, correct and
complete list of all permits, licenses and franchises from Governmental Entities
used by Seller in its business or operations as presently conducted and material
to the Business or operations of the Business (collectively, the "Material
Permits").
(b) Seller is in compliance with each, and not in violation of or default
under any, Material Permit, all of the Material Permits are valid and in full
force and effect and no proceeding is pending or, to the knowledge of Seller,
threatened to revoke or limit any of them.
(c) No Material Permit will be revoked, terminated prior to its normal
expiration date or not renewed solely as a result of the consummation of the
transactions contemplated by this Agreement, except, in either case, for any
violation, default, revocation, termination or renewal that would not reasonably
be expected to have a Business Material Adverse Effect and the consummation of
the transactions contemplated hereby will not violate or render any of the
Material Permits invalid, require any amendment or reissuance of any of the
Material Permits or require the consent of the Governmental Entity which has
issued any of the Material Permits, except for violations, invalidations,
amendments, reissuances or consents that would not reasonably be expected to
have a Business Material Adverse Effect.
2.19 Entire Business. Except for the Excluded Assets and the Deferred Items
and except as set forth on Section 2.19 of the Disclosure Schedule, the Acquired
Assets collectively are, when utilized by a labor force substantially similar to
that employed by Seller in connection with the Business on the date hereof,
41
<PAGE>
adequate to conduct the Business in all material respects as currently
conducted.
2.20 Broker's Fees. Except as set forth in Section 2.20 of the Disclosure
Schedule, Seller has no liability or obligation to pay any fees or commissions
to any broker, finder or agent with respect to the transactions contemplated by
this Agreement.
2.21 Insurance. Section 2.21 of the Disclosure Schedule lists each material
insurance policy maintained by Seller that relates or provides coverage with
respect to any Acquired Assets or the Business (the "Business Policies"). All of
such Business Policies are in full force and effect and Seller is not in default
with respect to its obligations under any of such Business Policies, except for
any failures to be in full force and effect or defaults that would not
reasonably be expected to have a Business Material Adverse Effect. The Business
Policies provide the Business with such coverages and in such amounts as are
equal to or in excess of such coverages or amounts required by any applicable
law, rule or regulation.
2.22 Business Relationships with Affiliates. Section 2.22 of the Disclosure
Schedule lists any written agreements or other enforceable arrangements with
respect to the Business whereby any Affiliate of Seller directly or indirectly
(a) owns any property or right, tangible or intangible, which is used in the
Business, (b) owes any money to Seller or is owed money by Seller or (c) has any
other business or contractual relationship with Seller.
2.23 Certain Definitions. For the purposes of Sections 2.23 through 2.33,
the following capitalized terms shall have the meanings set forth below:
"Governmental Authority": Any board, agency, commission or department of
any federal, state or municipal government having jurisdiction over the
applicable property.
42
<PAGE>
"Legal Requirements": (a) All present and future laws, rules, regulations
and permits of any Governmental Authority applicable to the Owned Real Property,
(b) all covenants, conditions, and restrictions contained in any deeds or other
instruments which relate to the Owned Real Property, and (c) all of Seller's
obligations under all Permits affecting the Owned Real Property and all
conditions thereof binding upon the Owned Real Property.
"Permits": All permits, licenses, certificates and approvals issued by
Governmental Authorities or otherwise necessary for the Owned Real Property to
comply with all Legal Requirements.
2.24 Conduct of Business. Seller has all Permits necessary to use and
operate the Owned Real Property.
2.25 Compliance with Laws; No Notices of Violation; No Flood Hazard;
Issuance of Permits. The use and occupancy of the Owned Real Property is in
material compliance with all Legal Requirements, without depending upon property
or rights other than the Owned Real Property (which for the purposes hereof
shall include appurtenant easements). No uncured notice of any asserted
violation of any Legal Requirement has been given to Seller. Seller has not
received any notices of proposed rezoning of the Owned Real Property or of any
proposed municipal or county assessments against the Owned Real Property. The
Owned Real Property is not in a Flood Hazard Area as defined in the "Flood
Disaster Protection Act of 1973", as amended, or identified as such by the
Federal Emergency Management Agency. All Governmental Authorities have issued
all Permits required for the use and operation of the Owned Real Property.
2.26 No Condemnation. No part of the Owned Real Property has been taken in
condemnation or any similar proceeding, and no part of the Owned Real Property
43
<PAGE>
has been transferred by deed in lieu of condemnation or other like proceeding.
To the best of Seller's knowledge, no condemnation or other like proceeding is
pending or threatened with respect to the Owned Real Property.
2.27 No Litigation. There is no pending or, to the best of Seller's
knowledge, threatened litigation against Seller relating to the Owned Real
Property, or to the title, use, occupancy or operation thereof.
2.28 Payment for Work; No Mechanics' Liens. All construction, alterations
and repairs with respect to the Owned Real Property have been paid for in full,
except for repair work performed in the Ordinary Course of Business for which
payment is not yet due and payable. No uncured notice of any mechanic's or
materialmen's lien has been received by Seller, and no mechanic's or
materialmen's liens claims are threatened, with respect to the Owned Real
Property.
2.29 Leases, Leasing, Commissions, Management Agreement. There are no
Leases or other occupancy agreements, or management agreements in force and
effect with respect to the Owned Real Property. There are no leasing commissions
or management fees due from Seller to any third party with respect to the Owned
Real Property.
2.30 Separate Tax Parcel. No land or improvements which is not a part of
the Owned Real Property is included within the tax assessment or assessments of
the Owned Real Property or the tax lots corresponding to the Owned Real
Property.
2.31 Condominium or Cooperative. The Owned Real Property has not been
subjected to a condominium or cooperative form of ownership.
2.32 Utilities Are Available to the Owned Real Property. To the best of
Seller's knowledge, all utilities, including, without limitation, electricity,
44
<PAGE>
gas, steam, public water, public storm and sanitary sewers and telephone
service, required for the current and intended use and operation of the Owned
Real Property are available at the lot lines thereof or through existing
easements appurtenant to the Owned Real Property, have been connected to the
improvements, are in full service, have been accepted or approved by the
appropriate Governmental Authorities with all necessary Permits required by
Legal Requirements having been issued. The existing utilities are of adequate
capacity for the Owned Real Property.
2.33 Proper Drainage. Design and as-built conditions of the Owned Real
Property are such that no material drainage of surface or other water across
land of others is expected to occur.
ARTICLE II A
REPRESENTATIONS AND WARRANTIES OF THE PARENTS
Each Parent, severally and not jointly, represents and warrants to Buyer as
follows:
2.1A Organization. Such Parent is a corporation duly organized, validly
existing
and in good standing under the laws of the state of its incorporation.
2.2A Authority. Such Parent has all requisite corporate power and authority
to execute and deliver this Agreement and to perform its obligations hereunder.
The execution and delivery of this Agreement by such Parent and the performance
by such Parent of its obligations hereunder and the consummation by such Parent
of the transactions contemplated hereby have been duly and validly authorized by
all necessary corporate action on the part of such Parent. This Agreement has
been duly and validly executed and delivered by such Parent and, assuming this
Agreement constitutes the valid and binding agreement of Buyer, constitutes a
valid and binding obligation of such Parent, enforceable against such Parent in
accordance with its terms, except as enforceability may be limited by
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium or other
45
<PAGE>
similar laws relating to or affecting the rights of creditors generally and by
equitable principles, including those limiting the availability of specific
performance, injunctive relief and other equitable remedies and those providing
for equitable defenses.
2.3A Noncontravention. Subject to compliance with the Hart-Scott-Rodino
Act, neither the execution and delivery of this Agreement by such Parent, nor
the consummation by such Parent of the transactions contemplated hereby, will:
(a) conflict with or violate any provision of the charter or bylaws of such
Parent;
(b) require on the part of such Parent any filing with, or any permit,
authorization, consent or approval of, any Governmental Entity, other than any
filing, permit, authorization, consent or approval which if not obtained or made
would not reasonably be expected to have a material adverse effect on the
ability of such Parent to perform its obligations under this Agreement (a
"Parent Material Adverse Effect");
(c) conflict with, result in a breach of, constitute (with or without due
notice or lapse of time or both) a default under, result in the acceleration of,
create in any party the right to accelerate, terminate, modify or cancel, or
require any notice, consent or waiver under, any contract, lease, sublease,
license, sublicense, franchise, permit, indenture, agreement or mortgage for
borrowed money, instrument of indebtedness, Security Interest or other
arrangement to which such Parent is a party or by which such Parent is bound or
to which any of its assets are subject, except for any conflict, breach,
default, acceleration, right to accelerate, termination, modification,
cancellation, notice, consent or waiver that would not reasonably be expected to
have a Parent Material Adverse Effect; or
46
<PAGE>
(d) violate any order, writ, injunction, decree, statute, rule or
regulation applicable to such Parent or any of its properties or assets, other
than a violation which would not reasonably be expected to have a Parent
Material Adverse Effect.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Seller and each Parent as follows:
3.1 Organization. Buyer is a corporation duly organized, validly existing
and in good standing under the laws of the state of its incorporation.
3.2 Authorization of Transaction. Buyer has all requisite corporate power
and authority to execute and deliver this Agreement and to perform its
obligations hereunder. The execution and delivery of this Agreement by Buyer and
the performance by Buyer of this Agreement and its obligations hereunder and the
consummation by Buyer of the transactions contemplated hereby have been duly and
validly authorized by all necessary corporate action on the part of Buyer. This
Agreement has been duly and validly executed and delivered by Buyer and,
assuming this Agreement constitutes the valid and binding obligation of Seller,
constitutes a valid and binding obligation of Buyer, enforceable against Buyer
in accordance with its terms, except as enforceability may be limited by
bankruptcy, insolvency, reorganization, fraudulent transfer, moratorium or other
similar laws relating to or affecting the rights of creditors generally and by
equitable principles, including those limiting the availability of specific
performance, injunctive relief and other equitable remedies and those providing
for equitable defenses.
3.3 Noncontravention. Subject to compliance with the applicable
requirements of the Hart-Scott-Rodino Act, neither the execution and delivery of
this Agreement by Buyer, nor the consummation by Buyer of the transactions
contemplated hereby, will:
47
<PAGE>
(a) conflict with or violate any provision of the charter or bylaws of
Buyer;
(b) require on the part of Buyer any filing with, or permit, authorization,
consent or approval of, any Governmental Entity, other than any filing, permit,
authorization, consent or approval which if not obtained or made would not
reasonably be expected to have a material adverse effect on the assets,
business, financial condition or results of operations of Buyer or on the
ability of Buyer to consummate the transactions contemplated by this Agreement,
including without limitation paying to Seller when due the portion of the
Purchase Price evidenced by the Mortgage Loan Documents (a "Buyer Material
Adverse Effect");
(c) conflict with, result in breach of, constitute (with or without due
notice or lapse of time or both) a default under, result in the acceleration of,
create in any party any right to accelerate, terminate, modify or cancel, or
require any notice, consent or waiver under, any contract, lease, sublease,
license, sublicense, franchise, permit, indenture, agreement or mortgage for
borrowed money, instrument of indebtedness, Security Interest or other
arrangement to which Buyer is a party or by which Buyer is bound or to which any
of its assets are subject, other than any conflict, breach, default,
acceleration, right to accelerate, termination, modification, cancellation,
notice, consent or waiver which would not reasonably be expected to have a Buyer
Material Adverse Effect; or
(d) violate any order,
writ, injunction, decree, statute, rule or regulation applicable to Buyer or any
of its properties or assets, other than any violation which would not reasonably
be expected to have a Buyer Material Adverse Effect.
3.4 Broker's Fees. Buyer has no liability or obligation to pay any fees or
commissions to any broker, finder or agent with respect to the transactions
contemplated by this Agreement.
48
<PAGE>
3.5 Litigation. There are no actions, suits, claims or legal,
administrative or arbitration proceedings pending against, or, to Buyer's
knowledge, threatened against, Buyer which would reasonably be expected to have
a Buyer Material Adverse Effect.
3.6 Financing. Buyer has, and at the Closing will have, sufficient sources
of financing in order to consummate the transactions contemplated by this
Agreement and to fulfill its obligations hereunder, including without limitation
payment to Seller of the Purchase Price at the Closing.
3.7 Solvency. Immediately after giving effect to the transactions
contemplated by this Agreement and the closing of any financing to be obtained
by Buyer or any of its Affiliates in order to effect the transactions
contemplated by this Agreement, Buyer shall be able to pay its debts as they
become due and shall own property having a fair saleable value greater than the
amounts required to pay its debts (including a reasonable estimate of the amount
of all contingent liabilities). Immediately after giving effect to the
transactions contemplated by this Agreement and the closing of any financing to
be obtained by Buyer or any of its Affiliates in order to effect the
transactions contemplated by this Agreement, Buyer shall have adequate capital
to carry on its business. No transfer of property is being made and no
obligation is being incurred in connection with the transactions contemplated by
this Agreement and the closing of any financing to be obtained by Buyer or any
of its Affiliates in order to effect the transactions contemplated by this
Agreement with the intent to hinder, delay or defraud either present or future
creditors of Buyer.
3.8 Commission Filings.
(a) Buyer has filed with the Securities and Exchange Commission (the
"Commission") all required reports, schedules, forms, statements and other
49
<PAGE>
documents required to be filed under the Securities Act of 1933 and the
Securities Exchange Act of 1934 from January 1, 1998 through the date of this
Agreement. All reports, schedules, forms, statements and other documents
(including exhibits) filed by Buyer with the Commission pursuant to the
Securities Act of 1933 and the Securities Exchange Act of 1934 since January 1,
1998 are referred to herein as the "Buyer Commission Filings." The Buyer
Commission Filings (i) were prepared in compliance, in all material respects,
with the applicable requirements of the Securities Act of 1933 and the
Securities Exchange Act of 1934, as the case may be, and the rules and
regulations thereunder, and (ii) did not at the time they were filed contain any
untrue statement of material fact or omit to state a material fact required to
be stated in such Buyer Commission Filings or necessary to make the statements
therein, in light of the circumstances in which they were made, not misleading,
and (iv) in the event of subsequent modifications of the circumstances or the
basis on which they had been made, were, to the extent required by the
Securities Act of 1933 and the Securities Exchange Act of 1934, as the case may
be, timely amended in order to make them not misleading in any material respects
in the light of such new circumstances or basis.
