EXHIBIT 2.1
ASSET PURCHASE AGREEMENT
BETWEEN
GSI LUMONICS LIFE SCIENCE TRUST ("SELLER"), AND
GSI LUMONICS TRUST, INC. ("TRUSTEE")
AND
PACKARD BIOSCIENCE COMPANY ("BUYER")
August 19, 2000
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TABLE OF CONTENTS
SECTION 1 - DEFINITIONS.....................................................11
SECTION 2 - BASIC TRANSACTION...............................................16
Section 2.1 Purchase and Sale of Assets........................16
Section 2.2 Assumption of Liabilities..........................16
Section 2.3 Purchase Price.....................................16
Section 2.4 Purchase Price Adjustment..........................16
Section 2.5 The Closing........................................17
Section 2.6 Deliveries at the Closing..........................17
Section 2.7 Allocation of Purchase Price.......................18
SECTION 3 - REPRESENTATIONS AND WARRANTIES OF TRUSTEE AND SELLER............18
Section 3.1 Organization of Seller and Trustee.................18
Section 3.2 Authorization of Transaction.......................18
Section 3.3 Noncontravention...................................19
Section 3.4 Brokers' Fees......................................19
Section 3.5 Acquired Assets; Title to Assets...................19
Section 3.6 Financial Statements...............................19
Section 3.7 Events Subsequent to Most Recent Statement Date....19
Section 3.8 Legal Compliance...................................21
Section 3.9 Taxes..............................................21
Section 3.10 Leased Property....................................21
Section 3.11 Intellectual Property..............................21
Section 3.12 Tangible Asset.....................................23
Section 3.13 Inventor...........................................23
Section 3.14 Contracts..........................................23
Section 3.15 Insurance..........................................24
Section 3.16 Litigation.........................................25
Section 3.17 Product Warranty...................................25
Section 3.18 Product Liability..................................25
Section 3.19 Employees..........................................25
Section 3.20 Employee Benefits..................................25
Section 3.21 Environment, Health and Safety.....................27
Section 3.22 Certain Business Relationships With Seller.........27
Section 3.23 Accounts Receivable................................27
Section 3.24 Licenses and Permits...............................28
Section 3.25 Undisclosed Liabilities............................28
Section 3.26 Books and Records..................................28
Section 3.27 Investment.........................................28
Section 3.28 Disclosure.........................................28
SECTION 4 - REPRESENTATIONS AND WARRANTIES OF BUYER.........................28
Section 4.1 Organization of Buyer..............................29
Section 4.2 Authorization of Transaction and Financial Status..29
Section 4.3 Noncontravention.................................. 29
Section 4.4 Brokers' Fees......................................29
Section 4.5 Capitalization of Buyer............................29
Section 4.6 SEC Filings; Financial Statements..................30
Section 4.7 Events Subsequent to June 30, 2000.................30
Section 4.8 Legal Compliance...................................30
Section 4.9 Undisclosed Liabilities............................30
Section 4.10 Disclosure.........................................31
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SECTION 5 - COVENANTS.......................................................31
Section 5.1 Covenants Pending Closing..........................31
Section 5.2 Post-Closing Covenants.............................32
Section 5.3 Indemnification Provisions for Benefit of Buyer....34
Section 5.4 Indemnification Provisions for Benefit of Trustee
and Seller.........................................35
Section 5.5 Indemnification Matters Involving Third Parties....36
Section 5.6 Other Indemnification Matters......................37
SECTION 6 - CONDITIONS TO OBLIGATION TO CLOSE...............................37
Section 6.1 Conditions to Obligation of Buyer..................37
Section 6.2 Conditions to Obligation of Seller.................38
SECTION 7 - CLOSING DOCUMENTS...............................................38
Section 7.1 Seller Deliveries..................................38
Section 7.2 Buyer Deliveries...................................39
SECTION 8 - NONCOMPETITION..................................................40
Section 8.1 Materiality........................................40
Section 8.2 Prohibited Activities of Seller....................40
Section 8.3 Prohibited Activities of Buyer.....................40
Section 8.4 Remedies...........................................40
Section 8.5 Jurisdiction.......................................41
SECTION 9 - OTHER AGREEMENTS................................................41
Section 9.1 Press Releases and Public Announcements............41
Section 9.2 No Third-Party Beneficiaries.......................41
Section 9.3 Entire Agreement...................................41
Section 9.4 Succession and Assignment..........................41
Section 9.5 Counterparts.......................................41
Section 9.6 Headings...........................................41
Section 9.7 Notices............................................42
Section 9.8 Governing Law......................................43
Section 9.9 Amendments and Waivers.............................43
Section 9.10 Severability.......................................43
Section 9.11 Expenses...........................................43
Section 9.12. Construction.......................................43
Section 9.13. Incorporation of Exhibits and Schedules............43
Section 9.14. Termination........................................43
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LIST OF SCHEDULES
Schedule 1.1............................................................... .1
Schedule 1.2.................................................................1
Schedule 1.3(a)..............................................................5
Schedule 1.3(b)..............................................................5
Schedule 3.1(a).............................................................10
Schedule 3.1(b).............................................................10
Schedule 3.1(c).............................................................10
Schedule 3.3................................................................11
Schedule 3.4................................................................11
Schedule 3.6................................................................11
Schedule 3.7................................................................12
Schedule 3.10...............................................................14
Schedule 3.11(a)............................................................15
Schedule 3.11(b)............................................................15
Schedule 3.11(c)............................................................15
Schedule 3.11(d)............................................................16
Schedule 3.14...............................................................17
Schedule 3.15...............................................................18
Schedule 3.16...............................................................19
Schedule 3.19...............................................................19
Schedule 3.20...............................................................20
Schedule 3.22...............................................................20
Schedule 3.24...............................................................23
Schedule 4.5................................................................25
Schedule 4.7................................................................26
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LIST OF EXHIBITS
Exhibit A - Bill of Sale.....................................................7
Exhibit B - Assignment Documents.............................................7
Exhibit C - Assumption.......................................................7
Exhibit D - Sublease........................................................30
Exhibit E - Parent Guarantee................................................30
Exhibit F - Transition Services Agreement...................................30
Exhibit G - Registration Rights Agreement...................................30
Exhibit H - Opinion of Counsel to Seller and Trustee........................
Exhibit I - Opinion of Counsel to Buyer.....................................
<PAGE>
ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement ("Agreement") is entered into as of August
19, 2000 among Packard BioScience Company, a Delaware corporation ("Buyer"), GSI
Lumonics Life Science Trust, u/t/a dated June 5, 2000 ("Seller"), and GSI
Lumonics Trust, Inc., a Massachusetts corporation ("Trustee"). The Buyer, Seller
and Trustee are referred to collectively in this Agreement as the "Parties" and
individually as a "Party."
This Agreement contemplates a transaction in which Buyer will, on the
terms and conditions set forth in this Agreement, purchase substantially all of
the assets (and assume certain of the liabilities) of Seller for the
consideration specified in this Agreement.
In consideration of the mutual promises and the representations,
warranties, and covenants contained in this Agreement, the Parties agree as
follows.
SECTION 1
DEFINITIONS
For purposes of this Agreement, the terms set forth below have the
following meaning:
"Acquired Assets" means all of the Business, goodwill, assets,
properties and rights of every nature, kind and description, whether tangible or
intangible, real, personal or mixed, wherever located and whether or not carried
or reflected on the books and records of Seller or any Affiliate of Seller,
which are owned by Seller or in which Seller has any interest (including the
right to use), or which are used by Seller or any Affiliate of Seller in the
Business as of the Closing Date, except those items specifically listed on the
Schedule 1.1 (the "Excluded Assets"). The Acquired Assets shall include, but not
be limited to, the following (except to the extent that any of the following are
Excluded Assets):
(a) All tangible personal property (such as machinery,
equipment, inventories of raw materials and supplies, manufactured and purchased
parts, goods in process and finished goods, furniture, and tools);
(b) All leaseholds and subleaseholds, and easements,
rights-of-way, and other appurtenants thereto (such as appurtenant rights in and
to public streets), excluding any improvements, fixtures, and fittings thereon,
subject to the terms of the Sublease.
(c) All Intellectual Property, associated goodwill, licenses
and sublicenses granted and obtained with respect thereto, and rights
thereunder, remedies against infringements thereof, and rights to protection of
interests therein under the laws of all jurisdictions, other than any right to
Seller Corporate Names.
(d) All agreements, indentures, instruments, guaranties,
other similar arrangements, and rights thereunder as set forth on Schedule 1.2
(the "Assigned Contracts");
(e) All accounts receivable, claims, deposits, prepayments,
refunds, causes of action, choses in action, rights of recovery, rights of set
off, and rights of recoupment (including any such item relating to the payment
of taxes);
(f) All franchises, approvals, permits, licenses, orders,
registrations, certificates, variances, and similar rights obtained from
governments and governmental agencies;
(g) With the exception of original tax and accounting records,
all books, records, ledgers, files, documents, correspondence, lists, mailing
and customer lists used by Seller or any Affiliate of Seller in the Business,
drawings, specifications, creative materials, advertising and promotional
materials, studies, reports, and other printed or written material;
(h) With the exception of original tax and accounting records,
all data processing programs, computer printouts, data bases and hardware and
related items used in the conduct of the Business, including accounting and
invoices; and
(i) All rights, claims and causes of action held by or
inuring to the benefit of Seller.
"Adverse Consequences" means all actions, suits, charges, complaints,
claims, demands, injunctions, judgments, orders, decrees, rulings, damages,
penalties, fines, costs, reasonable amounts paid in settlement, liabilities,
obligations, taxes, liens, losses, expenses, and fees, including court costs and
reasonable attorneys' fees and expenses.
"Affiliate" has the meaning set forth in Rule 12b-2 of the regulations
promulgated under the Securities Exchange Act of 1934, as amended, and, when
used with respect to Seller, includes only such entities which owned or
operated, at any time, any of the Business or Acquired Assets, and GSI Lumonics
Inc., a New Brunswick corporation.
"Assignment Documents" has the meaning set forth in Section 2.6(c) of
this Agreement.
"Assumed Liabilities" means (a) all liabilities and obligations listed
on the Final Balance Sheet; and (b) all obligations of Seller under the
agreements, contracts, licenses and other arrangements referred to in the
definition of Acquired Assets, and entered into in the Ordinary Course of
Business to furnish goods, services and other non-cash benefits to another party
after Closing or to pay for goods, services and other non-cash benefits that
another party will furnish to Buyer after Closing. Assumed Liabilities shall not
include, and Buyer shall not assume: (i) any liabilities for notes or other
payments due to beneficiaries, trustees, officers or shareholders of Seller or
its Affiliates, (ii) any obligations resulting from any breach or default of any
contract, breach of warranty, tort, infringement or violation of law which
occurred prior to the Closing Date, (iii) any obligations of Seller under any
severance plan or arrangement for the benefit of Seller's current or former
directors, officers or employees, (iv) liabilities or obligations for payroll,
payroll taxes and any other employee benefits accruing prior to the Closing
Date, (v) any liability of Seller on and after the Closing Date for health
benefits of persons who are provided with health plan continuation coverage
pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1986, as
amended to date ("COBRA"), (vi) any liability as of the Closing Date for
employee health benefits based upon claims arising prior to the Closing Date,
whether or not notice of such claim is received prior to or on or after the
Closing Date, (vii) any liability for retroactive premium adjustments for
workers' compensation for periods prior to the Closing Date, (viii) any
liability for compensation, including deferred compensation, accrued to the
Closing Date, (ix) any liability under any workers' compensation claims of
Seller's employees based upon claims arising prior to the Closing Date, whether
or not notice of such claim is received prior to or on or after the Closing
Date, or (x) any liability arising under or in connection with any Plan, as
defined in Section 3.20, of Seller or any Plan or other employee plans or
benefits of any kind for employees or former employees, officers, directors or
consultants of Seller's ERISA Affiliates, as defined in Section 3.20. Except as
expressly set forth in this Agreement, Buyer shall not assume or be liable for
any liabilities or obligations of Seller, whether the same are direct or
indirect, fixed, contingent or otherwise, known or unknown, whether arising
under an agreement or contract or otherwise, other than the Assumed Liabilities.
Seller shall satisfy when due all of its liabilities or obligations not assumed
by Buyer, except to the extent Seller is disputing any such liabilities or
obligations in good faith. Buyer shall satisfy when due all of the Assumed
Liabilities, except to the extent Seller is disputing any Assumed Liability in
good faith.
"Assumption" has the meaning set forth in Section 2.6(d) of this
Agreement.
"Authority" or "Authorities" means any governmental, regulatory or
administrative body, agency or authority, or any court or judicial authority.
"Average Closing Price" has the meaning set forth in Section 2.3 of
this Agreement.
"Bill of Sale" has the meaning set forth in Section 2.6(c) of this
Agreement.
"Business" means all of the businesses of designing, developing,
manufacturing and marketing microarray scanners, biochip arrayers, and
bioinformatics and/or other software owned or operated by Seller or any
Affiliate of Seller, including, without limitation, the operations, financial
condition and prospects of Seller as of the date of determination thereof.
"Business Day" means any day other than a Saturday, a Sunday or a day
on which banking institutions in New York, New York are not open for business.
"Buyer" has the meaning set forth in the preface of this Agreement.
"Buyer Common Stock" means the common stock, par value $0.002 per
share, of Buyer.
"Buyer Financial Statements" has the meaning set forth in Section 4.6
of this Agreement.
"Buyer Indemnified Parties" has the meaning set forth in Section 5.3 of
this Agreement.
"Buyer Material Adverse Effect" means a material adverse effect on the
business, or the financial condition, or the results of operations of Buyer and
its subsidiaries (taken as a whole), or in the ability of Buyer to consummate
the transactions contemplated in this Agreement or in the other Transaction
Documents; provided, however that Buyer Material Adverse Effect shall not be
deemed to include the impact of (a) any decline in the share price of Parent
Common Stock or Buyer Common Stock, (b) the implementation of changes in GAAP,
(c) changes in laws of general applicability or interpretations thereof by
courts or governmental authorities changes in laws of general applicability or
interpretations thereof by courts or governmental authorities, (d) actions or
omissions of Buyer or any of its Affiliates taken or permitted with the prior
written consent of Seller, (e) the direct effects of compliance with this
Agreement on the operating performance of Buyer, including expenses incurred by
Buyer in consummating the transactions contemplated by this Agreement and (f)
any transaction involving Buyer's Canberra Industries division that results
directly from Buyer's exploration of strategic alternatives therefor.
"Buyer SEC Reports" has the meaning set forth in Section 4.6 of this
Agreement.
"Cash Payment" has the meaning set forth in Section 2.3 of this
Agreement.
