SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): June 30, 1999
Galileo Corporation
(Exact Name of Registrant as Specified in Its Charter)
Delaware
(State or Other Jurisdiction of Incorporation)
000-11309 04-2526583
(Commission File Number) (IRS Employer Identification No.)
Galileo Park, P.O. Box 550, Sturbridge, Massachusetts 01566
(Address of Principal Executive Offices) (Zip Code)
(508) 347-9191
(Registrant's Telephone Number, Including Area Code)
<PAGE>
Item 2. Acquisition or Disposition of Assets.
On July 1, 1999, the Registrant sold its Scientific Detector
Products Business to Burle Industries, Inc. of Lancaster, Pennsylvania for a
sales price of approximately $7.1 million. Also on July 1, 1999, the Registrant
sold certain manufacturing assets relating to a previously discontinued business
to IPG Photonics Corporation of Sturbridge, Massachusetts for a sales price of
approximately $1.5 million. The sales price for each transaction was determined
in good faith, arms-length negotiations between the Registrant and the
respective purchaser. The Registrant has applied the proceeds from these two
transactions to the repayment of the Registrant's indebtedness under its
revolving credit agreement, reducing the outstanding balance thereunder to below
$6.0 million as required by the terms of such agreement.
For a more complete description of the terms of these two sales
transactions, reference is made to the Asset Purchase Agreement dated as of July
1, 1999 between Burle Industries, Inc. and the Registrant and the Asset Purchase
and Sale Agreement dated as of May 24, 1999 between the Registrant and IPG
Photonics Corporation, both of which are incorporated herein by reference as
Exhibits 2.1 and 2.2, respectively, to this Current Report on Form 8-K as
indicated in Item 7 below. The press release issued by the Registrant with
respect to these two transactions is filed as Exhibit 99.1 to this Current
Report on Form 8-K as indicated in Item 7 below.
Item 5. Other Events.
On June 30, 1999, the Registrant announced that the Registrant's
revolving credit agreement had been amended to extend until July 14, 1999 the
applicable dates of certain covenants in the revolving credit agreement,
including the Registrant's obligation to reduce the maximum borrowings
thereunder to below $6.0 million. On July 6, 1999, the Registrant announced that
Gerhard R. Andlinger, Chairman of the Board of the Registrant, had assumed the
additional titles of President and Chief Executive Officer, succeeding W. Kip
Speyer who had resigned from those positions and as a Director of the
Registrant. The Registrant also announced that John D. Barlow had been named
President and Chief Executive Officer of the Registrant's Leissegang Medical,
Inc. subsidiary, succeeding Mr. Speyer who resigned from these positions as
well. The press release issued by the Registrant with respect to the additional
titles assumed by Mr. Adlinger and the appointment of Mr. Barlow is filed as
Exhibit 99.2 to this Current Report on Form 8-K as indicated in Item 7 below.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(a) Not applicable
(b) Not applicable
<PAGE>
(c) Exhibits:
Exhibit Number
Exhibit Title
2.1 Asset Purchase Agreement dated as of July 1, 1999 between Burle
Industries, Inc., as Buyer and Galileo Corporation, as Seller
(see table of contents for list of omitted exhibits and
schedules)
The Registrant hereby agrees to provide the Commission, upon
request, with copies of any omitted exhibits or schedules
required by Item 601(b)(2) of Regulation S-K.
2.2 Asset Purchase and Sale Agreement dated as of May 24, 1999
between Galileo Corporation and IPG Photonics Corporation,
including a list of omitted exhibits and schedules
The Registrant hereby agrees to provide the Commission, upon
request, with copies of any omitted exhibits or schedules
required by Item 601(b)(2) of Regulation S-K.
99.1 Press Release dated July 1, 1999
99.2 Press Release dated July 6, 1999
<PAGE>
SIGNATURE
Pursuant to the requirement of the Securities Exchange Act of 1934, as
amended, the Registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
Galileo Corporation
By: /s/ Josef W. Rokus
----------------------
Josef W. Rokus
Vice President and Secretary
Dated: July 12, 1999
EXHIBIT 2.1
Execution Copy
SCIENTIFIC DETECTOR AND SPECTROSCOPY PRODUCTS BUSINESS
OF GALILEO CORPORATION
ASSET PURCHASE AGREEMENT
BETWEEN
BURLE INDUSTRIES, INC., AS BUYER
AND
GALILEO CORPORATION, AS SELLER
Dated as of July 1, 1999
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE1 DEFINITIONS...........................................................1
Definitions...........................................................1
Certain Interpretive Matters..........................................8
ARTICLE 2 PURCHASE AND SALE...................................................8
Sale of Assets........................................................8
Excluded Assets......................................................10
Assumed Liabilities and Obligations..................................11
Excluded Liabilities.................................................11
ARTICLE 3 THE CLOSING........................................................13
Closing 13
Purchase Price.......................................................13
Adjustment to Purchase Price and Cash Payment........................13
Allocation of Purchase Price.........................................15
Prorations...........................................................15
Deliveries by Seller.................................................15
Deliveries by Buyer..................................................16
ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF SELLER............................17
Organization; Qualification..........................................17
Authority Relative to this Agreement.................................17
Consents and Approvals; No Violation.................................18
Financial Statements.................................................18
Undisclosed Liabilities..............................................18
Absence of Certain Changes or Events.................................18
Title 19
Inventory............................................................19
Accounts Receivable..................................................19
Insurance............................................................19
Environmental Matters................................................19
Employees............................................................21
Overtime, Back Wage, Vacation, Discrimination and
Occupational Safety Claims.........................................21
Benefit Plans........................................................21
Tangible Personal Property...........................................23
Contracts and Arrangements...........................................23
Litigation and Claims................................................23
Permits 23
Taxes ............................................................24
Year 2000 Qualification..............................................24
Patents, Trademarks and Copyrights...................................24
Transactions with Affiliates.........................................24
Purchased Assets.....................................................25
Completeness and Accuracy............................................25
ARTICLE 5 REPRESENTATIONS AND WARRANTIES OF BUYER.............................25
Organization.........................................................25
Authority Relative to this Agreement.................................25
Consents and Approvals; No Violation.................................26
Availability of Funds................................................26
ARTICLE 6 COVENATNS OF THE PARTIES...........................................26
Conduct of Business Relating to the Purchased Assets.................26
Access to Information................................................27
Expenses 28
Further Assurances; Cooperation......................................28
Public Statements....................................................29
Consents and Approvals...............................................29
Fees and Commissions.................................................29
Tax Matters..........................................................30
Notification of Changes..............................................30
Employees............................................................30
Noncompetition and Nonsolicitation...................................31
Compliance with Environmental Corrective Action Program and Lead
Decontamination Protocol....................................32
SEM Microscope.......................................................32
ARTICLE 7 CONDITIONS..........................................................32
Conditions to Obligations of Buyer...................................32
Conditions to Obligations of Seller..................................34
ARTICLE 8 INDEMNIFICATION.....................................................35
Indemnification......................................................35
Defense of Claims....................................................36
Indemnification Limits...............................................37
Survival of Representations, Warranties, Covenants and Obligations...37
ARTICLE 9 TERMINATION.........................................................38
Termination..........................................................38
Procedure and Effect of Termination..................................39
ARTICLE 10 MISCELLANEOUS PROVISIONS...........................................39
Amendment and Modification...........................................39
Waiver of Compliance; Consents.......................................39
Notices 39
Assignment...........................................................40
No Third Party Beneficiary...........................................40
Governing Law........................................................41
Venue; Consent to Jurisdiction.......................................41
Counterparts.........................................................41
Severability.........................................................41
Interpretation.......................................................41
Schedules and Exhibits...............................................41
Entire Agreement.....................................................41
<PAGE>
LIST OF SCHEDULES
Schedule 1 Business Product Lines
Schedule 2.1(c) Tangible Personal Property
Schedule 2.1(d) Seller's Agreements
Schedule 2.1(e) Transferable Permits
Schedule 2.1(h) Intellectual Property
Schedule 2.1(l) Shared Assets
Schedule 3.3 Accounting Methodology
Schedule 3.4 Allocation of Purchase Price
Schedule 4.3 Consents and Approvals; Seller's Required Regulatory Approvals
Schedule 4.4 Financial Statements
Schedule 4.5 Undisclosed Liabilities
Schedule 4.6 Absence of Certain Changes or Events
Schedule 4.7 Title
Schedule 4.8 Inventory
Schedule 4.9 Accounts Receivable
Schedule 4.10 Insurance
Schedule 4.11 Environmental Matters
Schedule 4.12 Employees
Schedule 4.13 Labor Matters
Schedule 4.15 Benefit Plans
Schedule 4.16 Tangible Personal Property Exceptions
Schedule 4.17 Contracts and Arrangements
Schedule 4.18 Litigation and Claims
Schedule 4.19 Permits
Schedule 4.20 Taxes
Schedule 4.21 Year 2000 Compliance
Schedule 4.22 Expired and Abandoned Patents
Schedule 4.24 Transaction with Affiliates
Schedule 5.3 Consents and Approvals
Schedule 6.10 Employees
<PAGE>
LIST OF EXHIBITS
Exhibit A Form of Bill of Sale, Assignment and Assumption Agreement
Exhibit B Form of Sturbridge Property Lease
Exhibit C Form of Transition Services Agreement
Exhibit D Form of License Agreement
Exhibit E Form of Opinion of Seller's Counsel
Exhibit F Form of Opinion of Buyer's Counsel
<PAGE>
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT, dated as of July 1, 1999, is between
BURLE INDUSTRIES, INC., a Pennsylvania corporation ("Buyer"), and GALILEO
CORPORATION, a Delaware corporation ("Seller"). Seller and Buyer are referred to
individually as a "Party," and collectively as the "Parties."
W I T N E S S E T H
WHEREAS, Seller is engaged through its Scientific Detector and Remote
Spectroscopy Products business in the production of (i) components for
scientific and analytical instrumentation and image intensifiers (scientific
detector products), (ii) products used in remote process monitoring, (iii)
custom glass and (iv) glass-coated wire, including but not limited to single
channel detectors, microchannel plates, detector assemblies and systems,
flexible fiber optics, remote spectroscopy products, office products and related
products, as more fully set forth in Schedule 1 hereto (collectively, the
"Business");
WHEREAS, Buyer desires to purchase, and Seller desires to sell and
assign, the assets of the Business, including without limitation (i) the
accounts receivable, inventory, machinery, equipment and other fixed assets
(other than the Sturbridge Property, as herein defined) and (ii) all trademarks,
trade names, patents, know-how and other intellectual property, and, in
connection therewith, Buyer has agreed to assume certain liabilities of the
Business, upon the terms and conditions hereinafter set forth in this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants,
representations, warranties and agreements hereinafter set forth, and intending
to be legally bound hereby, the Parties agree as follows:
ARTICLE 1
DEFINITIONS
Definitions. As used in this Agreement, the following terms have the
meanings specified in this Section 1.1.
"Accounts Payable" as of any date means the trade accounts payable
associated with the Business as of such date determined in accordance with the
methodology set forth in Schedule 3.3, except any trade account payable to
Seller or an Affiliate of Seller.
"Accounts Receivable" means as of any date the trade accounts
receivable of the Business as of such date, excluding any trade accounts
receivable from Seller or any Affiliate of Seller.
"Accounts Receivable Value" means as of any date the aggregate dollar
value of the Accounts Receivable, determined in accordance with the methodology
set forth in Schedule 3.3.
"Affiliate" has the meaning set forth in Rule 12b-2 of the General
Rules and Regulations under the Securities Exchange Act of 1934.
"Agreement" means this Asset Purchase Agreement together with the
Schedules and Exhibits hereto, as the same may be from time to time amended.
"Assumed Accrued Expenses" means accrued expenses or reserves as would
appear on a balance sheet of the Business prepared in accordance with the
methodology set forth on Schedule 3.3 for (i) unused vacation and personal time
for the New Employees, (ii) sales commissions, (iii) product warranty claims and
(iv) customer deposits.
"Assumed Liabilities and Obligations" has the meaning set forth in
Section 2.3.
"Benefit Plans" means (i) any pension plan, 401(k) plan, profit-sharing
plan, health or welfare plan, and any other employee benefit plan (within the
meaning of Section 3(3) of ERISA) that is maintained or sponsored by Seller or
to which Seller contributes or for which Seller otherwise has or may have any
liability, contingent or otherwise, either directly or as a result of an ERISA
Affiliate, and (ii) any other benefit arrangement, obligation, or practice,
whether or not legally enforceable, to provide benefits, other than salary, as
compensation for services rendered, to one or more present or former employees,
directors, agents, or independent contractors, that is maintained or sponsored
by Seller or to which Seller contributes or for which Seller otherwise has or
may have any liability, contingent or otherwise, either directly or as a result
of an ERISA Affiliate, including, without limitation, employment agreements,
severance policies or agreements, executive compensation arrangements, incentive
arrangements, sick leave, vacation pay, salary continuation, consulting or other
compensation arrangements, workers' compensation, bonus plans, stock option,
stock grant or stock purchase plans, medical insurance, life insurance, tuition
reimbursement programs or scholarship programs, any plans subject to Section 125
of the Code, and any plans providing benefits or payments in the event of a
change of ownership or control.
"Bill of Sale, Assignment and Assumption Agreement" means the Bill of
Sale, Assignment and Assumption Agreement between Seller and Buyer, or its
designee, substantially in the form of Exhibit A hereto.
"Burle Retiree Medical Plan" has the meaning set forth in Section
6.10(f).
"Burle Retiree Medical Plan Liability Accrual" means the aggregate pro
forma amount of the accrual liability for the Burle Retiree Medical Plan for
each of the New Employees. Assuming all the employees set forth on Schedule 6.10
accept employment with Buyer, the amount of the Burle Retiree Medical Plan
Liability Accrual shall be $55,000.
"Business" has the meaning set forth in the Recitals.
"Business Day" shall mean any day other than Saturday, Sunday and any
day on which banking institutions in the Commonwealth of Massachusetts or the
Commonwealth of Pennsylvania are authorized by law or other governmental action
to close.
"Buyer Indemnitee" has the meaning set forth in Section 8.1(b).
"CERCLA" means the Federal Comprehensive Environmental Response,
Compensation, and Liability Act, as amended.
"Closing" has the meaning set forth in Section 3.1.
"Closing Date" has the meaning set forth in Section 3.1.
"Closing Date Balance Sheet" has the meaning set forth in Section
3.3(c).
"COBRA" means the Consolidated Omnibus Budget Reconciliation Act of
1985, as amended.
"Code" means the Internal Revenue Code of 1986, as amended.
"Commercially Reasonable Efforts" means efforts which are designed to
enable a Party to satisfy a condition to, or otherwise assist in the
consummation of, the transactions contemplated by this Agreement and which do
not require the performing Party to expend funds or assume liabilities other
than expenditures and liabilities which are reasonable in nature and amount in
the context of the transactions contemplated by this Agreement.
"Direct Claim" has the meaning set forth in Section 8.2(c).
"Encumbrances" means any mortgages, pledges, liens, security interests,
conditional and installment sale agreements, activity and use limitations,
conservation easements, deed restrictions, easements, encumbrances and charges
of any kind.
"Environment" means all air, surface water, groundwater or land,
including land surface or subsurface, including all fish, wildlife, biota and
all other natural resources.`
"Environmental Claim" means any and all pending and/or threatened
administrative or judicial actions, suits, orders, claims, liens, notices,
notices of violation, investigations, complaints, requests for information,
proceedings, or other oral or written communication, whether criminal or civil,
pursuant to or relating to any applicable Environmental Law by any Person
(including, but not limited to, any Governmental Authority, private person and
citizens' group) based upon, alleging, asserting, or claiming any actual or
potential (i) violation of, or liability under any Environmental Law, (ii)
violation of any Environmental Permit, or (iii) liability for investigatory
costs, cleanup costs, removal costs, remedial costs, response costs, natural
resource damages, property damage, personal injury, fines, or penalties arising
out of, based on, resulting from, or related to the presence, Release, or
threatened Release into the Environment of any Hazardous Substances at any
location including, but not limited to, any off-site location to which Hazardous
Substances, or materials containing Hazardous Substances, were sent for
handling, storage, treatment, or disposal.
"Environmental Laws" means any and all federal, state and local,
provincial and foreign, civil and criminal laws, regulations, rules, ordinances,
codes, decrees, judgments, directives, or judicial or administrative orders
relating to pollution or protection of health, the environment, natural
resources or worker health and safety, and/or governing the handling, use,
generation, storage, transportation, disposal, manufacture, distribution,
formulation, packaging, labeling or Releases or threatened Releases of Hazardous
Substances (including, without limitation, Releases to ambient air, surface
water, groundwater, land, surface and subsurface strata). "Environmental Laws"
include, without limitation, CERCLA, the Massachusetts Oil and Hazardous
Material Release Prevention and Response Act (M.G.L. Ch.21E), the Hazardous
Materials Transportation Act (49 U.S.C. ss.ss.1801 et seq.), the Resource
Conservation and Recovery Act (42 U.S.C. ss.ss. 6901 et seq.), the Federal Water
Pollution Control Act (33 U.S.C. ss.ss. 1251 et seq.), the Clean Air Act (42
U.S. C. ss.ss. 7401 et seq.), the Toxic Substances Control Act (15 U.S.C. ss.ss.
2601 et seq.), the Oil Pollution Act (33 U.S.C. ss.ss. 2701 et seq.), the
Emergency Planning and Community Right-to-Know Act (42 U.S.C. ss.ss. 11001 et
seq.), the Occupational Safety and Health Act (29 U.S.C. ss.ss. 651 et seq.),
the Federal Insecticide, Fungicide and Rodenticide Act (7 U.S.C. ss. 136 et
seq.) and the state analogies thereto.
"Environmental Permits" has the meaning set forth in Section 4.11(a).
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"ERISA Affiliate" means any Person that, together with Seller, is or
was at any time treated as a single employer under Section 414 of the Code or
Section 4001 of ERISA, and any general partnership of which Seller is or has
been a general partner.
"Excluded Assets" has the meaning set forth in Section 2.2.
"Excluded Liabilities" has the meaning set forth in Section 2.4.
"Financial Statements" has the meaning set forth in Section 4.4.
"GAAP" means generally accepted accounting principles in the United
States.
"Governmental Authority" means any federal, state, local or other
governmental, regulatory or administrative agency, commission, department,
board, or other governmental subdivision, court, tribunal, arbitrating body or
other governmental authority.
"Hazardous Substances" means (i) any petrochemical, petroleum products
or any byproducts or fractions thereof, any form of natural gas, oil or coal
ash, radioactive materials, radon gas, asbestos or asbestos-containing
materials, urea formaldehyde foam insulation, lead or lead-containing materials
and transformers or other equipment that contain dielectric fluid which may
contain levels of polychlorinated biphenyls ("PCBs"); (ii) any chemicals,
materials or substances defined as or included in the definition of "hazardous
substances," "hazardous wastes," "hazardous materials," "hazardous
constituents," "restricted hazardous materials," "extremely hazardous
substances," "toxic substances," "contaminants," "pollutants," "toxic
pollutants" or words of similar meaning and regulatory effect under any
applicable Environmental Law; and (iii) any other chemical, material or
substance, exposure to which is prohibited, limited or regulated by any
applicable Environmental Law.
"Indemnifiable Loss" has the meaning set forth in Section 8.1(a).
"Indemnification Threshold" has the meaning set forth in Section 8.3.