(b) Each of the audited consolidated financial statements and unaudited
interim consolidated financial statements (including, in each case, any related
notes or schedules) included in the Buyer Commission Filings (i) complied as to
form in all material respects with the applicable published rules and
regulations of the Commission with respect thereto, (ii) was prepared in
accordance with generally accepted accounting principles applied consistently
with Buyer's past practices, except as may be indicated therein or in the notes
or schedules thereto, and (iii) fairly presented in all material respects the
50
<PAGE>
financial position of Buyer as at the dates thereof and the results of its
operations and cash flows for the periods then ended, subject, in the case of
the unaudited interim financial statements, to normal year-end audit adjustments
and the absence of complete notes.
3.9 Absence of Certain Changes. Since July 1, 2000, (a) Buyer has conducted
its business only in the ordinary course of business and in a manner consistent
in all material respects with past custom and past practice and (b) there has
not been any event, change or effect which, individually or in the aggregate,
would reasonably be expected to have a Buyer Material Adverse Effect.
3.10 Certain Definitions. For the purposes of Sections 3.10 through 3.28,
the following capitalized terms shall have the meanings set forth below:
"Environmental Laws": All federal, state or local laws, rules and
regulations (whether now existing or hereafter enacted or promulgated, as they
may be amended from time to time) pertaining to Hazardous Materials,
environmental regulations, contamination by hazardous wastes, clean-up of
hazardous wastes or disclosures relating to Hazardous Materials or hazardous
wastes, and any judicial or administrative interpretation thereof, including any
judicial or administrative orders or judgments including, without limitation,
the Comprehensive Environmental Response, Compensation and Liability Act of
1980, 42 U.S.C. Section 9601 et seq. ("CERCLA"); the Federal Resource
Conservation and Recovery Act, 42 U.S.C. Section 6901 et seq. ("RCRA");
Superfund Amendments and Reauthorization Act of 1986, Public Law No. 99-499
("SARA"); Toxic Substances Control Act, 15 U.S.C. Section 2601 et seq. ("TSCA");
and all state superlien or environmental clean-up or disclosure statutes in the
state in which the Mortgaged Property is located.
"Governmental Authority": Any board, agency, commission or department of
any federal, state or municipal government having jurisdiction over the
applicable property.
51
<PAGE>
"Hazardous Materials": Any petroleum product and all hazardous or toxic
substances or wastes or any substances which because of their quantitative
concentration, chemical, radioactive, flammable, explosive, infectious or other
characteristics, constitute or may reasonably be expected to constitute or
contribute to a danger or hazard to public health, safety or welfare or to the
environment, including, without limitation, any asbestos (whether or not
friable) and any asbestos-containing materials, waste oils, solvents and
chlorinated oils, polychlorinated biphenyls (PCBs), toxic metals, etchants,
pickling and plating wastes, explosives, reactive metals and compounds,
pesticides, herbicides, radon gas, urea formaldehyde foam insulation and
chemical, biological and radioactive wastes, or any other similar materials or
any other hazardous or toxic wastes or substances which are included under or
regulated by any Environmental Laws.
"Legal Requirements": (a) All present and future laws, rules, regulations
and permits of any Governmental Authority applicable to the Mortgaged Property,
(b) all covenants, conditions, and restrictions contained in any deeds or other
instruments which relate to the Mortgaged Property, and (c) all of Buyer's
obligations under all Permits affecting the Mortgaged Property and all
conditions thereof binding upon the Mortgaged Property.
"Mortgage Loan Documents": The Bedford Mortgage, the Mortgage Note and all
other documents evidencing or securing the Mortgage Note or otherwise pertaining
thereto.
"Mortgaged Property": The land, improvement, fixtures and proceeds thereof
commonly referred to as 35 Crosby Drive, Bedford, Massachusetts, more
particularly described in the form of Bedford Mortgage attached hereto as
Exhibit F.
52
<PAGE>
"Permits": All permits, licenses, certificates and approvals issued by
Governmental Authorities or otherwise necessary for the Mortgaged Property to
comply with all Legal Requirements.
3.11 Conduct of Business. Buyer has all Permits necessary to use and
operate the Mortgaged Property.
3.12 Payment of Taxes. All income, franchise and personal property, excise
and other Taxes, charges and fees due and payable as of the date hereof by Buyer
to all Governmental Authorities the non-payment of which could result in a lien
upon the Mortgaged Property have been fully paid
3.13 Authority to Enter into Transaction; No Conflict; Authority and
Enforceability. Buyer has the right to borrow from Seller all funds evidenced by
the Mortgage Note, to encumber its interest in the Mortgaged Property, and to
execute and deliver the Mortgage Loan Documents. The execution and delivery of
the Mortgage Loan Documents will not conflict with or constitute a default under
any agreement or Legal Requirement binding upon Buyer. The execution, delivery
and performance of the Mortgage Loan Document have been duly authorized by all
necessary actions of Buyer, and the Mortgage Loan Document will be legal, valid
and binding obligations of Buyer, enforceable in accordance with their terms.
3.14 Title to the Mortgaged Property; Compliance with Laws; No Notices of
Violation; No Flood Hazard; Issuance of Permits. Buyer has good, record and
marketable title to the Mortgaged Property, free and clear of all mortgages,
deeds of trust, liens or other encumbrances of any kind or nature except
encumbrances which would not, individually or in the aggregate, reasonably be
expected to have a Buyer Material Adverse Effect. To the best of Buyer's
knowledge, the status of title to the Mortgaged Property is as reflected in that
certain Owner's Policy of Title Insurance issued by Lawyer's Title Insurance
53
<PAGE>
Corporation, dated July 30, 1998 (the "Current Title Policy"), a true and
correct copy of which Buyer has delivered to Seller. At Closing, Buyer shall
cause to be delivered to Seller, at Seller's expense, a lender's policy of title
insurance in the amount of $25,000,000 disclosing no encumbrances other than
those described in the first sentence of this Section 3.14 and a current update
of the survey of the Mortgaged Property referred to in the Current Title Policy,
provided that if Buyer cannot deliver such updated survey at the Closing, it
shall deliver to Seller at Closing a certification that there has been no change
in the condition of the Mortgaged Property since the date of the survey referred
to in the Current Title Policy, and it shall update the survey within thirty
(30) days thereafter and cause the lender's policy of title insurance to be
endorsed to reflect such updated survey. The use and occupancy of the Mortgaged
Property is in material compliance with all Legal Requirements, without
depending upon property or rights other than the Mortgaged Property (which for
the purposes hereof shall include appurtenant easements). No uncured notice of
any asserted violation of any Legal Requirement has been given to Buyer. Buyer
has not received any notices of proposed rezoning of the Mortgaged Property or
of any proposed municipal or county assessments against the Mortgaged Property.
The Mortgaged Property is not in a Flood Hazard Area as defined in the "Flood
Disaster Protection Act of 1973", as amended, or identified as such by the
Federal Emergency Management Agency. All governmental authorities have issued
all Permits required for the use and operation of the Mortgaged Property.
3.15 No Condemnation. No part of the Mortgaged Property has been taken in
condemnation or any similar proceeding, and no part of the Mortgaged Property
has been transferred by deed in lieu of condemnation or other like proceeding.
54
<PAGE>
To the best of Buyer's knowledge, no condemnation or other like proceeding is
pending or threatened with respect to the Mortgaged Property.
3.16 No Litigation. There is no pending or, to the best of Buyer's
knowledge, threatened litigation against Buyer relating to the Mortgaged
Property, or to the title, use, occupancy or operation thereof.
3.17 Payment for Work; No Mechanics' Liens. All construction, alterations
and repairs with respect to the Mortgaged Property have been paid for in full,
except for repair work performed in the ordinary course of business for which
payment is not yet due and payable. No uncured notice of any mechanic's or
materialmen's lien has been received by Buyer, and no mechanic's or
materialmen's liens claims are threatened, with respect to the Mortgaged
Property.
3.18 [Intentionally Omitted.]
3.19 Leases. Seller has delivered to Buyer true, correct and complete
copies of all leases and occupancy agreements ("Leases") affecting the Mortgaged
Property. Seller is not in material default under any Lease, and to Seller's
knowledge no other party to any Lease is in material default thereunder.
3.20 Leasing Commissions: Management Agreements. There are no agreements to
pay leasing commissions for existing Leases, or any management agreements for
the Mortgaged Property. The obligation to pay leasing commissions and management
fees are and will be (a) subject, subordinate and inferior to the Bedford
Mortgage and (b) not enforceable against Seller or anyone claiming by, through
or under Seller.
3.21 Separate Tax Parcel. No land or improvements which will not be
encumbered by the Bedford Mortgage is included within the tax assessment or
assessments of the Mortgaged Property or the tax lots corresponding to the
Mortgaged Property.
55
<PAGE>
3.22 Condominium or Cooperative. The Mortgaged Property has not been
subjected to a condominium or cooperative form of ownership.
3.23 Buyer Not "Foreign Person". Buyer is not a "foreign person" under the
Foreign Investment in Real Property Tax Act 1980, or the regulations promulgated
pursuant to such Act or any amendment to such Act or regulations.
3.24 Payment of Real Estate Taxes and Impositions. All water charges, sewer
rents, ad valorem taxes, assessments, vault charges and other similar liens or
impositions relating to the Mortgaged Property which are due and payable have
been paid in full.
3.25 [Intentionally Omitted.]
3.26 Utilities Are Available to the Mortgaged Property. To the best of
Buyer's knowledge, all utilities, including, without limitation, electricity,
gas, steam, public water, public storm and sanitary sewers and telephone
service, required for the current and intended use and operation of the
Mortgaged Property are available at the lot lines thereof or through existing
easements appurtenant to the Mortgaged Property, have been connected to the
improvements, are in full service, have been accepted or approved by the
appropriate Governmental Authorities with all necessary Permits required by
Legal Requirements having been issued. The existing utilities are of adequate
capacity for the Mortgaged Property.
3.27 Proper Drainage. Design and as-built conditions of the Mortgaged
Property are such that no material drainage of surface or other water across
land of others is expected to occur.
3.28 Environmental Matters. Except as to any matters disclosed in the
Buyer's Environmental Disclosure Documents (described below), true, correct and
complete copies of which Buyer has delivered to Seller:
56
<PAGE>
(a) Reasonable Investigation; Site Evaluation. Buyer has performed or
relied upon the performance by others of appropriate investigations, studies and
tests to discover (i) any environmental contamination in, on, under threatening
to or emanating from the Mortgaged Property; and (ii) any potential or actual
liabilities for clean-up of Hazardous Materials with respect to the Mortgaged
Property, and such investigations, studies and tests have disclosed no
environmental contamination, Hazardous Materials, facts which may give rise to
environmental claims or past or current violations of any Environmental Laws.
(b) No Knowledge of Hazardous Materials. To the best of the Buyer's
knowledge: no prior owner of the Mortgaged Property or current or prior tenant,
subtenant or other occupant of the Mortgaged Property has used Hazardous
Materials on, from or affecting the Mortgaged Property whether or not in a
manner that violates any of the Environmental Laws governing the contamination,
use, generation, placement, treatment, transportation, manufacture, refinement,
handling, production, disposal or storage of Hazardous Materials; there have
been no releases of Hazardous Materials either at, upon, under or within the
Mortgaged Property; no Hazardous Materials have migrated to the Mortgaged
Property; no Hazardous Materials are located on or have been stored on (other
than those Hazardous Materials which are customarily used by Buyer and other
tenants and occupants in the course of their business and then only in strict
compliance with all Environmental Laws affecting such materials and the
Mortgaged Property), generated at, processed or disposed of on, or released or
discharged from (including ground water contamination) the Mortgaged Property;
no above or underground storage tanks currently exist or previously existed on
the Mortgaged Property; and the Mortgaged Property does not contain and has not
57
<PAGE>
in the past contained any asbestos containing material or other airborne
contamination including any potential contamination that would be caused by
maintenance of the Mortgaged Property, equipment therein, operations or
activities conducted thereon or finishes in the Improvements.
(c) Limitation on Hazardous Materials Allowed on Mortgaged Property; Future
Compliance with Environmental Laws. Buyer shall not allow any Hazardous
Materials to exist or be stored, disposal of, located, discharged, generated,
managed, processed or otherwise handled on the Mortgaged Property other than
those Hazardous Materials which are customarily used by Buyer and other tenants
and occupants in the course of their business and then only in strict compliance
with all Environmental Laws affecting such materials and the Mortgaged Property.
(d) No Outstanding Notices of Violation; Mortgaged Property Currently
Complies with Environmental Laws. Neither Buyer nor the Mortgaged Property (i)
has received notice of or is subject to any private or governmental lien or
judicial or administrative notice, order or action relating to Hazardous
Materials or environmental concerns, impairments or liabilities with respect to
the Mortgaged Property, or (ii) is in, or with any applicable notice or lapse of
time, or failure to take curative or remedial actions, will be in, either direct
or indirect violation of any Environmental Laws.
(e) Buyer's Environmental Disclosure Documents. For purposes hereof,
"Buyer's Environmental Disclosure Documents" shall mean:
(i) Letter dated July 7, 1998 from the Massachusetts Department of
Environmental Protection, to Franz T. Litz, Brown, Rudnick, Freed &
Gesmer relating to a so-called Covenant Not to Sue;
(ii) Letter dated October 3, 1997 from Haley & Aldrich to 35 Crosby Drive
LLC relating to Underground Storage Tank Removal Activities; and
58
<PAGE>
(iii) Environmental Site Assessment dated July 17, 1998 prepared by
Jaworski, Geotech, Inc.