"Closing" has the meaning set forth in Section 2.5 of this Agreement.
"Closing Date" has the meaning set forth in Section 2.5 of this
Agreement.
"Closing Date Balance Sheet" has the meaning set forth in Section 2.4
of this Agreement.
"Code" means the Internal Revenue Code of 1986, as amended.
"Confidential Information" means any information concerning the
Business and affairs of Seller that is not already generally available to the
public.
"Environmental, Health and Safety Laws" means the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, the Resource
Conservation and Recovery Act of 1976, and the Occupational Safety and Health
Act of 1970, each as amended, together with all other laws (including rules,
regulations, codes, plans, injunctions, judgments, orders, decrees, rulings, and
charges thereunder) of federal, state and local governments (and all agencies
thereof) concerning pollution or protection of the environment, public health
and safety or employee health and safety, including laws relating to emissions,
discharges, releases, or threatened releases of pollutants, contaminants, or
chemical, industrial, hazardous or toxic materials or wastes into ambient air,
surface water, ground water, or lands or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport, or
handling of pollutants, contaminants, or chemical, industrial, hazardous or
toxic materials or wastes.
"Final Balance Sheet" has the meaning set forth in Section 2.4 of this
Agreement.
"GAAP" means United States generally accepted accounting principles as
in effect from time to time.
"Hazardous Materials" means, collectively, (a) any petroleum or
petroleum products, flammable explosives, radioactive materials, asbestos in any
form that is friable, and transformers or other equipment that contain
dielectric fluid containing polychlorinated biphenyls (PCBs) and (b) any
chemicals or other materials or substances which are now or hereafter become
defined as or included in the definition of "hazardous substances", "hazardous
wastes", "hazardous materials", "toxic substances", "toxic pollutants",
"contaminants", "pollutants" or words of similar import under any Environmental,
Health and Safety Law applicable to the Business.
"Intellectual Property" means: (a) all inventions (whether patentable
or unpatentable and whether or not reduced to practice), all improvements
thereto, and all patents, patent applications, and patent disclosures, together
with all reissuances, continuations, continuations-in-part, revisions,
extensions, and reexaminations thereof; (b) all trademarks, service marks, trade
dress, logos, trade names, and corporate names, together with all translations,
adaptations, derivations, and combinations thereof and including all goodwill
associated therewith, and all applications, registrations, and renewals in
connection therewith; (c) all copyrightable works, all copyrights, and all
applications, registrations, and renewals in connection therewith; (d) all mask
works and all applications, registrations, and renewals in connection therewith;
(e) all trade secrets and confidential business information (including ideas,
research and development, know-how, formulas, compositions, manufacturing and
production processes and techniques, technical data, designs, drawings,
specifications, mailing lists, customer and supplier lists, pricing and cost
information, and business and marketing plans and proposals); (f) all computer
software (including data and related documentation); (g) other proprietary
rights; and (h) all copies and tangible embodiments thereof (in whatever form or
medium).
"Knowledge" or "Knowledge of Seller" of any particular fact or other
matter shall be deemed to exist where any person set forth on Schedule 1.3(a)
hereto is actually aware of such fact or other matter. Schedule 1.3(a) hereto
includes, among other persons, all officers and directors of Seller or any
Affiliate of Seller.
"Knowledge of Buyer" of any particular fact or other matter shall be
deemed to exist where any person set forth on Schedule 1.3(b) hereto is actually
aware of such fact or other matter. Schedule 1.3(b) hereto includes all officers
and directors of Buyer.
"Liability" means any liability (whether known or unknown, whether
asserted or unasserted, whether absolute or contingent, whether accrued or
unaccrued, whether liquidated or unliquidated, and whether due or to become
due), including any liability for any Tax.
"Most Recent Balance Sheet" has the meaning set forth in Section 3.6 of
this Agreement.
"Most Recent Statement Date" has the meaning set forth in Section 3.6
of this Agreement.
"Ordinary Course of Business" means the ordinary course of business of
Seller and, to the extent related to the Business, its Affiliates consistent
with past custom and practice (including with respect to quantity and
frequency).
"Parent" means GSI Lumonics Inc., a New Brunswick corporation.
"Parent Common Stock" means the common stock, no par value per share,
of Parent.
"Parent Guarantee" has the meaning set forth in Section 7.1(g) of this
Agreement.
"Party" or "Parties" have the meaning set forth in the Preface of this
Agreement.
"Past custom and practice" means the past custom and practice of Seller
and its Affiliates with respect to the Business (including with respect to
quantity and frequency).
"Permitted Liens" has the meaning set forth in Section 3.5 of this
Agreement.
"Person" means an individual, a partnership (general or limited), a
member, a corporation, a limited liability company or partnership, an
association, a joint stock company, a trust, a joint venture, an unincorporated
organization, or a governmental entity (or any department, agency, or political
subdivision thereof).
"Purchase Price" has the meaning set forth in Section 2.3 of this
Agreement.
"Registration Rights Agreement" has the meaning set forth in Section
7.1(i) of this Agreement.
"Security Interest" means any mortgage, pledge, lien, encumbrance,
charge, or other security interest, except for minor imperfections of title and
liens which are not substantial in amount, which do not materially detract from
the property subject thereto or materially impair the use of the property in the
Business, and which have arisen in the Ordinary Course of Business.
"Seller" has the meaning set forth in the preface of this Agreement.
"Seller Corporate Names" means any trade name, trademark, service mark,
corporate name, registered name, assumed name, or other words or series of words
used in any manner by any Affiliate of Seller or any Affiliate of Parent
(including, without limitation, GSI Lumonics Corporation, a Michigan
corporation, or any Affiliate thereof) together with all translations,
adaptations, derivations, and combinations thereof and including all goodwill
associated therewith, and all applications, registrations, and renewals in
connection therewith, other than ScanArray, SpotArray, QuantArray and
ArrayInformatics.
"Seller Financial Statements" has the meaning set forth in Section 3.6
of this Agreement.
"Seller Material Adverse Effect" means a material adverse effect on the
Business, or the financial condition, or the results of operations of Seller, or
in the ability of Seller to consummate the transactions contemplated in this
Agreement or in the other Transaction Documents; provided, however that Seller
Material Adverse Effect shall not be deemed to include the impact of (a) any
decline in the share price of Parent Common Stock or Buyer Common Stock, (b) the
implementation of changes in GAAP, (c) changes in laws of general applicability
or interpretations thereof by courts or governmental authorities, (d) actions or
omissions of Seller or any of its Affiliates taken or permitted with the prior
written consent of Buyer, and (e) the direct effects of compliance with this
Agreement on the operating performance of Seller and its Affiliates, including
expenses incurred by Seller and its Affiliates in consummating the transactions
contemplated by this Agreement.
"Seller's Net Worth" means the total assets of the Business minus the
total liabilities of the Business as of the relevant date.
"Stock Payment" has the meaning set forth in Section 2.3 of this
Agreement.
"Sublease" has the meaning set forth in Section 7.1(e) of this
Agreement.
"Tax" means any federal, state, local and foreign income, profits,
franchise, gross receipts, payroll, employment, sales, use, property,
withholding, excise and other tax, duty or assessment of any nature whatsoever,
together with all interest, penalties and additions imposed with respect
thereto. The term "taxable" shall have a correlative meaning.
"Transaction Documents" means this Agreement, and every other
instrument and document entered into in connection with this Agreement.
"Transition Services Agreement" has the meaning set forth in Section
7.1(h) of this Agreement.
"Trustee" has the meaning set forth in the Preface of this Agreement.
"Trustee Indemnified Parties" has the meaning set forth in Section 5.4
of this Agreement.
SECTION 2
BASIC TRANSACTION
Section 2.1. Purchase and Sale of Assets. Upon the Closing (as defined
below) pursuant to this Agreement and subject to the terms of this Agreement,
Buyer will purchase from Seller, and Seller will sell, transfer, convey, and
deliver, or will cause to be conveyed and delivered, to Buyer, all of its right,
title and interest in and to the Acquired Assets.
Section 2.2. Assumption of Liabilities. Upon the Closing pursuant to
this Agreement and subject to the terms hereof, and in consideration of the
purchase by Buyer of the Acquired Assets, Buyer shall assume and become
responsible for all of the Assumed Liabilities pursuant to the Assumption. The
Buyer will not assume or have any responsibility, however, with respect to any
obligation or liability of Seller not included within the definition of Assumed
Liabilities.
Section 2.3. Purchase Price. In consideration of the purchase by Buyer
of the Acquired Assets, Buyer agrees to pay to Seller: (a) $40,000,000 in cash
(the "Cash Payment") and (b) that number of shares of Buyer Common Stock
(rounded to the nearest whole share) (the "Stock Payment") obtained by dividing
$80,000,000 by the Average Closing Price (defined to mean the average of the
daily last sale prices for the shares of Buyer Common Stock for the fifteen (15)
consecutive trading days on which such shares are actually traded as
over-the-counter securities and quoted on the Nasdaq National Market (as
reported by The Wall Street Journal or, if not reported thereby, any other
authoritative source selected by Seller) ending at the close of trading on the
second trading day immediately preceding the Closing Date); provided, however,
that in no event shall the Stock Payment consist of more than 4,571,429 shares
of Buyer Common Stock (plus any additional shares of Buyer Common Stock that may
be issued in connection with an adjustment pursuant to Section 2.4 of this
Agreement). The Cash Payment and the Stock Payment shall be referred to
collectively herein as the "Purchase Price." The Purchase Price shall be paid in
full at the Closing to Seller, with the Cash Payment being paid by wire transfer
of immediately available funds as instructed in writing by Seller and the Stock
Payment being paid (at Seller's election) either (i) by delivery of physical
stock certificate(s) registered in the name of Seller or its designee or (ii)
provided that Buyer's stock transfer agent is participating in The Depository
Trust Company ("DTC") Fast Automated Securities Transfer Program, by crediting
Seller's or its designee's balance account with DTC through its Deposit
Withdrawal Agent Commission system. The Purchase Price shall be subject to
adjustment as provided in Section 2.4 of this Agreement.
Section 2.4. Purchase Price Adjustment.
(a) Promptly (no later than thirty (30) days after the Closing
Date) following the Closing Date, the Seller shall prepare and deliver to the
Parties a balance sheet of Seller as of the end of business on the Closing Date
(the "Closing Date Balance Sheet"). The Closing Date Balance Sheet shall be
prepared on a consistent basis with the Most Recent Balance Sheet.
(b) If within thirty (30) days following delivery of the
Closing Date Balance Sheet, Buyer has not given Seller notice of its objection
to the Closing Date Balance Sheet (such notice must contain a statement of the
basis of Buyer's objection), then the Closing Date Balance Sheet shall be final
and shall constitute the "Final Balance Sheet" under this Agreement. If Buyer
gives such notice of objection, then the issues in dispute will be submitted to
Deloitte & Touche LLP (New York, New York office) (unless Deloitte & Touche LLP
are the auditors of Buyer or Seller, in which case the issues in the dispute
will be submitted to KPMG Peat Marwick LLP (New York, New York office)) (the
"Accountants"), for resolution. If issues in dispute are submitted to the
Accountants for resolution, (i) each party will furnish to the Accountants such
workpapers and other documents and information relating to the disputed issues
as the Accountants may request and are available to that Party or its Affiliates
(or its independent public accountants), and will be afforded the opportunity to
present to the Accountants any material relating to the determination and to
discuss the determination with the Accountants; (ii) the determination by the
Accountants, as set forth in a notice delivered to both Parties by the
Accountants within sixty (60) days of the date that the dispute is first
submitted to the Accountants (or such later date as mutually agreed in writing
by Buyer and Seller), will be binding and conclusive on the Parties and the
resulting balance sheet prepared by the Accountants shall constitute the "Final
Balance Sheet" under this Agreement; and (iii) Buyer and Seller will each bear
50% of the fees of the Accountants for such determination.
(c) The Purchase Price shall be reduced by the amount by which
the Seller's Net Worth as reflected on the Most Recent Balance Sheet exceeds the
Seller's Net Worth as reflected on the Final Balance Sheet. The Purchase Price
shall be increased by the amount by which the Seller's Net Worth as reflected on
the Final Balance Sheet exceeds the Seller's Net Worth as reflected on the Most
Recent Balance Sheet. For purposes of this Section 2.4(c), when calculating
Seller's Net Worth as reflected on the Final Balance Sheet, all liabilities or
obligations excluded from the definition of Assumed Liabilities pursuant to
clauses (iv) through (x) of such definition shall be disregarded as liabilities,
however liabilities and obligations for such matters shall not be disregarded
when calculating Seller's Net Worth as reflected on the Most Recent Balance
Sheet. Any adjustment to the Purchase Price under this Section 2.4 shall be
promptly paid one-third (1/3) in cash and two-thirds (2/3) in Buyer Common Stock
(valued at the Average Closing Price but in no event valued at less than $17.50
per share), provided that if such adjustment is for an amount of $1,000,000 or
less such adjustment shall be paid in cash only, and in no event shall such
payment be made later than five (5) Business Days after the date that the Final
Balance Sheet is determined under Section 2.4(b) of this Agreement.
Section 2.5. The Closing. The closing of the transactions contemplated
by this Agreement (the "Closing") shall take place at the offices of Bodman,
Longley & Dahling, LLP, 110 Miller, Suite 300, Ann Arbor, Michigan 48104 at
10:00 a.m. within five (5) Business Days following the satisfaction or waiver of
all conditions to the obligations of the Parties to consummate the transactions
contemplated by this Agreement (the date of the Closing is referred to as the
"Closing Date").
Section 2.6. Deliveries at the Closing. At the Closing, the following
documents shall be executed and delivered and the following actions shall occur:
(a) Seller shall deliver to Buyer the various
certificates, instruments, and documents referred to in Section 7.1 of this
Agreement;
(b) Buyer shall deliver to Seller the various
certificates, instruments, and documents referred to in Section 7.2 of this
Agreement;
(c) Seller shall execute, acknowledge (if appropriate), and
deliver to Buyer (i) a bill of sale for the Acquired Assets in the form of
Exhibit A of this Agreement (the "Bill of Sale"), (ii) assignments (including
real property lease and Intellectual Property transfer documents) in the forms
of Exhibit B of this Agreement (the "Assignment Documents"), and (iii) such
other instruments of sale, transfer, conveyance, and assignment as Buyer and its
counsel have reasonably requested for the sale, transfer, conveyance and
assignment of the Acquired Assets free and clear of all Security Interests,
other than as specifically agreed upon in this Agreement;
(d) Buyer shall execute, acknowledge (if appropriate), and
deliver to Seller (i) an assumption of the Assumed Liabilities in the form of
Exhibit C of this Agreement (the "Assumption"), and (ii) such other instruments
of assumption as Seller and its counsel have reasonably requested; and
(e) Buyer shall deliver to Seller the Purchase Price as
specified in Section 2.3 of this Agreement.