"Indemnifying Party" has the meaning set forth in Section 8.1(d).
"Indemnitee" has the meaning set forth in Section 8.1(d).
"Independent Accounting Firm" means the Boston office of
PricewaterhouseCoopers LLP, or such other firm as the Buyer and Seller may agree
upon.
"Intellectual Property" has the meaning set forth in Section 2.1(h).
"Inventory" means the inventory of the Business, including raw
materials, supplies, work-in-process and finished goods.
"Inventory Value" means the aggregate dollar value of the Inventory,
determined in accordance with the methodology set forth in Schedule 3.3.
"IRS" means the United States Internal Revenue Service or any successor
agency thereto.
"Knowledge" means the actual knowledge of the corporate officers or
managerial representatives of the specified Person charged with responsibility
for the particular function, after reasonable inquiry by them of selected
employees of such Person whom they believe, in good faith, to be the persons
responsible for the subject matter of the inquiry.
"Lease Guaranty" has the meaning set forth in the Sturbridge Property
Lease.
"Lessee" means Burle Electro-Optics, Inc., a Delaware corporation.
"License Agreement" means the agreement between Seller and Buyer, or
Lessee, in substantially the form attached hereto as Exhibit D.
"March 31 Balance Sheet" has the meaning set forth in Section 4.4.
"Material Adverse Effect" means any change (or changes taken together)
in, or effect on, the Purchased Assets or the Business that is materially
adverse to the operations or condition (financial or otherwise) of the Purchased
Assets or the Business, taken as a whole.
"New Employees" has the meaning set forth in Section 6.10(a).
"Party" (and the corresponding term "Parties") has the meaning set
forth in the preamble.
"PBGC" means the Pension Benefit Guaranty Corporation established by
ERISA.
"Permits" has the meaning set forth in Section 4.19.
"Permitted Encumbrances" means: (i) statutory liens for Taxes or other
governmental charges or assessments not yet due; (ii) mechanics', carriers',
workers', repairers' and other similar liens arising or incurred in the ordinary
course of business relating to obligations not yet due; (iii) zoning,
entitlement, conservation restriction and other land use and environmental
regulations by Governmental Authorities that do not materially, individually or
in the aggregate, detract from the value of the Purchased Assets as currently
used or interfere with the present use of the Purchased Assets; and (iv)
Encumbrances, which have previously been disclosed to Buyer, with respect to
property that is the subject of the Precious Metal Lease.
"Person" means any individual, partnership, limited liability company,
joint venture, corporation, trust, unincorporated organization, or governmental
entity or any department or agency thereof.
"Precious Metal Lease" means that certain Master Precious Metal Lease
Agreement No. 166 between Seller and Johnson Matthey Inc. dated September 2,
1998.
"Proprietary Information" means any non-public information regarding
the Business or the Purchased Assets.
"Purchased Assets" has the meaning set forth in Section 2.1.
"Purchase Price" has the meaning set forth in Section 3.2.
"Release" means any spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, leaching, dumping or disposing of
Hazardous Substances into the Environment.
"Remediation" means action of any kind to address a Release, the threat
of a Release or the presence of Hazardous Substances at a site or an off-site
location including, without limitation, any or all of the following activities
to the extent they relate to or arise from the presence of a Hazardous Substance
at a site or an off-site location: (i) monitoring, investigation, assessment,
treatment, cleanup, containment, removal, mitigation, response or restoration
work; (ii) obtaining any permits, consents, approvals or authorizations of any
Governmental Authority necessary to conduct any such activity; (iii) preparing
and implementing any plans or studies for any such activity; (iv) obtaining a
written notice from a Governmental Authority with jurisdiction over a site or an
off-site location under Environmental Laws that no material additional work is
required by such Governmental Authority; (v) the use, implementation,
application, installation, operation or maintenance of removal actions on a site
or an off-site location, remedial technologies applied to the surface or
subsurface soils, excavation and off-site treatment or disposal of soils,
systems for long term treatment of surface water or ground water, engineering
controls or institutional controls; and (vi) any other activities required under
Environmental Laws to address the presence or Release of Hazardous Substances at
a site or an off-site location.
"Representatives" of a Party means the Party and its directors,
officers, employees, agents, and advisors (including, without limitation,
accountants, counsel, environmental consultants, financial advisors and other
authorized representatives).
"Seller" has the meaning set forth in the preamble.
"Seller's Agreements" has the meaning set forth in Section 2.1(d).
"Seller Indemnitee" has the meaning set forth in Section 8.1(a).
"Seller's Required Regulatory Approvals" has the meaning set forth in
Section 4.3.
"Shared Assets" means those assets of Seller, which are used in the
Business and which are listed on Schedule 2.1(l).
"Sturbridge Property" means the real property of Seller located in
Sturbridge, Massachusetts, used by the Business, the possession and use of which
is granted to Buyer, or Lessee, pursuant to the Sturbridge Property Lease.
"Sturbridge Property Lease" means the Lease Agreement between Seller
and Buyer, or Lessee, in substantially the form attached hereto as Exhibit B to
be executed at the Closing.
"Tangible Personal Property" has the meaning set forth in Section
2.1(c).
"Taxes" means all taxes, charges, fees, levies, penalties or other
assessments imposed by any federal, state or local or foreign taxing authority,
including, but not limited to, income, excise, real or personal property, sales,
transfer, franchise, payroll, withholding, social security, gross receipts,
license, stamp, occupation, employment or other taxes, including any interest,
penalties or additions attributable thereto.
"Tax Return" means any return, report, information return, declaration,
claim for refund or other document (including any schedule or related or
supporting information) required to be supplied to any taxing authority with
respect to Taxes.
"Termination Date" has the meaning set forth in Section 9.1(b).
"Third Party Claim" has the meaning set forth in Section 8.2(a).
"Transferable Permits" has the meaning set forth in Section 2.1(e).
"Transition Services Agreement" means the agreement between Seller and
Buyer, or its designee, in substantially the form attached hereto as Exhibit C
to be executed at Closing.
"Working Capital Adjustment" has the meaning set forth in Section
3.3(a).
"Working Capital Amount" means, as of the Closing Date, (i) the sum of
Accounts Receivable Value plus Inventory Value plus prepaid items and unbilled
costs and fees, if any, minus (ii) the sum of Assumed Accrued Expenses plus
Accounts Payable, plus the Burle Retiree Medical Plan Liability Accrual.
"Working Capital Statement" has the meaning set forth in Section
3.3(c).
"Year 2000 Compliant," "Year 2000 Qualified" and "Year 2000 Ready" have
the meanings set forth in Section 4.21. "Year 2000 Qualification" has a meaning
correlative to Year 2000 Qualified.
Certain Interpretive Matters. In this Agreement, unless the context
otherwise requires, the singular shall include the plural, the masculine shall
include the feminine and neuter, and vice versa. The term "includes" or
"including" shall mean "including without limitation." References to a Section,
Article, Exhibit or Schedule shall mean a Section, Article, Exhibit or Schedule
of this Agreement, and reference to a given agreement or instrument shall be a
reference to that agreement or instrument as modified, amended, supplemented and
restated through the date as of which such reference is made.
ARTICLE 2
PURCHASE AND SALE
2.1. Sale of Assets. Upon the terms and subject to the satisfaction of
the conditions contained in this Agreement and except as otherwise provided in
Section 2.2, at the Closing Seller will grant, sell, assign, convey, transfer
and deliver to Buyer, and Buyer will purchase and acquire from Seller, free and
clear of all Encumbrances (except Permitted Encumbrances) all of Seller's right,
title and interest in and to all of the assets (other than Excluded Assets)
constituting or used in the Business, including those assets described below,
each as in existence on the Closing Date (collectively, "Purchased Assets"):
(a) the business and operations of the Business as a going
concern and all of Seller's goodwill related to the Business, including, without
limitation, all customer and supplier lists, all sales, marketing and other
records, technical information and all files and correspondence, in whatever
form, of the Business;
(b) all Accounts Receivable and Inventory;
(c) all machinery, equipment (including computer hardware,
software and telephones and other communications equipment), vehicles, tools,
dies, fixtures, spare parts, furniture and furnishings and other personal
property, wherever located, used in the operation of the Business, whether
currently in use or idle, including the items of personal property included in
Schedule 2.1(c) (collectively, "Tangible Personal Property");
(d) subject to the provisions of Section 6.4(c), all
contracts, agreements, sales orders, purchase orders, licenses and leases
relating to the Business (collectively, "Seller's Agreements") set forth in
Schedule 2.1(d) and other purchase and sales orders and other agreements entered
into in the ordinary course of business of the Business and not required to be
listed on Schedule 2.1(d);
(e) all Permits and Environmental Permits that may be
transferred to Buyer without a filing with, notice to, consent or approval of
any Governmental Authority, including those set forth on Schedule 2.1(e) (the
"Transferable Permits");
(f) all books, operating records, operating, safety and
maintenance manuals, inspection reports, engineering design plans, documents,
blueprints, specifications, procedures and similar items of Seller, wherever
located, relating primarily to the Business or the Purchased Assets (and copies
of such other documents related to the Business or the Purchased Assets that are
reasonably requested by Buyer, including, to the extent not otherwise prohibited
by law, copies of all confidential employment records and files of the New
Employees, which are hereby requested);
(g) all express and implied warranties and guarantees from
third parties with respect to any property constituting part of the Purchased
Assets;
(h) all rights under any patent, trademark, service mark,
logo, tradename, copyright or invention, technology, method, formulation,
know-how and other intellectual property owned by Seller (i) now, or at any
prior date, used in the Business and (ii) to the extent Seller presently has any
rights therein, whether registered or unregistered, and all pending applications
for registrations therefor, including those as set forth in Schedule 2.1(h)
(collectively, the "Intellectual Property").
(i) rights of Seller under any liability insurance policies
now or heretofore in effect to the extent any claim is made against Buyer with
respect to liabilities and obligations of Seller that are not Assumed
Liabilities and Obligations (subject to such required consents as may be listed
on Schedule 4.3);
(j) all rights or choses in action against third parties
relating to the Business;
(k) the GALHRIS, Dell Poweredge 4100, GALSQL1, Dell Poweredge 6100 and
GALWORK, Dell Poweredge 4200 servers; and
(l) those Shared Assets listed in Schedule 2.1(1) which are
specifically designated as part of the Purchased Assets.
2.2. Excluded Assets. Notwithstanding anything to the contrary in this
Agreement, nothing in this Agreement will constitute or be construed as
conferring on Buyer, and Buyer is not acquiring, any right, title or interest in
or to, the following specific assets which are associated with the Business (the
"Excluded Assets"):
(a) cash on hand and on deposit in bank accounts;
(b) any interest in the Sturbridge Property or any other real
property of Seller, except to the extent granted by the Sturbridge Property
Lease;
(c) any rights that accrue or will accrue to Seller under this
Agreement;
(d) any rights of Seller with regard to Taxes or Tax refunds;
(e) the originals of all confidential employment records and
files of the New Employees, as well as the corporate seal, minute books, stock
books and other records relating to the corporate organization of Seller and the
general ledger and other original accounting records of Seller;
(f) the name "Galileo" and any trademark or tradename using
the name "Galileo" except as provided in the License Agreement;
(g) the other tangible and intangible property of Seller,
wherever located, not used in the operation of the Business;
(h) those Shared Assets listed in Schedule 2.1(1) which are
specifically designated as excluded from the Purchased Assets.
2.3. Assumed Liabilities and Obligations. At Closing, pursuant to the
Bill of Sale, Assignment and Assumption Agreement, Buyer, or its designee shall
assume only the following liabilities and obligations of Seller as they exist on
the Closing Date (collectively, "Assumed Liabilities and Obligations"):
(a) the Assumed Accrued Expenses;
(b) the Accounts Payable;
(c) all liabilities and obligations of Seller arising on or
after the Closing Date under Seller's Agreements and the Transferable Permits in
accordance with the terms thereof, except to the extent such liabilities or
obligations arise or have arisen out of any claim asserted by another party
thereto related to breach of contract, warranty (except as provided in Section
2.3(c)), tort, infringement or other default or alleged default by Seller; and
(d) service obligations and express warranty obligations of
Seller to correct services rendered, or to repair or replace defective products
of the Business shipped, prior to Closing Date, but only to the extent that
Buyer's costs associated therewith do not exceed the reserve therefor, included
in Assumed Accrued Expenses (provided, however, that: (i) to the extent Buyer's
costs associated therewith do exceed the reserve therefor, Buyer shall perform
the service obligation or express warranty work during the life of the warranty
and invoice Seller at Buyer's full absorption cost for such correction, repair
or replacement; and (ii) to the extent Buyer's costs associated with any single
claim exceeds $10,000, Buyer shall seek the approval of Seller, which approval
shall not be unreasonably withheld, to honor the service obligation or express
warranty at issue).
2.4. Excluded Liabilities. Except as expressly set forth in Section
2.3, Buyer shall not assume or be obligated to pay, perform or otherwise
discharge any liabilities or obligations of Seller, including the following (the
"Excluded Liabilities"):
(a) Any liabilities or obligations in respect of Taxes
attributable to the ownership, operation or use of Purchased Assets for taxable
periods, or portions thereof, ending before the Closing Date;
(b) Any liabilities or obligations of Seller accruing under
any of Seller's Agreements prior to the Closing Date;
(c) Except as provided in Section 2.3(d), any liabilities or
obligations in respect of any claim, regardless of when made or asserted, which
arises out of or is based upon negligence, strict liability or any express or
implied representation, warranty, agreement or guarantee made by Seller, or
alleged to have been made by Seller, or which is imposed or asserted to be
imposed by operation of law, in connection with any product of the Business
shipped or installed by or on behalf of Seller prior, or alleged to be prior to,
the Closing Date or for any service performed by or on behalf of Seller prior,
or alleged to be prior to, the Closing Date, including without limitation any
claim relating to the repair or replacement of any such product and any claim
seeking recovery for property damage, consequential damage, lost revenue or
income or personal injury;
(d) Any and all asserted or unasserted liabilities or
obligations to third parties (including employees) for personal injury or tort,
or similar causes of action arising out of the ownership or operation of the
Purchased Assets prior to the Closing Date;
(e) Any fines, penalties or costs imposed by a Governmental
Authority with respect to the Purchased Assets arising out of, or alleged to
have arisen out of, any conduct of Seller;
(f) Except as otherwise expressly provided in Section 2.3, any
payment obligations of Seller for goods delivered or services rendered prior to
the Closing Date;
(g) Any liability, obligation or responsibility under or
related to Environmental Laws or the common law, whether such liability,
obligation or responsibility is known or unknown, contingent or accrued (whether
or not arising or made manifest before the Closing Date or on or after the
Closing Date), arising as a result of or in connection with the disposal,
storage, transportation, discharge, Release, or recycling by Seller, or any
agent or contractor of Seller, of Hazardous Substances at any location,
including but not limited to, any off-site location, or the arrangement for such
activities, prior to the Closing Date, in connection with the ownership or
operation of the Business by Seller, or any agent or contractor of Seller;
(h) Any liabilities or obligations relating to personal
injury, discrimination, wrongful discharge, unfair labor practice or similar
claim or cause of action filed with or pending before any court or
administrative agency on the Closing Date with respect to the ownership and
operation of the Business or the Purchased Assets or where the facts forming a
basis for such claim or cause of action occurred prior to the Closing Date;
(i) Any liabilities or obligations relating to any Benefit
Plans, including any multi-employer plan contributed to at any time by Seller or
any ERISA Affiliate, or any multi-employer plan to which Seller or any ERISA
Affiliate is or was obligated at any time to contribute, including but not
limited to any liability (i) relating to benefits payable under any Benefit
Plans, (ii) relating to the PBGC under Title IV of ERISA, (iii) relating to a
multi-employer plan, (iv) with respect to non-compliance with the notice and
benefit continuation requirements of COBRA, (v) with respect to any
noncompliance with ERISA or any other applicable laws, or (vi) with respect to
any suit, proceeding or claim which is brought against Buyer, any Benefit Plan,
any fiduciary or former fiduciary of any such Benefit Plan;
(j) Any liabilities or obligations relating to the employment
or termination of employment, including discrimination, wrongful discharge,
unfair labor practices, or constructive termination by Seller of any individual
with respect to the Business, attributable to any actions or inactions by Seller
prior to the Closing Date;
(k) Any obligations for salary, wages, overtime, employment
taxes, severance pay, transition payments in respect of compensation or similar
benefits accruing or arising prior to the Closing Date under any term or
provision of any contract, plan, instrument or agreement relating to any of the
Purchased Assets; and
(l) Any other liability or obligation of Seller not
specifically assumed hereunder.
ARTICLE 3
THE CLOSING
3.1 Closing. Upon the terms and subject to the satisfaction of the
conditions contained in Article 7 of this Agreement, the sale, assignment,
conveyance, transfer and delivery of the Purchased Assets to Buyer, the payment
of the Purchase Price to Seller, and the consummation of the other respective
obligations of the Parties contemplated by this Agreement shall take place at a
closing (the "Closing"), to be held at the offices of Morgan, Lewis & Bockius
LLP, 1701 Market Street, Philadelphia, Pennsylvania at 10:00 a.m. local time, or
another mutually acceptable time and location, on July 1, 1999, or such other
date as the Parties may mutually agree. The date of Closing is hereinafter
called the "Closing Date." The Closing shall be effective for all purposes as of
12:01 a.m. local time on the Closing Date.
3.2 Purchase Price. The purchase price payable by Buyer for the
Purchased Assets pursuant to this Agreement (the "Purchase Price") is
$7,655,000, which amount is intended to be paid in part in cash, in part by
assumption of the Assumed Accrued Expenses and the Accounts Payable as of the
Closing Date, and in part by establishment by Buyer of the Burle Retiree Medical
Plan. The Purchase Price is subject to adjustment as provided herein. Buyer will
pay or cause to be paid to Seller the following:
(a) at Closing, Seven Million One Hundred Thousand Dollars
($7,100,000) in cash by wire transfer of immediately available funds or by such
other means as are agreed upon by Seller and Buyer; and
(b) upon completion of the adjustment process provided for in
Section 3.3, any unpaid balance of the Purchase Price that is payable in cash.
3.3 Adjustment to Purchase Price and Cash Payment.
(a) Purchase Price Adjustment. The Purchase Price shall be
increased or decreased, as the case may be, by the amount (the "Working Capital
Adjustment") by which the Working Capital Amount as of the Closing Date is
greater than or less than, as the case may be, $2,923,000.
(b) Physical Inventory. As provided in Schedule 3.3, Buyer and
Seller will take a physical inventory to determine the Inventory of the Business
as of the Closing Date. Buyer and Seller will each appoint a supervisor to plan
and direct the taking of the physical inventory and will notify each other of
the respective names of each such supervisor. If the supervisors determine it to
be appropriate, several physical inventory teams may be appointed. A team will
consist of at least one representative of Buyer and one representative of
Seller. The two supervisors will mutually agree upon the number of teams
required to accomplish the physical inventory in such a manner as to keep
interference with the operation of the Business at a minimum. In the absence of
manifest error, such inventory shall be conclusive and accepted as the final
inventory for that location.