ARTICLE IV
PRE-CLOSING COVENANTS
4.1 Efforts.
(a) During the period from the date of this Agreement to and including the
Closing Date (or such earlier date as this Agreement may be terminated in
accordance with Article VII), each of Buyer and Seller shall use commercially
reasonable efforts to take all actions and to do all things necessary, proper or
advisable to consummate the transactions contemplated by this Agreement.
(b) During the period from the date of this Agreement to and including the
Closing Date (or such earlier date as this Agreement may be terminated in
accordance with Article VII), Seller shall use commercially reasonable efforts
to obtain for the benefit of Buyer a royalty free, fully-paid, worldwide,
perpetual, non-exclusive license of claim numbers 24, 25, 26 and 46 under United
States Patent No. 5,712,890; provided, however, that Seller shall not be
required to make any payments, incur any liabilities or agree to any
undertakings in connection therewith in excess of $100,000. Seller shall from
time to time consult with Buyer with respect to the status of such efforts and
shall consider any recommendations made by Buyer with respect thereto.
4.2 Hart-Scott-Rodino Act. During the period from the date of this
Agreement to and including the Closing Date (or such earlier date as this
Agreement may be terminated in accordance with Article VII), each of Buyer and
Seller (i) has filed (or caused to be filed) any Notification and Report Forms
and related material that it may be required to file with the Federal Trade
Commission and the Antitrust Division of the United States Department of Justice
59
<PAGE>
under the Hart-Scott-Rodino Act, (ii) shall use commercially reasonable efforts
to obtain an early termination of the applicable waiting period with respect to
such filing, and (iii) shall make any further filings or information submissions
pursuant thereto that may be necessary, proper or advisable. Buyer shall bear
the filing fees associated with such filings under the Hart-Scott-Rodino Act.
4.3 Replacement of Guarantees and Letters of Comfort. Unless otherwise
agreed to in writing by Seller, Buyer shall arrange, prior to the Closing, for
replacement arrangements, which shall include a full and complete release of
Seller and its Affiliates, including, to the extent required, guarantees and
letters of comfort, reasonably satisfactory to Seller with respect to all
letters of credit and other borrowings of the Business which are subject to any
guarantee, covenant, indemnity, letter of comfort or similar assurance provided
by Seller or any of its Affiliates as of the Closing Date, including without
limitation those listed on Annex 4.3 of the Disclosure Schedule.
4.4 Operation of Business. Except as otherwise specifically permitted by
this Agreement, including without limitation Section 10.7, during the period
from the date of this Agreement until the Closing (or such earlier date as this
Agreement may be terminated in accordance with Article VII):
(a) Subject to the provisions of Sections 4.4(b) and 4.4(c), Seller shall
cause the Business to use commercially reasonable efforts to (i) conduct its
operations in the Ordinary Course of Business and (ii) respond prudently to
matters affecting the operations of the Business not arising in the Ordinary
Course of Business;
60
<PAGE>
(b) Except as otherwise specifically set forth in this Agreement, or with
the prior written consent of Buyer (which consent shall not be unreasonably
withheld, conditioned or delayed), Seller covenants that it shall:
(i) use commercially reasonable efforts to preserve intact the Business
and its relationships with those customers, suppliers, Affiliates and
other third parties with whom it is commercially reasonable to do so;
(ii) use commercially reasonable efforts to (A) keep available the services
of key Business Employees who are not Non-Offered Employees and
consultants engaged with respect to the Business; and (B) recruit and
hire new employees in the Ordinary Course of Business; provided,
however, that, without first consulting with Buyer, Seller shall not
hire new employees other than pursuant to offers of employment
outstanding on the date hereof;
(iii)use commercially reasonable efforts to maintain the tangible assets
of the Business, in the aggregate, in good working order and
condition, normal wear and tear excepted;
(iv) notify Buyer of any written notice of default received by Seller with
respect to any Designated Contract and of any material default
becoming known to Seller under any Designated Contract;
(v) make payments on its liabilities with respect to the Business to
suppliers, employees and trade creditors in the Ordinary Course of
Business;
(vi) use commercially reasonable efforts to implement its research and
development plan through the Closing Date;
61
<PAGE>
(vii)make capital expenditures in the Ordinary Course of Business
consistent with Seller's plan for capital expenditures; and
(viii) maintain its books and records of the Business in accordance in all
material respects with its past practices for consolidating the
operations of the Business with that of Parents.
(c) Except as otherwise specifically permitted in this Agreement or except
with the prior written consent of Buyer (which consent, in the case of clauses
(iv), (v), (ix), (x) and, to the extent it relates to the foregoing clauses,
(xi) below, shall not be unreasonably withheld, conditioned or delayed), Seller
covenants that with respect to the Business it shall not:
(i) enter into or amend any contract of employment with any employee of
the Business providing for annual base compensation equal to or
greater than $100,000 or which is not terminable on not more than six
months notice without payment of penalty, amend in any material
respect or adopt any material Business Benefit Plan of general
application that provides pecuniary benefits, or change in any
material respect the benefits or compensation of any Transferred
Employee whose annual base compensation, together with targeted annual
incentive compensation, equals or exceeds $100,000;
(ii) make any material change in any pricing policies (including
discounting policies), financial reporting practices (except as
required by U.S. GAAP or as contemplated by this Agreement) or credit
policies, payment practices or accounting methods (except as required
by U.S. GAAP ) of the Business;
62
<PAGE>
(iii)enter into any material contract for the sale of goods or services on
terms and conditions which differ in any material respect from
Seller's standard terms and conditions with respect to such goods and
services;
(iv) give any notice of default or breach, or renewal, non-renewal or
cancellation to any person or entity with respect to any Designated
Contract;
(v) enter into any agreement or arrangement which provides for delivery,
transfer, license or escrow of any Designated Intellectual Property
other than to customers in the Ordinary Course of Business;
(vi) enter into any new material strategic alliance of any kind;
(vii)solicit or intentionally induce any Business Employee who is not a
Non-Offered Employee to refuse employment with Buyer;
(viii) except as contemplated herein or except for agreements relating to
the purchase and sale of goods and services entered into in the
Ordinary Course of Business, enter into any new agreement or
arrangement with any of its Affiliates which will not be terminated
without penalty at or prior to Closing;
(ix) commence any cease and desist demands, litigation or other similar
proceedings with respect to the Business;
(x) discontinue manufacturing, servicing or supporting any Product; or
(xi) enter into any contract, agreement, arrangement or binding commitment
with respect to any of the foregoing.
4.5 Access. During the period from the date of this Agreement to and
including the Closing Date (or such earlier date as this Agreement may be
terminated in accordance with Article VII), subject to compliance with
applicable laws and regulations, and contractual obligations of Seller regarding
63
<PAGE>
classified information, security clearance, proprietary information of third
parties and procurement of sensitive information, Seller shall permit the
representatives of Buyer to have reasonable access (at reasonable times, on
reasonable prior written notice and in a manner so as not to interfere with the
normal business operations of the Business) to the premises, properties,
financial and accounting records, contracts, other records and documents, and
personnel, of or pertaining to the Business for reasonable business purposes (it
being acknowledged by Buyer that Buyer has completed its due diligence
investigation and that the purpose of this provision is not to permit further
due diligence). Buyer acknowledges that it and its representatives remain bound
by the Confidentiality Agreement, dated March 21, 2000, previously entered into
by or on behalf of Buyer and Seller (the "Confidentiality Agreement"). Prior to
the Closing, Buyer and its representatives shall not contact or communicate with
the customers and suppliers of Seller in connection with the transactions
contemplated by this Agreement except with the prior written consent of Seller,
which consent will not be unreasonably withheld. Prior to the Closing, Buyer
shall consult with Seller prior to contacting or communicating with any group of
employees of Seller.
4.6 Consents and Approvals. During the period from the date of this
Agreement to and including the Closing Date (or such earlier date as this
Agreement may be terminated in accordance with Article VII), Seller shall use
commercially reasonable efforts to promptly obtain (i) the consents of all
requisite persons and entities to the transfer to Buyer of the Acquired Assets
pursuant to this Agreement, including without limitation, to the extent required
by the terms thereof, the Designated Contracts, the Leases and the Material
Permits, as of the Closing Date and (ii) tax clearance certificates from the
States of Connecticut, Massachusetts and New York.
64
<PAGE>
ARTICLE V
CONDITIONS PRECEDENT TO CLOSING
5.1 Conditions to Obligations of Buyer. The obligation of Buyer to
consummate the transactions contemplated by this Agreement is subject to the
satisfaction (or waiver by Buyer) of the following conditions:
(a) Seller shall have obtained (or caused to be obtained) all of the
waivers, permits, consents, approvals or other authorizations, and effected all
of the registrations, filings and notices, listed on Schedule 5.1(a) hereto;
(b) The representations and warranties of Seller set forth in Article II
and of Parents set forth in Article IIA shall be true and correct at and as of
the Closing Date as if made as of the Closing Date, except (i) for changes
permitted by this Agreement, (ii) for those representations and warranties that
address matters only as of a particular date (which shall be true and correct as
of such date, subject to clause (iii) below), and (iii) where the failure of the
representations and warranties to be true and correct would not reasonably be
expected to have a Business Material Adverse Effect in the case of
representations and warranties contained in Article II or a Parent Material
Adverse Effect in the case of representations and warranties contained in
Article IIA (it being agreed that this clause (iii) shall be inapplicable to any
portion of a representation and warranty which already contains a Business
Material Adverse Effect qualification or a Parent Material Adverse Effect
qualification, as applicable);
(c) Seller shall have performed or complied in all material respects with
the agreements and covenants required to be performed or complied with by it
under this Agreement as of or prior to the Closing;
(d) Seller shall have delivered to Buyer a certificate to the effect that
each of the conditions specified in clauses (a) through (c) of this Section 5.1
is satisfied in all respects;
65
<PAGE>
(e) No action, suit or proceeding shall be pending by or before any
Governmental Entity wherein an unfavorable judgment, order, decree, stipulation
or injunction would reasonably be expected to (i) prevent consummation of any of
the transactions contemplated by this Agreement or (ii) cause any of the
transactions contemplated by this Agreement to be rescinded following
consummation, and no such judgment, order, decree, stipulation or injunction
shall be in effect;
(f) All applicable waiting periods (and any extensions thereof) under the
Hart-Scott-Rodino Act shall have expired or otherwise been terminated;
(g) Buyer shall have received all of the items required to be delivered to
it pursuant to Sections 1.1(c) and 1.3(b);
(h) Seller and Tecomet Inc. shall have entered into a supply agreement for
HTC grids and an agreement for use of HTC technology in the forms attached
hereto as Exhibit H (the "Tecomet Agreements");
(i) Seller and ThermoTrex Corporation shall have entered into a letter
agreement amending the License Agreement dated October 16, 1995 between Trex
Medical Corporation and ThermoTrex Corporation with respect to CMOS technology
in the form attached hereto as Exhibit I (the "CMOS Letter Agreement"); and
(j) All actions to be taken by Seller in connection with the consummation
of the transactions contemplated hereby and all certificates, opinions,
instruments and other documents required to effect the transactions contemplated
hereby shall be reasonably satisfactory in form and substance to Buyer.
66
<PAGE>
5.2 Conditions to Obligations of Seller. The obligation of Seller to
consummate the transactions contemplated by this Agreement is subject to the
satisfaction (or waiver by Seller) of the following conditions:
(a) Seller shall have obtained (or caused to be obtained) all of the
waivers, permits, consents, approvals or other authorizations, and effected all
of the requisitions, filings and notices, listed on Schedule 5.1(a) hereto;
(b) The representations and warranties of Buyer set forth in Article III
shall be true and correct at and as of the Closing Date as if made as of the
Closing Date, except (i) for changes permitted by this Agreement, (ii) for those
representations and warranties that address matters only as of a particular date
(which shall be true and correct as of such date, subject to clause (iii)
below), and (iii) where the failure of the representations and warranties to be
true and correct would not reasonably be expected to have a Buyer Material
Adverse Effect (it being agreed that this clause (iii) shall be inapplicable to
any portion of a representation and warranty that already contains a Buyer
Material Adverse Effect qualification);
(c) Buyer shall have performed or complied in all material respects with
its agreements and covenants required to be performed or complied with by it
under this Agreement as of or prior to the Closing;
(d) Buyer shall have delivered to Seller a certificate to the effect that
each of the conditions specified in clauses (b) and (c) of this Section 5.2 is
satisfied in all respects;
(e) No action, suit or proceeding shall be pending by or before any
Governmental Entity wherein an unfavorable judgment, order, decree, stipulation
or injunction would reasonably be expected to (i) prevent consummation of any of
the transactions contemplated by this Agreement or (ii) cause any of the
transactions contemplated by this Agreement to be rescinded following
consummation, and no such judgment, order, decree, stipulation or injunction
shall be in effect;
67
<PAGE>
(f) All applicable waiting periods (and any extensions thereof) under the
Hart-Scott-Rodino Act shall have expired or otherwise been terminated;
(g) Seller shall have received all of the items required to be delivered to
it pursuant to Sections 1.3(b), 1.3(d) and 3.14; and
(h) All actions to be taken by Buyer in connection with the consummation of
the transactions contemplated hereby and all certificates, opinions, instruments
and other documents required to effect the transactions contemplated hereby
shall be reasonably satisfactory in form and substance to Seller.