Section 2.7. Allocation of Purchase Price. The consideration paid by
Buyer to Seller pursuant to this Agreement shall be allocated among the Acquired
Assets, including any intangible assets, as Seller and Buyer shall agree upon in
writing prior to Closing or as soon thereafter as is practicable. The allocation
of the Purchase Price was bargained and negotiated for, and each Party agrees to
report the transactions contemplated by this Agreement for federal income Tax
and all other Tax purposes (including, without limitation, for purposes of
Section 1060 of the Code) in a manner consistent with the agreed upon allocation
and in accordance with all applicable rules and regulations, and to take no
position inconsistent with such allocation in any administrative or judicial
examination or other proceeding. Each of Buyer and Seller shall timely file the
appropriate forms in accordance with the requirements of Section 1060 of the
Code. If there is a dispute between the Parties regarding the matters covered by
this Section 2.7, such dispute shall be submitted to the Accountants for
resolution in the same manner as set forth in Section 2.4 of this Agreement.
SECTION 3
REPRESENTATIONS AND WARRANTIES OF TRUSTEE AND SELLER
The Trustee and Seller jointly and severally represent and warrant to
Buyer that each of the statements set forth below (i) is true and correct in all
respects as of the date of this Agreement and (ii) will be true and correct in
all respects as of the Closing Date (as though made then and as though the
Closing Date were substituted for the date of this Agreement throughout this
Section 3), provided that if the Closing does not occur, Seller and Trustee
shall not be deemed to have made (and shall not be liable to Buyer or anyone
else for) the representation and warranty set forth in this clause (ii). Such
representations, warranties, covenants and agreements constitute a material
inducement to Buyer to enter into this Agreement, to enter into the other
Transaction Documents to purchase the Acquired Assets, to assume the Assumed
Liabilities and to consummate the other transactions contemplated by this
Agreement and by all other Transaction Documents.
Section 3.1. Organization of Seller and Trustee. Seller is a business
trust duly constituted under the laws of the Commonwealth of Massachusetts
pursuant to the Declaration of Trust, dated June 5, 2000, a true and correct
copy of which is attached to this Agreement as Schedule 3.1(a). As of the date
of this Agreement, Seller is in full force and effect and has no termination
date. Seller has all requisite power to own, lease and operate the Acquired
Assets and to carry on the Business. Other than as listed on Schedule 3.1(b) of
this Agreement, Seller neither owns nor leases any real property nor has any
employees, sales representatives, agents or inventory in any state of the United
States other than the Commonwealth of Massachusetts and there are no other
jurisdictions in which the nature of the Business or the locations of the
Acquired Assets requires Seller to obtain qualification or licensing to do
business as a foreign corporation, except where the failure to so qualify or
become licensed would not have a Seller Material Adverse Effect. Seller has
issued 100 shares to GSL Life Science Trust, a business trust duly constituted
under the laws of the Commonwealth of Massachusetts pursuant to the Declaration
of Trust, dated June 5, 2000, a true and correct copy of which is attached to
this Agreement as Schedule 3.1(c), and such 100 shares constitutes all of the
issued and outstanding shares of Seller and the entire beneficial interest in
Seller. Trustee is the sole trustee of Seller, is a corporation duly formed,
validly existing, and in good standing under the laws of the Commonwealth of
Massachusetts, and has all requisite power to own, lease and operate its assets,
and to authorize and approve the transactions contemplated by this Agreement.
Section 3.2. Authorization of Transaction. Seller has full power and
authority to execute and deliver this Agreement and the other Transaction
Documents to which it is a party and to perform its obligations under this
Agreement and under such other Transaction Documents. Without limiting the
generality of the foregoing, Trustee has duly authorized the execution,
delivery, and performance of this Agreement by Seller in accordance with
applicable law and the provisions of the Declaration of Trust, dated June 5,
2000, of Seller. The Board of Directors of Trustee has duly authorized the
execution, delivery, and performance of this Agreement by Seller in accordance
with applicable law. Trustee has taken all action required to authorize the
transactions contemplated herein on behalf of GSL Life Science Trust. This
Agreement has been duly executed and delivered by Seller and constitutes the
valid and legally binding obligation of Seller, enforceable in accordance with
its terms and conditions, subject to applicable bankruptcy, insolvency,
reorganization, moratorium and other laws of general application affecting the
rights and remedies of creditors and to general principles of equity (regardless
of whether such enforcement is sought in a proceeding in equity or at law).
Section 3.3. Noncontravention. Except as itemized in Schedule 3.3,
neither the execution and the delivery of this Agreement, nor the consummation
of the transactions contemplated hereby (including the execution, delivery and
performance of the assignments, assumptions and the other documents referred to
in Section 2 of this Agreement), will (a) violate any constitution, statute,
regulation, rule, injunction, judgment, order, decree, ruling, charge, or other
restriction of any Authority to which Seller or the Trustee is subject or any
provision of the Declaration of Trust, dated June 5, 2000, of Seller, or (b)
conflict with, result in a breach of, constitute a default under, result in the
acceleration of, create in any party the right to accelerate, terminate, modify,
or cancel any agreement, contract, lease, license, consent, instrument, or other
arrangement (including without limitation, any contract, license, instrument,
right or other arrangement by which Seller uses or has the right to use any
Intellectual Property) to which Seller is a party or by which Seller is bound or
to which any of the assets of the Business are subject (or result in the
imposition of any Security Interest upon any of the Acquired Assets), except
where the violation, conflict, breach, default, acceleration, termination,
modification, cancellation, or Security Interest together with other such
events, would not have a Seller Material Adverse Effect. Except as itemized in
Schedule 3.3, Seller does not need to give any notice to, make any filing with,
or obtain any authorization, consent, or approval of any Authority or other
Person in order for the Parties to consummate the transactions contemplated by
this Agreement (including the execution, delivery and performance of the
assignments and assumptions referred to in Section 2 of this Agreement), except
where the failure to give notice, to file, or to obtain any authorization,
consent, or approval would not have a Seller Material Adverse Effect.
Section 3.4. Brokers' Fees. Other than as set forth in Schedule 3.4,
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 for which Buyer could become liable or obligated.
Section 3.5. Acquired Assets; Title to Assets. The Acquired Assets
(together with the rights, services and other benefits to be provided to Buyer
pursuant to the Sublease and the Transition Services Agreement) comprise all
assets, real or personal, tangible or intangible, required for the continued
conduct of the Business by Buyer as now being conducted by Seller and its
Affiliates. Seller has good and valid title to or is the beneficial owner of, or
has a valid leasehold interest in, or the right to use, as the case may be, the
properties and assets used by it, located on its premises, or shown on the Most
Recent Balance Sheet or acquired after the date thereof, which are included in
the Acquired Assets, free and clear of all Security Interests other than the
Security Interests assumed by Buyer as set forth in the Assumption (the
"Permitted Liens"), except for properties and assets disposed of in the Ordinary
Course of Business since the date of the Most Recent Balance Sheet. On the
Closing Date, Buyer will receive good and valid title to, or a valid leasehold
interest in, or the right to use as the case may be, the Acquired Assets, free
and clear of any Security Interest or restriction on transfer (except for
Permitted Liens and except for Security Interests and restrictions on transfer
imposed as a result of actions or agreements of Buyer).
Section 3.6. Financial Statements. Attached to this Agreement as
Schedule 3.6 are the following financial statements (collectively, the "Seller
Financial Statements") of Seller: (a) the unaudited internally prepared balance
sheet as of June 30, 2000 (the "Most Recent Balance Sheet"); and (b) the
unaudited internally prepared statements of operations for the calendar year
ended December 31, 1999, and for the six (6) month period ended June 30, 2000
(the "Most Recent Statement Date"). The Seller Financial Statements have been
prepared in accordance with the books and records of Seller and present fairly
and accurately the financial condition of the Business as of the Most Recent
Statement Date, and the results of operations of the Business for the calendar
year ending December 31, 1999, and for the six (6) month period ending on the
Most Recent Statement Date, respectively.
Section 3.7. Events Subsequent to Most Recent Statement Date. Except as
set forth on Schedule 3.7, since the Most Recent Statement Date there have been
no events, changes or occurrences which have had, or are reasonably likely to
have, individually or in the aggregate, a Seller Material Adverse Effect.
Without limiting the generality of the foregoing, since that date and except as
set forth on Schedule 3.7:
(a) Except in the Ordinary Course of Business, Seller has
not sold, leased, transferred, or assigned any material assets (individually or
in the aggregate), tangible or intangible;
(b) Except in the Ordinary Course of Business, Seller has
not entered into any material agreement, contract, lease, or license;
(c) No party including Seller has accelerated, terminated,
made material modifications to, or canceled any material agreement, contract,
lease, or license to which Seller is a party or by which it or any of the
Acquired Assets is bound;
(d) Except in the Ordinary Course of Business, neither
Seller nor its Affiliates has imposed any Security Interest upon any of the
Acquired Assets;
(e) Seller has not made any capital expenditures totaling
in the aggregate more than $100,000;
(f) Seller has not made any capital investment in, or any
loan to, any other Person;
(g) Seller has not created, incurred, assumed, or
guaranteed more than $5,000 in aggregate indebtedness for borrowed money and
capitalized lease obligations;
(h) Seller has not granted any license or sublicense of
any rights under or with respect to any Intellectual Property;
(i) There has been no change made or authorized in the
Declaration of Trust, dated June 5, 2000, or other organizational documents of
Seller;
(j) Neither Seller nor any of its beneficiaries have issued,
sold, or otherwise disposed of any of its shares (or other beneficial interest
in Seller), or granted any options, warrants, or other rights to purchase or
obtain (including upon conversion, exchange, or exercise) any of its shares (or
other beneficial interest in Seller);
(k) Seller has not experienced any material damage,
destruction, or loss (whether or not covered by insurance) to its property or
assets;
(l) Seller has not made any loan to, or entered into any
other transaction with, any of its, or its Affiliates', trustees, beneficiaries,
directors, officers, or employees;
(m) No employment contract or collective bargaining agreement,
written or oral, has been entered into by Seller or any of its Affiliates with
respect to the employees primarily involved in the Business, nor have the terms
of any existing such contract or agreement been modified;
(n) Neither Seller nor any of its Affiliates has granted any
increase in the base compensation to any of Seller's directors or officers, or,
other than in the Ordinary Course of Business, any of the employees primarily
engaged in the Business;
(o) No bonus, profit-sharing, incentive, severance, or other
plan, contract, or commitment for the benefit of any of Seller's directors,
officers, or employees has been adopted, amended, modified or terminated (nor
has any such action with respect to any other employee benefit plan or
arrangement been taken);
(p) Neither Seller nor any of its Affiliates has made any
other material change in employment terms for any of Seller's directors or
officers, or, other than in the Ordinary Course of Business, any of the
employees of the Business;
(q) Except in the Ordinary Course of Business, Seller has not
paid in excess of $100,000 in the aggregate with respect to any liability or
obligation (other than costs and expenses Seller has incurred or may incur in
connection with this Agreement and the transactions contemplated by this
Agreement) which would not constitute an Assumed Liability if in existence as of
the Closing;
(r) Seller has kept in full force and effect insurance
comparable in amount and scope to coverage maintained by it as of the Most
Recent Statement Date and required pursuant to any material agreement,
instrument or document to which it is a party;
(s) Seller has not made any material change in any method
of accounting, or accounting principle, method or practice; and
(t) Seller has not settled, released or forgiven any claim or
litigation or waived any right with a value of greater than $10,000 in any
instance.
Section 3.8. Legal Compliance. Seller has complied with all applicable
laws (including rules, regulations, codes, plans, injunctions, judgments,
orders, decrees, rulings, and charges thereunder) of federal, state, local, and
foreign governments (and all agencies thereof), and no action, suit, proceeding,
hearing, investigation, charge, complaint, claim, demand, or notice has been
filed or commenced against it alleging any failure so to comply.
Section 3.9. Taxes. No action or proceeding for the assessment or
collection of any Taxes is pending or proposed in writing against Seller or as
to the Acquired Assets, and no deficiency, assessment or other claim in writing
for any Taxes has been asserted or made against Seller or as to the Acquired
Assets that has not been fully paid or finally settled. Seller, and any
Affiliate of Seller that owns any of the Acquired Assets on or before the
Closing Date, have timely filed all required Tax returns due (after taking into
account extensions duly obtained) on or before the Closing Date, and all Taxes
due on or before the Closing Date have been paid, provided for in reserves,
properly protested or will be so paid, reserved for or protested, except where
the failure to take any action set forth in this sentence would not result in
any Security Interest on the Acquired Assets other than a Permitted Lien, would
not materially adversely affect the Business and would not result in the Buyer
becoming liable therefor.
Section 3.10. Leased Property. Schedule 3.10 lists and describes
briefly all real property leased or subleased to Seller. Except as set forth on
Schedule 3.10, all such leases and subleases may be assigned by Seller. Seller
has delivered or made available to Buyer correct and complete copies of the
leases and subleases and title insurance policies listed in Schedule 3.10 (as
amended to date). With respect to each lease and sublease listed in Schedule
3.10: (i) the lease or sublease is legal, valid, binding, enforceable, and in
full force and effect against Seller in all material respects; (ii) all rent and
other amounts payable to date have been paid and Seller is not in material
breach or default, and no event has occurred which, with notice or lapse of
time, would constitute a material breach or default or permit termination,
modification, or acceleration thereunder; (iii) to the Knowledge of Seller there
are no material disputes, oral agreements, or forbearance programs in effect as
to the lease or sublease; (iv) Seller has not assigned, transferred, conveyed,
mortgaged, deeded in trust, or encumbered any interest in the leasehold or
subleasehold; and (v) all facilities leased or subleased thereunder have
received all material approvals of governmental authorities (including material
licenses and permits) required in connection with the operation thereof, and
have been operated and maintained in accordance with applicable laws, rules, and
regulations in all material respects.
Section 3.11. Intellectual Property.
(a) Except as disclosed on Schedule 3.11(a) of this Agreement,
to the Knowledge of Seller after due inquiry, neither Seller's nor any of its
Affiliates' use of the Intellectual Property included in the Acquired Assets has
interfered with, infringed upon, misappropriated, or violated any material
Intellectual Property rights of third parties in any material respect. None of
the Seller or any of its Affiliates, the Trustee, the officers of Seller, or the
directors or officers of Trustee have ever received any charge, complaint,
claim, demand, or notice alleging any material interference, infringement,
misappropriation, or violation of an Intellectual Property right of any third
party (including any claim that Seller, or as it relates to the Business, any
Affiliates of Seller, must license or refrain from using any Intellectual
Property rights of any third party). To the Knowledge of Seller or any of its
Affiliates, no third party has interfered with, infringed upon, misappropriated,
or violated any material Intellectual Property rights of the Business in any
material respect.
