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):
March 29, 1996
________________________________________
THERMO INSTRUMENT SYSTEMS INC.
(Exact name of Registrant as specified in its charter)
Delaware 1-9786 04-2925809
(State or other (Commission (I.R.S. Employer
jurisdiction of File Number) Identification Number)
incorporation or
organization)
1275 Hammerwood Avenue
Sunnyvale, California 94089
(Address of principal executive offices) (Zip Code)
(617) 622-1000
(Registrant's telephone number
including area code)
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FORM 8-K
Item 2. Acquisition or Disposition of Assets
------------------------------------
On March 29, 1996, Thermo Instrument Systems Inc. (the "Company")
acquired a substantial portion of the Scientific Instruments Division of
Fisons plc ("Fisons"), a wholly-owned subsidiary of Rhone-Poulenc Rorer
Inc., for 122,608,000 pounds sterling in cash and the assumption of
approximately 23,000,000 pounds sterling of indebtedness. The purchase
price is subject to a post-closing adjustment equal to the amount by which
the value of the net tangible assets of the acquired businesses on the
closing date is greater or less than, as the case may be, certain
benchmarks agreed to by the parties.
The acquisition was made pursuant an Amended and Restated Asset and
Stock Purchase Agreement dated as of March 29, 1996 among the Company,
Fisons and Thermo Electron Corporation (the "Agreement"). The Agreement
superseded a prior agreement dated March 1, 1995 under which the Company
had agreed to buy the entire Scientific Instruments Division of Fisons.
The Agreement modified the original agreement by excluding from the
businesses to be acquired by the Company substantially all of the mass
spectrometer businesses of Fisons and a high-resolution mass
spectrometer/ICP product. The parties excluded these product lines from
the acquisition in order to address concerns raised by the United States
Federal Trade Commission and antitrust authorities in England.
The purchase price was based on the Company's determination of the
fair value of the acquired businesses, and the terms of the Agreement were
determined by arms-length negotiation among the parties. In order to
finance the acquisition, the Company utilized approximately $98 million of
available cash, in addition to borrowings of approximately $90 million from
Thermo Electron. As of April 12, 1996, the Company repaid a portion of the
borrowings from Thermo Electron. Remaining acquisition indebtedness of $55
million to Thermo Electron will bear interest at a rate equal to the
Commercial Paper Composite Rate plus 25 basis points and is due April 11,
1997.
The Company has no present intention to use the plant, equipment or
other physical property acquired for purposes materially different for the
purposes for which such assets were used prior to the acquisition.
However, the Company will review the acquired businesses and their assets,
corporate structure, capitalization, operations, properties, policies,
management and personnel. After completion of this review, the Company may
develop alternative plans or proposals, including mergers, transfers of a
material amount of assets or other transactions or changes relating to the
acquired businesses. Any such transaction might involve Thermo Electron or
another subsidiary of Thermo Electron.
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FORM 8-K
Item 7. Financial Statements, Pro Forma Combined Condensed Financial
------------------------------------------------------------
Information and Exhibits
------------------------
(a) Financial Statements of Business Acquired: as it is
impracticable to file such information at this time, it will
be filed by amendment on or prior to June 14, 1996.
(b) Pro Forma Combined Condensed Financial Information: as it is
impracticable to file such information at this time, it will
be filed by amendment on or prior to June 14, 1996.
(c) Exhibits
2.1 Amended and Restated Asset and Stock Purchase Agreement
dated March 29, 1996 among the Registrant, Thermo
Electron Corporation and Fisons plc. Schedules and
exhibits to the agreement (each of which are identified
in the agreement) are omitted in reliance on Rule
601(b)(2) of Regulation S-K. The Registrant hereby
undertakes to furnish such schedules and exhibits to the
Commission supplementally upon request.
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FORM 8-K
SIGNATURES
----------
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized, on this 12th day of April 1996.
THERMO INSTRUMENT SYSTEMS INC.