ARTICLE VI
INDEMNIFICATION
6.1 Indemnification by Seller. Subject to the terms and conditions of this
Article VI, from and after the Closing, Seller shall indemnify Buyer and its
Affiliates and their respective directors, officers, employees, stockholders and
agents (the "Buyer Indemnified Parties") in respect of, and hold the Buyer
Indemnified Parties harmless against, any and all debts, obligations and other
liabilities, monetary damages, fines, fees, penalties, amounts paid in
settlement, interest obligations, deficiencies, losses, costs and expenses
(including, without limitation, reasonable attorneys' fees and expenses, costs
of investigation and evaluation, experts and other reasonable costs, in each
case whether incurred in defense of any third party claim indemnifiable
hereunder or in successfully enforcing the provisions of this Agreement)
(collectively, "Damages") incurred or suffered by a Buyer Indemnified Party:
(a) resulting from, relating to or constituting (i) any misrepresentation
or breach of warranty of Seller or Parents contained in this Agreement or the
68
<PAGE>
certificate of Seller delivered at the Closing pursuant to Section 5.1(d) or
(ii) any failure to perform any covenant or agreement of Seller contained in
this Agreement;
(b) resulting from or relating to Excluded Assets or resulting from,
relating to or constituting Excluded Liabilities or Seller's failure to
discharge the same; or
(c) resulting from the Fischer Litigation (as defined in Section 6.3(b)(i)
below) to the extent of any Damages (as defined in Section 6.3(b)(i) below)
resulting from infringement of the Patents in Suit (as defined in Section
6.3(b)(i) below) by any Table Products (as defined in Section 6.3(b)(i) below)
manufactured, sold, offered for sale or used on or prior to the last expiration
date of the Patents in Suit and such Damages are attributable to either (i) the
period prior to the Closing or (ii) the period from and after the Closing,
subject to the limitations set forth in Section 6.5 below.
6.2 Indemnification by Buyer. Subject to the terms and conditions of this
Article VI, from and after the Closing, Buyer shall indemnify Seller and its
Affiliates and their respective directors, officers, employees, stockholders and
agents (the "Seller Indemnified Parties") in respect of, and hold the Seller
Indemnified Parties harmless against, any and all Damages incurred or suffered
by a Seller Indemnified Party:
(a) resulting from, relating to or constituting (i) any misrepresentation
or breach of warranty of Buyer contained in this Agreement or the certificate of
Buyer delivered at the Closing pursuant to Section 5.2(d) or (ii) failure to
perform any covenant or agreement of Buyer contained in this Agreement;
(b) resulting from, relating to or constituting any obligations or
liabilities associated with the conduct of the business or operations of the
Business from and after the Closing, except to the extent that such Damages
result from a matter for which Buyer is entitled to indemnification from Seller
69
<PAGE>
pursuant to clause (c)(ii) of Section 6.1 above (after giving effect Section 6.5
below);
(c) subject to the limitations set forth in Section 6.5 below, resulting
from or relating to the Fischer Litigation;
(d) resulting from or relating to Buyer's 401(k) Plan following the
completion of the transfer of assets and liabilities from Seller's 401(k) Plan
(as defined below) pursuant to Section 10.7(c); or
(e) resulting from, relating to or constituting any obligations and
liabilities of Seller assumed by Buyer pursuant to this Agreement or the
Assumption Agreement or for which this Agreement provides that Seller has no
responsibility.
6.3 Claims for Indemnification.
(a) Third-Party Claims. All claims for indemnification made under this
Agreement resulting from, related to or arising out of a third-party claim
against any Buyer Indemnified Parties or Seller Indemnified Parties (each, an
"Indemnified Party") shall be made in accordance with the following procedures.
Each Indemnified Party shall give prompt written notification to the person from
whom indemnification is sought (the "Indemnifying Party") of the commencement of
any action, suit or proceeding relating to a third-party claim for which
indemnification may be sought or, if earlier, upon the assertion of any such
claim by a third party; provided, however, that the omission to give such notice
to the Indemnifying Party shall not relieve the Indemnifying Party of any
liability hereunder unless and only to the extent it was prejudiced thereby.
Within thirty (30) days after delivery of such notification, the Indemnifying
Party may, upon written notice thereof to the Indemnified Party, assume control
of the defense of such action, suit, proceeding or claim with counsel reasonably
satisfactory to the Indemnified Party. If the Indemnifying Party does not assume
70
<PAGE>
control of such defense, the Indemnified Party shall control such defense. The
Party not controlling such defense may participate therein at its own expense;
provided that if the Indemnifying Party assumes control of such defense and the
Indemnified Party reasonably concludes, based on advice from counsel, that the
Indemnifying Party and the Indemnified Party have conflicting interests with
respect to such action, suit, proceeding or claim, the reasonable fees and
expenses of counsel to the Indemnified Party solely in connection therewith
shall be considered "Damages" for purposes of this Agreement; provided, however,
that in no event shall the Indemnifying Party be responsible for the fees and
expenses of more than one counsel for all Indemnified Parties. The Party
controlling such defense shall keep the other Party advised of the status of
such action, suit, proceeding or claim and the defense thereof and shall
consider recommendations made by the other Party with respect thereto. The
Indemnified Party shall not agree to any settlement of such action, suit,
proceeding or claim without the prior written consent of the Indemnifying Party.
The Indemnifying Party shall not agree to any settlement of such action, suit,
proceeding or claim that does not include a complete release of the Indemnified
Party from all liability with respect thereto or that imposes any liability or
obligation on the Indemnified Party without the prior written consent of the
Indemnified Party, which shall not be unreasonably withheld, conditioned or
delayed.
(b) Fischer Litigation Claims. Notwithstanding the provisions of Section
6.3(a) but subject to the other provisions of this Article VI, the Parties agree
that the provisions of this Section 6.3(b) shall govern and control the rights
and obligations of the Buyer Indemnified Parties and the Seller Indemnified
Parties in connection with the Fischer Litigation.
(i) Definitions.
71
<PAGE>
"Damages" shall mean, for all purposes of indemnification under this
Agreement in connection with the Fischer Litigation and notwithstanding the
definition of "Damages" in Section 6.1 above, only (i) monetary damages
(including without limitation "enhanced damages"), fines, fees and interest
obligations ordered by a court in connection with the Fischer Litigation, (ii)
all amounts payable to Fischer Imaging Corporation (or its successor in
interest) ("Fischer") in settlement of the Fischer Litigation, including without
limitation any future royalties required to be paid by any Buyer Indemnified
Party as a result of such settlement, (iii) any losses, including consequential
damages, suffered by any Buyer Indemnified Party as the result of an injunction
in the Fischer Litigation prohibiting the sale of Table Products, and (iv)
reasonable costs and expenses, including without limitation reasonable
attorneys' fees and expenses, costs of investigation and evaluation, experts and
other reasonable costs, incurred in connection with the defense of the Fischer
Litigation.
"Fischer Litigation" shall mean (i) the suits captioned Fischer Imaging
Corp., a Delaware Corporation v. Trex Medical Corporation, a Connecticut
corporation fka Lorad Corporation, pending in the United States District Court
for the District of Colorado, Civil Action No. 92-N-619 (consolidated with Civil
Action No. 98-N-772) (D. Colo.), and Lorad Corp. v. Fischer Imaging Corp.,
pending in the United States District Court for the District of Colorado, Civil
Action No. 93-M-1588 (the "Original Litigation"); (ii) any other action or claim
brought against any Buyer Indemnified Party predicated on the Patents in Suit,
but only to the extent that such action or claim involves any Table Products;
and (iii) any actions or claims for indemnification or other relief brought or
made by customers or users of Table Products, based on actions or claims of
infringement of the Patents in Suit, based on the use or sale of Table Products
and filed or made by the owner or licensees of the Patents in Suit.
72
<PAGE>
"Patents in Suit" shall mean the patents in suit in the Original Litigation
(namely United States Patent Nos. 5,078,142 and 5,735,264) and any reissues,
extensions, continuations, divisions or continuations in part thereof, provided
that, in the case of any continuation in part, the term "Patents in Suit" shall
mean only those claims of such continuation in part supported by the disclosure
of any of the patents in suit in the Original Litigation.
"Table Products" shall mean the prone stereotactic breast biopsy table
manufactured, sold or offered for sale by Seller on or before the date hereof,
as such table may be enhanced or improved from time to time by or on behalf of
Buyer, so long as such table as so enhanced or improved is not alleged by
Fischer in good faith to infringe on any claims of any Patents in Suit which are
not infringed upon by such table as manufactured by Seller on the date hereof,
or any claims of foreign counterparts of the Patents in Suit whose corresponding
U.S. claims, if any, are not alleged to be infringed upon by such table as
manufactured by Seller on the date hereof, provided that in any such case such
table is manufactured, offered for sale or sold only for the uses offered by
Seller on or before the date hereof.
(ii) Procedure for Fischer Litigation Claims. No Buyer Indemnified Party
shall make any claim for indemnification from Seller with respect to
Damages resulting from the Fischer Litigation except pursuant to
Section 6.1(c). From and after the Closing, Seller shall continue to
control and defend the Fischer Litigation (at its own expense) with
its existing counsel or other counsel reasonably selected by Seller.
Seller shall keep Buyer periodically advised of the status of the
Fischer Litigation and shall consider any recommendations made by
Buyer with respect to the defense thereof. Seller shall have the right
(in its sole discretion) to settle all or any portion of the Fischer
Litigation without the prior consent of Buyer, so long as such
settlement does not directly or indirectly impose any liabilities,
limitations, restrictions or obligations on Buyer. If requested by
Seller, Buyer shall not unreasonably withhold, condition or delay its
consent to any settlement of all or any portion of the Fischer
73
<PAGE>
Litigation. Notwithstanding the foregoing, Buyer may, at any time,
elect to assume control and defense of the Fischer Litigation by (A)
releasing Seller and Parents from any further indemnification
obligations under Section 6.1(c) and (B) assuming Seller's further
obligations under this Section 6.3(b) (other than payment of amounts
incurred prior to such time by or on behalf of Seller in investigating
or defending such matter). Unless Buyer assumes the control and
defense of the Fischer Litigation as provided in the preceding
sentence, Buyer may not settle all or any portion of the Fischer
Litigation without the prior written consent of Seller.
(c) Procedure for Other Claims. An Indemnified Party wishing to assert a
claim for indemnification under this Article VI which is not subject to Section
6.3(a) or 6.3(b) shall deliver to the Indemnifying Party a written notice (a
"Claim Notice") which contains (i) a description and the amount (the "Claimed
Amount") of any Damages incurred by the Indemnified Party, (ii) a statement that
the Indemnified Party is entitled to indemnification under this Article VI and a
reasonable explanation of the basis therefor, and (iii) a demand for payment in
the amount of such Damages. Within thirty (30) days after delivery of a Claim
Notice, the Indemnifying Party shall deliver to the Indemnified Party a written
response in which the Indemnifying Party shall: (A) agree that the Indemnified
Party is entitled to receive all of the Claimed Amount (in which case such
response shall be accompanied by a payment by the Indemnifying Party to the
Indemnified Party of the Claimed Amount, by check or by wire transfer), (B)
74
<PAGE>
agree that the Indemnified Party is entitled to receive part, but not all, of
the Claimed Amount (the "Agreed Amount") (in which case such response shall be
accompanied by a payment by the Indemnifying Party to the Indemnified Party of
the Agreed Amount, by check or by wire transfer), or (C) contest that the
Indemnified Party is entitled to receive any of the Claimed Amount. If the
Indemnifying Party in such response contests the payment of all or part of the
Claimed Amount, the Indemnifying Party and the Indemnified Party shall use good
faith efforts to resolve such dispute. If such dispute is not resolved within
sixty (60) days following the delivery by the Indemnifying Party of such
response, the Indemnifying Party and the Indemnified Party shall each have the
right to submit such dispute to a court of competent jurisdiction in accordance
with the provisions of Section 11.14.
6.4 Survival.
(a) The representations and warranties of Seller and Buyer set forth in
this Agreement shall survive the Closing and the consummation of the
transactions contemplated hereby and continue until the second anniversary of
the Closing Date, at which time they shall expire. Notwithstanding the
foregoing, (i) the representations and warranties of Seller contained in
Sections 2.1 and 2.2, of Parents contained in Sections 2.1A and 2.2A and of
Buyer contained in Sections 3.1 and 3.2 shall survive the Closing and the
consummation of the transactions contemplated hereby without limitation and (ii)
the representations and warranties of Seller contained in Sections 2.8 and 2.16
shall expire upon the occurrence of the Closing.
(b) Any valid claim that is properly asserted in writing pursuant to
Section 6.3 prior to the expiration as provided in Section 6.4(a) of the
representation or warranty that is the basis for such claim shall survive until
such claim is finally resolved and satisfied; provided, however, that any valid
75
<PAGE>
claim that is properly asserted in writing pursuant to either Section 6.1(c) or
Section 6.2(c) shall survive until such claim is finally resolved and satisfied.
6.5 Limitations.
(a) Except with respect to claims based on actual fraud, Article VIII or
Article IX and claims of Seller under any of the Mortgage Loan Documents, the
rights of the Indemnified Parties under this Article VI shall be the sole and
exclusive remedies of the Indemnified Parties and their respective Affiliates
with respect to claims resulting from or relating to any misrepresentation,
breach of warranty or failure to perform any covenant or agreement contained in
this Agreement or otherwise relating to the transactions that are the subject of
this Agreement. Except with respect to claims based on actual fraud, the rights
of the Parties under Article VIII shall be the sole and exclusive remedy of the
Parties with respect to the subject matter of Article VIII. Except with respect
to claims based on actual fraud, the rights of the Parties under Article IX
shall be the sole and exclusive remedy of the Parties with respect to the
subject matter of Article IX. Without limiting the generality of the foregoing
three sentences, in no event shall Buyer, its successors or permitted assigns be
entitled to claim or seek rescission of the transactions consummated under this
Agreement.