(b) Other than Seller Corporate Names, Schedule 3.11(b)
identifies each: (i) patent, trademark or copyright (whether foreign or
domestic) which has been issued to or registered in the name of Seller or is
beneficially owned by Seller with respect to any of its Intellectual Property;
(ii) pending patent, trademark or copyright application or application for
registration (whether foreign or domestic) which Seller has made or which has
been made for the benefit of Seller with respect to any of its Intellectual
Property; (iii) license, sublicense, agreement, or other contract or other
permission, whether written or oral, pursuant to which Seller has granted to any
other party any rights with respect to any of its Intellectual Property
(together with any exceptions); and (iv) material unregistered copyright,
trademark, logo, or symbol with respect to any of its Intellectual Property
(collectively, "Seller Intellectual Property"). Schedule 3.11(b) identifies the
owner of all Seller Intellectual Property and the nature of Seller's interest
therein if Seller is not the owner. Seller has delivered or made available to
Buyer correct and complete copies of all patents, trademarks, copyrights,
registrations, applications, licenses, agreements, and permissions (as amended
to date) itemized in Schedule 3.11(b).
(c) With respect to each item of Seller Intellectual
Property, except as set forth in Schedule 3.11(c):
(i) Seller possesses all right, title, and interest
in and to, or has the right to use, without payment to any Person, the item,
free and clear of any Security Interest (other than Permitted Liens), license,
or other restriction, including without limitation all rights to the names
ScanArray and QuantArray. Seller has used the trade names SpotArray and Array
Informatics in the Business and has the common law rights to use SpotArray and
ArrayInformatics as have arisen as a result of such use;
(ii) Each application, registration or grant is
valid, subsisting, in proper form and enforceable, and has been duly maintained;
(iii) The Person designated as the owner of each
item on Schedule 3.11(b) currently is listed in the records of the appropriate
United States governmental body as the sole owner of record of each application,
registration and grant;
(iv) To the Knowledge of Seller the item is not
subject to any outstanding injunction, judgment, order, decree, ruling, or
charge;
(v) The item has not lapsed, expired or been
abandoned;
(vi) No action, suit, proceeding, hearing, charge,
complaint, claim, or demand is pending before any Authority or, to the Knowledge
of Seller, is threatened which challenges the legality, validity,
enforceability, use, or ownership of the item or application, registration or
grant therefor; and
(vii) Seller has not agreed to indemnify any
Person for or against any interference, infringement, misappropriation, or
other conflict with respect to the item.
(d) Other than as identified on Schedule 3.11(b), Schedule
3.11(d) identifies each item of Intellectual Property that any other party owns
and that Seller uses pursuant to a license, sublicense, agreement, or other form
of valid permission. With respect to each item of Intellectual Property required
to be identified in Schedule 3.11(d):
(i) The license, sublicense, agreement, or permission
covering the item is, with respect to Seller, legal, valid, binding,
enforceable, and in full force and effect in all material respects and, with
respect to the other party or parties thereto, is, to the Knowledge of Seller,
legal, valid, binding, enforceable, and in full force and effect in all material
respects;
(ii) No party to the license, sublicense,
agreement, or permission is in material breach or default, and, to the Knowledge
of Seller, no event has occurred which with notice or lapse of time would
constitute a material breach or default or permit termination, modification, or
acceleration thereunder;
(iii) No party to the license, sublicense, agreement,
or permission has repudiated any material provision thereof; and
(iv) Other than as set forth in Schedule 3.11(d),
Seller has not granted any sublicense or similar right with respect to the
license, sublicense, agreement, or permission.
(e) Other than as to Seller Corporate Names, the Intellectual
Property included in the Acquired Assets constitutes all of the Intellectual
Property used in or necessary for the conduct of the Business as currently
conducted.
Section 3.12. Tangible Assets. The buildings, machinery, equipment, and
other tangible assets that Seller owns, leases or uses in the Business are free
from material defects, have been maintained in accordance with normal industry
practice, and are in good operating condition and repair (subject to normal wear
and tear).
Section 3.13. Inventory. The inventory of Seller to be purchased by
Buyer as Acquired Assets consists of raw materials, work-in-progress, supplies
and finished goods, all of which is merchantable and fit for the purpose for
which it was procured or manufactured and none of which is slow moving,
obsolete, damaged or defective, subject to the reserve for inventory writedown
reflected in the inventory account in the Most Recent Balance Sheet as adjusted
for operations and transactions through the Closing Date in accordance with Past
custom and practice.
Section 3.14. Contracts. Schedule 3.14 lists the following contracts
and other arrangements, commitments or agreements to which Seller is a party or
to which it or any of the Acquired Assets is bound:
(a) Any written agreement (or group of related agreements) for
the lease of personal property to or from any Person providing for lease
payments in excess of $20,000 per annum;
(b) Any written agreement (or group of related agreements) for
the purchase or sale of raw materials, commodities, supplies, products, or other
personal property, or for the furnishing or receipt of services, the performance
of which will extend over a period of more than one year or involve
consideration in excess of $20,000;
(c) Any written agreement concerning a partnership or joint
venture;
(d) Any written agreement (or group of related agreements)
under which Seller has created, incurred, assumed, or guaranteed any
indebtedness for borrowed money, or any capitalized lease obligation, in excess
of $20,000; or under which it has imposed a Security Interest on any of its
assets, tangible or intangible;
(e) Any written agreement concerning confidentiality or
noncompetition, other than the standard form agreements contained in Seller's
employee manual furnished to Buyer;
(f) Any agreement involving any beneficiary or trustee of
Seller or their Affiliates (other than Seller);
(g) Any profit sharing, stock option, stock purchase, stock
appreciation, deferred compensation, severance, or other material plan or
arrangement for the benefit of Seller's current or former directors, officers,
or employees;
(h) Any agreement for the employment or consultancy of any
individual on a full-time, part-time, consulting, or other basis providing
annual compensation in excess of $50,000 or for periods greater than one year or
providing material severance benefits;
(i) Any agreement under which Seller has advanced or loaned
(or agreed to advance or loan) any amount to any of its directors, officers, or
employees;
(j) Any written agreement under which the consequences of a
default or termination could have a Seller Material Adverse Effect;
(k) Any other written agreement (or group of related
agreements) the performance of which involves consideration in excess of
$20,000; or
(l) Any other material written agreement or material group of
related written agreements not cancelable by Seller in 30 days or less without
premium or penalty.
Seller has delivered or made available to Buyer a correct and complete
copy of each agreement listed in Schedule 3.14 (as amended to date). Except as
set forth on Schedule 3.14, with respect to each such agreement that is to be
assigned to Buyer pursuant to the terms of this Agreement: (A) the agreement is
assignable without the consent of any other Person, and is legal, valid,
binding, enforceable, and in full force and effect in all material respects
against Seller and, to the Knowledge of Seller, against the other party(ies)
thereto; (B) Seller is not, and to the Knowledge of Seller no other party is, in
material breach or default, and, to the Knowledge Seller, no event has occurred
which with notice or lapse of time would constitute a material breach or
default, or permit termination, modification, or acceleration, under the
agreement; and (C) no party has repudiated in writing any material provision of
the agreement or has expressed in writing an intent to so repudiate.
Section 3.15. Insurance. Schedule 3.15 sets forth the following
information with respect to each material insurance policy (including policies
providing property, casualty, liability, product liability, and workers'
compensation coverage and bond and surety arrangements, but excluding directors
and officers liability insurance) with respect to which Seller is a party, a
named insured, or otherwise the beneficiary of coverage:
(a) The name, address, and telephone number of the agent;
(b) The name of the insurer, the name of the policyholder, and
the name of each covered insured;
(c) The policy number and the period of coverage; and
(d) The scope (including an indication of whether the coverage
is on a claims made, occurrence, or other basis) and amount of coverage.
With respect to each such insurance policy to the Knowledge of Seller:
(i) the policy is legal, valid, binding, enforceable, and in full force and
effect in all material respects; (ii) neither Seller nor any other party to the
policy is in material breach or default (including with respect to the payment
of premiums or the giving of notices), and no event has occurred which, with
notice or the lapse of time, would constitute such a material breach or default,
or permit termination, modification, or acceleration, under the policy; and
(iii) no party to the policy has repudiated any material provision thereof. Such
insurance policies listed and described on Schedule 3.15 include all insurance
coverage that Seller is required to have in place pursuant to license agreements
or any other contracts or agreements, and each such policy is in full force and
effect for the amounts and types of coverage and for the insured parties as
required by such agreements or contracts.
Section 3.16. Litigation. Schedule 3.16 sets forth each instance in
which Seller (or to the extent related to the Business, any of Seller's
Affiliates): (a) is subject to any outstanding injunction, judgment, order,
decree, ruling, or charge pending before any Authority; or (b) is a party or, to
the Knowledge of Seller or any Affiliate of Seller, is threatened to be made a
party to any action, suit, proceeding, hearing, or investigation of, in, or
before any Authority, arbitrator or mediator.
Section 3.17. Product Warranty. Substantially all of the products of
the Business manufactured, sold, leased, and delivered by Seller have conformed
in all material respects with all applicable contractual commitments and all
express and implied warranties and government regulations and Seller has no
material Liability for replacement or repair of defective products or other
damages in connection therewith, subject only to the reserve for product
warranty claims set forth in the Most Recent Balance Sheet as adjusted for
operations and transactions through the Closing Date in accordance with Past
custom and practice. All of the products manufactured, sold, leased, and
delivered by Seller are subject to standard terms and conditions of sale or
lease.
Section 3.18. Product Liability. Neither Seller nor any Affiliate of
Seller has any material Liability arising out of any injury to individuals or
property as a result of the ownership, possession, or use of any product
manufactured, sold, leased, or delivered in connection with the Business.
Section 3.19. Employees. Schedule 3.19 hereto lists all of the
employees of Seller or its Affiliates who are engaged primarily in the Business
as of the Closing Date, including for each such employee (i) their date of hire,
(ii) compensation, (iii) position, and (iv) employer if other than Seller.
Except as disclosed in Schedule 3.19, to the Knowledge of Seller or its
Affiliates engaged primarily in the Business, no executive, key employee, or
significant group of employees plans to terminate employment with Seller during
the next 12 months. Except as disclosed in Schedule 3.19, there currently exists
no contract, agreement, understanding or arrangement with Seller pursuant to
which any current or former employee of Seller has or, upon termination of
employment by Seller or Buyer or upon the execution and delivery of this
Agreement or the consummation of the transactions contemplated herein, would
have any right to severance, termination, change in control or other similar
payments. Seller is not a party to or bound by any collective bargaining
agreement or any arrangement with or commitment to any labor union or guild, nor
has it experienced any strike or material grievance, claim of unfair labor
practices, or other collective bargaining dispute within the past three years.
Seller has not committed any material unfair labor practice. To the Knowledge of
Seller, there is no organizational effort presently being made or threatened by
or on behalf of any labor union with respect to employees of Seller.
Section 3.20. Employee Benefits. Schedule 3.20 sets forth a complete
and accurate list of (i) all employee benefit plans, all employee welfare
benefit plans, all employee pension benefit plans, all multiemployer plans and
all multiple employer welfare arrangements (as defined in Sections 3(3), (1),
(2), (37) and (40), respectively, of the Employee Retirement Income Security Act
of 1974, as amended ("ERISA")), and (ii) all equity-based plans, arrangements or
agreements, which are currently maintained and/or sponsored by Seller and in
which employees of Seller participate (collectively, the "Plans"). Those Plans
that are identified in (i) above are known as "ERISA Plans." Those Plans that
are subject to Title IV of ERISA are known as "Title IV Plans." Schedule 3.20
sets forth each plan or arrangement that would have been an employee pension or
welfare benefit plan but for its termination within the past three years.
Schedule 3.20 sets forth any Title IV Plans that within the last six (6) years
have been maintained, contributed to and/or sponsored by Seller or any other
entity which together with the Seller would be deemed a "single employer" within
the meaning of Section 4001 of ERISA or Sections 414(b), (c), (m) or (o) of the
Code (an "ERISA Affiliate").
Seller has heretofore delivered or made available to Buyer to the
extent reasonably available, true, correct and complete copies of (i) each of
the Plans, (ii) to the extent applicable, the actuarial report for each Plan for
the last three years, (iii) to the extent applicable, the most recent
determination letter from the IRS for each Plan, (iv) the current summary plan
description and any summaries of material modification, (v) all annual reports
(Forms 5500 series) for each Plan filed for the preceding three plan years, (vi)
all agreements with fiduciaries and service providers relating to any Plan that
is an Assumed Liability and (vii) all substantive correspondence relating to any
such Plan from the IRS, the Department of Labor, the Pension Benefit Guaranty
Corporation or any other governmental agency to the extent such correspondence
relates to an Assumed Liability.