/s/ Paul F. Kelleher
------------------------
Paul F. Kelleher
Chief Accounting Officer
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EXHIBIT 2.1
AMENDED AND RESTATED
ASSET AND STOCK PURCHASE AGREEMENT
between
FISONS plc
and
THERMO INSTRUMENT SYSTEMS INC.
and
THERMO ELECTRON CORPORATION
Dated as of March 29, 1996
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AMENDED AND RESTATED ASSET AND STOCK PURCHASE AGREEMENT
AMENDED AND RESTATED ASSET AND STOCK PURCHASE AGREEMENT
(this "Agreement") dated as of March 29, 1996, between Fisons
plc, a company organized under the laws of England (the
"Seller"), Thermo Instrument Systems Inc., a corporation
organized under the laws of Delaware, U.S.A. (the "Buyer"), and
Thermo Electron Corporation, a Delaware corporation ("Parent").
W I T N E S S E T H:
WHEREAS, the Buyer, the Seller and the Parent entered into
an Agreement dated as of March 1, 1995, as amended (the "1995
Agreement"), contemplating the sale by the Seller to the Buyer of
the Seller's Scientific Instruments Division.
WHEREAS, to address concerns of the U.S. Federal Trade
Commission and following discussions with the staff of the United
Kingdom Office of Fair Trading, the Buyer, the Seller and the
Parent wish to enter into a new agreement which shall amend and
supersede the 1995 Agreement, under which certain product lines
within the Seller's Scientific Instruments Division will not be
sold to Buyer and under which certain other modifications to the
1995 Agreement will be made.
NOW, THEREFORE, the parties hereto agree as follows:
1. GENERAL.
1.1 Definitions. The terms defined in Exhibit A, whenever
used in this Agreement, shall have the meanings provided in such
Exhibit for all purposes of this Agreement.
1.2 Schedules and Exhibits. A "Schedule" is a
Schedule attached hereto and made a part hereof . An "Exhibit"
is an agreement or other document attached hereto and made a part
hereof.
1.3 Pounds Sterling. Unless otherwise indicated herein or
on the Schedules, all references to amounts in pounds (#) shall
mean English pounds sterling. For purposes of determining the
applicability of any figures expressed in English pounds sterling
contained in Sections 5, 6 or 11 to items denominated in a
currency other than English pounds sterling, the relevant
currency shall be converted to English pounds sterling at the
applicable exchange rate published in the currency crossrate
table of The Wall Street Journal (New York edition) on the date
of this Agreement (or, with respect to amounts referred to in
Section 11, on the date on which notice of a claim is given or,
if no notice is given because a Loss is not quantifiable, on the
first day of the month during which an estimate of the amount of
the claim can reasonably be made).
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2. PURCHASE AND SALE.
2.1 Agreement to Sell and to Purchase. In reliance upon
the representations and warranties of the Buyer contained herein,
and on the terms and subject to the conditions herein set forth,
the Seller agrees to sell, convey, assign, transfer and deliver,
or cause to be sold, conveyed, assigned, transferred and
delivered, the Shares and the Assets to the Buyer. In reliance
upon the representations and warranties of the Seller contained
herein, and on the terms and subject to the conditions herein set
forth, the Buyer agrees to purchase, or cause to be purchased, at
the Closing the Shares and the Assets and to assume, or cause to
be assumed, at the Closing, the Assumed Liabilities. In reliance
upon the representations and warranties of the Seller contained
herein, on the terms and subject to the conditions herein set
forth, and in consideration of the sale of the Shares and the
Assets, the Buyer agrees to pay, at the Closing, an aggregate
purchase price of #122,608,000 subject to adjustment as provided
in Section 4.1 (the "Purchase Price"), and to assume, at the
Closing, the Assumed Liabilities.
2.2 Transfer of Shares. At the Closing, the Seller shall,
or shall cause each Share Seller to, execute and deliver to the
Buyer a certificate or certificates representing the Shares (in
the case of certificated Shares) together with duly executed
stock powers, share transfer forms, transfer deeds or other
documents of transfer sufficient to convey the Shares to the
Buyer, and such other instruments of conveyance as the Buyer may
reasonably request in order to effect the sale, transfer,
conveyance and assignment to the Buyer of good title to the
Shares free and clear of all Encumbrances other than Permitted
Encumbrances.