(b) Notwithstanding anything to the contrary contained in this Agreement,
each of the following limitations shall apply:
(i) the aggregate liability of Seller for the sum of all Damages under
this Article VI (other than Section 6.1(c)) and Article VIII shall not
exceed an amount equal to $16,000,000, and the aggregate liability of
Seller for the sum of all Damages under this Article VI (including
Section 6.1(c)) and Article VIII shall not exceed an amount equal to
the Adjusted Purchase Price (to the extent Seller has actually
76
<PAGE>
received such Adjusted Purchase Price from Buyer either upon payment
at the Closing or pursuant to the Mortgage Loan Documents thereafter);
(ii) no individual claim or series of related claims for indemnification
under Sections 6.1(a)(i), 6.2(a)(i) or 8.2(a) shall be valid and
assertable unless it is (or they are) for an amount in excess of
$10,000;
(iii)Seller shall not be liable under clause (a)(i) of Section 6.1 or
Section 8.2(a) unless and until the aggregate Damages under clause
(a)(i) of Section 6.1 and Section 8.2(a) exceed $1,500,000 (the
"Basket Amount"), and then only to the extent that the aggregate
Damages under clause (a)(i) of Section 6.1 and Section 8.2(a) exceed
an amount equal to one-half of the Basket Amount (it being understood
that Seller shall not be liable, in any event, for the first amount of
Damages equal to one-half of the Basket Amount); and
(iv) the amount of any Damages for which indemnification is provided under
this Article and Articles VIII and IX shall be calculated net of any
associated accruals or reserves reflected on the books of the Business
as of the Closing Date;
provided, however, that the foregoing limitations shall not apply to a claim
described in paragraph (b) of Section 6.1 or paragraphs (b) through (e) of
Section 6.2.
(c) In no event shall Seller be responsible and liable for any Damages or
other amounts under this Article VI or under Article VIII that are
consequential, in the nature of lost profits, diminution in value, damage to
reputation or the like, special or punitive or otherwise not actual Damages;
provided, however, that Seller shall be liable for any such Damages owed by a
Buyer Indemnified Party to any non-Affiliated person.
77
<PAGE>
(d) Seller shall not have any right of contribution against the Business
with respect to any breach by Seller of any of its representations, warranties,
covenants or agreements.
(e) The amount of any Damages for which indemnification is provided under
this Article VI or under Article VIII shall be reduced by any related recoveries
which the Indemnified Party actually receives under insurance policies or other
related payments received or receivable from third parties and any Tax benefits
actually received by the Indemnified Party or any of its Affiliates on account
of the matter resulting in such Damages or the payment of such Damages. Each
Indemnified Party agrees to use commercially reasonable efforts to pursue rights
to insurance proceeds with respect to any claims for indemnification made by
such Indemnified Party.
(f) Buyer hereby agrees that any Damages with respect to any claim for
indemnification by Seller or its Affiliates under this Article VI or Articles
VIII or IX and any other amounts otherwise owing by Seller or its Affiliates to
any Buyer Indemnified Party pursuant to this Agreement may, at the option of
Seller, be offset against any amounts payable by Buyer to Seller or its
Affiliates pursuant to this Article VI or Articles VIII or IX or under the
Mortgage Loan Documents
6.6 Treatment of Indemnification Payments. All indemnification payments
made under this Agreement shall be treated by the Parties as an adjustment to
the Purchase Price to the extent permitted by law.
6.7 Parent Guaranty. Each Parent hereby unconditionally guarantees, jointly
and severally, the due and punctual payment and performance of all obligations
of Seller under this Article VI and Articles VIII and IX, subject to the
limitations and restrictions contained therein. This guaranty is an irrevocable
78
<PAGE>
guaranty of payment (and not just of collection) and shall continue in effect
notwithstanding any extension or modification of the terms of this Agreement,
any assumption of any such guaranteed obligation by any other party or any other
act or event which might otherwise operate as a legal or equitable discharge of
any Parent under this Section 6.7. Each Parent hereby waives all special
suretyship defenses and notice requirements. This guaranty is in no way
conditioned upon any requirement that Buyer first attempt to collect or enforce
the guaranteed obligation from or against Seller or any other Parent. So long as
any obligation of Seller to Buyer under this Article VI or Articles VIII and IX
remains unpaid or undischarged, each Parent hereby waives all rights to
subrogation arising out of any payment by it pursuant to this Section 6.7.
The obligations of each Parent hereunder shall be absolute and
unconditional irrespective of the validity, legality or enforceability of this
Agreement or any document related hereto, and shall not be affected by or
contingent upon (a) the liquidation or dissolution of, or the merger or
consolidation of Seller with or into any entity, or any sale or transfer by
Seller of all or any part of its property or assets, (b) the bankruptcy,
receivership, insolvency, reorganization or similar proceedings involving or
affecting Seller, (c) any modification, alteration, amendment or addition of or
to this Agreement, or (d) any disability or any other defense of Seller or any
other person and any other circumstance whatsoever (with or without notice to or
knowledge of such Parent) which may or might in any manner or to any extent vary
the risks of such Parent or might otherwise constitute a legal or equitable
discharge of a surety or a guarantor or otherwise.
79
<PAGE>
ARTICLE VII
TERMINATION
7.1 Termination of Agreement. Buyer and Seller may terminate this Agreement
prior to the Closing as provided below:
(a) Buyer and Seller may terminate this Agreement by mutual written
consent;
(b) Buyer may terminate this Agreement by giving written notice to Seller
in the event Seller is in material breach, and Seller may terminate this
Agreement by giving written notice to Buyer in the event Buyer is in material
breach, of any representation, warranty, covenant or agreement contained in this
Agreement, and such breach is not remedied within ten days of delivery of
written notice thereof;
(c) Buyer may terminate this Agreement by giving written notice to Seller
if the Closing shall not have occurred on or before December 1, 2000 by reason
of the failure of any condition precedent under Section 5.1 hereof (unless the
failure results primarily from a breach by Buyer of any representation,
warranty, covenant or agreement contained in this Agreement); and
(d) Seller may terminate this Agreement by giving written notice to Buyer
if the Closing shall not have occurred on or before December 1, 2000 by reason
of the failure of any condition precedent under Section 5.2 hereof (unless the
failure results primarily from a breach by Seller of any representation,
warranty, covenant or agreement contained in this Agreement).
80
<PAGE>
7.2 Effect of Termination.
(a) Except as set forth in Sections 7.2(b) and 7.2(c), if either Buyer or
Seller terminates this Agreement pursuant to Section 7.1, all obligations of the
Parties hereunder shall terminate without any liability of any Party to any
other Party.
(b) Termination of this Agreement pursuant to clause (b) of Section
7.1 by reason of a breach prior to the time of such termination of any covenant,
agreement or, in the case of a breach by Buyer, representation or warranty
contained in this Agreement shall not relieve a defaulting or breaching Party
(whether or not it is the terminating Party) from any liability to the other
Parties.
(c) Notwithstanding any other provision contained in this Agreement to the
contrary, the Confidentiality Agreement shall survive the termination of this
Agreement for any reason.
ARTICLE VIII
ENVIRONMENTAL MATTERS
8.1 Definitions. For purposes of this Agreement, the following terms have
the meanings provided below.
(a) "Response Costs" means all "costs of response" within the meaning of
CERCLA and all costs recoverable pursuant to any other environmental law.
(b) "Damages" has the meaning assigned to that term under Section 6.1 and,
for purposes of this Article VIII, shall include Response Costs.
(c) "Develop" and "Development" mean (i) the construction, reconstruction,
refurbishment, renovation, substantial modification, restoration, conversion,
structural alteration, relocation or enlargement of any building or structure;
81
<PAGE>
any change in use of any building or land or any change in zoning or government
land use approval, (ii) any extension of any use of land, or (iii) any clearing,
grading or other movement of land.
(d) "Natural Resources Damages" means "damages" to "natural resources," as
those terms are defined under CERCLA or analogous state and provincial laws.
8.2 Environmental Indemnification by Seller. (a) Subject to the terms and
conditions of this Article VIII, with respect to any valid claim properly
asserted in writing by Buyer prior to the first anniversary of the Closing Date,
Seller shall indemnify Buyer in respect of, and hold Buyer harmless against:
(i) any Damages incurred or suffered by Buyer or any Affiliate thereof
(other than with respect to an Excluded Liability) as a result of any
failure by Seller to comply with any applicable Environmental Law
prior to the Closing Date in connection with the Business; provided
that such Damages result directly from (A) compliance by Buyer or any
Affiliate thereof with an order issued by a Governmental Entity or by
a court in a proceeding commenced by a Governmental Entity which
establishes a mandatory obligation to rectify such failure to comply
with applicable Environmental Law, or (B) the mandatory obligation of
the Business or any Affiliate of Buyer to pay a fine or penalty which
is imposed by a Governmental Entity or a court in a proceeding
commenced by a Governmental Entity as a result of such failure to
comply with applicable Environmental Law; and
(ii) any Damages incurred or suffered by Buyer or any Affiliate thereof
(other than with respect to an Excluded Liability) as a result of any
Release of Materials of Environmental Concern to the Environment in
connection with the Business that occurred prior to the Closing Date;
82
<PAGE>
provided that, such Damages result directly from a legal obligation
arising pursuant to Environmental Laws on the part of Buyer or any
Affiliate thereof to investigate, remediate or pay Damages on account
of said Release of Materials of Environmental Concern;
provided further, however, that, in the case of both clauses (i) and (ii), to
the extent Buyer's claim for indemnification relates to a Business Property,
Seller shall be obligated under this Section 8.2 if and only if (A) Buyer has
operated the applicable Business Property continuously for commercial or
industrial purposes (including related office, warehouse, sale and service
activities) and not sold, transferred or sublet that property during such one
year indemnification period or thereafter during the pendency of any claim
asserted prior to the first anniversary of the Closing Date and (B) Buyer has
retained responsibility for and continued to perform remedial actions and
programs in existence and operation at the Business Properties as of the Closing
Date, if any.
(b) Buyer shall give prompt written notification to Seller of the
commencement of any action, suit or proceeding for which indemnification under
this Section 8.2 may be sought or, if earlier, upon the assertion of any claim
or commencement of any inquiry for which indemnification under this Section 8.2
may be sought, whereupon Seller shall assume exclusive control of the defense
and settlement of such action, suit, proceeding, claim or inquiry. Without
limiting the generality of the foregoing, if a mandatory obligation of the kind
specified in Section 8.2(a) exists: (i) Seller shall determine, control and
undertake the actions to be taken in order to comply with or satisfy such
mandatory obligation, including the performance of any further investigation or
remediation; (ii) Buyer shall be provided reasonable notice and opportunity to
comment (at its own cost and expense) upon Seller's plans for addressing such
mandatory obligation; (iii) Buyer shall allow access to Seller and its agents
83
<PAGE>
and independent contractors necessary to allow Seller to perform actions to be
taken in order to comply with or satisfy a mandatory obligation under this
Section 8.2(b); and (iv) Seller and its agents and independent contractors shall
make all reasonable efforts to perform any mandatory obligation under this
Section 8.2 in a manner that does not unreasonably interfere with Buyer's
occupation and use of the Business Properties.
(c) In addition to the agreements of the Parties set forth in Section 10.1,
Buyer shall, and shall cause its Affiliates to, cooperate with Seller (as Seller
may reasonably direct) in connection with the prosecution, defense, settlement
or performance of Seller's agreements in this Section 8.2. Without limiting the
generality of the foregoing, as to all matters with respect of which Seller has
agreed to indemnify Buyer and its Affiliates, Buyer shall, and shall cause its
Affiliates to (i) assign to Seller (or its designee) all existing contracts with
independent consultants, attorneys and other advisors relating to such matters,
(ii) waive all professional conflicts and take other reasonable steps necessary
to allow any counsel representing the Business with respect to such matters to
represent Seller (or its designee) with respect to such matters, and (iii) sign
such documents, assign such rights, and take such actions as Seller may
reasonably request.
8.3 Limitations.
(a) The provisions of Sections 6.5 and 6.6 are applicable to this Article
VIII.
(b) Seller shall have no liability under Sections 8.2(a) or 8.2(b) for any
Damages in any way arising out of or related to an actual or proposed
Development at a Business Property after the Closing.
84
<PAGE>
(c) The Parties agree that any Damages incurred by Buyer in investigation
or remediation activities that are not required pursuant to Environmental Laws
shall not be deemed a mandatory obligation for purposes of Section 8.2(a).
(d) Costs and expenses incurred in connection with investigation and
remediation of a Release of Materials of Environmental Concern shall be
indemnifiable under Section 8.2(a) only to the extent (i) required for the
remediation of Materials of Environmental Concern to levels that will permit
continued industrial uses at the Business Properties or that meet risk-based
cleanup standards based upon industrial use of the Business Properties under
applicable Environmental Laws as of the date the remediation is completed; or
(ii) necessary to obtain a "no further action" letter or equivalent from a
Governmental Entity with primary jurisdiction therefor.
(e) This Article VIII shall be the sole and exclusive remedy of (i) Buyer
and its Affiliates against Seller or any of its Affiliates, and their respective
present or former officers, directors and employees, agents, attorneys or
contractors, and (ii) Seller and its Affiliates against Buyer or any of its
Affiliates, and their respective present or former officers, directors and
employee, agents, attorneys or contractors, for any and all claims, Damages or
other matters related directly or indirectly to the Business and arising at any
time under Environmental Laws, or under any common law with respect to Materials
of Environmental Concern.
(f) Buyer and Seller hereby waive (and shall cause their respective
Affiliates and the respective successors and assigns of Buyer, Seller and their
respective Affiliates to waive) any right to seek contribution or other recovery
from each other or their respective Affiliates or any present or former officer,
director or employee, agent attorney or contractor of Buyer, Seller or any of
their respective subsidiaries with respect to events related directly or
85
<PAGE>
indirectly to the Business prior to the Closing that Buyer and its Affiliates or
any of them may now or in the future have under any Environmental Law or any
common law providing for any remedy or right of recovery with respect to
Environmental Matters or Materials of Environmental Concern other than as
expressly provided for in this Article VIII. Buyer and Seller hereby release
(and shall cause their respective Affiliates and the respective successors and
assigns of Buyer, Seller and their respective Affiliates to release) each other
and their respective Affiliates and all present or former officers, directors
and employees, agents, attorneys or contractors of Buyer, Seller or any of their
respective subsidiaries from any and all such claims, demands and causes of
action.