Except as set forth in Schedule 3.20, all Plans have been operated and
administered and are in material compliance with all applicable provisions of
ERISA and the regulations issued thereunder, as well as with all other
applicable laws, and in accordance with the governing documents. All Plans that
are intended to qualify (the "Qualified Plans") under Section 401(a) of the
Code, have been determined by the IRS to be so qualified. To the extent that any
Qualified Plans have not been amended to comply with applicable law, the
remedial amendment period permitting retroactive amendment of such Qualified
Plans has not expired. None of: (i) any beneficiary or trustee of Seller; (ii)
any Plan; or (iii) Seller or ERISA Affiliate has engaged in any transaction
prohibited under the provisions of Section 4975 of the Code or Section 406 of
ERISA for which an exemption is not available. Neither Seller, nor any ERISA
Affiliate, has ever sponsored a Plan subject to Title IV of ERISA or which has
incurred an accumulated funding deficiency (whether or not waived), as defined
in Section 412(a) of the Code and Section 302(a)(2) of ERISA; and Seller does
not currently have (nor at the Closing Date will it have) any direct or indirect
liability whatsoever (including, without limitation, being subject to any
statutory lien to secure payment of any such liability), with respect to any
such Plan, or to the IRS for any tax or penalty with respect to any plan
sponsored by Seller or any ERISA Affiliate of Seller and except as set forth on
Schedule 3.20, neither Seller nor any ERISA Affiliate currently has (or at the
Closing Date will have or previously had) any obligation whatsoever to
contribute to, nor has any withdrawal liability (whether or not yet assessed)
arising under or capable of assertion under any "multiemployer pension plan" (as
defined in ERISA Section 4001(a)(3)) or Title IV of ERISA (including, without
limitation, Sections 4201, 4202, 4203, 4204, or 4205 thereof) been incurred
directly or indirectly by Seller. Further, except as set forth on Schedule 3.20:
(a) There have been no terminations, partial terminations or
discontinuances of contributions to any Qualified Plan without notice to and
issuance of a favorable determination letter by the IRS;
(b) There is no pending litigation, arbitration, or disputed
claim, settlement or adjudication proceeding and, to the Knowledge of Seller,
there is no threatened litigation, arbitration or disputed claim, settlement or
adjudication proceeding, or any governmental or other proceeding, or
investigation with respect to any Plan, or any disputed claim, settlement or
adjudication (other than routine claims for benefits) with respect to any
fiduciary, administrator, party in interest or sponsor thereof (in their
capacities as such);
(c) The Most Recent Balance Sheet reflects the approximate
total pension, medical and other benefit expense for all Plans as of the date
thereof, and no funding changes or irregularities not reflected thereon would
cause such Seller Financial Statements to be inaccurate;
(d) Seller, and with respect to the Business, the Affiliates
and ERISA Affiliates of Seller, have paid to each Plan or properly accrued on
the Seller's financial statements all contributions or other amounts payable
with respect to such Plan prior to the Closing Date by the terms of such Plan,
by any statute, regulation or other governmental authority, or by any collective
bargaining agreement or other agreement in accordance with GAAP (to the extent
applicable) and, if applicable, Section 412 of the Code; and
(e) Neither Seller nor any ERISA Affiliate has any liability
under any Plan that is an employee welfare benefit plan (as defined in ERISA
Section 3(1)) or under any individual arrangement or agreement for benefits for
any former employee or for any current employee beyond their retirement or other
termination of employment (to the extent any of the foregoing is an Assumed
Liability), other than as required by ERISA Sections 601-608.
(f) To the extent any Plan is an Assumed Liability, such Plan
could be terminated as of the Closing Date without any material liability;
(g) To the extent a Plan or any payments described in this
subparagraph (g) are an Assumed Liability, no Plan, program, agreement or other
arrangement, either individually or collectively, provides for any payment by
Seller or any ERISA Affiliate that would not be deductible under Code Section
162(a)(1), 162(m) or 404; and
(h) No Title IV Plan sponsored by the Seller or its ERISA
Affiliates has experienced a "reportable event" (as such term ins defined in
Section 4043 of ERISA) that is not subject to an administrative or statutory
waiver from this reporting requirement.
Except as set forth in Schedule 3.20 and only for any Plan or payment
or obligation described in this paragraph that is an Assumed Liability, neither
the execution and delivery of this Agreement nor the consummation of the
transactions contemplated hereby (either alone or in conjunction with any other
event) will (a) restrict or prohibit Seller or any ERISA Affiliate from amending
or terminating any Plan, (b) result in any material payment (including, without
limitation, severance, unemployment compensation, "excess parachute payment"
(within the meaning of Section 280G of the Code), forgiveness of indebtedness or
otherwise) becoming due to any director, officer or employee of Seller or an
ERISA Affiliate under any Plan or otherwise, (c) materially increase any
benefits otherwise payable under any Plan, (d) result in any acceleration of the
time of payment or vesting of any benefits under an Plan or otherwise, or (e)
affect the calculation of the value of any benefits pursuant to any Plan or
otherwise.
Section 3.21. Environment, Health and Safety.
(a) Seller and its predecessors and Affiliates: (i) have
complied with the Environmental, Health and Safety Laws in all material respects
in connection with the Business as conducted by Seller and its Affiliates (and
no action, suit, proceeding, hearing, investigation, charge, complaint, claim,
demand, or notice has been filed or commenced against any of them alleging any
such failure to comply); (ii) have obtained and been in substantial compliance
with all of the terms and conditions of all material permits, licenses, and
other governmental authorizations which are required under the Environmental,
Health and Safety Laws for the Business as conducted by Seller and its
Affiliates; and (iii) have complied in all material respects with all other
limitations, restrictions, conditions, standards, prohibitions, requirements,
obligations, schedules, and timetables which are contained in the Environmental,
Health and Safety Laws required for the Business as conducted by Seller and its
Affiliates.
(b) In connection with the Business, Seller has no Liability
under Environmental, Health and Safety Laws and Seller and its predecessors and
Affiliates have not handled or disposed of any substance, treated, handled,
generated, stored transported, disposed of, or arranged for the disposal of any
Hazardous Material, exposed any employee or other individual to any Hazardous
Material or condition, or owned or operated any property of facility in any
manner that could give rise to any Liability, for damage to any site, location,
or body of water (surface or subsurface), for any illness of or personal injury
to any employee or other individual, or for any reason under any Environmental,
Health and Safety Laws.
(c) All properties and equipment used in the Business by
Seller and its respective predecessors and Affiliates have been free of
asbestos, PCB'S, methylene chloride, trichloroethylene,
1,2-transdichloroethylene, dioxins, dibenzofurans, petroleum products and any
other Hazardous Materials.
Section 3.22. Certain Business Relationships With Seller. Except as set
forth on Schedule 3.22 to this Agreement, no trustee, beneficiary, director,
officer or shareholder of Seller nor any of their respective Affiliates has been
involved in any business arrangement or relationship with Seller within the past
12 months, nor owns any asset, tangible or intangible, which is used in the
Business.
Section 3.23. Accounts Receivable. All accounts receivable of Seller
arose in the Ordinary Course of Business from bona fide transactions, are
reflected properly on Seller's books and records, and are collectible, subject
only to the reserve for bad debts set forth in the Most Recent Balance Sheet.
Prior to the Closing, Seller shall utilize commercially reasonable efforts to
collect outstanding accounts receivable consistent with past custom and
practice.
Section 3.24. Licenses and Permits. The Acquired Assets include all
domestic and governmental licenses and permits necessary to conduct the Business
as presently conducted. All of such licenses and permits are in full force and
effect. Except as set forth in Schedule 3.24, all such licenses and permits are
freely transferable to Buyer by Seller or its Affiliates. No proceeding is
pending, or to the Knowledge of Seller and its Affiliates, threatened regarding
the revocation or limitation of any such governmental license or permit and, to
the Knowledge of Seller and its Affiliates, there is no basis or grounds for any
such revocation or limitation.
Section 3.25. Undisclosed Liabilities. Seller has no Liability (and, to
the Knowledge of Seller, there is no basis for any present or future action,
suit, proceeding, hearing, investigation, charge, complaint, claim, or demand
against it giving rise to any Liability), except for (i) Liabilities reflected
on the face of the Most Recent Balance Sheet (rather than in any notes thereto),
(ii) Liabilities which have arisen after the Most Recent Statement Date in the
Ordinary Course of Business (none of which results from, arises out of, relates
to, is in the nature of, or was caused by any breach of contract, breach of
warranty, tort, infringement, or violation of law), and (iii) Liabilities
incurred in connection with the transactions contemplated by this Agreement.
Section 3.26. Books and Records. All accounts, books, ledgers and
official and other records of Seller and, with respect to the Business, its
Affiliates, have been fully, properly and accurately kept and completed in all
material respects, and there are no material inaccuracies or discrepancies
contained therein.
Section 3.27. Investment. Seller is acquiring its interest in the
shares of Buyer Common Stock issued pursuant to this Agreement for its own
account for investment and not with a view to, or for the sale in connection
with, any distribution of its interest, except in compliance with applicable
state and federal securities laws. Seller has been provided, to its
satisfaction, the opportunity to discuss the transactions contemplated hereby
with Buyer and has had the opportunity to obtain such information pertaining to
Buyer as has been requested, including, but not limited to, the Buyer SEC
Reports. Seller is an "Accredited Investor" as defined in Rule 501 of Regulation
D promulgated under the Securities Act of 1933, as amended (the "Securities
Act"). Seller has such knowledge and experience in business and financial
matters that it is capable of evaluating the merits and risks of an investment
in the shares of Buyer Common Stock. Seller acknowledges and understands that
such shares of Buyer Common Stock have not been registered under the Securities
Act and understands that such shares must be held indefinitely unless they are
subsequently registered under the Securities Act or such sale is permitted
pursuant to an available exemption from such registration requirement.
Section 3.28. Disclosure. The representations and warranties contained
in this Section 3 do not contain any untrue statement of fact or omit to state
any fact necessary in order to make the statements and information contained in
this Section 3 not misleading.
SECTION 4
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Seller and Trustee that each of the
statements set forth below (i) is true and correct in all respects as of the
date of this Agreement and (ii) will be true and correct in all respects as of
the Closing Date (as though made then and as though the Closing Date were
substituted for the date of this Agreement throughout this Section 4), provided
that if the Closing does not occur, Buyer shall not be deemed to have made (and
shall not be liable to Seller, Trustee or anyone else for) the representation
and warranty set forth in this clause (ii). Such representations, warranties,
covenants and agreements have constituted a material inducement to Seller to
enter into this Agreement, to enter into the other Transaction Documents to
which it has become a party, to sell the Acquired Assets sold by it pursuant to
this Agreement and to consummate the other transactions contemplated by this
Agreement and by all other Transaction Documents.
Section 4.1. Organization of Buyer. Buyer is a corporation duly
formed, validly existing, and in good standing under the laws of the State of
Delaware.
Section 4.2. Authorization of Transaction and Financial Status. Buyer
has full power and authority to execute and deliver this Agreement and the other
Transaction Documents to which it is a party and to perform its obligations
under this Agreement or under any other Transaction Document. This Agreement
constitutes the valid and legally binding obligation of Buyer, enforceable in
accordance with its terms and conditions, subject to bankruptcy, insolvency,
reorganization, moratorium and other laws of general application affecting the
rights and remedies of creditors and to general principles of equity (regardless
of whether such enforcement is sought in a proceeding in equity or at law).
Buyer has and will have at Closing all of the necessary financial resources to
consummate the transactions contemplated by this Agreement. Buyer has accurately
disclosed to Seller the source or sources of funds to be used to consummate the
transactions contemplated by this Agreement.
Section 4.3. Noncontravention. Except as otherwise provided in this
Agreement, neither the execution and the delivery of this Agreement, nor the
consummation of the transactions contemplated hereby (including the assignments
and assumptions referred to in Section 2 of this Agreement), will: (a) violate
any constitution, statute, regulation, rule, injunction, judgment, order,
decree, ruling, charge, or other restriction of any Authority to which Buyer is
subject or any provision of its certificate of formation or operating agreement;
or (b) conflict with, result in a breach of, constitute a default under, result
in the acceleration of, create in any party the right to accelerate, terminate,
modify, or cancel, or require any notice under any agreement, contract, lease,
license, instrument, or other arrangement to which Buyer is a party or by which
it is bound or to which any of its assets is subject. Except as otherwise
provided in this Agreement, Buyer does not need to give any notice to, make any
filing with, or obtain any authorization, consent, or approval of any government
or governmental agency in order for the Parties to consummate the transactions
contemplated by this Agreement (including the assignments and assumptions
referred to in Section 2 of this Agreement).
Section 4.4. Brokers' 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 for which Seller could become liable
or obligated.
Section 4.5. Capitalization of Buyer.
(a) The authorized capital stock of Buyer consists of (i)
200,000,000 shares of Buyer Common Stock, of which 62,069,535 shares are issued
and outstanding as of August 17, 2000, and (ii) 1,000,000 shares of preferred
stock, of which no shares are issued and outstanding. All of the issued and
outstanding shares of Buyer Common Stock are, and all of the shares of Buyer
Common Stock to be issued pursuant to Section 2.3 of this Agreement (when issued
in accordance with the terms of this Agreement) will be, duly and validly issued
and outstanding and fully paid and nonassessable. Except as set forth in
Schedule 4.5, none of the outstanding shares of Buyer Common Stock has been, and
none of the shares of Buyer Common Stock to be issued pursuant to Section 2.3 of
this Agreement will be, issued in violation of any preemptive rights of the
current or past stockholders of Buyer.
(b) Except as set forth in Section 4.5(a), in Buyer SEC
Reports or as set forth in Schedule 4.5, there are no shares of capital stock or
other equity securities of Buyer outstanding or any outstanding arrangements,
calls, commitments, agreements, options, rights to subscribe to, scrip,
understandings, warrants, or other binding obligations of any character
whatsoever relating to, or securities or rights convertible into or exchangeable
for, shares of capital stock of Buyer or by which Buyer is or may be bound to
issue additional shares of, or any rights with respect to, its capital stock.
(c) Except as provided in that certain Stockholders'
Agreement, dated as of March 4, 1997, by and among Buyer, Merrill Lynch KECALP
L.P. 1994, KECALP Inc., the Management Investors listed in Schedule 1 thereto,
the Non-Management Investors listed in Schedule 2 thereto and Stonington Capital
Appreciation 1994 Fund, L.P. (as amended by Amendment No. 1 thereto dated as of
June 2, 1997, Amendment No. 2 thereto dated as of January 23, 1998 and Amendment
No. 3 thereto dated as of March 31, 1998), Buyer has not granted to any person
any rights to cause Buyer to register under the Securities Act (or any rights to
include in any registration statement filed by Buyer under the Securities Act)
(i) any shares of Buyer's capital stock or (ii) any securities or other
instruments convertible into, exchangeable for or exercisable for shares of
Buyer's capital stock.
Section 4.6. SEC Filings; Financial Statements.
(a) Buyer has timely filed and made available to Seller all
forms, proxy statements, registration statements, reports, schedules, and other
documents required to be filed by Buyer with the SEC pursuant to federal
securities laws (including the rules and regulations of the SEC) since December
31, 1997 (the "Buyer SEC Reports"). The Buyer SEC Reports (i) at the time filed,
complied in all material respects with the applicable requirements of the
federal securities laws (including the rules and regulations of the SEC) and
other applicable laws and (ii) did not, at the time they were filed (or, if
amended or superseded by a filing prior to the date of this Agreement, then on
the date of such filing) contain any untrue statement of a material fact or omit
to state a material fact required to be stated in such Buyer SEC Reports or
necessary in order to make the statements in such Buyer SEC Reports, in light of
the circumstances under which they were made, not misleading. No subsidiary of
Buyer is required to file any reports or other documents with the SEC pursuant
to federal securities laws (including the rules and regulations of the SEC).