(c) Statement of Adjustments. Within thirty (30) days after
the Closing Date, Seller, with Buyer's assistance, shall compute and deliver to
Buyer a proposed balance sheet of the Business (the "Closing Date Balance
Sheet"), prepared in accordance with the principles set forth on Schedule 3.3,
and a proposed statement (the "Working Capital Statement") prepared in
accordance with the procedures set forth on Schedule 3.3, setting forth
calculations provided for in Schedule 3.3, including the Working Capital Amount
as of the Closing Date and the adjustments to the Purchase Price provided for in
Sections 3.3(a) and (b), together with a reasonably detailed basis for
establishing such amounts. Upon Buyer's request, Seller shall also deliver to
Buyer copies of all documents, schedules, working papers and other factual
material used by Seller and its accountants in connection with the preparation
of the Closing Date Balance Sheet and the Working Capital Statement.
(d) Within thirty (30) days following its receipt of the
Closing Date Balance Sheet and the Working Capital Statement, Buyer shall
present Seller with a written statement setting forth Buyer's proposed
adjustments thereto, if any, together with a reasonably detailed explanation of
the reason for each such proposed adjustment. Buyer and Seller shall negotiate
in good faith to resolve any disagreement regarding Buyer's proposed
adjustments. If they are unable to do so within ninety (90) days after the
Closing Date, either Party shall have the right to refer the dispute to the
Independent Accounting Firm for resolution. The determination by the Independent
Accounting Firm with respect to the correctness of each item in dispute shall be
conclusive and binding on the Parties. All fees and expenses billed by the
Independent Accountant in connection with the resolution of disputes under this
Section 3.3(c) shall be borne one-half by Seller and one-half by Buyer.
(e) Payment of Adjustment. Any unpaid portion of the Purchase
Price payable by Buyer, together with required interest, if any, in accordance
with this Section, shall be paid in cash in immediately available funds within
five (5) Business Days after the determination thereof pursuant to Section
3.3(c). Any refund by Seller of any excess paid by Buyer shall be taken as a
deduction from the rental payments otherwise due under the Sturbridge Property
Lease. Any unpaid portion of the Purchase Price owed by Buyer, or any refund
thereof owed by Seller, shall begin to accrue interest at a rate of 7% per annum
beginning 45 days after the Closing Date, to the extent it has not been paid by
such time.
(f) Allocation of Purchase Price. The Parties agree that the
Purchase Price shall be allocated as set forth in Schedule 3.4 hereto, which
allocation is based upon the fair market values of the Purchased Assets and
conforms with the requirements of Section 1060 of the Code. Each Party agrees
not to assert, in connection with any tax return, tax audit or similar
proceeding, any allocation of the Purchase Price that differs from any
allocation agreed upon pursuant to this Schedule 3.4 hereto.
3.4 Prorations.
(a) Buyer and Seller agree that amounts, if any, relating to
the Business that cover periods both prior to and after the Closing Date and
that are normally prorated shall be prorated as of the Closing Date, with Seller
liable to the extent such items relate to any time period prior to the Closing
Date, and Buyer liable to the extent such items relate to periods commencing
with the Closing Date (measured in the same units used to compute the item in
question, otherwise measured by calendar days).
(b) In connection with the prorations referred to in (a)
above, in the event that actual figures are not available at the Closing Date,
the proration shall be based upon the actual Taxes or other amounts accrued
through the Closing Date or paid for the most recent year (or other appropriate
period) for which actual Taxes or other amounts paid are available. Such
prorated Taxes or other amounts shall be re-prorated and paid to the appropriate
Party within sixty (60) days of the date that the previously unavailable actual
figures become available. The prorations shall be based on the number of days in
a year or other appropriate period (i) before the Closing Date and (ii)
including and after the Closing Date. Seller and Buyer agree to furnish each
other with such documents and other records as may be reasonably requested in
order to confirm all adjustment and proration calculations made pursuant to this
Section 3.5.
3.5 Deliveries by Seller. At the Closing, Seller will deliver, or cause
to be delivered, the following to Buyer:
(a) The Bill of Sale, Assignment and Assumption Agreement, the
Transition Services Agreement, the License Agreement and the Sturbridge Property
Lease, duly executed by Seller;
(b) Copies of any and all governmental and other third party
consents, waivers or approvals obtained by Seller with respect to the transfer
of the Purchased Assets or the consummation of the transactions contemplated by
this Agreement;
(c) The opinion of counsel and officer's certificate
contemplated by Section 7.1;
(d) Copies, certified by the Secretary or Assistant Secretary
of Seller, of the Certificate of Incorporation and Bylaws of Seller and
resolutions adopted by the Board of Directors of Seller authorizing the
execution and delivery of this Agreement and all of the agreements and
instruments to be executed and delivered by Seller in connection herewith and
the consummation of the transactions contemplated hereby;
(e) A certificate of the Secretary or Assistant Secretary of
Seller identifying the name and title and bearing the signatures of the officers
of Seller authorized to execute and deliver this Agreement and the other
agreements and instruments contemplated hereby;
(f) A certificate of good standing with respect to Seller,
issued by the Secretaries of State of the State of Delaware and the Commonwealth
of Massachusetts, respectively;
(g) The originals of all Seller's Agreements and Transferable
Permits or, if originals are not available, true and correct copies thereof;
(h) All such other instruments of assignment, transfer or
conveyance as shall, in the reasonable opinion of Buyer and its counsel, be
necessary or desirable to transfer to Buyer the Purchased Assets in accordance
with this Agreement;
(i) Such affidavits or other documents in customary form as
Buyer's title insurance company may require in order to insure Buyer's leasehold
interest in the Sturbridge Property; and
(j) Such other agreements, documents, instruments and writings
as are required to be delivered by Seller at or prior to the Closing Date
pursuant to this Agreement or otherwise reasonably required in connection
herewith.
3.6 Deliveries by Buyer. At the Closing, Buyer will deliver, or cause
to be delivered, the following to Seller:
(a) The amount payable by Buyer at Closing pursuant to Section
3.2(a);
(b) The Bill of Sale, Assignment and Assumption Agreement, the
Transition Services Agreement, License Agreement and the Sturbridge Property
Lease, duly executed by Buyer, or Buyer's designee;
(c) The opinion of counsel and officer's certificate
contemplated by Section 7.2;
(d) Copies, certified by the Secretary or Assistant Secretary
of Buyer, of the Articles of Incorporation and Bylaws of Buyer and Lessee and
resolutions adopted by the Board of Directors of Buyer and Lessee authorizing
the execution and delivery of this Agreement, the Lease, the Lease Guaranty and
all of the agreements and instruments to be executed and delivered by Buyer in
connection herewith, and the consummation of the transactions contemplated
hereby and under the Lease and the Lease Guaranty (as applicable);
(e) Certificates of the Secretary or Assistant Secretary of
Buyer and Lessee identifying the name and title and bearing the signatures of
the officers of Buyer and Lessee authorized to execute and deliver this
Agreement, and the other agreements contemplated hereby;
(f) Certificates of good standing with respect to Buyer issued
by the Secretary of State of the Commonwealth of Pennsylvania and the Lessee
issued by the Secretary of State of Delaware and Secretary of State of the
Commonwealth of Massachusetts;
(g) All such other instruments of assumption as shall, in the
reasonable opinion of Seller and its counsel, be necessary for Buyer to assume
the Assumed Liabilities and Obligations and Permitted Encumbrances in accordance
with this Agreement; and
(h) Such other agreements, documents, instruments and writings
as are required to be delivered by Buyer at or prior to the Closing Date
pursuant to this Agreement or otherwise reasonably required in connection
herewith.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller hereby represents and warrants to Buyer as follows:
4.1 Organization; Qualification. Seller is a corporation duly
incorporated, validly existing and in good standing under the laws of the State
of Delaware and has all requisite corporate power and authority to own, lease,
and operate its properties and to carry on its business as it is now being
conducted. Seller, with respect to the Business, is in good standing, and
qualified to do business, in the Commonwealth of Massachusetts.
4.2 Authority Relative to this Agreement. Seller has full corporate
power and authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby. The execution and delivery of this Agreement
and the consummation of the transactions contemplated hereby have been duly and
validly authorized by all necessary corporate action required on the part of
Seller, and no other corporate proceedings on the part of Seller are necessary
to authorize this Agreement or to consummate the transactions contemplated
hereby. This Agreement has been duly and validly executed and delivered by
Seller, and, assuming that this Agreement constitutes a valid and binding
agreement of Buyer, constitutes the legal, valid and binding agreement of
Seller, enforceable against Seller in accordance with its terms, except that
such enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, fraudulent conveyance, moratorium or other similar laws
affecting or relating to the enforcement of creditors rights generally or
general principles of equity (regardless of whether enforcement is considered in
a proceeding at law or in equity).
4.3 Consents and Approvals; No Violation.
Except as set forth in Schedule 4.3, neither the execution and
delivery of this Agreement by Seller nor the consummation of the transactions
contemplated hereby will (i) conflict with or result in the breach or violation
of any provision of the Certificate of Incorporation or Bylaws of Seller, (ii)
require any consent, approval, authorization or permit of, or filing with or
notification or declaration to, any governmental or regulatory authority (the
filings and approvals referred to in Schedule 4.3 are collectively referred to
as "Seller's Required Regulatory Approvals"), (iii) require any consent,
approval or waiver under any of the terms, conditions or provisions of any note,
bond, mortgage, indenture, license, agreement or other instrument or obligation
to which Seller is a party or by which Seller, or any of the Purchased Assets
may be bound, except for such consents, approvals or waivers that have been
obtained, or (iv) violate any order, writ, injunction, decree, statute, rule or
regulation applicable to Seller or any of its assets, including the Purchased
Assets.
4.4 Financial Statements. Schedule 4.4 sets forth complete and correct
copies of (i) the unaudited balance sheet of the Business at March 31, 1999 and
the related statements of income, retained earnings and cash flows for the six
months then ended (the "March 31 Balance Sheet") and all notes and schedules
that are a part thereof and (ii) the unaudited balance sheets of the Business at
September 30, 1998, 1997 and 1996 and the related statements of income, retained
earnings and cash flows for the fiscal years then ended, and all notes and
schedules that are a part thereof (collectively, the "Financial Statements").
All such Financial Statements were prepared in accordance with GAAP, except as
specified in the footnotes to the Financial Statements, and, subject to the
matters contained in such footnotes, present fairly and accurately the financial
condition and results of operations and cash flows of the Business at March 31,
1999 and for the period covered.
4.5 Undisclosed Liabilities. Except as disclosed in Schedule 4.5,
Seller, with respect to the Business, is not liable for or subject to, and
Seller does not have any Knowledge of any basis for assertion against it with
respect to the Business of, any liabilities that are not adequately reflected,
reserved against or given effect to in the Financial Statements, except (a)
customary expenses and Accounts Payable that have arisen in the ordinary course
of business consistent with past practice since March 31, 1999, (b) liabilities
for obligations which are not required to have been performed prior to the
Closing under Seller's Agreements and (c) matters not required by GAAP to be
disclosed as liabilities on the Financial Statements of Seller which include
information concerning the Business.
4.6 Absence of Certain Changes or Events. With respect to the Business,
since March 31, 1999, except as set forth in Schedule 4.6, there has not been:
(a) any Material Adverse Effect, (b) any damage, destruction or casualty loss,
whether or not covered by insurance, (c) any agreement, commitment or
transaction entered into by Seller that is material to the ownership or
operation of the Purchased Assets, and (d) any sale or disposition of any fixed
assets except normal disposition of worn out or obsolete equipment in the
ordinary course of business.
4.7 Title. Except for Permitted Encumbrances and items disclosed in
Schedule 4.7, Seller has good and marketable title to the Sturbridge Property,
free and clear of all Encumbrances. The Sturbridge Property constitutes all of
the real property used in the operation of the Business. Except for Permitted
Encumbrances and matters disclosed on Schedule 4.7, Seller has good title to
each of the Purchased Assets free and clear of all Encumbrances.
4.8 Inventory. Except as set forth in Schedule 3.3 and Schedule 4.8,
the Inventory (a) was acquired and has been maintained in accordance with the
regular business practices of Seller with respect to the Business, (b) subject
to the reserves on the books of the Business, which have been disclosed to
Buyer, consists of new and unused items of a quality and quantity useable or
saleable in the ordinary course of business consistent with past practice, (c)
is owned by Seller free and clear of all Encumbrances, other than Permitted
Encumbrances, (d) subject to the reserves on the books of the Business, which
have been disclosed to Buyer, is valued using the methodology as set forth in
Schedule 3.3, and (e) subject to the reserves on the books of the Business, is
not obsolete, unusable, damaged, slow moving or unsaleable in the ordinary
course of business.
4.9 Accounts Receivable. Schedule 4.9 contains a list, including the
aging of, the Accounts Receivable at May 31, 1999. Except as set forth in
Schedule 3.3, all such Accounts Receivable, and any Accounts Receivable arising
after the date hereof and prior to Closing, (a) are valid and genuine, (b) arise
out of bona fide sales and deliveries of goods, performance of services or other
transactions in connection with the Business, (c) are not subject to defenses,
setoffs or counterclaims, and (d) are collectible in full (less any reserve for
bad debts set forth in Schedule 3.3) without resort to litigation or other
extraordinary collection efforts within 180 days of their due date.
4.10 Insurance. All policies of fire, liability, workers' compensation
and other forms of insurance owned or held by Seller and insuring the Purchased
Assets or the Business are in full force and effect, all premiums with respect
thereto covering all periods up to and including the date hereof, if due, have
been paid in full and no notice of cancellation or termination has been received
with respect to any such policy. Except as described in Schedule 4.10, Seller
has not been refused any insurance with respect to the Purchased Assets or the
Business since April 1, 1996, nor has its coverage been denied or limited by any
insurance carrier to which Seller has applied for any such insurance or with
which it has carried insurance since April 1, 1996. Schedule 4.10 sets forth a
true and correct summary of all insurance policies presently in effect and of
all insurance claims made since April 1, 1994.
4.11 Environmental Matters. Except as disclosed in Schedule 4.11:
Seller holds and is, and has been, in compliance with all
permits, certificates, licenses and governmental approvals, consents and
authorizations required under applicable Environmental Laws for Seller to own
and operate the Purchased Assets and the Business ("Environmental Permits");
(a) Seller and the Sturbridge Property are in compliance with
applicable Environmental Laws;
(b) Seller has not been notified by any Governmental Authority
or third party of any pending or threatened Environmental Claim against Seller
in connection with the Business and has no Knowledge of any event, condition or
circumstance which could give rise to such Environmental Claim;
(c) Seller has not been notified by any Governmental Authority
or any third party that Seller in connection with the Business may be a
potentially responsible party for environmental contamination or any Release or
Remediation of Hazardous Substances and has no Knowledge of any event, condition
or circumstance which could give rise to such potential responsibility;
(d) Seller has not in connection with the Business entered
into or agreed to any settlement agreement, consent decree or order with respect
to or affecting the Sturbridge Property or the Purchased Assets relating to
compliance with any Environmental Law or to investigation, Remediation or
cleanup of Hazardous Substances under any Environmental Law;
(e) there are no aboveground or underground storage tanks,
lagoons, pits or surface impoundments located on, in or under any properties
currently or formerly owned, operated or leased by Seller in connection with the
Business or any predecessor of the Business or Seller in connection with the
Business;
(f) no Releases of Hazardous Substances have occurred at,
from, in, on, to or under any property currently or formerly owned, operated or
leased by Seller in connection with the Business or any predecessor of Seller in
connection with the Business, and no Hazardous Substances are present in, on or
about or are migrating to or from any such property that could give rise to an
Environmental Claim by a Governmental Authority or third party against the
Business or Seller;
(g) Seller has not in connection with the Business nor has any
predecessor of Seller transported, treated, stored, handled or disposed of nor
arranged for the treatment, storage, handling, disposal or transportation of any
Hazardous Substance to any location that could result in an Environmental Claim
against or liability to the Business or Seller;
(h) there is no amount of asbestos, ureaformaldehyde material,
polychlorinated biphenyl containing equipment or lead or lead containing
materials in, at or on any property owned, leased or operated by Seller in
connection with the Business; and
(i) there have been no environmental investigations, studies,
audits or tests conducted by, on behalf of or which are in the possession of
Seller with respect to any property currently or formerly owned, leased or
operated by Seller in connection with the Business which have not been delivered
to Buyer prior to execution of this Agreement.
4.12 Employees. Schedule 4.12 lists all of the present employees of
Seller engaged for substantially all of their working time in the Business and
each such employee's position, location, social security number, date of hire,
current annual salary rate or hourly wage and date of last salary increase.
4.13 Labor Matters. Seller is not a party to any collective bargaining
agreement which relates to the Purchased Assets or the Business. With respect to
the ownership or operation of the Business, except as set forth in Schedule
4.13, (a) Seller is in compliance in all material respects with all applicable
laws respecting employment and employment practices, terms and conditions of
employment and wages and hours, (b) Seller has not received notice of any unfair
labor practice complaint pending before the National Labor Relations Board, (c)
there is no labor strike, slowdown or stoppage actually pending or threatened by
any authorized representative of any union or other representative of employees
against or affecting Seller, (d) Seller has not received notice that any
representation petition respecting the employees of Seller has been filed with
the National Labor Relations Board, and (e) Seller has not experienced any
primary work stoppage within the last five years.
4.14 Overtime, Back Wage, Vacation, Discrimination and Occupational
Safety Claims. With respect to the Business, there are no claims pending or, to
the Knowledge of Seller, threatened against Seller by any present or former
employee of Seller or any Governmental Authority, including, but not limited to,
claims for or on account of (a) wages, salary, severance or overtime pay, (b)
vacation pay or pay in lieu of vacation time off, or (c) any violation of any
regulation relating to minimum wages or maximum hours of work. No person
(including any Governmental Authority) has asserted or, to the Knowledge of
Seller, threatened a claim against Seller under or arising out of, and Seller is
not subject to any, judgment, order or inquiry relating to, any regulation
relating to discrimination, occupational safety in employment or employment
practices.
4.15 Benefit Plans.
(a) Schedule 4.15 contains a complete and accurate list of all
Benefit Plans. True, correct, and complete copies of all the following documents
with respect to each Benefit Plan, to the extent applicable, have been delivered
to Buyer: (i) all documents constituting the Benefit Plan, including but not
limited to, trust agreements, insurance policies, service agreements, and formal
and informal amendments thereto; (ii) all IRS determination letters for the
Benefit Plan; (iii) the most recent summary plan description and any amendments
or modifications thereof; (iv) all memoranda, minutes, resolutions and similar
documents describing the manner in which the Benefit Plan is or has been
administered or describing corrections to the administration of a Benefit Plan;
and (v) all employee manuals or handbooks containing personnel or employee
relations policies.
(b) Except as set forth in Schedule 4.15, Seller and the ERISA
Affiliates have fulfilled their respective obligations under the minimum funding
requirements of Section 302 of ERISA and Section 412 of the Code with respect to
each Benefit Plan which is an "employee pension benefit plan" as defined in
Section 3(2) of ERISA and to which Section 302 of ERISA applies, and each such
plan is in compliance in all material respects with the presently applicable
provisions of ERISA and the Code. Except as set forth in Schedule 4.15, neither
Seller nor any ERISA Affiliate has incurred any material liability under Title
IV of ERISA to the PBGC (other than premiums not yet due) in connection with any
Benefit Plan which is subject to Title IV of ERISA, and no condition exists that
could reasonably be expected to result in Seller or an ERISA Affiliate incurring
such material liability nor is there or has there been any reportable event (as
defined in Section 4043 of ERISA), which has not been waived by the PBGC with
respect to any Benefit Plan. Each of the Benefit Plans that is intended to be
qualified under Section 401(a) of the Code has been determined by the IRS to be
so qualified and exempt from tax under section 501(a) of the Code, and each such
determination remains in effect and has not been revoked. Copies of the most
recent IRS determination letters, if any, applicable to the Benefit Plans have
been delivered to Buyer. To the Knowledge of Seller, nothing has occurred with
respect to the design or operation of any Qualified Plan that could cause the
loss of such qualification or exemption or the imposition of any liability,
lien, penalty, or tax under ERISA or the Code.