8.4 Environmental Indemnification by Buyer.
(a) Except as otherwise specifically provided in this Article VIII and
regardless of whether the events giving raise to the Damages occurred or are
alleged to have occurred before or after the Closing, from and after the
Closing, Buyer shall indemnify Seller and its Affiliates in respect of, and hold
Seller and its Affiliates harmless against, any and all Damages arising from or
related to (i) Off-Site Liabilities, including, without limitation, any Natural
Resources Damages; (ii) all claims under Environmental Law or common law arising
from or related to alleged or actual exposures of employees or third parties to
Materials of Environmental Concern; (iii) diminution in property values or other
property damage claims arising from any Releases of Materials of Environmental
Concern; and (iv) all other Environmental Matters related directly or indirectly
to the Business as to which Seller is not obligated to indemnify Buyer pursuant
to Section 8.2(a).
(b) The procedures set forth in Section 6.3 shall apply with respect to any
claim for indemnification made by Seller or its Affiliates pursuant to this
Article VIII.
86
<PAGE>
ARTICLE IX
TAX MATTERS
9.1 Preparation and Filing of Tax Returns; Payment of Taxes.
(a) Seller shall be responsible for the preparation and filing of all Tax
Returns for Seller for all periods as to which Tax Returns are due after the
Closing Date (including the consolidated, unitary and combined Tax Returns for
Seller which include the operations of the Business for any period ending on or
before the Closing Date). Seller shall make or cause to be made all payments
required with respect to any such Tax Returns except to the extent provided in
Sections 1.1(d)(ix) and 1.4(b) hereof. Buyer shall assume responsibility for and
promptly reimburse Seller for the amount of any such Taxes paid by Seller (i) to
the extent such Taxes are attributable (as determined under Section 9.2 hereof)
to periods following the Closing Date and (ii) to the extent of any reserves for
Taxes on the Most Recent Balance Sheet reduced by any subsequent payments of
Taxes reflected in such reserves through the Closing Date and increased by the
amount of any subsequent increases in such reserves in accordance with GAAP for
Taxes attributable to the operation of the Business in the Ordinary Course of
Business following the date of the Most Recent Balance Sheet through the Closing
Date (as so adjusted, "Tax Reserves").
(b) Buyer shall be responsible for the preparation and filing of all other
Tax Returns for the Business Buyer shall make all payments required with respect
to any such Tax Returns; provided, however, that Seller shall promptly reimburse
Buyer to the extent any payment Buyer is required to make relates to the
operations of the Business for any period ending on or before the Closing Date.
(c) Any Tax Return to be prepared and filed for taxable periods beginning
before the Closing Date and ending after the Closing Date shall be prepared on a
basis consistent with the last previous Tax Return, and Buyer shall consult with
87
<PAGE>
Seller concerning each such Tax Return and report all items with respect to the
period ending on the Closing Date in accordance with the instructions of Seller,
if timely received by Buyer; provided, however, that if Buyer is advised by
counsel that the filing of any Tax Return and the reporting on such Tax Return
of any item in accordance with the instructions of Seller may subject Buyer to
any penalties or fines, Buyer may file such Tax Return without regard to
Seller's instructions relating to such item. Buyer shall provide Seller with a
copy of each proposed Tax Return (and such additional information regarding such
Tax Return as may reasonably be requested by Seller) at least 10 days prior to
the filing of such Tax Return.
(d) Seller shall be responsible for the payment of any transfer, sales,
use, stamp, conveyance, value added, recording, registration, documentary,
filing and other non-income Taxes arising in connection with the consummation of
the transactions contemplated by this Agreement.
(e) Buyer shall be responsible for the payment of any and all Taxes not
incurred in the Ordinary Course of Business attributable to the acts or
omissions of Buyer or Buyer's Affiliates occurring after the Closing on the
Closing Date.
9.2 Allocation of Certain Taxes.
(a) Buyer and Seller agree that if Seller is permitted but not required
under applicable foreign, state or local Tax laws to treat the Closing Date as
the last day of a taxable period, Buyer and Seller shall treat such day as the
last day of a taxable period. Buyer and Seller agree that they will treat the
Business as if it ceased to be part of Seller's operations, as of the close of
business on the Closing Date.
88
<PAGE>
(b) Any property or substantially similar Taxes on Acquired Assets shall be
apportioned between Buyer and Seller based upon the number of days in the
relevant assessment period included in the period ending on (and including) the
Closing Date (for Seller) and the number of days in the relevant assessment
period included in the period beginning on the day following the Closing Date
(for Buyer).
9.3 Refunds and Carrybacks.
(a) Seller shall be entitled to any refunds (including any interest paid
thereon) or credits of Taxes attributable to taxable periods ending (or deemed
pursuant to Section 9.2(b) to end) on or before the Closing Date.
(b) Buyer and/or its Affiliates, as the case may be, shall be entitled to
any refunds (including any interest paid thereon) or credits of Taxes
attributable to taxable periods beginning (or deemed pursuant to Section 9.2(b)
to begin) after the Closing Date.
(c) Buyer shall forward to or reimburse Seller for any refunds (including
any interest paid thereon) or credits due Seller after receipt thereof, and
Seller shall promptly forward to Buyer or reimburse Buyer for any refunds
(including any interest paid thereon) or credits due Buyer after receipt
thereof.
9.4 Cooperation on Tax Matters; Tax Audits.
(a) Buyer and Seller and their respective Affiliates shall cooperate in the
preparation of all Tax Returns for any Tax periods for which one Party could
reasonably require the assistance of the other Party in obtaining any necessary
information. Such cooperation shall include, but not be limited to, furnishing
prior years' Tax Returns or return preparation packages to the extent related to
the Business illustrating previous reporting practices or containing historical
information relevant to the preparation of such Tax Returns, and such other
information, in each case, to the extent within such Party's possession
requested by the Party filing such Tax Returns as is relevant to their
89
<PAGE>
preparation. Such cooperation and information also shall include without
limitation provision of powers of attorney for the purpose of signing Tax
Returns and defending audits and promptly forwarding copies of appropriate
notices and forms or other communications received from or sent to any
applicable governmental authority responsible for the imposition of Taxes (the
"Taxing Authority") which relate to the Business, and providing copies of all
relevant Tax Returns to the extent related to the Business, together with
accompanying schedules and related workpapers, documents relating to rulings or
other determinations by any Taxing Authority and records concerning the
ownership and Tax basis of property, which the requested Party may possess.
Buyer and Seller and their respective Affiliates shall make their respective
employees and facilities available on a mutually convenient basis to explain any
documents or information provided hereunder.
(b) Seller shall have the right, at its own expense, to control any audit
or examination by any Taxing Authority ("Tax Audit"), initiate any claim for
refund, contest, resolve and defend against any assessment, notice of
deficiency, or other adjustment or proposed adjustment relating to any and all
Taxes for any taxable period ending on or before the Closing Date with respect
to the Business. Buyer shall have the right, at its own expense, to control any
other Tax Audit, initiate any other claim for refund, and contest, resolve and
defend against any other assessment, notice of deficiency, or other adjustment
or proposed adjustment relating to Taxes with respect to the Business; provided
that, with respect to (i) any state, local or foreign Taxes for any taxable
period beginning before the Closing Date and ending after the Closing Date and
(ii) any item the adjustment of which may cause Seller to become obligated to
make any payment pursuant to Section 9.1(a) hereof, Buyer shall consult with
90
<PAGE>
Seller with respect to the resolution of any issue that would affect Seller, and
not settle any such issue, or file any amended Tax Return relating to such
issue, without the consent of Seller. Where consent to a settlement is withheld
by Seller pursuant to this Section, Seller may continue or initiate any further
proceedings at its own expense, provided that any liability of Buyer, after
giving effect to this Agreement, shall not exceed the liability that would have
resulted had Seller not withheld its consent.
9.5 Termination of Tax Sharing Agreements. All Tax sharing agreements or
similar arrangements with respect to or involving the Business (other than as
set forth in this Article IX) shall be terminated prior to the Closing Date and,
after the Closing Date, Buyer and its Affiliates shall not be bound thereby or
have any liability thereunder for amounts due in respect of periods ending on or
before the Closing Date.
ARTICLE X
FURTHER AGREEMENTS
10.1 Access to Information; Record Retention; Cooperation.
(a) Access to Information. Subject to compliance with applicable laws and
regulations regarding classified information and security clearance, following
the Closing, Seller and Buyer each shall afford to each other and to the other's
Affiliates, authorized accountants, counsel and other designated representatives
reasonable access (including using reasonable efforts to give access to third
parties possessing information and providing reasonable access to its own
employees who are in possession of relevant information) and duplicating rights
during normal business hours in a manner so as to not unreasonably interfere
with the conduct of business to all non-privileged records, books, contracts,
instruments, documents, correspondence, computer data and other data and
information (collectively, "Information") within the possession or control of
such Party or its Affiliates, relating to the Business prior to the Closing,
insofar as such access is reasonably required by the other Party. Information
may be requested under this Section 10.1(a) for, without limitation, financial
reporting and accounting matters, preparing financial statements, preparing and
filing of any Tax Returns, prosecuting any claims for refund, defending any Tax
claims or assessment, preparing securities law or exchange filings, prosecuting,
defending or settling any litigation, Environmental Matter or insurance claim,
91
<PAGE>
performing this Agreement and the transactions contemplated hereby (including
without limitation the preparation of the Preliminary Closing Statement and in
connection with the review thereof and any disputes in connection therewith),
and all other proper business purposes. Following the Closing, Seller and its
Affiliates may retain duplicate copies of any Information (however maintained)
transferred to Buyer pursuant to this Agreement for any purpose for which access
is permitted to Information in accordance with the first sentence of this
paragraph.
(b) Access to Personnel. Following the Closing, Seller and Buyer each shall
use reasonable efforts to make available to each other, upon written request,
such Party's and its Affiliates' officers, directors, employees and agents to
the extent that such persons may reasonably be required in connection with any
legal, administrative or other proceedings in which the requesting Party may
from time to time be involved relating to the Business prior to the Closing or
for any other matter referred to in Section 10.1(a); provided, however, that
such access shall not materially impair the ability of such person to carry on
his or her duties to the employing Party.
(c) Reimbursement. A Party providing Information or personnel to another
Party under Section 10.1(a) or (b) shall be entitled to receive from the
recipient, upon the presentation of invoices therefor, payments for such
amounts, relating to supplies, disbursements and other out-of-pocket expenses,
as may reasonably be incurred in providing such Information; provided, however,
92
<PAGE>
that no such reimbursements shall be required for the salary or cost of fringe
benefits or similar expenses pertaining to employees or directors of the
providing Party or its Affiliates.
(d) Retention of Records. Except as otherwise required by law or agreed to
in writing by Seller and Buyer, Seller and Buyer each shall (and shall cause its
Affiliates to) use reasonable efforts to preserve all Information in its
possession pertaining to the Business prior to the Closing until December 31,
2006. Notwithstanding the foregoing, in lieu of retaining any specific
Information, Seller and Buyer each may offer in writing to each other to deliver
such Information to the other and, if such offer is not accepted within 90 days,
the offered Information may be disposed of at any time.
(e) Preparation of Seller Financial Statements. Following the Closing,
Buyer shall cause the Business to prepare and provide to Seller and its
Affiliates the information relating to the Business required for Seller and its
Affiliates to prepare the financial statements of Seller and its Affiliates for
all fiscal periods within the fiscal year in which the Closing occurs, in such
form as was previously prepared by Seller for Parents with respect to the
Business prior to the Closing.
+ 10.2 Restrictive Covenants.
(a) Background. Seller acknowledges that (i) the Business is conducted by
Seller both within and outside the United States, and the Business involves the
identification and development of new markets; (ii) Seller has developed trade
secrets and confidential information concerning the Business; and (iii) as a
condition to the consummation of the transactions contemplated hereby, Buyer has
required Seller and Parents to enter into the agreements and covenants contained
93
<PAGE>
in this Section 10.2 to protect the Business following the consummation of the
transactions contemplated hereby, which transactions will benefit each of the
Parents. Accordingly, Seller and Parents each covenant and agree as follows:
(b) Covenant Not to Compete. During the period commencing on the Closing
Date and continuing until the thirty-month anniversary of the Closing Date (the
"Noncompetition Period"), Seller and Parents shall not (and shall cause each
Noncompetition Party (as defined below) not to), individually or in combination,
directly or indirectly own, manage, operate or control any business engaged in
the business of developing, manufacturing and selling mammography and breast
biopsy systems, medical mobile X-ray systems, specialized medical X-ray imaging
equipment for cardiac catheterization laboratories, digital
radiographic/fluoroscopic (R/F) systems, electrophysiology products or general
purpose radiography products for medical purposes, in each case of the type and
kind being sold by the Business on the Closing Date (a "Competitive Business");
provided, however, that the foregoing covenants shall not prohibit, or be
interpreted as prohibiting, any Noncompetition Party from:
(i) continuing anywhere in the world in any type of business conducted by
any Noncompetition Party on the date hereof, which is not part of the
Business;
(ii) entering into any relationship with a person or entity not owned,
managed, operated or controlled by any Noncompetition Party for
purposes primarily unrelated to a Competitive Business;
(iii)making equity investments in publicly owned companies which conduct a
Competitive Business, provided such investments do not exceed 5% of
the voting securities of other otherwise confer control of any such
Competitive Business upon any Noncompetition Party; or
94
<PAGE>
(iv) acquiring any person or entity which conducts a Competitive Business
if either: (A) in the calendar year prior to such acquisition, the
revenues of such person or entity from its Competitive Business do not
constitute more than 15% of the total revenues of such person or
entity; or (B) the applicable Noncompetition Party promptly commences
and thereafter pursues until the earlier to occur of the expiration of
the Noncompetition Period and 12 months after such acquisition, the
transfer of that portion of the business of such person or entity as
constitutes a Competitive Business upon terms and conditions and at a
price determined by the applicable Noncompetition Party in its sole
discretion.