(b) Each of (i) the consolidated balance sheets (including
related notes and schedules, if any) of Buyer as of June 30, 2000 and as of
December 31, 1999, and the related statements of income, stockholders' equity,
and cash flows (including related notes and schedules, if any) for the six
months ended June 30, 2000 and for each of the three fiscal years ended December
31, 1997, 1998, and 1999, as filed by Buyer in the Buyer SEC Reports, and (ii)
the consolidated balance sheets of Buyer (including related notes and schedules,
if any) and related statements of income, stockholders' equity, and cash flows
(including related notes and schedules, if any) included in any documents filed
with the SEC pursuant to federal securities laws (including the rules and
regulations of the SEC) with respect to periods ended subsequent to June 30,
2000 (collectively, the "Buyer Financial Statements"), complied as to form in
all material respects with federal securities laws (including the rules and
regulations of the SEC), was prepared in accordance with GAAP applied on a
consistent basis throughout the periods involved (except as may be indicated in
the notes to such financial statements or, in the case of unaudited interim
statements, as permitted by Form 10-Q of the SEC), and fairly presented in all
material respects the consolidated financial position of Buyer and its
subsidiaries as at the respective dates and the consolidated results of
operations and cash flows for the periods indicated, except that the unaudited
interim financial statements were or are subject to normal and recurring
year-end adjustments which were not or are not expected to be material in amount
or effect.
Section 4.7. Events Subsequent to June 30, 2000. Except as set forth on
Schedule 4.7, since June 30, 2000 there have been no events, changes or
occurrences which have had, or are reasonably likely to have, individually or in
the aggregate, a Buyer Material Adverse Effect.
Section 4.8. Legal Compliance. Buyer and it subsidiaries have complied
with all applicable laws (including rules, regulations, codes, plans,
injunctions, judgments, orders, decrees, rulings, and charges thereunder) of
federal, state, local, and foreign governments (and all agencies thereof), and
no action, suit, proceeding, hearing, investigation, charge, complaint, claim,
demand, or notice has been filed or commenced against it alleging any failure so
to comply, except where the failure to comply would not have a Buyer Material
Adverse Effect.
Section 4.9. Undisclosed Liabilities. Buyer has no material Liability
(and, to the Knowledge of Buyer, there is no basis for any present or future
action, suit, proceeding, hearing, investigation, charge, complaint, claim, or
demand against it giving rise to any material Liability), except for (i)
Liabilities reflected on the face of or in any notes to the consolidated balance
sheet of Buyer as of June 30, 2000 included in the Buyer Financial Statements,
(ii) Liabilities which have arisen after June 30, 2000 in the ordinary course of
business (none of which results from, arises out of, relates to, is in the
nature of, or was caused by any breach of contract, breach of warranty, tort,
infringement, or violation of law), (iii) Liabilities incurred in connection
with the transactions contemplated by this Agreement and (iv) as set forth on
Schedule 4.9.
Section 4.10. Disclosure. The representations and warranties contained
in this Section 4 do not contain any untrue statement of fact or omit to state
any fact necessary in order to make the statements and information contained in
this Section 4 not misleading.
SECTION 5
COVENANTS
Section 5.1. Covenants Pending Closing.
(a) (i) Prior to the Closing, Buyer shall be entitled, through
its employees and representatives, to make such investigations and examinations
of Seller, its books and records, business, and assets as Buyer may reasonably
request for the sole purpose of verifying the representations and warranties of
Seller and Trustee as contained in this Agreement. Seller shall furnish Buyer
and its representatives during such period with information concerning the
Business and Acquired Assets as Buyer or such representatives may reasonably
request and cause Seller's trustees, beneficiaries, officers, employees,
consultants, agents, accountants, and attorneys to cooperate with Buyer and such
representatives. Any such investigations and examinations shall be conducted at
reasonable times, under reasonable circumstances, during normal business hours,
and at the normal place of Seller's business.
(ii) Prior to the Closing, Seller shall be entitled,
through its employees and representatives, to make such investigations and
examinations of Buyer, its books and records, business, and assets as Seller may
reasonably request for the sole purpose of verifying the representations and
warranties of Buyer as contained in this Agreement. Buyer shall furnish Seller
and its representatives during such period with information concerning Buyer as
Seller or such representatives may reasonably request and cause Buyer's
officers, employees, consultants, agents, accountants, and attorneys to
cooperate with Seller and such representatives. Any such investigations and
examinations shall be conducted at reasonable times, under reasonable
circumstances, during normal business hours, and at the normal place of Buyer's
business.
(b) From the date of this Agreement through the Closing Date,
except as otherwise contemplated in this Agreement, or as previously approved by
Buyer or included in a business plan approved by Buyer, Seller shall conduct its
business only in the ordinary course and consistent with its prior practices,
shall not make or institute any unusual or novel methods of purchase, sale,
lease, management, accounting, or operation or that vary materially from those
in use as of the date hereof. In addition, Seller shall use its reasonable
efforts: (i) to preserve the Business and organization of Seller intact; (ii) to
keep available to the Business the services of the present officers, employees,
agents, and independent contractors employed or engaged primarily in the
Business or that provide services to the operation of the Business; (iii) to
preserve for the benefit of Buyer the goodwill of Seller's suppliers, customers,
licensors, distributors of Seller's catalogs and others having business
relations with it; and (iv) to cooperate with Buyer and use reasonable efforts
to assist Buyer in obtaining the consent of any note holder, licensor,
distributors, or other party to any agreement with Seller or its Affiliates
where the consent of such other party may be required or advisable by reason of
the transactions contemplated in this Agreement or in the Transaction Documents.
Without limiting the generality of the foregoing, prior to the Closing, Seller
shall not, without Buyer's prior written approval, amend or propose to amend its
Declaration of Trust or take any action or enter into any transaction of the
sort described in Section 3.7, or which would cause any representation or
warranty made in Section 3.7 to be untrue.
(c) From the date hereof through the Closing Date, Seller and
its Affiliates shall: (i) maintain in force (including necessary renewals
thereof) the insurance policies currently in effect, except to the extent that
they may be replaced with equivalent policies appropriate to insure the Acquired
Assets and Business, to the same extent as currently insured; (ii) comply in all
material respects with all agreements related to the Business; (iii) duly and
timely file all tax returns related to the Business required to be filed with
Authorities and duly observe and conform, in all material respects, to all
applicable laws and orders related to the Business; and (iv) notify Buyer of any
lawsuit, claim, proceeding, or investigation that after the date hereof is
threatened or commenced against Seller or related to the Business.
(d) Unless and until this Agreement shall be terminated,
Seller and its Affiliates shall not, nor shall any of them cause, suffer, or
permit their respective beneficiaries, trustees, directors, officers, employees,
representatives, agents, accountants, or attorneys to, initiate or solicit,
directly or indirectly, any inquiries or the making of any proposal, or engage
in negotiations or discussions with any person, or provide any confidential
information or data to any person, with respect to any acquisition, business
combination or purchase of all or substantially all of the outstanding shares or
assets, or any significant asset of Seller, or any direct or indirect equity
interest in Seller or otherwise facilitate any effort or attempt to seek any of
the foregoing. Furthermore, Seller shall immediately terminate any existing
activities, discussions, or negotiations with any person other than Buyer with
respect to any of the foregoing.
(e) Each Party shall cooperate in obtaining all required
consents, audits, and completion of other transactions contemplated to have
occurred as of the Closing and to use reasonable efforts to cause the
fulfillment of the conditions to the other Party's obligation to consummate the
transactions contemplated hereby. Each Party's representations and warranties
contained in this Agreement and in all Schedules delivered by such Party
hereunder shall be updated to the Closing Date (except for representations and
warranties that speak as of a specific date) by such Party and delivered to the
other Party(ies); provided that such updates shall be for information purposes
only and shall not alter or modify the representations made pursuant to Sections
3 or 4 of this Agreement.
(f) Each Party will give to the other prompt written notice of
any material adverse change in any fact respecting which a representation or
warranty has been made by it in this Agreement.
(g) Seller and Buyer shall file any information and documents
that remain to be filed under the Hart-Scott-Rodino Antitrust Improvements Act
of 1976, as amended, and the rules and regulations thereunder (the "HSR Act") as
promptly as practicable at such time as such items are required to be filed, if
any. The parties hereby agree to (i) cooperate with each other in connection
with such HSR Act filings, which cooperation shall include, without limitation,
furnishing the other with any information or documents that may be reasonably
required in connection with such filings; (ii) promptly file, after any request
by the Federal Trade Commission ("FTC") or Department of Justice ("DOJ") and
after appropriate negotiation with the FTC or DOJ of the scope of such request,
any information or documents requested by the FTC or DOJ; and (iii) furnish each
other with any correspondence from or to, and notify each other of any other
communications with, the FTC or DOJ that relates to the transactions
contemplated hereunder, and to the extent practicable, to permit each other to
participate in any conferences with the FTC or DOJ.
(h) Nothing in this Section 5.1 is intended, or shall be
construed, to modify or expand the representation and warranties of Seller under
Section 3 of this Agreement.
(i) Prior to and after Closing, Buyer, Seller and Trustee
shall be bound by the terms and conditions of any written agreement to which
Buyer or Seller or Trustee is a party concerning the confidential treatment of
any information or materials of either Party.
Section 5.2. Post-Closing Covenants.
(a) General. Each of the Parties will use its reasonable
efforts to take all action and to do all things necessary in order to consummate
and make effective the transactions contemplated by this Agreement (including
satisfaction, but not waiver, of the closing conditions set forth in Section 6
of this Agreement). Seller and its Affiliates shall provide Buyer such
assistance as necessary (including completion of an audit of the Business by
Seller's outside auditors, the cost of which shall be shared equally by Buyer
and Seller) to allow Buyer to prepare and file any forms that may be required by
the SEC, including, without limitation, a Form 8-K.
(b) Confidentiality. Following the Closing, Seller and Trustee
will, and will cause their respective Affiliates, beneficiaries, trustees,
directors, officers and employees to, treat and hold confidential all of the
Confidential Information and all terms of the transactions contemplated by the
Transaction Documents, refrain from using any of the Confidential Information or
such transactional terms except in connection with this Agreement (or as
required to be disclosed to taxing authorities in connection with the payment of
taxes or as required to be disclosed in filings made with the SEC or similar
Canadian Authorities) and shall deliver promptly to the Buyer or destroy, at the
request and option of the Buyer, all tangible embodiments (and all copies) of
the Confidential Information which are in his or its possession (except for
copies of such Confidential Information as may be required to be retained in
connection with the payment of taxes or the preparation of filings with the SEC
or similar Canadian Authorities). In the event that Seller or Trustee or their
respective beneficiaries, trustees, directors, officers or employees is
requested or required (by oral question or request for information or documents
in any legal proceeding, interrogatory, subpoena, civil investigative demand, or
similar process) to disclose any Confidential Information or any terms of the
transactions contemplated by the Transaction Documents, then Seller or Trustee,
as the case may be, will notify Buyer promptly of the request or requirement so
that Buyer may seek an appropriate protective order or waive compliance with the
provisions of this Section 5.2(b). If, in the absence of a protective order or
the receipt of a waiver, Seller or Trustee, as the case may be, is, or their
respective beneficiaries, trustees, directors, officers or employees are, on the
advice of counsel, compelled to disclose any Confidential Information or any
terms of the transactions contemplated by the Transaction Documents to any
tribunal or else stand liable for contempt, then Seller or Trustee or such
beneficiaries, trustees, directors, officers or employees may disclose such
Confidential Information or such transaction terms to the tribunal; provided,
however, that the disclosing Person shall use its reasonable best efforts to
obtain, at the expense and reasonable request of Buyer, an order or other
assurance that confidential treatment will be accorded to such portion of the
Confidential Information or transaction terms required to be disclosed as Buyer
shall designate.
(c) Records. Buyer shall preserve and retain the corporate,
accounting, legal, and other records of Seller and the Business that shall come
into Buyer's possession as a result of the transactions contemplated by this
Agreement for a period of not less than three years from the Closing Date and
give reasonable access to Trustee, and their auditors, counsel, and other
authorized representatives for the purpose of preparing or defending Tax returns
or for other reasonable business purposes.
(d) Employees.
(i) As of Closing, all employees identified on
Schedule 3.19 hereto who as of such date are hired by the Buyer ("Hired
Employees") shall be terminated by Seller and shall cease to participate in any
Plan sponsored by Seller or any Affiliate of Seller (except as permitted under
the terms of such Plans). Buyer will provide all Hired Employees with medical
and other welfare benefits as deemed appropriate by Buyer in its sole discretion
(Seller shall have no obligation of any nature whatsoever for any such medical
and other welfare benefits for any period after Closing other than obligations
under COBRA or under the terms of Seller's Plans). Notwithstanding the
foregoing, Buyer will give Hired Employees credit for their employment with
Seller for purposes of Buyer's vacation, sick pay and short-term disability
policies, retirement plans, and other benefit plans (but not benefit accrued
service under any defined benefit pension plan). Buyer will assume Seller's
accrued vacation pay and will provide such accrued vacation pay to the Hired
Employees on the same basis as under Seller's vacation policy. Notwithstanding
the foregoing, nothing herein shall prevent Buyer from terminating the
employment of any Hired Employee or modifying or terminating such medical and
other welfare benefits from time to time.
(ii) For notices and payments related to events
occurring prior to the Closing Date, Seller and its ERISA Affiliates shall be
responsible for any notices required to be given to employees of the Business
pursuant to the Worker Adjustment and Retraining Notification Act ("WARN"),
COBRA and/or Section 402(f) of the Code ("Rollover Notice"), and for any
payments or benefits required pursuant to such laws or on account of violation
of any requirement of such laws. Buyer shall be responsible for providing any
notice required to be given to employees pursuant to WARN, and shall indemnify
and hold the Seller harmless from and against any and all Adverse Consequences
with respect to or arising out of a layoff or plant closing relating to the
Business that occurs on or after the Closing Date.
(iii) Seller and Buyer acknowledge that all
contributions to the medical and dependent care reimbursement flexible spending
accounts maintained by Seller with respect to Hired Employees of the Business
shall cease as of the Closing Date. Such Hired Employees shall be eligible, in
accordance with the terms of said medical and dependent care reimbursement
flexible spending accounts, to submit on or before March 31, 2001 claims for
reimbursement of expenses incurred prior to the Closing Date.
(iv) Buyer shall not adopt, assume or otherwise
become responsible for, either primarily or as a successor employer, any
liabilities of any Plans as defined in Section 3.20 of this Agreement.
(v) All stock options and other forms of equity-
based compensation granted by Seller or any Affiliate of Seller to Hired
Employees shall fully vest immediately prior to the Closing Date and the terms
of such options or equity-based compensation awards shall allow for exercise or
sale of the same within a period of not less than thirty (30) days following the
Closing Date.
(vi) Seller agrees that Hired Employees shall be
eligible to rollover from the 401(k) plan maintained by Seller to the 401(k)
plan maintained by Buyer their account balances, if any, under Seller's 401(k)
plan, that any such rollover may include any promissory note representing a loan
from Seller's 401(k) plan, and, to the extent permitted by law, any such
rollover of a promissory note from Seller's 401(k) plan to Buyer's 401(k) plan
shall not be reported as deemed distributions from Seller's 401(k) plan.