(c) Seller does not contribute to, and has never contributed
to or had any other liability with respect to, a multiemployer plan as defined
in Section 3(37) of ERISA.
(d) Seller has no material liability with respect to any
benefit plan or arrangement other than the Benefit Plans.
(e) With respect to each Benefit Plan, there has occurred no
non-exempt "prohibited transaction" (within the meaning of Section 4975 of the
Code or Section 406 of ERISA) or breach of any fiduciary duty described in
Section 404 of ERISA that could result in any material liability, direct or
indirect, for Seller.
(f) Seller has not incurred any material liability for any
excise, income or other taxes or penalties with respect to any Benefit Plan, and
no event has occurred and no circumstance exists or has existed that could give
rise to any such material liability. There are no pending or to the Knowledge of
Seller threatened material claims by or on behalf of any Benefit Plans, or by or
on behalf of any participants or beneficiaries of any Benefit Plans or other
persons (other than routine claims for benefits), alleging any breach of
fiduciary duty on the part of Seller or any of its officers, directors or
employees under ERISA or any applicable law, or claiming benefit payments other
than those made in the ordinary operation of such plans, nor to the Knowledge of
Seller is there any basis for any such claim. No Benefit Plan is presently under
audit or examination (nor has notice been received of a potential audit or
examination) by the IRS, the Department of Labor, or any other governmental
entity.
(g) No Benefit Plan contains any provision or is subject to
any law that would prohibit the transactions contemplated by this Agreement or
that would give rise to any vesting of benefits, severance, termination, or
other payments or liabilities as a result of the transactions contemplated by
this Agreement, and no payments or benefits under any Benefit Plan or other
agreement of Seller will be considered "excess parachute payments" under Section
280G of the Code. Seller has not declared or paid any bonus compensation in
contemplation of the transactions contemplated by this Agreement.
4.16 Tangible Personal Property. Schedule 2.1(c) contains a listing of
all of the material Tangible Personal Property comprising the Purchased Assets
as of the date hereof. Except as set forth in Schedule 4.16, all Tangible
Personal Property is in good operating condition and repair (ordinary wear and
tear excepted) in all material respects and is useable in the ordinary course of
the Business consistent with past practice. Except for items leased to Seller
under leases disclosed in Schedule 4.17, and items subject to the Sturbridge
Property Lease or the Transition Services Agreement and the License Agreement,
no person other than Seller owns any equipment or other property used in the
operation of the Business.
4.17 Contracts and Arrangements.
(a) Listed in Schedule 2.1(d) are all contracts, agreements,
leases, commitments, understandings or instruments to which Seller is a party
with respect to the Business, except for purchase and sale orders and other
non-material agreements entered into in the ordinary course of business
involving amounts less than $10,000. Other than contracts described pursuant to
the preceding sentence, Seller is not with respect to the Business a party to
any written contract, agreement, lease, commitment, understanding or instrument
which is material to the ownership or operation of the Purchased Assets, and no
third party has any contract, agreement or other legal or equitable right to
acquire any of the Purchased Assets or any interest therein. True, correct and
complete copies of Seller's Agreements have been delivered to Buyer.
(b) Except as disclosed in Schedule 4.17, each of Seller's
Agreements (i) constitutes the legal, valid and binding obligation of Seller,
and constitutes the legal, valid and binding obligation of the other parties
thereto, (ii) is in full force and effect, and (iii) may be transferred or
assigned to Buyer at the Closing without consent or approval of the other
parties thereto, and will continue in full force and effect thereafter, in each
case without breaching the terms thereof or resulting in the forfeiture or
impairment of any material rights thereunder.
(c) Except as set forth in Schedule 4.17, there is not, under
any of Seller's Agreements, any material default or event which, with notice or
lapse of time or both, would constitute a default on the part of any of Seller,
or to the Knowledge of Seller, any other party, except such events of default
and other events as to which requisite waivers or consents have been obtained.
4.18 Litigation and Claims. Schedule 4.18 contains a list and brief
description of any and all litigation, including any settlement thereof, to
which Seller has been a party with respect to the Business or the Purchased
Assets since April 1, 1994. Except as disclosed on Schedule 4.18, there is no
claim, action, proceeding or investigation pending or, to the Knowledge of
Seller, threatened against Seller with respect to the Business, and to the
Knowledge of Seller, no event has occurred that provides a reasonable basis for
a material claim, action, proceeding or investigation against Seller with
respect to the Business.
4.19 Permits.
(a) Seller has all permits, licenses, franchises and other
governmental authorizations, consents and approvals (collectively, "Permits")
used in or necessary for the ownership and operation of the Purchased Assets.
Except as set forth in Schedule 4.19, since April 1, 1994, Seller has not
received any written notification that it is in violation of any of such
Permits, or any law, statute, order, rule, regulation, ordinance or judgment of
any governmental or regulatory body or authority applicable to it. Seller is in
compliance in all material respects with all Permits, laws, statutes, orders,
rules, regulations, ordinances, or judgments of any governmental or regulatory
body or authority applicable to the Purchased Assets or the Business.
(b) Schedule 4.19 sets forth a listing of all Permits and
Environmental Permits other than Transferable Permits.
4.20 Taxes. Except as set forth on Schedule 4.20, Seller has filed all
Tax Returns and paid all Taxes that could become an Encumbrance on any of the
Purchased Assets.
4.21 Year 2000 Qualification. Except as listed in Schedule 4.21, all of
the hardware, software and firmware products (including embedded
microcontrollors in non-computer equipment) which are included in the Purchased
Assets or which constitute a part of the Sturbridge Property are Year 2000
Qualified. For purposes of this Agreement, "Year 2000 Qualified" shall mean that
all constituent software, controllers, central processing units, and other
computer equipment, including all components, applications and modules thereof,
are either "Year 2000 Compliant" or "Year 2000 Ready." As used herein (a) the
term "Year 2000 Compliant" means computer systems or applications that
accurately process date/time data (including but not limited to calculating,
comparing, and sequencing) from, into, and between the twentieth and
twenty-first centuries, the years 1999 and 2000, and leap-year calculations and
(b) the term "Year 2000 Ready" means a computer system or application that has
been determined to be suitable for continued use into the year 2000 even though
the computer system or application is not fully Year 2000 Compliant.
4.22 Patents, Trademarks and Copyrights. Except as listed on Schedule
2.1(h), Seller, with respect to the Business, does not hold or utilize any (a)
patents, (b) registered or unregistered trademarks or service marks or (c)
registered copyrights, and there are no pending applications for any of the
foregoing. Except as set forth in Schedule 4.22, the Business does not conflict
with or infringe upon any such patents, copyrights, trademarks, service marks or
applications that are owned or claimed by any third party. Except as set forth
in Schedule 4.22, Seller lawfully owns or possesses the right to use all patents
or proprietary information used in the conduct of the Business, and Seller is
not required to pay any royalty, license fee or similar type of compensation in
connection with the conduct of the Business.
4.23 Transactions with Affiliates. Except as disclosed in Schedule
4.23, none of the directors or officers of Seller, directly or indirectly, has
business arrangements or relationships of any kind with Seller with respect to
the Business. Except as set forth in Schedule 4.23, any such arrangement and
relationship has been on substantially the same terms and conditions as similar
transactions between Seller and non-affiliated parties and are properly recorded
on the books and records of Seller.
4.24 Purchased Assets. Except with respect to certain of the Shared
Assets set forth on Schedule 2.1(l), to Seller's Knowledge, there are no other
assets, other than the Purchased Assets, used by the Business.
4.25 Completeness and Accuracy. (a) All information set forth on any
Schedule hereto is true, correct and complete in all material respects. No
representation or warranty of Seller contained in this Agreement or in any
certificate delivered pursuant hereto contains or will contain an untrue
statement of material fact, or omits or will omit to state any material fact
necessary to make the statements made therein not misleading. All contracts,
permits and other documents and instruments furnished or made available to Buyer
by Seller are or will be true, complete and accurate originals or copies of
originals and include all amendments, supplements, waivers and modifications
thereto. There is no fact, development or threatened development (excluding
general economic factors affecting business in general) that Seller has not
disclosed to Buyer in writing that materially adversely affects or, so far as
Seller can now foresee, may materially adversely affect, the Business or the
Purchased Assets
(b) The information provided in the Schedules, which have been
numbered in accordance with the sections of the Agreement to which they relate,
shall be deemed to supplement and be part of the representations and warranties
of the Seller contained in the Agreement. All information provided in the
Schedules shall be construed as exceptions to the representations and warranties
contained in the Agreement, unless otherwise indicated by the context.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Seller as follows:
5.1 Organization. Buyer is a corporation duly incorporated, validly
existing and in good standing under the laws of the Commonwealth of Pennsylvania
and has all requisite power and authority to own, lease and operate its
properties and to carry on its business as is now being conducted.
5.2 Authority Relative to this Agreement. Buyer has full power and
authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby. The execution and delivery of this Agreement
and the consummation of the transactions contemplated hereby have been duly and
validly authorized by all necessary action required on the part of Buyer and no
other proceedings on the part of Buyer are necessary to authorize this Agreement
or to consummate the transactions contemplated hereby. This Agreement has been
duly and validly executed and delivered by Buyer, and assuming that this
Agreement constitutes a valid and binding agreement of Seller, constitutes a
valid and binding agreement of Buyer, enforceable against Buyer in accordance
with its terms, except that such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium or
other similar laws affecting or relating to enforcement of creditors' rights
generally or general principles of equity.
5.3 Consents and Approvals; No Violation.
Except as set forth in Schedule 5.3, neither the execution and
delivery of this Agreement by Buyer nor the purchase by Buyer of the Purchased
Assets pursuant to this Agreement will (i) conflict with or result in any breach
of any provision of the Articles of Incorporation or Bylaws of Buyer, (ii)
require any consent, approval, authorization or permit of, or filing with or
notification to, any Governmental Authority, (iii) require any consent, approval
or waiver under any of the terms, conditions or provisions of any note, bond,
mortgage, indenture, agreement, lease or other instrument or obligation to which
Buyer is a party or by which any of its assets may be bound, except for such
consents, approvals or waivers that have been obtained, or (iv) violate any
order, writ, injunction, decree, statute, rule or regulation applicable to
Buyer.
5.4 Availability of Funds. Buyer has available sufficient funds or
commitments of lenders to enable Buyer to pay the portion of the Purchase Price
due on the Closing Date and to enable Buyer timely to perform all of its
obligations under this Agreement.
ARTICLE 6
COVENANTS OF THE PARTIES
6.1 Conduct of Business Relating to the Purchased Assets. Except to the
extent Buyer otherwise consents in writing, during the period from the date of
this Agreement to the Closing Date, Seller shall operate the Business in the
ordinary course consistent with past practice, shall use Commercially Reasonable
Efforts to preserve intact the Purchased Assets and preserve the goodwill and
relationships with customers, employees, suppliers and others having business
dealings with it with respect thereto, shall maintain the insurance coverage
described in Section 4.10, and shall comply with all applicable laws, rules and
regulations relating to the Purchased Assets, including without limitation, all
Environmental Laws. Without limiting the generality of the foregoing, and,
except as contemplated in this Agreement, or as required under applicable law or
by any Governmental Authority, prior to the Closing Date, without the prior
written consent of Buyer, Seller will not with respect to the Business or the
Purchased Assets:
(a) sell, lease (as lessor), pledge, encumber, restrict,
transfer or otherwise dispose of, or grant any right with respect to, any of the
Purchased Assets, other than Inventory sold, used, consumed or replaced in the
ordinary course of business consistent with past practice;
(b) modify, amend or voluntarily terminate prior to the
expiration date thereof any of Seller's Agreements or any material Permit or
Environmental Permits or waive any material default by, or release, settle or
compromise any claim against, any other party thereto, other than in the
ordinary course of business;
(c) enter into any commitment or contract for the purchase or
sale of goods or services that will be delivered or provided after the Closing
Date except purchase and sale orders entered into in the ordinary course of
business consistent with past practice in amounts not exceeding $10,000;
(d) hire any new employees, terminate or transfer any existing
full-time employees of the Business, except terminations for cause or
termination of employees not to be offered employment by Buyer or change the
salaries, wages or benefits of any employees to be offered employment Buyer; or
(e) enter into any written or oral contract, agreement,
commitment or arrangement with respect to any of the matters set forth in the
foregoing paragraphs (a) through (d).
6.2 Access to Information.
(a) Between the date of this Agreement and the Closing Date,
Seller will, during ordinary business hours and upon reasonable notice (i) give
Buyer and its representatives reasonable access to all books, records, plants,
offices and other facilities and properties constituting the Purchased Assets,
(ii) permit Buyer to make such reasonable inspections thereof as Buyer may
reasonably request, (iii) furnish Buyer with such financial and operating data
and other information available to Seller with respect to the Business and the
Purchased Assets as Buyer may from time to time reasonably request and (iv)
furnish Buyer a copy of each material report, schedule or other document filed
or received by Seller with respect to the Purchased Assets with any Governmental
Authority having jurisdiction over the Purchased Assets; provided, however, that
any such investigation shall be conducted in such a manner as not to interfere
unreasonably with the operation of the Purchased Assets.
(b) Seller agrees (i) not to release any Person (other than
Buyer) from any confidentiality agreement now existing with respect to the
Purchased Assets or the Business, or waive or amend any provision thereof, and
(ii) to assign any rights arising under any such confidentiality agreement (to
the extent assignable) to Buyer.
(c) Except as required by law, unless otherwise agreed to in
writing by Buyer, Seller shall (i) keep all Proprietary Information confidential
and not disclose or reveal any Proprietary Information to any Person, and (ii)
not use Proprietary Information for any purpose other than consistent with the
terms of this Agreement. Seller shall continue to hold all Proprietary
Information according to the same internal security procedures and with the same
degree of care regarding its secrecy and confidentiality as currently applicable
thereto. Seller shall notify Buyer of any unauthorized disclosure to third
parties that it discovers, and shall endeavor to prevent any further such
disclosures.
(d) After the Closing Date, in the event that Seller is
requested pursuant to, or required by, applicable law or regulation or by legal
process to disclose any Proprietary Information, Seller shall use its best
efforts to provide Buyer with prompt notice of such request or requirement in
order to enable Buyer to seek an appropriate protective order or other remedy,
to consult with Seller with respect to taking steps to resist or narrow the
scope of such request or legal process, or to waive compliance, in whole or in
part, with the terms of this Section 6.2(d). Seller agrees not to oppose any
action by Buyer to obtain a protective order or other appropriate remedy after
the Closing Date. In the event that no such protective order or other remedy is
obtained, or Buyer waives compliance with the terms of this Section 6.2(d),
Seller shall furnish only that portion of the Proprietary Information which
Seller is advised by counsel is legally required. In any such event, Seller
shall use its Commercially Reasonable Efforts, but at Buyer's expense, to ensure
that all Proprietary Information that is so disclosed will be accorded
confidential treatment.
6.3 Expenses. Except to the extent specifically provided herein,
whether or not the transactions contemplated hereby are consummated, all costs
and expenses incurred in connection with this Agreement and the transactions
contemplated hereby shall be borne by the Party incurring such costs and
expenses.
6.4 Further Assurances; Cooperation.
(a) Subject to the terms and conditions of this Agreement,
each of the Parties hereto will use Commercially Reasonable Efforts to take, or
cause to be taken, all action, and to do, or cause to be done, all things
necessary, proper or advisable under applicable laws and regulations to
consummate and make effective the sale of the Purchased Assets pursuant to this
Agreement, including without limitation using Commercially Reasonable Efforts to
ensure satisfaction of the conditions precedent to each Party's obligations
hereunder. Neither of the Parties hereto will take or fail to take any action
which would reasonably be expected to prevent or materially impede, interfere
with or delay the transactions contemplated by this Agreement.
(b) From time to time after the Closing Date, without further
consideration, Seller will, at Buyer's expense, execute and deliver to Buyer
such documents as Buyer may reasonably request in order to more effectively
consummate the sale and purchase of the Purchased Assets or to more effectively
vest in Buyer good and marketable title to the Purchased Assets subject to the
Permitted Encumbrances. From time to time after the Closing Date, without
further consideration, Buyer will, at Seller's expense, execute and deliver to
Seller such documents as Seller may reasonably request in order to evidence
Buyer's assumption of the Assumed Liabilities and Obligations.
(c) To the extent that Seller's rights under any Seller's
Agreement may not be assigned without the consent of another Person which
consent has not been obtained, this Agreement shall not constitute an agreement
to assign the same if an attempted assignment would constitute a breach thereof
or be unlawful, and Seller, at its expense, shall use Commercially Reasonable
Efforts to obtain any such required consent as promptly as possible. Seller and
Buyer agree that if any consent to an assignment of any Seller's Agreement shall
not be obtained or if any attempted assignment would be ineffective or would
impair Buyer's rights and obligations under the applicable Seller's Agreement so
that Buyer would not in effect acquire the benefit of all such rights and
obligations, Seller, to the maximum extent permitted by law and such Seller's
Agreement, shall after the Closing appoint Buyer to be Seller's representative
and agent with respect to such Seller's Agreement, and Seller shall, to the
maximum extent permitted by law and such Seller's Agreement, enter into such
reasonable arrangements with Buyer as are necessary to provide Buyer with the
benefits and obligations of such Seller's Agreement. Seller and Buyer shall
cooperate and shall each use Commercially Reasonable Efforts after the Closing
to obtain an assignment of such Seller's Agreement to Buyer.
6.5 Public Statements. Except as required by law or any stock exchange
rules, the Parties shall consult with each other before issuing any public
announcement, statement or other disclosure with respect to this Agreement or
the transactions contemplated hereby and shall not issue any such public
announcement, statement or other disclosure prior to such consultation and
agreement on the contents thereof.
6.6 Consents and Approvals.
(a) Seller and Buyer shall cooperate with each other and (i)
promptly prepare and file all necessary documentation, (ii) effect all necessary
applications, notices, petitions and filings and execute all agreements and
documents, (iii) use Commercially Reasonable Efforts to obtain the transfer or
reissuance to Buyer of all necessary Transferable Permits, consents, approvals
and authorizations of all Governmental Authority and (iv) use Commercially
Reasonable Efforts to obtain all necessary consents, approvals and
authorizations of all other parties, necessary or advisable to consummate the
transactions contemplated by this Agreement or required by the terms of any
note, bond, mortgage, indenture, deed of trust, license, franchise, permit,
concession, contract, lease or other instrument to which Seller or Buyer is a
party or by which any of them is bound.
(b) Seller and Buyer shall cooperate with each other and
promptly prepare and file notifications with, and request Tax clearances from,
state and local taxing authorities in jurisdictions in which a portion of the
Purchase Price may be required to be withheld or in which Buyer would otherwise
be liable for any Tax liabilities of Seller pursuant to such state and local Tax
law.
(c) Buyer shall have the primary responsibility for securing
the transfer, reissuance or procurement of the Permits and Environmental Permits
(other than Transferable Permits) effective as of the Closing Date, to the
extent such Permits and Environmental Permits are capable of being transferred.