For purposes of the Agreement, "Noncompetition Party" means each of
Seller, each Parent and any direct or indirect majority-owned subsidiaries of
Seller or any Parent (each, a "Controlled Subsidiary") while (but only while)
such Controlled Subsidiary is a direct or indirect majority-owned subsidiary of
Seller or any Parent. For avoidance of any doubt, (I) the Parties acknowledge
that the Parents are in the process of organizing a new subsidiary (the
"BioMedical Subsidiary") to engage in the business of developing, manufacturing,
selling, reselling and servicing medical devices, including respiratory devices
and neurodiagnostic products, and components, parts and accessories with respect
to each of the foregoing, (II) it is currently anticipated that, subject to the
receipt of all necessary consents and approvals, Thermo Electron Corporation
will "spin-off" the BioMedical Subsidiary to its stockholders (the "Spin-Off"),
and (III) the Parties agree that the restrictive covenants contained in this
Section 10.2 shall apply to the BioMedical Subsidiary only while the BioMedical
Subsidiary is a direct or indirect majority-owned subsidiary of any Parent and
not after the Spin-Off. Furthermore, for the avoidance of any doubt, Seller and
Parents will not sell, license, transfer or assign any Intellectual Property to
the BioMedical Subsidiary or any other Controlled Subsidiary in order to enable
95
<PAGE>
the BioMedical Subsidiary or such other Controlled Subsidiary to, directly or
indirectly, own, manage, operate or control, during the Noncompetition Period,
any Competitive Business.
(c) Non-Solicitation. For a period of two (2) years
following the Closing (the "Non-Solicitation Period"), without the prior written
consent of Buyer, neither Seller nor any Noncompetition Party shall, directly or
indirectly, (i) solicit for the purpose of employment any person who was
employed by Seller with respect to the Business on the Closing Date and who
continues to be so employed by Buyer immediately preceding such solicitation or
encourage any such person to leave such employment; provided, however, that the
foregoing shall not prohibit Seller or any Noncompetition Party from placing any
general advertisements for employees so long as such general advertisements are
not expressly directed to any employees of the Business or from hiring or
engaging any employee in response thereto or from hiring any person who
initiates, directly or indirectly, discussions with Seller or any Noncompetition
Party regarding potential employment, or (ii) solicit, induce or influence any
customer of the Business on the date hereof or on the Closing Date or any
sole-source supplier of the Business to discontinue or reduce, under Buyer's
ownership of the Business after the Closing Date, the extent of such customer's
or supplier's relationship as of the Closing Date with the Business with respect
to Products sold by the Business on the Closing Date.
(d) Severability of Covenants. Seller and each Parent acknowledges and
agrees that the covenants set forth in Sections 10.2(b) and 10.2(c) (the
"Restrictive Covenants") are reasonable in geographical and temporal scope and
in all other respects. If any court determines that any of the Restrictive
96
<PAGE>
Covenants, or any part thereof, are invalid or unenforceable, the remainder of
the Restrictive Covenants shall not thereby be affected and shall be given full
effect, without regard to the invalid portions.
(e) Blue-Penciling. If any court determines that any of the Restrictive
Covenants, or any part thereof, are unenforceable because of the duration or
geographic scope of such provision, such court shall have the power to reduce
the duration or scope of such provision, as the case may be, and, in its reduced
form, such provision shall then be enforceable.
10.3 Enforceability in Jurisdictions. The parties hereto intend to and
hereby confer jurisdiction to enforce the Restrictive Covenants upon the courts
of any jurisdiction within the geographical scope of such Restrictive Covenants.
If the courts of any one or more of such jurisdictions hold the Restrictive
Covenants unenforceable by reason of the breadth of such scope or otherwise, it
is the intention of the parties hereto that such determination not bar or in any
way affect Buyer's right to the relief provided above in the courts of any other
jurisdiction within the geographical scope of such Restrictive Covenants, as to
breaches of such Restrictive Covenants in such other respective jurisdictions,
such Restrictive Covenants as they relate to each jurisdiction being, for this
purpose, severable into diverse and independent covenants.
10.4 Disclosure Generally.
(a) The inclusion of any information in the Disclosure Schedule (or any
update thereto) shall not be deemed to be an admission or acknowledgment, in and
of itself, that such information is required by the terms hereof to be
disclosed, is material to the Business, has or would have a Business Material
Adverse Effect, or is outside the Ordinary Course of Business. For purposes of
this Agreement, the terms "to Seller's knowledge," "known by Seller" or other
words of similar meaning shall mean the knowledge of William J. Webb, Ira S.
97
<PAGE>
Miller, Gerald R. Roda, Raymond Cirmo, Gary Lyke, Raymond Calvo, John Gemma,
Mark Torpey, Mahmuud Ganigham and Oscar Khutoryansky.
(b) Commencing on the date of this Agreement and continuing until the
Closing Date (or such earlier date as this Agreement may be terminated in
accordance with Article VII), Seller shall deliver to Buyer written notice (or
an updated Section of the Disclosure Schedule) of any event or development that
would (i) render any statement, representation or warranty of Seller in this
Agreement (including the Disclosure Schedule) inaccurate or incomplete in any
material respect or (ii) constitute or result in a breach by Seller of, or a
failure by Seller to comply with, any agreement or covenant in this Agreement
applicable to it. Any disclosure made by Seller pursuant to clause (i) of the
prior sentence shall be deemed to amend and supplement the Disclosure Schedule
for all purposes of this Agreement (except for Buyer's right to terminate this
Agreement pursuant to clause (b) of Section 7.1, which right (A) must be
initiated by Buyer giving notice of a breach, as required by clause (b) of
Section 7.1, and (B) will be subject to Sellers' right to cure under clause (b)
of Section 7.1).
10.5 [Intentionally Omitted.]
10.6 Certain Insurance Matters. Seller shall maintain, and shall not take
any steps to prospectively or retrospectively cancel, buy-out or remove the
Business or Seller as an additional named insured from (i) any and all Business
Policies providing insurance coverage for all periods prior to the Closing with
respect to any events, occurrences or matters occurring prior to the Closing
(the "Occurrence-Based Business Policies") (subject in each case to the
deductibles, limits and other terms and conditions of such policies) or (ii) any
and all Business Policies providing insurance coverage with respect to
liabilities that constitute Excluded Liabilities pursuant to Section 1.1(e)(ii)
(the "Claims-Made Business Policies") (subject in each case to the deductibles,
98
<PAGE>
limits and other terms and conditions of such policies). Seller shall take such
actions as necessary to amend (I) the Occurrence-Based Business Policies so that
they continue to cover such events, occurrences or matters that occur prior to
the Closing for claims reported after the Closing and (II) the Claims-Made
Business Policies so that they continue to cover the liabilities that constitute
Excluded Liabilities pursuant to Section 1.1(e)(ii), including in each case the
naming of the Business as a covered discontinued operation if necessary in order
to preserve such insurance coverage. Seller shall cooperate with Buyer in using
commercially reasonable efforts to make and pursue claims under the Business
Policies and, to the extent applicable to the foregoing, under any prior
policies, including any that were acquired by any entity acquired by Seller or
an entity that sold an entity to Seller. Buyer shall be entitled to the benefit
of, and Seller shall pay to Buyer, any amounts and/or recoveries received by
Seller under any Business Policies and other insurance policy in respect of any
Acquired Assets or Assumed Liabilities (subject to the deductibles, limits and
other terms and conditions of such policies). Nothing in this Agreement shall be
construed to eliminate Seller's rights to coverage and to make claims under the
Business Policies and any other policies for any events, occurrences or matters
which, except for this Agreement, would have been covered by those policies,
including but not limited to Buyer's assumption of liabilities hereunder.
10.7 Certain Employee Benefits Matters.
(a) Pre-Closing Conduct; Other Liabilities. Seller shall be under no
obligation to terminate the employment of any employee of Seller engaged in the
Business (a "Business Employee") prior to the Closing Date. Buyer shall be
liable for any amounts to which any Business Employee becomes entitled under
applicable law or otherwise, as a result of, or in connection with: (i) the
99
<PAGE>
employment of any Business Employee by Buyer at or after the Closing and (ii)
the termination of employment of any Transferred Employee at or after the
Closing.
(b) Offer of Employment; Continuation of Employment. The Parties hereto
intend that there shall be an offer of continuity of employment with respect to
all Business Employees other than those Business Employees listed on Annex
10.7(b) (collectively, the "Non-Offered Employees"). Buyer shall offer
employment commencing on the Closing Date to all Business Employees other than
the Non-Offered Employees, including those Business Employees on vacation, leave
of absence, disability or layoff, on the terms set forth in Section 10.7(d),
subject to Buyer's generally applicable employment policies. Those persons who
accept Buyer's offer of employment and who commence working with Buyer on or
after the Closing Date shall hereafter be referred to as "Transferred
Employees." Buyer shall not assume any liability with respect to any Business
Employee who does not become a Transferred Employee, provided that Buyer
complies with its obligation under this Section 10.7.
(c) 401(k) Plan Transfer. As soon as practicable after the Closing Date,
Seller shall cause the transfer of (i) the account balances of the current and
former Business Employees who participate under the Thermo Choice Plan (401(k))
Plan (the "Seller's 401(k) Plan"), including outstanding loans of such persons
and (ii) assets having a value equal to said account balances to a
profit-sharing plan maintained by Buyer which is qualified under Section 401(a)
of the Code and which includes a cash or deferred arrangement which qualifies
under Section 401(k) of the Code (the "Buyer's 401(k) Plan"). Buyer shall, prior
to the Closing, notify Seller in writing of the identity of Buyer's 401(k) Plan
and shall cause Buyer's 401(k) Plan to accept the transfers referred to in the
prior sentence. The assets transferred shall consist of the assets allocated
under Seller's 401(k) Plan to the accounts of current and former Business
100
<PAGE>
Employees, including promissory notes evidencing outstanding loans of such
persons. From and after the Closing, Buyer shall assume all responsibility for
the management and administration of the account balances of the current and
former Business Employees under Seller's 401(k) Plan and Seller shall have no
further obligations with respect thereto.
(d) Compensation; Employee Benefits; Severance Plans. Except as otherwise
provided in this Section 10.7 or as otherwise required by applicable law, the
Transferred Employees shall cease to participate in or accrue further benefits
under the Business Benefit Plans immediately prior to the Closing Date. Starting
on the Closing Date, Buyer shall, for a period ending on the date twelve (12)
months after the Closing Date, provide each Transferred Employee with
compensation determined in accordance with policies applicable to similarly
situated employees of Buyer, and benefits available to such employees; provided
that, except as required by law as to benefits, no such compensation or benefits
shall continue beyond the last day of employment of any Transferred Employee
whose employment with the Buyer terminates, voluntarily or otherwise.
(e) Service Credit. Transferred Employees shall be given credit for all
service with Seller and for any service credited by Seller under the employee
benefit plans, programs and policies and fringe benefit arrangements of Buyer in
which they become participants for purposes of eligibility, vesting and level of
benefits; provided that no such service shall be credited (a) under Buyer's
plans providing retiree welfare benefits, and (b) for any purposes under Buyer's
defined benefit pension plans.
(f) Welfare Plans. With respect to any Buyer Plan that is a "welfare
benefit plan" (as defined in Section 3(1) of ERISA) or any Buyer Plan that would
be a "welfare benefit plan" (as defined in Section 3(1) of ERISA) if it were
101
<PAGE>
subject to ERISA, Buyer shall (i) cause to be waived any pre-existing condition
limitations, (ii) use commercially reasonable efforts to give effect, in
determining any deductible and maximum out-of-pocket limitations, to claims
incurred and amounts paid by, and amounts reimbursed to, such employees with
respect to similar plans maintained by Seller immediately prior to the Closing
Date and (iii) recognize all credited service for purposes of eligibility and
vesting and level of benefits to the same extent such service was recognized
under similar plans maintained by Seller immediately prior to the Closing Date.
Buyer shall make appropriate arrangements to allow the use by Transferred
Employees of any accrued benefits under any cafeteria plan (as defined in
Section 125 of the Code) which was maintained by Seller or any of its Affiliates
for such Transferred Employees.
(g) Accrued Vacation, Personal or Sick Time. With respect to any accrued
but unused vacation, personal or sick time to which any Transferred Employee is
entitled pursuant to the vacation, personal or sick policies applicable to such
Transferred Employee immediately prior to the Closing Date (the "PS Policies"),
Buyer shall assume the liability for such accrued vacation, personal or sick
time and allow such Transferred Employee to use such accrued vacation, personal
or sick time; provided, however, that if Buyer deems it necessary to disallow
such Transferred Employee from taking such accrued vacation, personal or sick
time, Buyer shall be liable for and pay in cash to each such Transferred
Employee an amount equal to such vacation, personal or sick time in accordance
with the terms of the PS Policies; and provided, further, that Buyer shall be
liable for and pay in cash an amount equal to such accrued vacation, personal or
sick time to any Transferred Employee whose employment terminates for any reason
subsequent to the Closing Date.
(h) U.S. WARN Act. Buyer agrees to provide any required notice under the
Worker Adjustment and Retraining Notification Act ("WARN") and any other
102
<PAGE>
applicable law and to otherwise comply with any such statute with respect to any
"plant closing" or "mass layoff' (as defined in WARN) or similar event affecting
employees and occurring on or after the Closing Date or arising as a result of
the transactions contemplated hereby. Buyer shall indemnify and hold harmless
Seller and its Affiliates with respect to any liability under WARN or other
similar applicable law arising from the actions (or inactions) of Buyer or its
Affiliates on or after the Closing Date or arising as a result of the
transactions contemplated hereby.