(vii) Seller agrees to make tuition reimbursements
in accordance with its tuition reimbursement plan in effect as of the Closing
Date to Hired Employees who as of the Closing Date have applied for tuition
reimbursement thereunder or have enrolled in courses for which reimbursement
would otherwise be available thereunder had such Hired Employees continued
employment with Seller.
(viii) From and after Closing, Buyer shall be solely
responsible for all costs, taxes (all types), charges, liabilities, and
termination and severance benefits (if any), of any nature incurred with respect
to the employment or termination of a Hired Employee after the Closing Date.
Section 5.3. Indemnification Provisions for the Benefit of Buyer.
(a) In the event Seller or Trustee breaches any of its
representations, warranties, and covenants contained in this Agreement, and a
Buyer Indemnified Party (as defined below) makes a written claim for
indemnification against any of Seller or Trustee then, each of Seller and
Trustee agree jointly and severally to indemnify Buyer, its members, Affiliates
and agents and their respective officers, directors and employees (collectively,
the "Buyer Indemnified Parties," and individually a "Buyer Indemnified Party")
from and against the Adverse Consequences any Buyer Indemnified Party may suffer
resulting from, arising out of, relating to, or caused by such breach.
(b) Each of Seller and Trustee agrees, jointly and severally,
to indemnify Buyer Indemnified Parties from and against the entirety of any
Adverse Consequences Buyer Indemnified Party may suffer resulting from, arising
out of, relating to or caused by reason of: (i) any liability or obligation of
Seller or any Affiliate of Seller which is not an Assumed Liability (including
any liability of Seller for Taxes that becomes a liability of Buyer under any
Tax or bulk transfer law of any jurisdictions, under any common law doctrine of
de facto merger or successor liability, or otherwise by operation of law); (ii)
the claims of any broker or finder engaged or alleged to have been engaged by
Seller or Trustee or any Affiliate of either; (iii) the BioDiscovery matter
described on Schedule 3.16; or (iv) any failure on the part of Seller and
Trustee to convey to Buyer the right, title and interest that Seller, Trustee or
any Affiliate of Seller has in and to the Acquired Assets.
(c) All of the covenants, representations, warranties and
indemnification obligations of Seller and/or Trustee: (i) other than under
Section 3.9, Section 3.20, Section 3.21, Section 5.2, Section 5.3(b)(iii),
Section 5.3(b)(iv) and Section 8, shall survive the Closing and continue in full
force and effect only until the first anniversary of the Closing Date; (ii)
contained in Section 3.9, Section 3.20 and Section 3.21 shall survive the
Closing and continue in full force and effect for so long as any Authority may
bring a claim with respect to such matters; and (iii) contained in Section 5.2,
Section 5.3(b)(iii), Section 5.3(b)(iv) or Section 8 shall survive the Closing
for the periods specified therein or, if no periods are specified therein, for
the applicable statute of limitations period. No claim for indemnification under
this Section 5.3 shall be brought by any Buyer Indemnified Party after the time
periods specified in the immediately preceding sentence, provided that the
foregoing time limitations shall not limit Buyer's indemnification rights with
respect to any claim properly made within such time limitations.
(d) Notwithstanding the provisions of this Section 5.3, (i)
neither Seller nor Trustee shall have any liability under this Section 5.3
unless and until the amount of the aggregate indemnification obligations exceeds
Five Hundred Thousand Dollars ($500,000) (the "Threshold"), whereupon Seller and
Trustee shall jointly and severally indemnify, defend, protect and hold harmless
the Buyer Indemnified Parties for the amount of all Adverse Consequences under
this Section 5.3 solely to the extent that such Adverse Consequences exceed the
Threshold, and (ii) the aggregate amount of the Seller and Trustee's liability
under this Section 5.3 shall not exceed the amount of twenty percent (20%) of
the total Purchase Price. The immediately preceding sentence shall not apply to
any matter covered by Section 5.3(b)(iii) or Section 5.3(b)(iv).
(e) The obligations of Seller and Trustee under this Section
5.3 and Section 2.4 shall be guaranteed by GSI Lumonics Inc., a New Brunswick
corporation, in accordance with the terms and conditions of the Parent
Guarantee.
(f) The obligations of Seller and Trustee under this Section
5.3 and the obligations of Parent under the Parent Guarantee may be paid at
Seller's option in either (i) cash or (ii) a combination of one-third (1/3) cash
and two-thirds (2/3) Buyer Common Stock (valued at the Average Closing Price but
in no event valued at less than $17.50 per share).
Section 5.4. Indemnification Provisions for the Benefit of Trustee
and Seller.
(a) In the event Buyer breaches any of its representations,
warranties, and covenants contained in this Agreement and a Trustee Indemnified
Party (as defined below) makes a written claim for indemnification against
Buyer, then, Buyer agrees to indemnify each of Parent, Seller, Trustee and their
respective beneficiaries, trustees, officers, directors, employees, Affiliates
and agents (collectively, the "Trustee Indemnified Parties"; each a "Trustee
Indemnified Party") from and against the entirety of any Adverse Consequences
any Trustee Indemnified Party may suffer resulting from, arising out of,
relating to, or caused by such breach.
(b) Buyer agrees to indemnify the Trustee Indemnified Parties
from and against the entirety of any Adverse Consequences any Trustee
Indemnified Party may suffer resulting from, arising out of, relating to, or
caused by, (i) any Assumed Liability, (ii) Buyer's operation of the Business
after the Closing Date (other than as to any liability or obligation of Seller
or any Affiliate of Seller which is not an Assumed Liability), or (iii) the
claims of any broker or finder engaged or alleged to have been engaged by Buyer
or any Affiliate of Buyer.
(c) All of the covenants, representations, warranties and
indemnification obligations of Buyer: (i) other than under Section 5.2 and
Section 8, shall survive the Closing and continue in full force and effect only
until the first anniversary of the Closing Date; and (ii) contained in Section
5.2 or Section 8 shall survive the Closing for the periods specified therein or,
if no periods are specified therein, for the applicable statute of limitations
period. No claim for indemnification under this Section 5.4 shall be brought by
any Seller Indemnified Party after the time periods specified in the immediately
preceding sentence, provided that the foregoing time limitations shall not limit
Seller's indemnification rights with respect to any claim properly made within
such time limitations.
(d) Notwithstanding the provisions of this Section 5.4, (i)
Buyer shall not have any liability under this Section 5.4 unless and until the
amount of the aggregate indemnification obligations exceeds the Threshold,
whereupon Buyer shall indemnify, defend, protect and hold harmless the Seller
Indemnified Parties for the amount of all Adverse Consequences under this
Section 5.4 solely to the extent that such Adverse Consequences exceed the
Threshold, and (ii) the aggregate amount of the Buyer's liability under this
Section 5.4 shall not exceed the amount of twenty percent (20%) of the total
Purchase Price.
Section 5.5. Indemnification Matters Involving Third Parties.
(a) If any third party shall notify any Party (the
"Indemnified Party") with respect to any matter (a "Third Party Claim") which
may give rise to a claim for indemnification against any other Party (the
"Indemnifying Party") under Section 5.3 or Section 5.4, then the Indemnified
Party shall promptly notify each Indemnifying Party thereof in writing;
provided, however, that no delay on the part of the Indemnified Party in
notifying any Indemnifying Party shall relieve the Indemnifying Party from any
obligation under this Agreement unless (and then solely to the extent) the
Indemnifying Party is prejudiced thereby.
(b) Any Indemnifying Party will have the right to assume the
defense of the Third Party Claim with counsel of his or its choice reasonably
satisfactory to the Indemnified Party at any time within 20 days after the
Indemnified Party has given notice of the Third Party Claim; provided, however,
that: (i) the Indemnifying Party must conduct the defense of the Third Party
Claim actively and diligently thereafter in order to preserve its rights in this
regard; (ii) the Indemnified Party may retain separate co-counsel at its sole
cost and expense and participate in the defense of the Third Party Claim; and
(iii) if the named parties to any such Third Party Claim (including any
impleaded parties) include an Indemnified Party and the Indemnifying Party or
one or more other Indemnified Parties, and such Indemnified Party shall have
been advised by its counsel in writing that there is a conflict of interest
between such Indemnified Party and the Indemnifying Party or any such other
Indemnified Party in the conduct of the defense thereof, then in any such case
the reasonable fees and expenses of such separate counsel shall be borne by the
Indemnifying Party. In the event that the Indemnifying Party fails to assume the
defense of a Third Party Claim in the manner provided above in this Subsection
5.5(b), or fails to conduct the defense of a Third Party Claim actively and
diligently after such assumption, the Indemnified Party shall have the right to
select counsel of his or its choice (and at his or its sole discretion), and the
reasonable fees and expenses of such counsel shall be paid by the Indemnifying
Party.
(c) So long as the Indemnifying Party has assumed and is
conducting the defense of the Third Party Claim in accordance with Subsection
5.5(b) of this Agreement: (i) the Indemnifying Party will not consent to the
entry of any judgment or enter into any settlement with respect to the Third
Party Claim without the prior written consent of the Indemnified Party (not to
be withheld unreasonably) unless the judgment or proposed settlement involves
only the payment of money damages by one or more of the Indemnifying Parties and
does not impose an injunction or other equitable relief upon the Indemnified
Party; and (ii) the Indemnified Party will not consent to the entry of any
judgment or enter into any settlement with respect to the Third Party Claim
without the prior written consent of the Indemnifying Party (not to be withheld
unreasonably).
(d) In the event none of the Indemnifying Parties assumes and
conducts the defense of the Third Party Claim in accordance with Subsection
5.5(b) of this Agreement: (i) the Indemnified Party may defend against, and
consent to the entry of any judgment or enter into any settlement with respect
to, the Third Party Claim in any manner he or it reasonably may deem appropriate
(although the Indemnified Party shall use reasonable efforts to consult with,
and obtain prior written consent from, any Indemnifying Party in connection
therewith, which consent shall not be unreasonably withheld or delayed); and
(ii) the Indemnifying Parties will remain responsible for any Adverse
Consequences the Indemnified Party may suffer resulting from, arising out of,
relating to, in the nature of, or caused by, the Third Party Claim to the
fullest extent provided in this Subsection 5.5(d).
Section 5.6. Other Indemnification Matters.
(a) In determining the amount of Adverse Consequences for
purposes of Sections 5.3, 5.4 and 5.5 of this Agreement, the Parties shall make
appropriate adjustments for tax effects and insurance coverage and take into
account the time cost of money (using the prime commercial lending rate for
Citibank, NA (New York) plus 2% as the discount rate).
(b) Except for claims of fraud or intentional
misrepresentation, the Parties agree that their respective remedies under
Sections 5.3, 5.4, 5.5 and 5.6 of this Agreement are their exclusive remedies
under this Agreement (other than Section 8 of this Agreement), including without
limitation, any matter based on the inaccuracy, untruth, incompleteness or
breach of any representation or warranty of any Party contained herein or based
on the failure of any covenant, agreement or undertaking herein, and the Parties
hereby waive any claims with respect to any other right of contribution or
indemnity available on the basis of common law, statute or otherwise beyond the
express terms of this Agreement.
(c) Notwithstanding any other provision of this Agreement, the
liability of any indemnifying party under this Agreement (other than liability
under Section 5.3(b)(iii) or Section 5.3(b)(iv)) shall not exceed the actual
damages of the party entitled to indemnification and shall not otherwise include
incidental, consequential, indirect, special, punitive, exemplary or other
similar damages, other than compensatory damages.
(d) Any indemnification claim made by an indemnified party
under this Section 5 shall be made in writing to the indemnifying party. If a
controversy, claim or dispute arises out of, or relating to, any such
indemnification claim (the "Dispute"), within thirty (30) days of its receipt of
the indemnification claim, the indemnifying party shall notify the indemnified
party in writing of the Dispute containing sufficient detail to provide the
indemnified party with sufficient notice as to the Dispute (the "Dispute
Notice"). The parties agree to use their reasonable efforts to resolve the
Dispute through good faith business negotiation, which shall be a condition
precedent to the institution of any arbitration proceedings. The good faith
business negotiations must take place for at least sixty (60) days after the
date that the Dispute Notice is sent to the indemnified party. Any Dispute not
resolved during such sixty (60) day period shall be settled by binding
arbitration in accordance with the Commercial Arbitration Rules of the American
Arbitration Association and the arbitration award may be entered as a final
judgment in any court of competent jurisdiction.
SECTION 6
CONDITIONS TO OBLIGATION TO CLOSE
Section 6.1. Conditions to Obligation of Buyer. The obligation of Buyer
to consummate the transactions to be performed by it in connection with the
Closing is subject to satisfaction of the conditions set forth in this Section
6.1.
(a) The representations and warranties set forth in Section 3
above shall be true and correct in all material respects at and as of the
Closing Date (except for representations and warranties made as of a specified
date, which shall be measured only as of such specified date), except where the
failure of such representations and warranties to be so true and correct does
not have and is not reasonably likely to have a Seller Material Adverse Effect.
(b) Seller shall have procured all of the third party
consents specified in Schedule 3.3 at or prior to the Closing.
(c) Buyer shall have received from or on behalf of Seller
delivery of all the Closing Documents listed in Section 7.1 of this Agreement.
(d) Any waiting period under the HSR Act applicable to the
consummation of the transactions contemplated hereby shall have expired or been
terminated, and no action by the DOJ or FTC challenging or seeking to enjoin the
consummation of the transactions contemplated hereby shall be pending.
Buyer may waive any condition specified in this Section 6.1 if it
executes a writing so stating at the Closing.
Section 6.2. Conditions to Obligation of Seller. The obligation of
Seller to consummate the transactions to be performed by it in connection with
the Closing is subject to satisfaction of the following conditions set forth in
this Section 6.2:
(a) The representations and warranties set forth in Section 4
above shall be true and correct in all material respects at and as of the
Closing Date (except for representations and warranties made as of a specified
date, which shall be measured only as of such specified date), except where the
failure of such representations and warranties to be so true and correct does
not have and is not reasonably likely to have a Buyer Material Adverse Effect.
(b) Seller shall have received from or on behalf of Buyer
delivery of all the Closing Documents listed in Section 7.2 of this Agreement.
(c) Any waiting period under the HSR Act applicable to the
consummation of the transactions contemplated hereby shall have expired or been
terminated, and no action by the DOJ or FTC challenging or seeking to enjoin the
consummation of the transactions contemplated hereby shall be pending.