Seller shall cooperate with Buyer's efforts in this regard and assist in any
transfer or reissuance of a Permit or Environmental Permit held by Seller or the
procurement of any other Permit or Environmental Permit when so requested by
Buyer.
6.7 Fees and Commissions. Seller and Buyer each represent and warrant
to the other that no broker, finder or other Person is entitled to any brokerage
fees, commissions or finder's fees in connection with the transaction
contemplated hereby by reason of any action taken by the Party making such
representation. Seller and Buyer will pay to the other or otherwise discharge,
and will indemnify and hold the other harmless from and against, any and all
claims or liabilities for all brokerage fees, commissions and finder's fees
incurred by reason of any action taken by the indemnifying party.
6.8 Tax Matters.
(a) All transfer and sales taxes incurred in connection with
this Agreement and the transactions contemplated hereby shall be borne equally
by Buyer and Seller. The Parties will cooperate in the filing of all necessary
Tax Returns and other documentation with respect to all such transfer or sales
taxes.
(b) Buyer and Seller shall provide each other with such
assistance as may reasonably be requested by the other Party in connection with
the preparation of any Tax Return, any audit or other examination by any taxing
authority, or any judicial or administrative proceedings relating to liability
for Taxes, and each will retain and provide the requesting Party with any
records or information which may be relevant to such return, audit or
examination, proceedings or determination.
6.9 Notification of Changes. Prior to the Closing Date, each Party will
promptly advise the other in writing with respect to any matter arising after
execution of this Agreement which, if existing or occurring at the date of this
Agreement, would have been required to be set forth in this Agreement, including
any of the Schedules hereto. Nothing contained herein shall relieve Seller or
Buyer of any breach of representation, warranty or covenant under this Agreement
existing as of the date hereof or any subsequent date as of which such
representation, warranty or covenant shall have been made.
6.10 Employees.
Effective on the Closing Date, Buyer shall have extended
offers of employment to those employees of Seller listed on Schedule 6.10. (Such
employees who accept offers of employment by Buyer are hereinafter referred to
as "New Employees".) Seller shall have terminated the employment of all New
Employees immediately prior to the Closing Date.
(a) As of the Closing Date, the New Employees shall commence
participation in welfare benefit plans maintained by Buyer or its Affiliates.
Buyer shall waive all limitations as to pre-existing condition exclusions and
waiting periods with respect to the New Employees under the health insurance
plans, other than limitations or waiting periods that were in effect with
respect to such New Employees under the health insurance plans maintained by
Seller that have not been satisfied as of the Closing Date.
(b) The New Employees shall be given credit for all service
with Seller for purposes of eligibility and vesting for Buyer's 401(k) plan, as
well as for Buyer's vacation policies, sick days and similar plans and policies.
(c) Seller shall retain any obligation to make any severance
payments to which any employee of Seller who is not hired by Buyer may be
entitled and shall provide health care insurance continuation for such persons
as required by COBRA.
(d) To the extent permitted by applicable law, all employee
records for the New Employees shall be delivered promptly after the Closing Date
to Buyer.
(e) Buyer shall establish a retiree medical plan (the "Burle
Retiree Medical Plan"), comparable to that currently maintained by Seller, for
the New Employees.
6.11 Noncompetition and Nonsolicitation.
(a) Noncompetition. From the Closing Date until the fifth
(5th) anniversary thereof (the "Noncompete Period"), except with Buyer's prior
written consent, Seller will not, and will cause its controlled Affiliates not
to, directly or indirectly own, manage, operate, join, control, finance or
otherwise 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 their name to be used by or in connection
with, any business or enterprise engaged in the business of manufacturing,
marketing, selling or distributing of scientific detector and spectroscopy
products within the United States of America.
(b) Nonsolicitation. During the Noncompete Period, Seller will
not, and will cause its controlled Affiliates not to, directly or indirectly
call on or solicit for the purpose of diverting or take away from Buyer the
business of (including, without limitation, by divulging to any competitor or
potential competitor of Buyer the name of) any person, firm, corporation or
other entity who or which on the Closing Date was, or at any time during the two
years preceding the Closing Date had been, a customer of the Business or whose
identity was Known to Seller on the Closing Date as one whom or which the
Business intended to solicit within the succeeding year. Nothing contained in
this Section 6.11(b) shall be deemed to limit or impair, or be limited or
impaired by, the provisions of Section 6.11(a).
(c) Hiring of Seller's Employees. During the Noncompete
Period, Seller will not, and will cause its controlled Affiliates not to,
directly or indirectly hire or offer employment to, or induce any other person
to hire or offer employment to, any employee of the Business who is employed by
Buyer after the Closing Date, unless Buyer first terminates the employment of
such employee, nor will Seller induce any such employee to terminate his or her
employment with Buyer.
(d) Remedies for Breach. Seller acknowledges that (i) the
provisions of this Section 6.11 are reasonable and necessary to protect the
legitimate interests of Buyer, that any violation of this Section 6.11 will
result in irreparable injury to Buyer and that damages at law would not be
reasonable or adequate compensation to Buyer for a violation of this Section
6.11, and (ii) Buyer shall be entitled to have the provisions of this Section
6.11 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 have an equitable accounting of all earnings,
profits and other benefits arising out of any violation of this Section 6.11. If
the provisions of this Section 6.11 should ever be deemed to exceed the time,
geographic, product or other limitations permitted by applicable law, then such
provisions shall be deemed reformed to the maximum time, geographic, product or
other limitations permitted by law. If a breach of this Section 6.11 occurs, the
running of the Noncompete Period shall be tolled during the time of such
violation and shall not continue to run until such violation has been fully and
finally cured.
6.12 Compliance with Environmental Corrective Action Program and Lead
Decontamination Protocol. Seller shall at its own cost and expense diligently
complete: (i) from and after the Closing Date, the Remediation of the Sturbridge
Property in compliance with applicable Environmental Laws, including but not
limited to the remedial approvals and corrective Action Program described in
Schedule 4.11 and timely complete all work and file all reports prescribed
thereon with the appropriate regulatory authorities; and (ii) the further
cleaning (with additional confirmatory wipe sampling) necessary to reduce
residual levels of lead to a concentration of less than 100 micrograms/100cm2 in
all the areas described in the document prepared by Spectrum Environmental
Services, Inc. labeled "Surface Wipes for Lead Contamination Post-Cleaning
Sample Results dated June 3, 1999," such further cleaning to be completed not
later than ten Business Days after the Closing Date. Seller shall furnish to
Buyer at its request copies of all test results, reports, requests for approval
and other correspondence to or from the United States Environmental Protection
Agency, the Massachusetts Department of Environmental Protection or any other
local governmental body in connection with the foregoing.
6.13 SEM Microscope. Buyer shall provide IPG Phonics Corporation
("IPG") with the opportunity to use the SEM Microscope, which is a part of the
Purchased Assets, when reasonably convenient for Buyer, up to two hours per
week, for a reasonable price and on such other reasonable terms and conditions
as IPG and Buyer may agree upon.
ARTICLE 7
CONDITIONS
7.1 Conditions to Obligations of Buyer. The obligation of Buyer to
purchase the Purchased Assets and to consummate the other transactions
contemplated by this Agreement shall be subject to the fulfillment at or prior
to the Closing Date of the following conditions:
(a) No preliminary or permanent injunction or other order or
decree by any federal or state court or Governmental Authority which prevents
the consummation of the sale of the Purchased Assets contemplated herein shall
have been issued and remain in effect and no proceeding therefor shall be
pending or threatened;
(b) Seller shall have performed and complied in all material
respects with the covenants and agreements contained in this Agreement which are
required to be performed and complied with by Seller on or prior to the Closing
Date;
(c) The representations and warranties of Seller set forth in
this Agreement that are qualified by materiality shall be true and correct in
all respects as of the Closing Date, and all other representations and
warranties shall be true and correct in all material respects as of the Closing
Date, in each case as though made at and as of the Closing Date;
(d) Buyer shall have received a certificate of Seller signed
by an authorized officer of Seller, dated the Closing Date, to the effect set
forth in Section 7.1(b) and (c);
(e) All consents and approvals for the consummation of the
sale of the Purchased Assets contemplated hereby required under the terms of any
note, bond, mortgage, indenture, material agreement or other instrument or
obligation to which Seller is party or by which Seller, or any of the Purchased
Assets, may be bound, shall have been obtained, other than those which if not
obtained, would not, individually or in the aggregate, create a Material Adverse
Effect;
(f) Buyer shall have received an opinion from Edwards &
Angell, LLP, Seller's counsel, dated the Closing Date and reasonably
satisfactory in form and substance to Buyer and its counsel, as to the matters
set forth in Exhibit E hereto;
(g) Seller shall have delivered, or caused to be delivered, to
Buyer at the Closing, Seller's closing deliveries described in Section 3.6;
(h) Seller shall have executed and delivered the Sturbridge
Property Lease and a memorandum thereof for recording;
(i) BankBoston N.A. and its Affiliates shall have delivered to
Buyer a release or releases of all liens on the Purchased Assets and a
nondisturbance agreement satisfactory to Buyer with respect to Buyer's lease of
the Sturbridge Property;
(j) Buyer shall have received from a title insurance company
selected by Buyer a title insurance policy insuring Buyer's leasehold interest
created by the Sturbridge Property Lease, subject only to Permitted Encumbrances
and other matters set forth on Schedule 4.7;
(k) Substantially all of the employees, as well as all of the
key managers, of the Business to whom Buyer has offered employment pursuant to
Section 6.10 shall have accepted such offers by Buyer;
(l) Since the date of this Agreement, no Material Adverse
Effect shall have occurred;
(m) Seller shall have executed and delivered the Transition
Services Agreement and the License Agreement; and
(n) Seller shall have executed and delivered such patent and
trademark assignments and other documents necessary to vest in Buyer ownership
of the Intellectual Property.
(o) Johnson Matthey, Inc. shall have entered into a new
precious metals lease with Buyer, which shall be in form and substance
satisfactory to Buyer.
7.2 Conditions to Obligations of Seller. The obligation of Seller to
sell the Purchased Assets and to consummate the other transactions contemplated
by this Agreement shall be subject to the fulfillment at or prior to the Closing
Date of the following conditions:
(a) No preliminary or permanent injunction or other order or
decree by any federal or state court which prevents the consummation of the sale
of the Purchased Assets contemplated herein shall have been issued and remain in
effect and no proceeding therefor shall be pending or threatened;
(b) Buyer shall have performed and complied with in all
material respects the covenants and agreements contained in this Agreement which
are required to be performed and complied with by Buyer on or prior to the
Closing Date;
(c) The representations and warranties of Buyer set forth in
this Agreement that are qualified by materiality shall be true and correct in
all respects as of the Closing Date and all other representations and warranties
shall be true and correct in all material respects as of the Closing Date, in
each case as though made at and as of the Closing Date;
(d) Seller shall have received a certificate of Buyer signed
by an authorized officer of Buyer, dated the Closing Date, to the effect set
forth in Sections 7.2(b) and (c);
(e) Seller shall have received an opinion from Morgan, Lewis &
Bockius LLP, Buyer's counsel, dated the Closing Date and reasonably satisfactory
in form and substance to Seller and its counsel, as to the matters set forth in
Exhibit F hereto;
(f) Buyer shall have delivered, or caused to be delivered, to
Seller at the Closing, Buyer's closing deliveries described in Section 3.7; and
(g) Buyer shall have executed and delivered the Transition
Services Agreement and the License Agreement.
(h) The Precious Metal Lease shall have been terminated with
respect to the platinum that is the subject of the lease referenced in Section
7.1(o).
ARTICLE 8
INDEMNIFICATION
8.1 Indemnification.
(a) Buyer shall indemnify, defend and hold harmless Seller,
its officers, directors, employees, shareholders, Affiliates and agents (each, a
"Seller Indemnitee") from and against any and all claims, demands, suits,
losses, liabilities, damages, obligations, payments, costs and expenses
(including, without limitation, the costs and expenses of any and all actions,
suits, proceedings, assessments, judgments, settlements and compromises relating
thereto and reasonable attorneys' fees and reasonable disbursements in
connection therewith) (each, an "Indemnifiable Loss"), asserted against or
suffered by any Seller Indemnitee relating to, resulting from or arising out of
(i) any breach by Buyer of any representations, warranties or covenants
contained in this Agreement, (ii) any of the Assumed Liabilities and
Obligations, (iii) any Third Party Claims against a Seller Indemnitee arising
out of or in connection with Buyer's ownership or operation of Purchased Assets
on or after the Closing Date, or (iv) the Burle Retiree Medical Plan.
(b) Seller shall indemnify, defend and hold harmless Buyer,
its officers, directors, members, employees, shareholders, Affiliates and agents
(each, a "Buyer Indemnitee") from and against any and all Indemnifiable Losses
asserted against or suffered by any Buyer Indemnitee relating to, resulting from
or arising out of (i) any breach by Seller of any representations, warranties or
covenants contained in this Agreement (other than claims arising under Section
4.11 or relating to Environmental Laws, which shall be covered by Section
8.1(c)), (ii) any of the Excluded Liabilities, or (iii) any Third Party Claims
against a Buyer Indemnitee arising out of or in connection with Seller's
ownership or operation of the Purchased Assets or the Business on or prior to
the Closing Date (except Third Party Claims arising out of Assumed Liabilities
and Obligations).
(c) Seller shall further indemnify, defend and hold harmless
the Buyer Indemnitees from and against, any and all Indemnifiable Losses
incurred or sustained by any of them or to which any of them become subject,
resulting from, arising out of or relating to (i) the presence, Release,
threatened or suspected Release, of any Hazardous Substances at, from, in, to,
on or under any property currently or formerly owned, operated or leased by
Seller in connection with the Business, or any predecessor of the Business or
Seller in connection with the Business, existing as of the Closing Date,
including the work order referred to on Schedule 4.11; (ii) the Release,
transportation, storage or disposal of Hazardous Substances generated by Seller,
any predecessor of Seller or any entities previously owned by Seller to, from,
at or under any off-site location prior to the Closing Date; or (iii) any
violation of any Environmental Law by Seller, any predecessor of Seller or any
entity previously owned by Seller prior to the Closing Date.
(d) The expiration of any representation or warranty shall not
affect a Party's obligations under this Section 8.1 if the Person entitled to
indemnification hereunder (the "Indemnitee") provided the Party required to
provide indemnification under this Agreement (the "Indemnifying Party") with
proper notice of the claim or event for which indemnification is sought prior to
such expiration.
8.2 Defense of Claims.
(a) If any Indemnitee receives notice of the assertion of any
claim or of the commencement of any claim, action, or proceeding made or brought
by any Person who is not a Party to this Agreement (a "Third Party Claim") with
respect to which indemnification is to be sought from an Indemnifying Party, the
Indemnitee shall give such Indemnifying Party prompt written notice thereof, but
in any event such notice shall not be given later than fifteen (15) calendar
days after the Indemnitee's receipt of notice of such Third Party Claim. Such
notice shall describe the nature of the Third Party Claim in reasonable detail
and shall indicate the estimated amount, if practicable, of the Indemnifiable
Loss that has been or may be sustained by the Indemnitee. The Indemnifying Party
will have the right to participate in or, by giving written notice to the
Indemnitee, to elect to assume the defense of any Third Party Claim at such
Indemnifying Party's expense and by such Indemnifying Party's own counsel,
provided that the counsel for the Indemnifying Party who shall conduct the
defense of such Third Party Claim shall be reasonably satisfactory to the
Indemnitee. The Indemnitee shall cooperate in good faith in such defense at such
Indemnitee's own expense. If an Indemnifying Party elects not to assume the
defense of any Third Party Claim, the Indemnitee may compromise or settle such
Third Party Claim over the objection of the Indemnifying Party, which settlement
or compromise shall conclusively establish the Indemnifying Party's liability
pursuant to this Agreement.
(b) (i) If, within fifteen (15) calendar days after an
Indemnitee provides written notice to the Indemnifying Party of any Third Party
Claims, the Indemnitee receives written notice from the Indemnifying Party that
such Indemnifying Party has elected to assume the defense of such Third Party
Claim as provided in Section 8.2 (a) , the Indemnifying Party will not be liable
for any legal expenses subsequently incurred by the Indemnitee in connection
with the defense thereof; provided, however, that if the Indemnifying Party
shall fail to take reasonable steps necessary to defend diligently such Third
Party Claim within fifteen (15) calendar days after receiving notice from the
Indemnitee that the Indemnitee believes the Indemnifying Party has failed to
take such steps, the Indemnitee may assume its own defense and the Indemnifying
Party shall be liable for all reasonable expenses thereof; (ii) Without the
prior written consent of the Indemnitee, the Indemnifying Party shall not enter
into any settlement of any Third Party Claim which would lead to liability or
create any financial or other obligation on the part of the Indemnitee for which
the Indemnitee is not entitled to indemnification hereunder. If a firm offer is
made to settle a Third Party Claim without leading to liability or the creation
of a financial or other obligation on the part of the Indemnitee for which the
Indemnitee is not entitled to indemnification hereunder and the Indemnifying
Party desires to accept and agree to such offer, the Indemnifying Party shall
give written notice to the Indemnitee to that effect. If the Indemnitee fails to
consent to such firm offer within fifteen (15) calendar days after its receipt
of such notice, the Indemnifying Party shall be relieved of its obligations to
defend such Third Party Claim and the Indemnitee may contest or defend such
Third Party Claim. In such event, the maximum liability of the Indemnifying
Party as to such Third Party Claim will be the amount of such settlement offer
plus reasonable costs and expenses paid or incurred by Indemnitee up to the date
of said notice.
(c) Any claim by an Indemnitee on account of an Indemnifiable
Loss which does not result from a Third Party Claim (a "Direct Claim") shall be
asserted by giving the Indemnifying Party written notice thereof, stating the
nature of such claim in reasonable detail and indicating the estimated amount,
if practicable, and the Indemnifying Party shall have a period of thirty (30)
calendar days within which to respond to such Direct Claim. If the Indemnifying
Party does not respond within such thirty (30) calendar day period, the
Indemnifying Party shall be deemed to have accepted such claim. If the
Indemnifying Party rejects such claim, the Indemnitee will be free to seek
enforcement of its right to indemnification under this Agreement.
(d) A failure to give timely notice as provided in this
Section 8.2 shall not affect the rights or obligations of any Party hereunder
except if, and only to the extent that, as a result of such failure, the Party
which was entitled to receive such notice was actually prejudiced as a result of
such failure.
8.3 Indemnification Limits. The rightto indemnification under this
Article shall be subject to the following limitations:
(a) Except as provided in this Section, no indemnification
shall be payable under this Article by an Indemnifying Party with respect to
breaches of or inaccuracies in any representations or warranties contained
herein unless and until the aggregate amount of all Indemnifiable Losses
sustained by all Indemnified Parties exceeds $200,000 (the "Indemnification
Threshold"), whereupon indemnification by the Indemnifying Party shall be
payable for all Losses back to the first dollar.
(b) The aggregate liability of either party for all claims for
indemnification under this Article with respect to breaches of or inaccuracies
in the representations and warranties contained herein shall not exceed
$4,000,000.
(c) Notwithstanding the foregoing, nothing herein shall limit
a Party's liability for an intentional misrepresentation contained herein.
(d) With respect to breaches by Seller of Section 4.9,
indemnification therefor by Seller shall not be subject to the Indemnification
Threshold.