(i) U.S. COBRA.
(i) With respect to Business Employees which are Transferred Employees,
Buyer agrees to provide any required notice under the Consolidated
Omnibus Budget Reconciliation Act of 1986 ("COBRA") and any other
applicable law on or after the Closing Date. Buyer shall indemnify and
hold harmless Seller and its Affiliates with respect to any liability
under COBRA or other similar applicable law arising from the actions
(or inactions) of Buyer or its Affiliates on or after the Closing Date
or arising as a result of the transactions contemplated hereby.
(ii) With respect to Business Employees which are not Transferred
Employees, Seller agrees to provide any required notice under COBRA
and any other applicable law prior to the Closing Date. Seller shall
indemnify and hold harmless Buyer and its Affiliates with respect to
any liability under COBRA or other similar applicable law arising from
the actions (or inactions) of Seller or its Affiliates prior to the
Closing Date.
10.8 Further Assurances. At any time and from time to time after the
Closing, as and when requested by a Party hereto and at such Party's expense,
the other Parties shall promptly execute and deliver, or cause to be executed
103
<PAGE>
and delivered, all such documents and instruments and shall take, or cause to be
taken, all such further or other actions as such other Party may reasonably
request to evidence and effectuate the transactions contemplated by this
Agreement.
10.9 Use of Name for Transition Period. Seller hereby grants to Buyer, and
Buyer hereby accepts from Seller, a royalty-free, worldwide exclusive right and
license to use the name "Trex Medical Systems" for a period of one year after
the Closing Date solely in connection with the conduct by Buyer of the Business,
as the Business was conducted on the Closing Date. Seller shall not use the name
"Trex Medical" other than in the name "Trex Medical Systems." The license set
forth in this Section 10.9 shall not prohibit Seller or any of its Affiliates
from using during the term of the license the name "Trex Medical Systems" when
describing their former affiliation with the Business. Buyer agrees that its use
of the name "Trex Medical Systems" shall be consistent with Seller's past
practices in connection with the Business and, with respect to such use, Buyer
shall adhere to substantially similar quality standards to which Seller adhered
immediately prior to the Closing.
10.10 Dowlatshahi License. Seller hereby grants to Buyer and the other
Buyer Indemnified Parties, effective only upon the occurrence of the Closing, a
royalty free, fully-paid, worldwide, perpetual, non-exclusive license of all of
Seller's rights received pursuant to the Agreement dated July 2, 1997, among
Trex Medical Corporation, Kelsy, Inc. and Dr. Kambiz Dowlatshahi.
ARTICLE XI
MISCELLANEOUS
11.1 Press Releases and Announcements. Neither Buyer nor Seller shall issue
(and Seller and Buyer shall cause their respective Affiliates not to issue) any
press release or public disclosure relating to the subject matter of this
Agreement without the prior written approval of the other Party; provided,
however, that either Buyer or Seller may make any public disclosure it believes
104
<PAGE>
in good faith is required by law, regulation or stock exchange rule (in which
case the disclosing Party shall advise the other Parties and the other Parties
shall have the right to review such press release or announcement prior to its
publication).
11.2 No Third Party Beneficiaries. This Agreement shall not confer any
rights or remedies upon any person (including with respect to any collective
bargaining unit or employee organization or any employee or former employee of
Seller, any Parent, Buyer or any of their Affiliates, any Transferred Employees,
any Non-Offered Employees and any Business Employees, any right to employment or
contractual employment for any specified period) other than the Parties and
their respective successors and permitted assigns and, to the extent specified
herein, their respective Affiliates; provided, however, that the provisions of
Article VI and Article VIII are intended for the benefit of the entities and
individuals specified therein and their respective legal representatives,
successors and assigns.
11.3 Action to be Taken by Affiliates. The Parties shall cause their
respective Affiliates to comply with all of the obligations specified in this
Agreement to be performed by such Affiliates.
11.4 Entire Agreement. This Agreement (including the documents referred to
herein) and the Confidentiality Agreement constitute the entire agreement among
Buyer, Seller and the Parents. This Agreement supersedes any prior
understandings, agreements, or representations by or between Buyer, on the one
hand, and Seller and/or any or all Parents, on the other hand, whether written
or oral, with respect to the subject matter hereof (other than the
Confidentiality Agreement).
11.5 Succession and Assignment. This Agreement shall be binding upon and
inure to the benefit of the Parties named herein and their respective successors
105
<PAGE>
and permitted assigns. No Party may assign either this Agreement or any of its
rights, interests, or obligations hereunder without the prior written approval
of the other Parties. Notwithstanding the foregoing, (i) Buyer may, by prior
written notice to Seller, assign some or all of its rights, interests and/or
obligations hereunder to (A) one or more banks or other commercial lenders which
provide financing to Buyer from time to time, (B) any successor to all or
substantially all of its business and assets or (C) one or more Affiliates of
Buyer (each, a "Buyer Designated Transferee"); provided that (I) as a condition
of such assignment the Designated Transferee agrees to be bound by the
provisions of this Agreement and (II) no such assignment shall relieve Buyer of
any of its obligations hereunder, and (ii) Seller and any Parent may, by prior
written notice to Buyer, assign some or all of its rights, interests and/or
obligations hereunder to (A) one or more banks or other commercial lenders which
provide financing to Seller or any Parent from time to time, (B) any successor
to all or substantially all of the business and assets or Seller or any Parent
or (C) one or more Affiliates of Seller or any Parent (each, a "Seller
Designated Transferee"); provided that (I) as a condition of such assignment the
Seller Designated Transferee agrees to be bound by the provisions of this
Agreement and (II) no such assignment shall relieve Thermo Electron Corporation
of any of its obligations hereunder. If Buyer so assigns any of its rights,
interests and/or obligations hereunder to one or more Buyer Designated
Transferees, unless the context otherwise requires, all references herein to
Buyer shall mean and include both Buyer and any and all such Buyer Designated
Transferees. If Seller or any Parent so assigns any of its rights, interests
and/or obligations hereunder to one or more Seller Designated Transferees,
unless the context otherwise requires, all references herein to Seller or such
Parent, as applicable, shall mean and include both Seller or such Parent, as
applicable, and any and all such Seller Designated Transferees.
106
<PAGE>
11.6 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
11.7 Headings. The section headings contained in this Agreement are
inserted for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.
11.8 Notices. All notices,
requests, demands, claims and other communications hereunder shall be in
writing. Any notice, request, demand, claim or other communication hereunder
shall be deemed duly delivered one Business Day after it is sent by (a) a
reputable courier service guaranteeing delivery within one Business Day or (b)
telecopy, provided electronic confirmation of successful transmission is
received by the sending Party and a confirmation copy is sent on the same day as
the telecopy transmission by certified mail, return receipt requested, in each
case to the intended recipient as set forth below:
If to Buyer: Copy to:
Hologic, Inc. Brown, Rudnick, Freed & Gesmer
35 Crosby Drive One Financial Center
Bedford, Massachusetts Boston, Massachusetts 02111
Telecopy: (781) 280-0669 Telecopy: (617) 856-8201
Attention: Glenn Muir Attention: Philip Flink, Esq.
If to Seller: If to Parents:
Trex Medical Corporation Thermo Electron Corporation
81 Wyman Street 81 Wyman Street
P.O. Box 9046 P.O. Box 9046
Waltham, Massachusetts 02254-9046 Waltham, Massachusetts 02254-9046
Telecopy: (781) 768-6655 Telecopy (617) 622-1283
Attention: James H. DaCosta Attention: General Counsel
107
<PAGE>
Copies to:
Hale and Dorr LLP
60 State Street
Boston, Massachusetts 02109
Telecopy: (617) 526-5000
Attention: Hal J. Leibowitz, Esq.
Any Party may give any notice, request, demand, claim, or other
communication hereunder using any other means (including personal delivery,
expedited courier, messenger service, telex, ordinary mail, or electronic mail),
but no such notice, request, demand, claim or other communication shall be
deemed to have been duly given unless and until it actually is received by the
Party for whom it is intended. Any Party may change the address to which
notices, requests, demands, claims and other communications hereunder are to be
delivered by giving the other Parties notice in the manner herein set forth.
11.9 Governing Law. This Agreement shall be governed by and construed in
accordance with the internal laws of the Commonwealth of Massachusetts without
giving effect to any choice or conflict of law provision or rule (whether of the
Commonwealth of Massachusetts or any other jurisdiction) that would cause the
application of laws of any jurisdiction other than those of the Commonwealth of
Massachusetts.
11.10 Amendments and Waivers. The Parties may mutually amend or waive any
provision of this Agreement at any time. No amendment or waiver of any provision
of this Agreement shall be valid unless the same shall be in writing expressly
indicating the intent to amend or waive a provision of this Agreement and signed
by the Party against whom enforcement of such waiver or amendment is sought. No
waiver by any Party of any default, misrepresentation, or breach of warranty or
covenant hereunder, whether intentional or not, shall be deemed to extend to any
prior or subsequent default, misrepresentation or breach of warranty or covenant
hereunder or affect in any way any rights arising by virtue of any prior or
subsequent such occurrence.
108
<PAGE>
11.11 Severability. Any term or provision of this Agreement that is invalid
or unenforceable in any situation in any jurisdiction shall not affect the
validity or enforceability of the remaining terms and provisions hereof or the
validity or enforceability of the term or provision in any other situation or in
any other jurisdiction. If the final judgment of a court of competent
jurisdiction declares that any term or provision hereof is invalid or
unenforceable, the Parties agree that the body making the determination of
invalidity or unenforceability shall have the power to reduce the scope,
duration or area of the offending term or provision, to delete specific words or
phrases, or to replace any invalid or unenforceable term or provision with a
term or provision that is valid and enforceable and that comes closest to
expressing the intention of the invalid or unenforceable term or provision, and
this Agreement shall be enforceable as so modified after the expiration of the
time within which the judgment may be appealed. If such body declines to so
amend this Agreement, upon determination that any term or other provision hereof
is invalid, illegal or incapable of being enforced, the Parties shall negotiate
in good faith to modify this Agreement so as to effect the original intent of
the Parties as closely as possible to the fullest extent permitted by applicable
law in an acceptable manner to the end that the transactions contemplated hereby
are fulfilled to the extent possible.
11.12 Expenses. Except as otherwise specifically provided to the contrary
in this Agreement, each of the Parties shall bear its own costs and expenses,
including legal fees and expenses, incurred in connection with this Agreement
and the transactions contemplated hereby.
11.13 Specific Performance. Each Party acknowledges and agrees that the
other Party would be damaged irreparably in the event any of the provisions of
this Agreement are not performed in accordance with their specific terms or
otherwise are breached. Accordingly, each Party agrees that the other Party may
be entitled to an injunction or injunctions to prevent breaches of the
109
<PAGE>
provisions of this Agreement and to enforce specifically this Agreement and the
terms and provisions hereof in any action instituted in any court of the United
States or any state thereof having jurisdiction over the Parties and the matter.
11.14 Submission to Jurisdiction. Each Party (a) submits to the exclusive
jurisdiction of any state or federal court sitting in the Commonwealth of
Massachusetts in any action or proceeding arising out of or relating to this
Agreement, (b) agrees that all claims in respect of such action or proceeding
may be heard and determined only in any such court, and (c) agrees not to bring
any action or proceeding arising out of or relating to this Agreement in any
other court. Each Party waives any defense of inconvenient forum to the
maintenance of any action or proceeding so brought and waives any bond, surety
or other security that might be required of the other Parties with respect
thereto. Any Party may make service on any other Party by sending or delivering
a copy of the process to the Party to be served at the address and in the manner
provided for the giving of notices in Section 11.8. Nothing in this Section
11.14, however, shall affect the right of any Party to serve legal process in
any other manner permitted by law.
11.15 Bulk Transfer Laws. Buyer acknowledges that Seller will not comply
with the provisions of the bulk transfer laws of any jurisdiction in connection
with the transaction contemplated by this Agreement.
11.16 Construction. The language used in this Agreement shall be deemed to
be the language chosen by the Parties hereto to express their mutual intent, and
no rule of strict construction shall be applied against any Party. Any reference
to any federal, state, local or foreign statute or law shall be deemed also to
refer to all rules and regulations promulgated thereunder, unless the context
110
<PAGE>
requires otherwise. All references to "$", "Dollars" or "US$" refer to currency
of the United States of America.
11.17 Incorporation of Exhibits and Schedules. The Exhibits, Schedules
(including the Disclosure Schedule) and Annexes identified in this Agreement are
incorporated herein by reference and made a part hereof.
11.18 Facsimile Signature. This Agreement may be executed by facsimile
signature which for all purposes shall be equivalent to an original signature.
[Remainder of page intentionally left blank]
111
<PAGE>
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of
the date first above written.
SELLER:
TREX MEDICAL SYSTEMS CORPORATION
By:___________________________________
Name:_________________________________
Title:________________________________
BUYER:
HOLOGIC, INC.
By:___________________________________
Name:_________________________________
Title:________________________________
PARENTS:
The undersigned hereby enter into this
Agreement for the purpose of agreeing to be
bound by the provisions of Sections 6.7 and
10.2 and Article XI hereof
TREX MEDICAL CORPORATION
By:___________________________________
Name:_________________________________
Title:________________________________
THERMOTREX CORPORATION
By:___________________________________
Name:_________________________________
Title:________________________________
[Signature page 1 to Asset Purchase and Sale Agreement]
112
<PAGE>
THERMO ELECTRON CORPORATION
By:___________________________________
Name:_________________________________
Title:________________________________
[Signature page 2 to Asset Purchase and Sale Agreement]
113
<PAGE>