(d) Each of Stonington Capital Appreciation 1994 Fund, L.P.
and Stonington Partners, Inc. shall have executed and delivered the Registration
Rights Agreement.
Seller may waive any condition specified in this Section 6.2 if it
executes a writing so stating at the Closing.
SECTION 7
CLOSING DOCUMENTS
Section 7.1. Seller Deliveries. Seller shall execute and deliver
(or cause the execution and delivery of) the documents itemized in this Section
7.1 to Buyer, prior to or simultaneously with the Closing:
(a) The Bill of Sale.
(b) The Assignment Documents.
(c) Those consents listed on Schedule 3.3.
(d) The following certificates, dated the Closing Date:
(i) A certificate of the Secretary of Seller (i)
attaching evidence of the approval of the Trustee in connection with
the authorization and approval of the execution, delivery and
performance by Seller of this Agreement and the Transaction Documents
as required by Massachusetts law and the Declaration of Trust of
Seller; and (ii) setting forth the incumbency of the officer or
officers of Seller who have executed and delivered this Agreement and
each other Transaction Document, including therein a signature specimen
of each such officer or officers.
(ii) A certificate of an authorized officer of Seller
stating (i) that the conditions specified in Section 6.1(a) and (b)
have been fulfilled, and (ii) that except as set forth on Schedule 3.7,
since the Most Recent Statement Date there have been no events, changes
or occurrences which have had, or are reasonably likely to have,
individually or in the aggregate, a Seller Material Adverse Effect.
(e) A sublease for the premises located at 39 Manning Road,
Billerica, Massachusetts, 01821 in the form of Exhibit D to this Agreement (the
"Sublease").
(f) [Intentionally left blank.]
(g) A guarantee executed by GSI Lumonics Inc., a New Brunswick
corporation, in the form of Exhibit E to this Agreement (the "Parent
Guarantee").
(h) A transition services agreement in the form of Exhibit F
to this Agreement (the "Transition Services Agreement").
(i) A registration rights agreement in the form of Exhibit G
to this Agreement (the "Registration Rights Agreement").
(j) An opinion of Seller and Trustee's counsel substantially
in the form of Exhibit H to this Agreement.
(k) Such other instruments of sale, transfer, conveyance, and
assignment as Buyer and its counsel have reasonably requested for the sale,
transfer, conveyance and assignment of the Acquired Assets free and clear of all
Security Interests, other than as specifically agreed upon in this Agreement.
Section 7.2. Buyer Deliveries. Buyer shall execute and deliver to
Seller (or Seller shall receive from third parties) prior to or simultaneously
with the Closing, each of the documents itemized in this Section 7.2.
(a) The Assumption.
(b) Buyer shall deliver to Seller the payments specified in
Section 2.3 of this Agreement.
(c) The following certificates, dated the Closing Date:
(i) A certificate of the Secretary of Buyer: (i)
attaching resolutions of the Board of Directors of Buyer in connection
with the authorization and approval of the execution, delivery and
performance by Buyer of this Agreement and the Transaction Documents;
and (ii) setting forth the incumbency of the officer or officers of
Buyer who have executed and delivered this Agreement and each other
Transaction Document, including therein a signature specimen of each
such officer or officers.
(ii) A certificate of an authorized officer of Buyer
stating (i) that the condition specified in Section 6.2(a) has been
fulfilled, and (ii) that except as set forth on Schedule 4.7, since
June 30, 2000 there have been no events, changes or occurrences which
have had, or are reasonably likely to have, individually or in the
aggregate, a Buyer Material Adverse Effect.
(d) The Sublease.
(e) The Transition Services Agreement.
(f) The Registration Rights Agreement.
(g) A valid Massachusetts resale certificate with respect to
the inventory of Seller to be purchased by Buyer as Acquired Assets.
(h) An opinion of Buyer's counsel substantially in the form of
Exhibit I to this Agreement
(i) Such other instruments of assumption as to the Assumed
Liabilities as Seller and its counsel have reasonably requested.
SECTION 8
NONCOMPETITION
Section 8.1. Materiality. Buyer, Seller and Trustee hereby agree that
the covenants set forth in this Section 8 are a material and substantial part of
the transactions contemplated by this Agreement, and that a portion of the
Purchase Price shall be paid for and allocated to the covenants set forth in
this Section 8.
Section 8.2. Prohibited Activities of Seller. Until three years after
the Closing Date none of Seller, Trustee or any Affiliate of Seller or Trustee
will, anywhere in the world (the "Territory"), unless acting for Buyer or its
Affiliates or in accordance with Buyer's prior written consent:
(a) (directly or indirectly) own, manage, operate, join,
control, finance or participate in the ownership, management, operation, control
or financing of, or be connected as an officer, director, employee, principal,
agent, representative, consultant, investor, owner, partner, manager, joint
venturer or otherwise with, or permit its, his or her name to be used by or in
connection with, any business or enterprise engaged anywhere in the Territory in
the Business;
(b) Call on or solicit any person who or which is, at that
time, or has been within two years prior thereto, a customer of Seller or any
predecessor of Seller with respect to any business covered by clause (a) above;
(c) Other than as a direct result of a general advertisement
for employment, solicit the employment of any Hired Employee while such person
is employed by Buyer or any of its Affiliates; or
(d) Otherwise attempt to interfere with or disrupt Buyer or
its Affiliates in the operation of the Business.
Notwithstanding the above, the foregoing covenant shall not be deemed
to prohibit the any Person subject to this Section 8 from acquiring as a passive
investment not more than five percent of the outstanding voting capital stock of
a competing business.
Section 8.3. Prohibited Activities of Buyer. Until 18 months after the
Closing Date, none of Buyer or any Affiliate of Buyer will solicit the
employment of any person who is employed by Parent or any of its Affiliates as
of the Closing Date while such person is employed by Parent or any of its
Affiliates, except (i) for the Hired Employees or (ii) as a direct result of a
general advertisement for employment.
Section 8.4. Remedies. The Parties hereto acknowledge that (a) the
provisions of this Section 8 are reasonable and necessary to protect the
legitimate interests of the respective Parties to this Agreement and their
respective Affiliates, (b) any violation of this Section 8 will result in
irreparable injury and that damages at law would not be reasonable or adequate
compensation for a violation of this Section 8 and (c) the Parties hereto shall
be entitled to have the provisions of this Section 8 specifically enforced by
preliminary and permanent injunctive relief without the necessity of proving
actual damages and without posting bond or other security as well as to an
equitable accounting of all earnings, profits and other benefits arising out of
any violation of this Section 8, including, without limitation, estimated future
earnings. In the event that the provisions of this Section 8 should ever be
deemed to exceed the time, geographic, product or any other limitations
permitted by applicable law, then such provisions shall be deemed reformed to
the maximum permitted by applicable law.
Section 8.5. Jurisdiction. Buyer, Seller and Trustee intend to and do
hereby confer jurisdiction to enforce the covenants set forth in this Section 8
upon the courts of any jurisdiction within the geographical scope of such
covenants. If the courts of any one or more of such jurisdictions hold such
covenants unenforceable in whole or in part, it is the intention of Buyer,
Seller and Trustee that such determination not bar or in any way adversely
affect the Parties' respective rights to equitable relief and remedies hereunder
in courts of any other jurisdiction as to breaches or violations of this Section
8, such covenants being, for this purpose, severable into diverse and
independent covenants.
SECTION 9
OTHER AGREEMENTS
Section 9.1. Press Releases and Public Announcements. Prior to the
Closing no Party shall issue any press release or make any public announcement
relating to the subject matter or disclose to any third party other than its
legal and financial advisers and others who need to know in order to consummate
this Agreement or the other Transaction Documents without the prior written
approval of the other Parties; provided, however, that any Party may make any
public disclosure it believes in good faith is required by applicable law or any
listing or trading agreement concerning its publicly-traded securities (in which
case the disclosing Party will use its reasonable best efforts to advise the
other Parties prior to making the disclosure).
Section 9.2. No Third-Party Beneficiaries. This Agreement shall
not confer any rights or remedies upon any Person other than the Parties and
their respective successors and permitted assigns.
Section 9.3. Entire Agreement. This Agreement (including the documents
referred to in this Agreement) constitutes the entire agreement among the
Parties and supersedes any prior and contemporaneous understandings, agreements,
or representations by or among the Parties, written or oral, to the extent they
related in any way to the subject matter hereof.
Section 9.4. Succession and Assignment. This Agreement shall be binding
upon and inure to the benefit of the Parties named in this Agreement and their
respective successors and permitted assigns. No Party may assign either this
Agreement or any of its rights, interests, or obligations under this Agreement
without the prior written approval of the other Parties; provided, however, that
Buyer may (i) assign any or all of its rights and interests under this Agreement
to one or more of its Affiliates and (ii) designate one or more of its
Affiliates to perform its obligations under this Agreement (in any or all of
which cases Buyer nonetheless shall remain responsible for the performance of
all of its obligations under this Agreement).
Section 9.5. Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original but all of which
together will constitute one and the same instrument.
Section 9.6. 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.
Section 9.7. Notices. All notices, requests, demands, claims, and other
communications under this Agreement will be in writing. Any notice, request,
demand, claim, or other communication under this Agreement shall be deemed duly
given if (and then two Business Days after) it is sent by registered or
certified mail, return receipt requested, postage prepaid, and addressed to the
intended recipient as set forth below:
If to Seller:
GSI Lumonics Life Science Trust
c/o General Scanning, Inc.
39 Manning Road
Billerica, Massachusetts 01821
ATT: Victor Woolley
Fax: (978) 663-9466
If to Trustee:
GSI Lumonics Trust, Inc.
c/o General Scanning, Inc.
39 Manning Road
Billerica, Massachusetts 01821
ATT: Victor Woolley
Fax: (978) 663-9466
In the case of Seller or Trustee, with a copy to:
GSI Lumonics Inc.
Attn: General Counsel
105 Schneider Road
Kanata, Ontario K2K 1Y3
CANADA
Fax: (613) 592-7549
and to:
Timothy R. Damschroder J. Vaughan Curtis
Bodman, Longley & Dahling LLP Alston & Bird LLP
110 Miller, Suite 300 AND 1201 West Peachtree Street
Ann Arbor, Michigan 48104 Atlanta, Georgia 30309
Fax (734) 930-2494 Fax: (404) 881-7777
If to Buyer:
Packard BioScience Company
800 Research Parkway
Meriden, CT 06880
Attn: Chief Financial Officer
Fax: (203) 235-6089
With a copy to:
Packard BioScience Company
800 Research Parkway
Meriden, CT 06880
Attn: General Counsel
Fax: (203) 235-6089
Any Party may send any notice, request, demand, claim, or other communication
under this Agreement to the intended recipient at the address set forth above
using any other means (including personal delivery, expedited courier, messenger
service, telecopy, 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 intended
recipient. Any Party may change the address to which notices, requests, demands,
claims, and other communications under this Agreement are to be delivered by
giving the other Parties notice in the manner set forth in this Section.
Section 9.8. Governing Law. This Agreement shall be governed by and
construed in accordance with the domestic 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 the laws of any jurisdiction other than the
Commonwealth of Massachusetts.
Section 9.9. Amendments and Waivers. No amendment of any provision of
this Agreement shall be valid unless the same shall be in writing and signed by
each Party. No waiver by any Party of any default, misrepresentation, or breach
of warranty or covenant under this Agreement, whether intentional or not, shall
be deemed to extend to any prior or subsequent default, misrepresentation, or
breach of warranty or covenant under this Agreement or affect in any way any
rights arising by virtue of any prior or subsequent such occurrence.
Section 9.10. 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 of
this Agreement or the validity or enforceability of the offending term or
provision in any other situation or in any other jurisdiction.
Section 9.11. Expenses. Except as provided in Section 5.2(a), each of
Buyer and Seller will bear its own, and Seller will bear Trustees' costs and
expenses (including legal fees and expenses) incurred in connection with this
Agreement, the other Transaction Documents and the preparation and negotiation
thereof and the consummation of the transactions contemplated by this Agreement
or by the other Transaction Documents.
Section 9.12. Construction. The Parties have participated jointly in
the negotiation and drafting of this Agreement and the other Transaction
Documents. In the event an ambiguity or question of intent or interpretation
arises, this Agreement and the other Transaction Documents shall be construed as
if drafted jointly by the Parties and no presumption or burden of proof shall
arise favoring or disfavoring any Party by virtue of the authorship of any of
the provisions of this Agreement and the other Transaction Documents. 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 requires otherwise. The word "including" shall mean including
without limitation. All monetary amounts referred to in this Agreement are in
United States dollars.
Section 9.13. Incorporation of Exhibits and Schedules. The Exhibits
and Schedules identified in this Agreement are incorporated in this Agreement by
reference and made a part of this Agreement.
Section 9.14. Termination.
(a) In the event that the Closing has not occurred on or prior
to December 31, 2000, any Party may terminate this Agreement, as long as such
Party in not in breach any of the material terms or conditions of this Agreement
as of the date that such Party provides the other Party with a written notice of
such termination.
(b) Any Party may terminate this Agreement on or prior to
December 31, 2000, by giving thirty (30) Business Days prior written notice of
its intent to terminate to the other Party, without prejudice to any rights or
obligations it may have, if any other Party has failed: (i) in the due and
timely performance of any of its covenants or agreements under this Agreement or
there shall have been a material breach of the other's warranties and
representations under this Agreement, in each case that has caused or is
reasonably likely to cause a Seller Material Adverse Effect (in the case of a
non-performance or breach by Seller or Trustee) or a Buyer Material Adverse
Effect (in the case of a non-performance or breach by Buyer); and (ii) to cure
such non-performance or breach within such thirty (30) Business Day period. Any
notice of intent to terminate under this Section 9.14(b) shall provide the Party
receiving such notice with detailed information concerning the non-performance
or breach. If the Party receiving notice under this Section 9.14(b) fails to
cure such non-performance or breach within such thirty (30) Business Day period,
the other Party may immediately terminate this Agreement by providing written
notice of termination to the non-performing or breaching Party. In any such
event any Party who is not guilty of the non-performance or breach may, in
addition to all of its other rights and remedies, recover from the Party
responsible for the non-performance or breach all losses and pursue such
remedies as are available to it at law or in equity.
<PAGE>
Signature page to the Asset Purchase Agreement, dated August 19, 2000, among the
parties listed below.
ACCEPTED AND AGREED:
"BUYER" "SELLER"
Packard BioScience Company GSI Lumonics Life Science Trust
By: /s/ Ben D. Kaplan By: /s/ Victor H. Woolley
----------------------------- ----------------------------
Its: Vice President and Its: Treasurer
Chief Financial Officer
"TRUSTEE"
GSI Lumonics Trust, Inc.
By: /s/ Charles D. Winston
----------------------------
Its: President