(e) Any determination of losses actually incurred shall be net
of any insurance proceeds fully recoverable by the Indemnified Party with
respect to such claim or the underlying facts (net of insurance detriments such
as premium adjustments or increases).
8.4 Survival of Representations, Warranties, Covenants and Obligations.
(a) The representations and warranties given or made by each
Party to this Agreement or in any certificate or other writing furnished in
connection herewith shall survive the Closing for a period of two (2) years
after the Closing Date and shall thereafter terminate and be of no further force
or effect, except that (a) all representations and warranties relating to Taxes
and Tax Returns shall survive the Closing for the period of the applicable
statutes of limitation plus any extensions or waivers thereof, (b) all
representations and warranties with respect to environmental matters shall
survive the Closing for a period of six (6) years after the Closing Date; and
(c) any representation or warranty as to which a claim (including without
limitation a contingent claim) shall have been asserted prior to the expiration
of such representation or warranty shall continue in effect with respect to such
claim until such claim shall have been finally resolved or settled. Each Party
shall be entitled to rely upon the representations and warranties of the other
Party or Parties set forth herein, notwithstanding any investigation or audit
conducted before or after the Closing Date or the decision of any Party to
complete the Closing.
(b) The covenants and obligations of Seller and Buyer set
forth in this Agreement, including without limitation the indemnification
obligations of the Parties under this Article 8, shall survive the Closing
indefinitely in accordance with their terms.
ARTICLE 9
TERMINATION
9.1 Termination.
(a) This Agreement may be terminated at any time prior to the
Closing Date by mutual written consent of Seller and Buyer.
(b) This Agreement may be terminated by Seller or Buyer, if
(i) any Federal or state court of competent jurisdiction shall have issued an
order, judgment or decree permanently restraining, enjoining or otherwise
prohibiting the Closing, and such order, judgment or decree shall have become
final and nonappealable or (ii) any statute, rule, order or regulation shall
have been enacted or issued by any Governmental Authority which, directly or
indirectly, prohibits the consummation of the Closing or (iii) the Closing
contemplated hereby shall have not occurred on or before July 1, 1999 (the
"Termination Date"); provided, however, that the right to terminate this
Agreement under this Section 9.1(b) (iii) shall not be available to a Party
whose failure to fulfill any obligation under this Agreement has been the cause
of, or resulted in, the failure of the Closing to occur on or before such date.
(c) This Agreement may be terminated by Buyer if there has
been a material violation or breach by Seller of any covenant, representation or
warranty contained in this Agreement and such violation or breach is not cured
by the earlier of the Closing Date or the date ten (10) days after receipt by
Seller of notice specifying such violation or breach, and such violation or
breach has not been waived by Buyer.
(d) This Agreement may be terminated by Seller if there has
been a material violation or breach by Buyer of any covenant, representation or
warranty contained in this Agreement and such violation or breach is not cured
by the earlier of the Closing Date or the date ten (10) days after receipt by
Buyer of notice specifying such violation or breach, and such violation or
breach has not been waived by Seller.
9.2 Procedure and Effect of Termination. In the event of termination of
this Agreement by either or both of the Parties pursuant to this Article 9,
written notice thereof shall forthwith be given by the terminating Party to the
other Party. If this Agreement is terminated pursuant to any of Sections 9.1(a)
or (b), the obligations of the Parties hereunder will terminate, except as
otherwise expressly provided in this Agreement, and thereafter neither Party
shall have any recourse against the other by reason of this Agreement. In the
event that this Agreement is terminated by a Party for a breach of any material
representation, warranty, covenant or other agreement contained herein, and
provided that the terminating Party is not then in breach of any material
representation, warranty, covenant or other agreement contained herein, in
addition to any rights or remedies provided by law, the breaching Party shall be
liable to the terminating party for all fees, expenses and disbursements,
including the fees and expenses of their respective counsel, accountants and
other experts, incurred by the terminating party in connection with the subject
matter of this Agreement.
<PAGE>
ARTICLE 10
MISCELLANEOUS PROVISIONS
10.1 Amendment and Modification. This Agreement may be amended,
modified or supplemented only by written agreement of Seller and Buyer.
10.2 Waiver of Compliance; Consents. Except as otherwise provided in
this Agreement, any failure of any of the Parties to comply with any obligation,
covenant, agreement or condition herein may be waived by the Party entitled to
the benefits thereof only by a written instrument signed by the Party granting
such waiver, but such waiver of such obligation, covenant, agreement or
condition shall not operate as a waiver of, or estoppel with respect to, any
subsequent failure to comply therewith.
10.3 Notices. All notices and other communications hereunder shall be
in writing and shall be deemed given and effective if delivered personally or by
facsimile transmission, or mailed by overnight courier or registered or
certified mail (return receipt requested), postage prepaid, to the recipient
Party at its address (or at such other address or facsimile number for a Party
as shall be specified by like notice; provided however, that notices of a change
of address shall be effective only upon receipt thereof):
If to Buyer, to:
Burle Industries, Inc.
1000 New Holland Ave.
Lancaster, PA 17601
Attention: President
FAX: 717-295-6098
with a copy to:
Morgan Lewis & Bockius LLP
1701 Market Street
Philadelphia, PA 19103
Attention: Peter S. Sartorius, Esq.
FAX: 215-963-5299
if to Seller, to:
Galileo Corporation
6401 Congress Avenue
Boca Raton, FL 33487
Attention: President
FAX: 561-997-1645
with a copy to:
Edwards & Angell, LLP
250 Royal Palm Way
Suite 300
Palm Beach, FL 33480
Attention: Jonathan E. Cole, Esq.
FAX: 561-655-8719
10.4 Assignment. This Agreement and all of the provisions hereof shall
be binding upon and inure to the benefit of the Parties hereto and their
respective successors and permitted assigns, but neither this Agreement nor any
of the rights, interests or obligations hereunder shall be assigned by either
Party hereto without the prior written consent of the other Party, such consent
not to be unreasonably withheld. Notwithstanding the foregoing, Buyer may assign
its rights, interests and obligations hereunder, or cause the Purchased Assets
to be conveyed, to one or more Affiliates, but no such assignment shall relieve
Buyer of performance of its obligations hereunder.
10.5 No Third Party Beneficiary. This Agreement is not intended to
confer upon any other Person except the Parties hereto any rights, interests,
obligations or remedies hereunder. No provision of this Agreement shall create
any third party beneficiary rights in any employee or former employee of Seller
(including any beneficiary or dependent thereof) in respect of continued
employment or resumed employment, and no provision of this Agreement shall
create any rights in any such Persons in respect of any benefits that may be
provided, directly or indirectly, under any employee benefit plan or
arrangement.
10.6 Governing Law. This Agreement shall be governed by and construed
in accordance with the law of the Commonwealth of Massachusetts (without giving
effect to conflict of law principles) as to all matters, including but not
limited to matters of validity, construction, effect, performance and remedies.
10.7 Venue; Consent to Jurisdiction. The Parties hereby expressly and
irrevocably submit to the jurisdiction of the courts of the Commonwealth of
Massachusetts and of the United States District Court for the District of
Massachusetts for the purpose of any litigation based hereon, or arising out of,
under, or in connection with, this Agreement, and irrevocably agree to be bound
by any judgment rendered thereby in connection with such litigation. The Parties
hereby expressly and irrevocably waive, to the fullest extent permitted by law,
any objection that they now have or hereafter may have to the laying of venue of
any such litigation brought in any such court referred to above and any claim
that any such litigation has been brought in an inconvenient forum. To the
extent that any Party has acquired or hereafter may acquire any immunity from
the jurisdiction of any court or from any legal process (whether through service
or notice, attachment prior to judgment, attachment in aid of execution or
otherwise) with respect to itself or its property, such Party hereby irrevocably
waives such immunity with respect to its obligations under this Agreement. The
Parties hereby further irrevocably consent to the service of process by
registered mail, postage prepaid, or by personal service within or without the
Commonwealth of Massachusetts.
10.8 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
10.9 Severability. Any provision of this Agreement that is invalid or
unenforceable in any jurisdiction shall be ineffective to the extent of such
invalidity or unenforceability without invalidating or rendering unenforceable
the remaining provisions hereof, and any such invalidity or unenforceability in
any jurisdiction shall not invalidate or render unenforceable such provision in
any other jurisdiction.
10.10 Interpretation. The articles, section and schedule headings
contained in this Agreement are solely for the purpose of reference, are not
part of the agreement of the Parties and shall not in any way affect the meaning
or interpretation of this Agreement.
10.11 Schedules and Exhibits. Except as otherwise provided in this
Agreement, all Exhibits and Schedules referred to herein are intended to be and
hereby are specifically made a part of this Agreement.
10.12 Entire Agreement. This Agreement, including the Exhibits,
Schedules, documents, certificates and instruments referred to herein, embody
the entire agreement and understanding of the Parties hereto in respect of the
transactions contemplated by this Agreement. There are no restrictions,
promises, representations, warranties, covenants or undertakings, other than
those expressly set forth or referred to herein. This Agreement supersedes all
prior agreements and understandings between the Parties with respect to the
transactions contemplated hereby.
<PAGE>
IN WITNESS WHEREOF, Buyer and Seller have caused this Agreement to be
signed by their respective duly authorized officers as of the date first above
written.
BURLE INDUSTRIES, INC.
By: /s/ Kirk Jenne
--------------------------
Kirk Jenne
Vice President
GALILEO CORPORATION
By: /s/ Charles T. Ball
--------------------------
Charles T. Ball
Director and Authorized
Signatory
ASSET PURCHASE AND SALE AGREEMENT
THIS AGREEMENT, made and entered into as of this 24th day of May, 1999
(the "Effective Date") between Galileo Corporation, a Delaware corporation
having its office at Galileo Park, Sturbridge, Massachusetts 01566 ("Seller")
and IPG Photonics Corporation, a Delaware corporation having its office at
Galileo Park, Sturbridge, Massachusetts 01566 ("Buyer");
W I T N E S S E T H:
WHEREAS, Seller wishes to sell to Buyer and Buyer wishes to buy from
Seller the following assets: (i) certain assets relating to the Seller's
telecommunications business unit (the "Business") and (ii) certain intellectual
property rights relating to the Business, upon the terms and conditions set
forth herein;
WHEREAS, Buyer has, since December 15, 1998, had access to and use of
the assets of the Business and has used the Assets (as herein defined) and
manufactured products of the Business since such date pursuant to an oral
agreement between Buyer and Seller (the "Buyer Prior Use"); and
WHEREAS, simultaneously with execution of this Agreement, Seller and
Buyer are entering into a Lease Agreement (the "Lease") under which Seller as a
lessor will lease to Buyer as a lessee that portion of the building, fixtures
and other improvements located on the land known as Galileo Park, Sturbridge,
Massachusetts, as set forth in the Lease, and Seller agrees to share with Buyer
certain facilities and services and share the costs associated therewith, all as
set forth in the Lease, to enable Buyer to operate the Business and exercise
ownership of the Assets.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby mutually acknowledged, Buyer and Seller do
hereby covenant and agree as follows:
1. Assets.
1.1 Assets Purchased. Subject to the terms and conditions contained
herein, Buyer agrees to buy and Seller agrees to sell to Buyer the following
property and rights (collectively, the "Assets"), in each case free and clear of
all liens, charges, pledges, security interests or other encumbrances except as
may be set forth in Schedule 5.1(b) (the "Liens"):
(a) Certain tangible assets owned by the Seller and used or held
for use or sale in the Business, including, without limitation, certain
machinery, equipment, inventory, work-in progress and other items, including
without limitation, laboratory fixtures and furniture, office furniture, small
tools and other property currently located on the premises or the property owned
by the Seller and used or held for use or sale in the Business, all of which are
identified on Schedule A annexed hereto (the "Business Assets"), and
(b) Certain intellectual property rights and other intangible
assets owned by the Seller and used or held for use or sale in the Business as
set forth on Schedule B annexed hereto (the "Intellectual Property").
1.2 Assumption of Liabilities. Except for the liabilities expressly
disclosed on Schedule 1.2 hereto (the "Assumed Liabilities"), which Assumed
Liabilities Buyer hereby agrees to assume and perform as of the date of
execution of this Agreement, Buyer assumes no obligations or liabilities of
Seller in connection with this transaction, the Business or the Assets. Without
limiting the generality of the foregoing, Seller shall be solely responsible for
payment of all amounts at any time owing by Seller at the time of the Closing
(other than the Assumed Liabilities and amounts incurred by Buyer from December
15, 1998, with respect to the Business, Assets or this transaction), whether
accrued or contingent, known or unknown, including, without limitation,
liabilities arising out of the provision by Seller of goods or services prior to
the Closing, obligations for any payments that may be due to employees of Seller
and obligations for any of Seller's Taxes. As used herein, "Tax" and "Taxes"
refer to any and all taxes, duties, levies, fines, license fees or other
monetary charges imposed by any governmental or regulatory entity.
1.3 Instruments of Transfer. The transfer of the Assets to Seller at
the Closing shall be effected by a Bill of Sale and Patent and Trademark
Assignments in the forms attached hereto as Exhibits A-1, A-2 and A-3.
1.4 Instrument of Assumption of Liabilities. The assumption of the
Assumed Liabilities by the Buyer at the Closing shall be effected by an
instrument of Assumption of Liabilities in the form attached hereto as Schedule
1.4.
1.5 Use of Assets and Intellectual Property Prior to Closing. Seller
has previously loaned the Assets to Buyer and Buyer, with Seller's permission,
has made and will continue to make use of such Assets prior to the Closing or
until earlier termination of this Agreement. Seller agrees that all proceeds
from such use of such Assets shall be the sole and exclusive property of Buyer.
2. Purchase Price.
2.1 Purchase Price. Buyer shall pay to Seller, in consideration of the
transfer of the Assets, a purchase price (the "Purchase Price") of ONE MILLION
FIVE-HUNDRED THOUSAND DOLLARS ($1,500,000) in cash payable by Buyer to Seller by
wire transfer in immediately available funds to an account designated by Seller
to be paid at the Closing.
2.2 In preparation for payment of the Purchase Price, Buyer agrees to
transfer to an escrow account (the "Escrow Account") to be held by Foley, Hoag &
Eliot, LLP as escrow agent (the "Escrow Agent") the following sums which will be
held in escrow in accordance with the terms of this Agreement:
(a) The sum of FIVE HUNDRED THOUSAND DOLLARS ($500,000) (the "First
Deposit") will be paid into the Escrow Account on the Effective Date, and
(b) The sum of ONE MILLION DOLLARS ($1,000,000) (the "Second
Deposit") shall be paid into the Escrow Account prior to the Closing.
2.3 Deferred Payments. Within thirty (30) days after the end of each
calendar quarter over the ten (10) year period following the Closing Date (the
"Deferred Payment Period"), Buyer shall make the additional payments to Seller
as specified in Schedule 2.3 attached hereto (the "Deferred Payments").
2.4 Escrow Account.
(a) The First Deposit, the Second Deposit, and all accrued interest
thereon (the "Deposit") shall be held in escrow by Escrow Agent, subject to the
terms of this Agreement and shall be duly accounted for at the time of the
Closing or other termination of this Agreement. All such deposits shall be
invested to the extent practicable in Qualified Investments by the Escrow Agent.
For the purposes hereof, unless otherwise agreed in writing by Seller and Buyer,
"Qualified Investments" shall mean United States Treasury bills or notes having
a maturity date which is not more than 21 days after the date of purchase. All
interest and other income earned on the Deposit shall be paid to Buyer.
(b) The liability of the Escrow Agent to the parties hereto shall
be only as set forth in this Agreement. The Escrow Agent shall not be liable for
any mistake or error of judgment in the discharge of its functions hereunder,
but shall be liable only for bad faith or gross negligence. Without limiting the
generality of the foregoing, the Escrow Agent shall not incur any liability with
respect to any action taken or omitted in reliance upon any instrument, not only
as to its due execution and delivery and the validity and effectiveness of its
provisions, but also as to the truth and accuracy of any information contained
therein, which the Escrow Agent shall in good faith believe to be genuine, to
have been signed or presented by a proper person or persons and to conform with
the provisions of this Agreement.
(c) Notwithstanding anything contained in this Agreement to the
contrary, should any dispute arise with respect to the disposition of any sum or
any document held by the Escrow Agent pursuant to the terms hereof, the Escrow
Agent shall retain the disputed sum or document (or make delivery to a court in
accordance with the immediately succeeding sentence) and the Escrow Agent shall
have no liability to any party hereto for retaining any portion of such sum or
any document until such dispute shall have been settled by either a mutual
written agreement between the parties or a final order, decree or judgment by a
court of competent jurisdiction in the United States of America (and no such
order, decree or judgment shall be deemed to be "final" unless and until the
time for appeal has expired and no appeal has been perfected), and the Escrow
Agent shall deliver such sum or such document in accordance with such mutual
agreement or final order, decree or judgment. In the event that there shall be
any action or legal proceeding arising out of this Agreement, to which action or
legal proceeding the Escrow Agent is or may be a party, whether directly, as
counsel to the Buyer or otherwise, the Escrow Agent shall be entitled, at any
time, in its sole discretion, to deliver the moneys or documents held by it
hereunder, or any portion thereof, into court, and upon so doing, it shall be
relieved of any further responsibility or liability as to said moneys or
documents, as the case may be, and as an Escrow Agent under this Agreement. In
no event shall the Escrow Agent be under any duty whatsoever to institute,
defend or actively participate in any such proceeding. Each party acknowledges
and agrees that Escrow Agent has rendered, and may continue to render, legal
services to Buyer in connection with the preparation of this Agreement and the
consummation of the transactions to which it relates.
(d) Upon receipt of a joint written notice from Buyer and Seller
directing Escrow Agent to deliver any sum or document held in the Escrow
Account, the Escrow Agent shall make delivery as directed by such written notice
unless otherwise directed by a court or administrative agency.
(e) Seller and Buyer agree to indemnify the Escrow Agent and to
hold it harmless from and against any and all losses, claims, damages,
liabilities and expenses (including, without limitation, costs of investigation,
disbursements and attorneys' fees) which may be imposed upon or incurred by the
Escrow Agent pursuant to this Agreement or in the performance of its duties
hereunder, or in connection with any arbitration or litigation arising from this
Agreement or involving the subject matter hereof.
3. Closing. Subject to the terms and conditions of this Agreement,
Seller shall deliver to Buyer the documents specified in Section 7, and Buyer
shall (i) deliver the documents specified in Section 8 and (ii) instruct the
Escrow Agent to use the Deposit to pay the Purchase Price to Seller in
accordance with Section 2.1 hereof (or to BankBoston, pursuant to the terms of
the letter agreement (the "BankBoston Letter") attached hereto as Schedule 3) at
a closing (the "Closing") which shall take place on June 15, 1999, or such other
date as may be mutually agreed upon by the parties (the "Closing Date"), at the
offices of Foley, Hoag & Eliot LLP, One Post Office Square, Boston,
Massachusetts. It is agreed that time is of the essence of this Agreement.
4. Seller's Obligations. Between the date hereof and the Closing Date,
Seller hereby agrees that:
(a) Leases. Seller shall not enter into any leases, lease
amendments or other agreements (written or oral) relating to any portion of the
Assets without in each case obtaining the prior written consent of Buyer.
(b) Contracts. Seller shall not enter into any management or other
agreements in any way relating to the Assets without obtaining the prior written
consent of Buyer.
(c) Consent to Governmental Action. Seller shall not request or
apply for any action by any federal, state or local agency or authority
involving the Assets without obtaining the prior written consent of Buyer, which
consent shall not be withheld or delayed unless in Buyer's reasonable judgment
such action by Seller will or could materially adversely affect Buyer. Seller
shall provide notice to Buyer of any proposed action by any federal, state or
local agency or authority involving the Assets and shall provide not less than
five days' prior notice to Buyer of its proposed consent to any such action.
(d) No Sales. Seller shall not sell or otherwise transfer, or enter
into any agreement to sell or otherwise transfer, the Assets or any portion
thereof.
(e) No Encumbrances. Seller shall not pledge or affirmatively grant
any Lien on the Assets or any portion thereof.
(f) Compliance with Laws. Seller shall comply in all material
respects with all applicable laws, rules, orders and regulations relating to the
Assets or the Business.
5. Representations and Warranties.
5.1 By Seller. Seller represents, warrants and agrees as follows:
(a) Authority. Seller is a corporation duly organized and validly
existing under the laws of the State of Delaware, qualified to do business in
The Commonwealth of Massachusetts, with full capacity, power and authority to
enter into this Agreement and to perform all of its obligations hereunder. The
execution, delivery and performance of this Agreement and the consummation of
the transactions contemplated hereby have been duly authorized by all necessary
action on the part of the Seller. This Agreement constitutes the legal, valid
and binding obligation of the Seller, enforceable against Seller in accordance
with its terms.
(b) Title to the Assets. Absence of Liens and Encumbrances. Except
as set forth on Schedule 5.1(b) hereto, Seller has the full right to sell,
transfer, and assign all of the Assets to Buyer, and has good title thereto,
free and clear of all Liens whatsoever. Following the Closing, Buyer will be the
lawful owner of, and have good title to, the Assets, free and clear of any Liens
whatsoever other than the Assumed Liabilities. The Assets include all of the
assets and properties, tangible and intangible, necessary for Buyer to conduct
the Business substantially as Seller has conducted its business in the past.
None of the Assets is in the possession, custody or control of any person other
than Seller or Buyer.
(c) Condition. Each item of tangible personal property included in
the Business Assets is in good operating condition, repair and calibration in
light of its age, ordinary wear and tear excepted.
(d) Inventory. Not less than 90% of inventory included in the
Business Assets is saleable in the ordinary course of business.
(e) Rights in Intellectual Property. Except as set forth on
Schedule 5.1(e), the Seller owns the Intellectual Property free and clear of any
liens or other encumbrances. Except as set forth on Schedule 5.1(e), to the
Seller's knowledge, the use of the Intellectual Property by Buyer will not
infringe or violate or constitute the misappropriation of any proprietary rights
of any other person or entity and no other person or entity is infringing or
violating or misappropriating any proprietary rights of Seller in such
Intellectual Property. Except as set forth on Schedule 5.1(e), Seller has not
received notice of any claim that the conduct of the Business infringes any
patent, invention, trademark, service mark, trade name or other property right
of any other person or entity or notice of any claim of any other person or
entity relating to the Intellectual Property and Seller does not know of any
basis for any such claim. Except as set forth on Schedule 5.1(e), all of
Seller's rights in and to the Intellectual Property are freely transferable.
Seller has granted no licenses or other rights to use any of the Intellectual
Property to any other person or entity. Except as set forth on Schedule 5.1(e),
no royalties or other amounts are payable by the Seller to any other person or
entity by reason of the ownership or use of the Intellectual Property. The
Seller has made available to the Buyer correct and complete copies of all
written documentation evidencing ownership of each patent and registered mark
and any claims or disputes relating to each item of Intellectual Property.
(f) Contracts. Schedule 5.1(f) attached hereto sets forth a true,
correct and complete list of all outstanding management and other agreements
(collectively, the "Contracts") relating to the Assets to which Seller is a
party or by which Seller or the Assets are bound.
(g) Year 2000. Except as disclosed in Schedule 5.1(g), (1) no
change of date, including, but not limited to, the change of date from December
31, 1999 to January 1, 2000, will have any material adverse impact on the
performance or use of any of the Assets; and (2) any of the Assets with date
processing functions will be able to perform such functions to the same extent
and with the same accuracy notwithstanding any change of date, including but not
limited to the change of date from December 31, 1999 to January 1, 2000,
provided in each case that all other technology used in combination with the
Assets properly exchanges date data with the Assets.
(h) Violations. This Agreement and the performance hereof by Seller
will not, with or without the passage of time or the giving of notice, or both,
contravene any law, judgment, order, injunction, or decree, the Seller's
Certificate of Incorporation or By-Laws, or any contractual restriction or other
arrangement binding on Seller or by which any of Seller's assets or properties
may be affected.
(i) Consents. No consent, approval, order or authorization of any
court or other governmental entity or any third party, other than that of
BankBoston, N.A. and British Telecommunications PLC, is required to be obtained
by Seller in connection with the execution and delivery of this Agreement or the
performance hereof by Seller.
(j) Violation of Laws. Except as disclosed in Schedule 5.1(j)
annexed hereto, Seller has not received any notice from any governmental entity
of any violation of any statutes, ordinances, rules, regulations, orders or
requirements of any federal, state or local authority or of any other
governmental entity having jurisdiction relating to or affecting the Assets or
any portion thereof and, to the best of Seller's knowledge, no such violation
now exists, and no event has occurred and is continuing which with the giving of
notice or the passage of time or both, would constitute such a violation.
(k) Pending or Threatened Proceedings. There is no pending or, to
the best of Seller's knowledge, threatened action or proceeding before any
court, governmental agency or arbitrator relating to or arising out of the
ownership of the Assets or any portion thereof, or which may adversely affect
Seller's ability to perform this Agreement, or which may affect the Assets or
any portion thereof.
(l) Outstanding Agreements. There are no outstanding options,
purchase and sale agreements or other agreements, other than as set forth as
Schedule 5.1(b), Schedule 5.1(f) and the license dated December 23, 1992 by and
between Seller and British Telecommunications PLC (the "BT Agreement") with
respect to the Assets or any portion thereof.
(m) Full Disclosure. To the best knowledge of the Seller, neither
this Agreement nor any written statement, report or other document furnished by
Seller pursuant to this Agreement with respect to the Assets contains any untrue
statement of a material fact or omits to state a material fact necessary to make
the statements contained herein or therein, in light of the circumstances in
which it was made, not false or misleading. There is no fact known to the Seller
which the Seller has not disclosed to Buyer in writing that materially adversely
affects or so far as the Seller can now reasonably foresee will materially
adversely affect (i) the ability of Seller to perform this Agreement or the
consummation of the transactions contemplated hereby, or (ii) the use of the
Assets by Buyer.
(n) Tax Matters. Within the time and in the manner prescribed by
law, (a) all Tax returns that were or are required to be filed with respect to
the Assets or the Business have been filed and all Taxes that have become due or
have been assessed with respect to the Assets or the Business have been timely
paid in full unless otherwise identified on Schedule 5.1(n); (b) no Tax liens
have been filed with respect to the Assets and no material claims are being
asserted or have been threatened with respect to any of such Taxes; and (c)
Seller has withheld, collected and paid to the proper governmental agencies all
amounts which it has been required by law to withhold or collect with respect to
the Assets and the Business.
5.2 By Buyer. Buyer represents, warrants and agrees as follows:
(a) Authority. Buyer is a corporation duly organized and validly
existing under the laws of the State of Delaware, qualified to do business in
The Commonwealth of Massachusetts, with full capacity, power and authority to
enter into this Agreement and to perform all of its obligations hereunder. The
execution, delivery and performance of this Agreement and the consummation of
the transactions contemplated hereby have been duly authorized by all necessary
action on the part of the Buyer. This Agreement constitutes a legal, valid and
binding obligation of the Buyer, enforceable against the Buyer in accordance
with its terms.
(b) No Violations. This Agreement and the performance hereof by
Buyer will not, with or without the passage of time or the giving of notice, or
both, contravene any law, judgment, order, injunction, or decree, the Buyer's
Certificate of Incorporation or By-Laws, or any contractual restriction or other
arrangement binding on Buyer or by which any of Buyer's assets or properties may
be affected.
(c) Consents. No consent, approval, order or authorization of any
court or other governmental entity or any third party is required to be obtained
by Buyer in connection with the execution and delivery of this Agreement or the
performance hereof by Buyer.
(d) Financial Resources. The Buyer has sufficient financial
resources to complete the transactions contemplated by this Agreement and the
ancillary agreements.
(e) Full Disclosure. To the best knowledge of Buyer, neither this
Agreement nor any written statement, report or other document, taken as a whole,
furnished by Buyer pursuant to this Agreement contains any untrue statement of
material fact or omits to state a material fact necessary to make the statements
contained herein or therein, in light of the circumstances in which it was made,
not false or misleading. There is no fact known to the Buyer which the Buyer has
not disclosed to Seller in writing that materially adversely affects or so far
as the Buyer can now reasonably foresee will materially adversely affect the
ability of Buyer to perform this Agreement or the consummation of the
transactions contemplated hereby.
(f) Pending and Threatened Proceedings. There is no pending or, to
the best of Buyer's knowledge, threatened, action or proceeding before any
court, governmental agency or arbitrator which will or could adversely affect
Buyer's ability to perform this Agreement and/or the ancillary agreements or the
transactions contemplated hereby and/or thereby.
6. Termination of Agreement.
6.1 Termination. This Agreement may be terminated at or prior to the
Closing:
(a) by mutual agreement of Buyer and Seller;
(b) by the Seller by written notice stating the reasons therefor
(provided that the Seller is not then in material breach of any representation,
warranty, covenant or other agreement contained herein) if there shall have been
a material breach of any of the covenants or agreements or any of the
representations or warranties contained in this Agreement on the part of the
Buyer, which breach is either not cured by the earlier of (a) 30 days after
receipt of such notice or (b) the Closing Date, or which cannot be cured prior
to the Closing Date; provided, however, that the Seller shall not have the right
to terminate this Agreement pursuant to this subsection because of the breach of
any representation or warranty unless such breach, together with all such other
breaches, would entitle the Seller not to consummate the transactions
contemplated hereby under Section 8.1(a);
(c) by the Buyer by written notice stating the reasons therefor
(provided that the Buyer is not then in material breach of any representation,
warranty, covenant or other agreement contained herein) if there shall have been
a material breach of any of the covenants or agreements or any of the
representations or warranties contained in this Agreement on the part of the
Seller, which breach is either not cured by the earlier of (a) 30 days after
receipt of such notice or (b) the Closing Date, or which cannot be cured prior
to the Closing Date; provided, however, that the Buyer shall not have the right
to terminate this Agreement pursuant to this subsection because of the breach of
any representation or warranty unless such breach, together with all such other
breaches, would entitle the Buyer not to consummate the transactions
contemplated hereby under Section 7.1(a).
6.2 Effect of Termination. Each party's rights of termination under
Section 6.1 is in addition to any other rights it may have under this Agreement
or otherwise and the exercise of a right of termination will not be an election
of remedies. Upon any termination of this Agreement, all obligations of the
parties hereto shall cease, other than under Section 2.4 and this Section 6, and
this Agreement shall be void and without recourse to the parties hereto;
provided, however, that nothing in this Section 6.2 shall relieve any party from
liability for any breach of this Agreement occurring before such termination.
Upon any termination of this Agreement, Buyer shall pay to Seller (i) the amount
of the Deferred Payments set forth on Schedule 2.3, Item 1, calculated through
the termination date, (ii) restitution for actual damage caused to the Assets
(which shall not include any damages for any ordinary wear and tear or
consequential, incidental, exemplary or other damages), (iii) payment of unpaid
rent and unpaid operating costs for the premises being occupied by Buyer for the
period beginning March 1, 1999 through the date of termination; and (iv) if such
termination is not resulting from Seller's non-performance or from the material
breach by Seller of any of its covenants or agreements or any of its
representations or warranties contained in this Agreement, $25,000 for Buyer's
Prior Use. Upon any termination, the Deposit will be returned to the Buyer, less
moneys, if any, due to the Seller pursuant to the immediately preceding
sentence, which moneys, upon joint notice from Buyer and Seller, shall be
transferred from the Escrow Account by Escrow Agent to Seller.
7. Buyer's Closing Requirements.
7.1 Buyer Closing Conditions. The obligations of Buyer hereunder shall
be subject to the fulfillment prior to or at the Closing, of each of the
following conditions (any or all of which may be waived, in writing, by Buyer in
its sole discretion):
(a) The representations and warranties made by Seller in this
Agreement shall be true and correct in all material respects on and as of the
date of the Closing (except for changes contemplated by this Agreement and
except for those representations and warranties that address matters only as of
a particular date, which shall remain true and correct as of such particular
date) with the same force and effect as though such representations and
warranties had been made on and as of the Closing Date, and Seller shall have
performed and complied with in all material respects all covenants,
undertakings, obligations and conditions required by this Agreement to be
performed or complied with by Seller at or prior to the Closing. Seller shall
have delivered to Buyer a certificate dated the Closing Date executed by the
President or a Vice President of Seller to such effect.
(b) The novation of the BT Agreement, in the form attached hereto
as Schedule 7.2(f), shall have been duly executed and delivered by British
Telecommunications PLC.
7.2 Buyer Closing Documents. At the Closing, Seller shall deliver to
Buyer the following documents:
(a) A certificate, dated as of the Closing Date, duly executed by
the Seller's Secretary, certifying as to (i) the signing authority, incumbency
and specimen signature of the signatory of this Agreement and the other
documents signed on behalf of the Seller in connection herewith, (ii) the
resolutions adopted by the Board of Directors of Seller authorizing and
approving the execution, delivery and performance of this Agreement and the
other documents executed in connection herewith and the consummation of the
transactions contemplated hereby and thereby and stating that such resolutions
have not been modified, amended, revoked or rescinded and remain in full force
and effect, and (iii) the Certificate of Incorporation and By-Laws of Seller.
(b) A recently dated legal existence and good standing certificate
issued by the Secretary of State of Delaware.
(c) A recently dated certificate of Seller's qualification to do
business in Massachusetts issued by the Secretary of the Commonwealth of
Massachusetts.
(d) The Bill of Sale and the Patent and Trademark Assignments, duly
executed by Seller, each in the form attached hereto as Exhibits A-1, A-2 and
A-3, respectively.
(e) An assignment, duly executed by Seller, of Seller's right,
title and interest in and to all assignable guarantees and warranties, if any,
issued in connection with the Assets, together with the original of each such
guaranty or warranty, if such original is in the possession or control of
Seller.
(f) The novation of the BT Agreement duly executed by Seller, in
the form attached hereto as Schedule 7.2(f).
(g) A Non-Disturbance Agreement, duly executed by BankBoston, in
the form attached hereto as Schedule 7.2(g).
(h) The original of each certificate, license, permit,
authorization and approval required by law with respect to the Assets and issued
by any governmental authority having jurisdiction, the absence of which would
have a material adverse effect on the operation of the Business, together with
an assignment thereof, duly executed by Seller, if any of the same are
assignable.
(i) All files and records relating to the continuing operation and
maintenance of the Assets.
(j) All books and records relating to or constituting part of the
Business Assets.
(k) Such other informational instruments, documents and other
materials in the possession of Seller as may be necessary or desirable for, or
incidental to, the consummation of the sale provided for herein, as Buyer may
reasonably request, provided however that Seller shall not be required to give
any indemnities or undertake any obligation not specifically contemplated
herein.
(l) Instruments, in form and substance reasonably acceptable to
Buyer, releasing or sufficient to release the Assets from all liens, charges,
pledges, security interests and other encumbrances, including, but not limited
to, the Liens.
8. Seller's Closing Requirements.
8.1 Seller Closing Conditions. The obligations of Seller hereunder
shall be subject to the fulfillment prior to or at the Closing of each of the
following conditions (any or all of which may be waived in writing by the Seller
in its sole discretion):
(a) The representations and warranties made by Buyer in this
Agreement shall be true and correct in all material respects on and as of the
date of the Closing (except for changes contemplated by this Agreement and
except for those representations and warranties that address matters only as of
a particular date, which remain true and correct as of such particular date)
with the same force and effect as though such representations and warranties had
been made on and as of the Closing Date, and Buyer shall have performed and
complied with in all material respects all covenants, undertakings, obligations
and conditions required by this Agreement to be performed or complied with by
Buyer prior to or at the Closing. Buyer shall have delivered to Seller a
certificate dated the Closing Date executed by the Buyer's President to such
effect. (b) The novation of the BT Agreement, in the form attached hereto as
Schedule 7.2(f), shall have been duly executed and delivered by British
Telecommunications PLC.
8.2 Seller Closing Documents. At the Closing, Buyer shall deliver the
following to Seller (unless otherwise indicated):
(a) The Purchase Price to Seller or BankBoston.
(b) A certificate, dated the Closing Date, duly executed by its
Secretary certifying as to (i) the signing authority, incumbency and specimen
signature of the signatory of this Agreement and the other documents signed on
behalf of such entity in connection herewith and (ii) the resolutions adopted by
the sole Director of Buyer authorizing the execution, delivery and performance
of this Agreement and the documents executed in connection herewith and the
consummation of the transactions contemplated hereby and thereby and stating
that such resolutions have not been modified, amended, revoked or rescinded and
remain in full force and effect, and (iii) the Certificate of Incorporation and
Bylaws of Buyer.
(c) A recently dated legal existence and good standing certificate
issued by the Secretary of State of Delaware.
(d) A recently dated certificate of Buyer's qualification to do
business in Massachusetts issued by the Secretary of the Commonwealth of
Massachusetts.
(e) The instrument of Assumption of Liabilities duly executed by
Buyer in the form attached hereto as Schedule 1.4.
(f) The novation of the BT Agreement, duly executed by Buyer, in
the form attached hereto as Schedule 7.2(f).
(g) All amounts due to Seller for rent during the period of Buyer's
Prior Use.
9. Closing Costs. The cost and expense of or related to any
documentary, transfer or sales tax payable in connection with the delivery of
any instrument or document provided in or contemplated by this Agreement, and
the cost of recording any discharges or other documents necessary to comply with
Seller's obligations hereunder, shall be paid by Seller. Each party shall pay
its own attorneys' fees and other costs incurred in connection with the
transactions contemplated hereby.
10. Seller's Performance. The acceptance of the certificates and
documents to be delivered pursuant to the provisions of this Agreement by Seller
to Buyer at the Closing shall be deemed to be a full performance and discharge
of every agreement and obligation on the part of Seller to be performed pursuant
to the provisions of this Agreement, except those which are herein specifically
stated to survive the Closing.
11. Failure to Perform.
(a) If Seller is unable to give title or deliver possession of the
Assets, all as herein stipulated, or if, at the Closing, the Assets do not
conform with the provisions hereof or any other condition to Buyer's obligation
to purchase the Assets is not satisfied, then Seller shall use its good faith
efforts and due diligence to remove any defects in title or to deliver
possession as provided herein or to make the Assets conform to the provisions
hereof or to satisfy such closing conditions, as the case may be, and the
Closing Date, at Buyer's option, shall be postponed for a period of up to thirty
(30) days. If at the expiration of the extended time Seller shall have failed to
remove such defects, deliver possession or make the Assets conform or to satisfy
such closing conditions, as the case may be, then subject to the provisions of
subsections (b) and (c) below, this Agreement may be terminated by Buyer,
whereupon the Deposit shall be forthwith repaid in full to Buyer and all other
obligations of the parties hereto shall cease and this Agreement shall be void
and without recourse to the parties hereto.
(b) Buyer shall have the election, without waiving any other rights
it may have, at either the original or any extended time for Closing, to accept
such title as Seller can deliver to the Assets or to accept the Assets in their
then condition or to waive any other obligation of Seller and to pay therefor
the full Purchase Price without deduction, in which case Seller shall transfer
such title; provided, however, that Buyer may use the Deposit to terminate any
and all liens on the Assets held by BankBoston, as provided in BankBoston
Letter.
(c) In the event of a breach of any of Seller's agreements,
representations or warranties under this Agreement, Buyer shall be entitled to
all of its rights and remedies under applicable law, including, without
limitation the right to specific performance of this Agreement.
12. Certain Additional Covenants
(a) Access to Information. Seller shall give Buyer and its
representatives, upon reasonable prior notice to Seller, access during normal
business hours to the facilities, properties, books, financial statements,
records, directors, officers, employees and agents of Seller with respect to the
Assets and shall permit Buyer to confirm with contractual partners and other
third parties the title to any Assets. Seller shall furnish to Buyer all such
reasonable information concerning the Business or the Assets as Buyer or its
representatives may reasonably request.
(b) Covenant of Further Assurances. Seller shall, at any time and
from time to time after the Closing, execute, acknowledge, seal and deliver all
such instruments and documents, and do all such further things, as Buyer may
reasonably request to perfect the transfer and delivery to Buyer of any and all
of the Assets or to transfer to or otherwise obtain for Buyer any consent,
license, permit, registration or approval necessary or desirable to accomplish
the purchase of the Assets or to enable Buyer, fully and without restriction, to
use the Assets.
(c) Buyer Patent Covenant. Buyer shall make commercially reasonable
efforts to maintain all of the patents, including the payment of all maintenance
fees, until the end of the Deferred Payment Period.
(d) BT Royalty Payments. Seller shall be responsible for and shall
pay all royalty payments due to BT for sales made prior to December 15, 1998. In
accordance with the Novation of the BT Agreement, the Buyer shall be responsible
for and shall pay all royalty payments due to BT after December 15, 1998.
13. Notices. Any notice pursuant to this Agreement shall be in writing
and shall be delivered by hand, by facsimile transmission with receipt confirmed
by telephone or automatic transmission report, sent by registered or certified
mail, send by the registered or certified mail, return-receipt requested,
postage prepaid or by Federal Express or other recognized commercial overnight
courier, addressed as follows:
If to Seller to: Galileo Corporation
P.O. Box 550
Galileo Park
Sturbridge, MA 01566
Attention: Josef W. Rokus, Vice President
Fax: (617) 347-2270
With copies to: Palmer & Dodge LLP
One Beacon Street
Boston, Massachusetts 02108
Attention: David R. Pokross Jr., Esquire
Fax: (617) 227-4420
If to Buyer to: Dr. Valentin Gapontsev
IPG Laser GmbH
Siemensstrasse 7,
Burbach
D-57299 Germany
Fax:
and to: Mr. Peter Mammen
14 Fitzgerald Park
Seaford, East Sussex BN25 1AX
United Kingdom
With copies to: Foley, Hoag & Eliot LLP
One Post Office Square
Boston, MA 02109
Attention: Brandon F. White, Esquire
Fax: (617) 832 7000
and
IPG Photonics Corporation
660 Main Street, P. O. Box 519
Sturbridge, MA 01566
Attention: Mr. David Hardwick
Fax:
Notice shall be deemed effective on the date of receipt thereof.
Either party may from time to time change the address to which notices may be
sent by giving the other party notice of such change in accordance herewith.
14. Indemnification.
14.1 By Seller. Seller hereby agrees to defend, indemnify, and hold
harmless Buyer and its officers, directors, employees, agents, successors and
assigns from and against any and all liability, loss, cost, damage, penalties,
fines, expenses and causes of action, including but not limited to, personal
injury, property damage, damage to natural resources, investigation, and
reasonable attorneys' and consultants' fees and disbursements ("Losses") arising
from or relating to:
(a) any breach of Seller's representations, warranties, or
covenants contained in this Agreement or made in any document delivered pursuant
to this Agreement;
(b) any claim, action or proceeding asserted or brought against
Buyer which arises in whole or in part out of, or in connection with, Seller's
conduct of the Business before or after the Closing;
(c) any claim, action or proceeding asserted or brought against the
Buyer which arises out of, or in connection with, Seller's failure to pay, when
due, any amount owing with respect to Seller's conduct of the Business or use of
Assets prior to the Closing (other than the Assumed Liabilities, if any);
(d) any claim, action or proceeding asserted or brought against the
Buyer asserting that the manufacture, sale or use of Products (as defined
herein) infringes U.S. Patent No. 5,309,452 identified on Schedule 5.1(e), up to
the total amount of $250,000 for all losses under this Section 14.1(d). For the
purposes of this Section 14.1(d), "Products" shall mean (i) single stage
amplifiers using Praseodymium (Pr3+) dopant in an optical fiber producing
optical gain within wavelength range 1.25 to 1.34 microns such as the FluoroAmp
1310P, (ii) multi stage amplifiers using Praseodymium (Pr3+) dopant within an
optical fiber such as the FluoroAmp 1310, (iii) broadband light sources using
amplified spontaneous emission from Praseodymium (Pr3+) dopant in an optical
fiber producing light within the wavelength range 1.25 to 1.34 microns such as
the FluoroLight, (iv) tunable and fixed laser light sources using Praseodymium
(Pr3+) dopant in an optical fiber producing light within the wavelength range
1.25 to 1.34 microns, and (v) all modified and substituted versions of (i)
through (iv) above that incorporate, rely on or are based upon any of the
Intellectual Property.
(e) any claim, action or proceeding asserted or brought against the
Buyer which arises out of, or in connection with, Seller's failure to pay, when
due, any Tax, fee or other charge assessed against Seller which shall become due
or shall have accrued (i) on account of Seller's use, acquisition or ownership
of any of the Assets or (ii) on account of the transactions contemplated hereby.
14.2 By Buyer. Buyer agrees to defend, indemnify and hold harmless
Seller and its officers, directors, employees, agents, successors and assigns
from and against any and all Losses arising from or relating to:
(a) any breach of Buyer's covenants, warranties or representations
contained in this Agreement or made in any document delivered pursuant to this
Agreement;
(b) any claim, action or proceeding asserted or brought against
Seller which arises in whole or in part out of, or in connection with, Buyer's
conduct of the Business before or after the Closing;
(c) any claim, action or proceeding asserted or brought against the
Seller which arises out of, or in connection with, Buyer's failure to pay, when
due, any amount owing with respect to Buyer's conduct of the Business before or
after the Closing or use of the Assets after the Closing or during Buyer's Prior
Use;
(d) any claim, action or proceeding asserted or brought against the
Seller which arises out of, or in connection with, Buyer's failure to pay, when
due, any Tax, fee or other charge assessed against Buyer which shall become due
or shall have accrued on account of Buyer's use, acquisition or ownership of any
of the Assets.
14.3 Survival. Any claim alleging (i) that any representation or
warranty contained in this Agreement or any document delivered in connection
with the transactions contemplated hereby was false when made, or (ii) the
breach of any representation or warranty or agreement contained in this
Agreement or any document delivered in connection with the transactions
contemplated hereby, or (iii) any right of indemnification under this Section 14
shall be brought within two (2) years after the Closing Date, except that
Seller's indemnification obligation pursuant to Section 14.1(d) shall be brought
within five (5) years after the Closing Date.
14.4 Claims for Indemnification. Whenever any claim shall arise for
indemnification hereunder with respect to a liability or obligation owed or
asserted to be owed to a third party, the party seeking indemnification (the
"Indemnified Party") shall promptly notify (in accordance with Section 13) the
party from whom indemnification is sought (the "Indemnifying Party") of the
claim and, when known, the facts constituting the basis for such claim;
provided, however, that no delay on the part of the Indemnified Party in
notifying the Indemnifying Party shall relieve the Indemnifying Party from any
liability or obligation hereunder except to the extent of any damage or
liability caused by or arising out of such failure (except that the Indemnifying
Party shall not be liable for any expenses, including attorneys' fees, incurred
during the period in which the Indemnified Party failed to give such notice). In
the event of any such claim for indemnification hereunder resulting from or in
connection with any claim or legal proceedings by a third party, the notice to
the Indemnifying Party shall specify, if known, the amount or an estimate of the
amount of the liability arising therefrom. The Indemnified Party shall not
settle or compromise any claim by a third party for which it is seeking
indemnification hereunder without the prior written consent of the Indemnifying
Party (which shall not be unreasonably withheld).
14.5 Defense by the Indemnifying Party. In connection with any claim
for indemnification hereunder resulting from or arising out of any claim or
legal proceeding by a third party, the Indemnifying Party at its sole cost and
expense may, upon written notice to the Indemnified Party given within twenty
(20) days after the date of the notice of the claim from the Indemnified Party
pursuant to Section 14.4, assume the defense of such claim or legal proceeding.
If the Indemnifying Party so assumes such defense, the Indemnified Party shall
be entitled to participate in (but not control) such defense, with its counsel
and at its own expense. In addition, if the Indemnifying Party so assumes such
defense, it shall take all steps necessary in the defense or settlement thereof;
provided, however, that the Indemnifying Party shall not consent to any
settlement or to the entry of any judgment with respect to a claim or legal
proceeding which does not include a complete release of the Indemnified Party
from all liability with respect thereto or which imposes any liability on the
Indemnified Party without the written consent of the Indemnified Party. If the
Indemnifying Party does not assume the defense of any such claim or legal
proceeding, the Indemnified Party may defend against such claim or legal
proceeding (with the Indemnifying Party responsible for the reasonable fees and
expenses of counsel for the Indemnified Party) in such manner as it may deem
appropriate, and the Indemnifying Party shall be entitled to participate (but
not control) the defense of such action, with its counsel and at its own
expense.
14.6 Limitation. The indemnification provided for in this Agreement
shall not apply unless and until the aggregate Losses for which the Indemnified
Party seeks indemnification (a) with respect to claims solely between Buyer and
Seller, exceeds $15,000, exclusive of legal fees; and (b) with respect to third
party claims, exceeds or is reasonably expected to exceed, $15,000, including
legal fees; when either case (a) or (b) applies, the Indemnifying Party will be
liable for all Losses (including amounts less than $15,000), except as such
liability is limited by Section 14.1(d) hereof. Notwithstanding the foregoing,
(i) the maximum liability of the Indemnifying Party to the Indemnified Party
shall not exceed the Purchase Price and (ii) the Losses shall be reduced by (A)
any tax benefit received by the Indemnified Party in connection with such Losses
and (B) any insurance proceeds received by the Indemnified Party with respect to
such Losses. No party shall be liable for any special, exemplary, indirect,
reliance, incidental, or consequential damages, including, without limitation,
loss of profits, even if the Indemnifying Party was advised of the possibility
of such damages. No party shall have a right to recovery against any party (or
any officer, director, employee or agent of a party) other than through the
exercise of the indemnification rights set forth in this Section 14, which shall
constitute the sole and exclusive remedy after the Closing Date for any breach
by a party of any representation, warranty, covenant or agreement contained
herein or in any certificate or other instrument delivered pursuant hereto.
15. Entire Agreement. This Agreement sets forth all of the prior
promises, representations, agreements, conditions and understandings, whether
oral or written, between the parties and there exist no promises,
representations, agreements, conditions or understandings which have not been
expressed herein with respect to the subject matter hereof. This Agreement
cannot be changed orally, and no agreement shall be effective to waive, amend or
modify this Agreement or any provision hereof, or discharge either party hereto
in whole or in part, unless such agreement is in writing and signed by both
parties.
16. Binding Effect. This Agreement shall inure to the benefit of, and
be binding upon, the parties hereto and their respective legal representatives,
successors and assigns and upon any successor or assign of the Business or the
Assets.
17. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original and all of which
together shall be deemed to be one and the same agreement.
18. Schedules. All Schedules annexed hereto and referred to herein
shall constitute part of this Agreement.
19. Governing Law. This Agreement shall be construed in accordance
with the substantive laws of The Commonwealth of Massachusetts, provided that if
the principles of conflict of laws would apply the substantive law of another
jurisdiction, the substantive law of Massachusetts will be applied nevertheless.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement, under seal, as of the day and year first above written.
GALILEO CORPORATION
By: /s/ Josef W. Rokus
------------------------------------
Name: Josef W. Rokus
Title: Vice President
IPG PHOTONICS CORPORATION
By: /s/ Valentin P. Gapontsev
------------------------------------
Name: Dr. Valentin P. Gapontsev
Title: President
For the purposes of Section 2.4 only:
FOLEY, HOAG & ELIOT LLP,
as ESCROW AGENT
By: /s/ Paul R. Murphy
---------------------------------
A Partner
<PAGE>
Schedule of Omitted Exhibits
Schedule A - Business Assets
Appendix A-1 - Machinery and Equipment
Appendix A-2 - Furniture
Appendix A-3 - Inventory
Appendix A-4 - Computer Software
Schedule B - Intellectual Property
Exhibit B-1 - Patents & Foreign Patent Applications
Appendix B-2 - Trademarks
Exhibit B-3 - Third Party License Agreements
Exhibit B-4 - British Telecommunications PLC License Agreement
Exhibit B-5 - Employee Agreements
Schedule 1.2 - Assumed Liabilities
Schedule 1.4 - Form of Assumption of Liabilities
Schedule 2.3 - Deferred Payments
Schedule 3 - BankBoston Letter Agreement
Schedule 5.1(b) - Liens and Encumbrances
Schedule 5.1(e) - Rights in Intellectual Property; Disclaimers and Limitations
Schedule 5.1(f) - Contracts
Schedule 5.1(g) - Year 2000 Compliance Exceptions
Schedule 5.1(j) - Violation of Laws
Schedule 5.1(n) - Tax Matters
Schedule 7.2(f) - BT Novation Agreement
Schedule 7.2(g) - Non-Disturbance Agreement
Exhibit A-1 - Form of Bill of Sale
Exhibit A-2 - Form of Patent Assignment
Exhibit A-3 - Form of Trademark Assignment
EXHIBIT 99.1
Contact: Josef W. Rokus, Vice President -- 508-347-4347
Galileo Corporation Announces Sale of
Its Scientific Detector Products Business and Other Assets
Sturbridge, Massachusetts, July 1, 1999 - Galileo Corporation (NASDAQ National
Market: GAEO) today announced that it has sold its Scientific Detector Products
Business to BURLE INDUSTRIES, INC. of Lancaster, Pennsylvania. This business
includes microchannel plates, Channeltron(R) single channel detectors,
microchannel plate-based detectors, flexible fiberoptics lightguides,
glass-coated wire, and remote spectroscopy products. BURLE is a leading supplier
of electronic tubes, including photomultipliers and silicon target imaging
devices as well as power tubes and cavities. BURLE plans to operate the business
at its present location in Sturbridge, Massachusetts. Separately, Galileo
announced that it has also sold certain manufacturing assets related to a
previously discontinued business to IPG Photonics Corporation of Sturbridge,
Massachusetts. IPG Photonics, a part of the IP Group which is based in Burbach,
Germany, is a supplier of optical fiber amplifiers and lasers for applications
in telecommunications, laser material processing, product coding and the
printing industry. The Company has applied the proceeds from these transactions,
aggregating approximately $8.5 million, to the repayment of the Company's
indebtedness under its revolving credit agreement, reducing the outstanding
balance thereunder to below $6 million, as required. Gerhard R. Andlinger,
Galileo's Chairman of the Board, said, "The sales of our Scientific Detector
Products Business and the other assets are key steps in our strategy of focusing
our Company on those businesses which we believe provide the best long-term
growth opportunities for Galileo. We are particularly pleased that we were able
to sell the Scientific Detector Products Business to BURLE INDUSTRIES because of
BURLE's long involvement in many of the same markets. We believe that the sale
will benefit our customers, employees and suppliers, as well as our
shareholders, and we will work closely with BURLE to ensure a smooth
transition."
EXHIBIT 99.2
Contact: Josef W. Rokus, Vice President - 508-347-4347
GALILEO CORP. ANNOUNCES APPOINTMENT OF
GERHARD R. ANDLINGER AS
PRESIDENT AND CHIEF EXECUTIVE OFFICER
Sturbridge, MA, July 6, 1999 -- Galileo Corporation (NASDAQ National Market:
GAEO) today announced that Gerhard R. Andlinger, Chairman of the Board of the
Company, has assumed the additional titles of President and Chief Executive
Officer, succeeding W. Kip Speyer who has resigned from those positions and as a
Director of the Company.
John D. Barlow, 48, most recently President of Ethox Corp., Buffalo, NY, a
business affiliated with Andlinger & Company, has been named President and Chief
Executive Officer of Galileo's Leisegang Medical, Inc. subsidiary, succeeding
Mr. Speyer who resigned from those positions as well. Ethox Corp., with
approximately $20 million in annual sales, is engaged in the manufacture of
plastic disposable medical devices and provides ethylene oxide sterilization and
microbiological/chemistry laboratory testing services. Mr. Barlow has more than
twenty years experience in the pharmaceutical and medical device manufacturing
and distribution industries and is a seasoned operating executive. He is a
graduate of the University of Michigan and holds an MBA from Eastern Michigan
University.
Gerhard R. Andlinger, Chairman of Galileo since January, 1999 when an affiliate
of his closely held investment and management firm, Andlinger & Company, Inc.,
invested in 2 million shares of Galileo Corporation with options to acquire an
additional 2 million shares, has an extensive background in telecommunications,
both in operating and equipment manufacturing companies, having served as an
Executive Vice President of ITT Corporation, and President of its ITT Europe
subsidiary. Mr. Andlinger is a graduate of Princeton University and the Harvard
Business School. He is recognized as an accomplished turnaround manager and has
previously managed and taken public Esterline Technologies Corp. and Anitec
Image Technology Corp.
Mr. Andlinger commented: "With the addition of an executive of John Barlow's
background and experience with our operating policies and standards of
performance to Galileo's female health care business; the recently announced
recruitment of Ralf Faber (See press release dated June 21, 1999) as President
and CEO of Galileo's Optical Filter Corporation subsidiary; and the earlier
addition of Thomas J. Mathews as Vice President, Finance and CFO, Galileo
Corporation (See press release dated February 24, 1999), we have achieved our
first priority: namely, the building of an experienced, hard hitting and
cohesive top management team which can propel Galileo into its well defined
future."
"Our second priority, strengthening Galileo's balance sheet and liquidity which
was initially addressed with our January equity investment, was further realized
with last weeks' announcement (See press release dated July 1, 1999) of the sale
of nonstrategic assets in the amount of $8.5 million, the proceeds from which
have reduced the Company's debt to approximately $1.1 million. Our materially
strengthened financial position should enable us to continue making major
research and capital commitments in the rapidly growing area of Dense Wavelength
Division Multiplex (DWDM) filters for the telecommunications industry."
This press release includes forward-looking statements concerning growth
opportunities for the company and other aspects of future operations. These
forward-looking statements are based on certain underlying assumptions and
expectations of management. As such, these forward-looking statements are
subject to risks and uncertainties which could cause actual results to differ
materially from the forward-looking statements included in this press release.
For additional information on those factors which could affect actual results,
please refer to the Company's Form 10-K for the fiscal year ended September 30,
1998.