2.3 Transfer of Assets. At the Closing, subject to the
proviso contained in Section 2.6(a) and, in the case of the UK
Properties, subject to the provisions of Exhibit B, the Seller
shall, or shall cause each Asset Seller to, execute and deliver
to the Buyer a bill of sale and such other instruments of
conveyance as the Buyer may reasonably request in order to effect
the sale, transfer, conveyance and assignment to the Buyer of
good title to the Assets, free and clear of all Encumbrances
other than Permitted Encumbrances.
2.4 Payment of Purchase Price. At the Closing, the Buyer
shall deliver the portion of the Purchase Price payable at
Closing in immediately available funds by wire transfer to an
account designated by the Seller, acting on behalf of the Share
Sellers and the Asset Sellers.
2.5 Assets Not Transferred. Notwithstanding the foregoing,
the Assets to be transferred shall not include the following (the
"Excluded Assets"):
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(a) all of the rights, properties and assets used in the
Business which shall have been transferred or disposed of prior
to the Closing in transactions conducted in the Ordinary Course
of Business or as described on Schedule 2.5;
(b) all assets in the possession of the Business but owned
by third parties, other than third party owned assets that, under
GAAP, are appropriate to be reflected on the Closing Balance
Sheet as Assets, subject to any third party rights in respect of
the same being reflected thereon as liabilities of the Business;
(c) all intercompany receivables, notes or loans with
respect to the Business between (i) the Seller and its
subsidiaries and affiliates which are not constituents of the
Business and (ii) the Asset Sellers, in each case except for
trade payables or receivables related to the provision of goods
or services to or by the Business in the Ordinary Course of
Business;
(d) Restricted Assets that are not assignable to the Buyer
as a matter of law;
(e) the name "Fisons" and any derivation thereof and the
stylized logo "Fisons" (collectively, the "Retained Names and
Logos"); provided, however, that the Buyer shall be entitled to
the use thereof pursuant to Section 7.10(a);
(f) any shares of capital stock of any of the Dormant
Shells designated in writing by the Buyer to the Seller prior to
the Closing;
(g) any assets described on Schedule 2.5;
(h) any foreign currency agreement to which any Asset
Seller is a party; and
(i) assets reflected on the balance sheets of the
former Laboratory Supplies Division and the Pharmaceutical
Division of the Seller, none of which assets are used primarily
in the Business or will be reflected on the Closing Balance
Sheet.
2.6 Documents of Transfer. At the Closing, in addition to
the documents of transfer described in Sections 2.2 and 2.3, the
Seller will, or will cause each respective Share Seller or Asset
Seller to:
(a) execute, acknowledge and deliver to the Buyer such
deeds, bills of sale, endorsements, assignments, stock powers,
share transfer forms and other good and sufficient instruments of
conveyance, sale, transfer and assignment as shall be reasonably
requested by the Buyer, and , subject to Section 4.3, with all
required federal, state, local, foreign and other documentary and
revenue stamps affixed where customarily paid or provided by a
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seller, as shall be required in order to effectively vest,
subject only to any required recordation or similar filing, in
the Buyer all of the Share Sellers' and Asset Sellers' right,
title and interest in and to the Assets or the Shares, as the
case may be, provided that (i) where the Buyer is satisfied that
title to any of the Assets located in England can effectively
pass by way of physical delivery without the use of any document
of transfer, the Seller will deliver or cause to be delivered
such Assets to the Buyer at Closing, such delivery to take place
by means of the relevant Assets being retained at the places at
which they are physically located at the Closing to the order of
the Buyer and (ii) where title to such Assets can pass only by
way of document of transfer, subject to Section 4.3, the Buyer
shall be responsible for any stamp duty or other tax liable to be
paid thereon; and
(b) deliver or make available to the Buyer all of the
files, documents, papers, contracts, agreements, legal
descriptions, open books of account or ledgers and documentation
in support thereof, and all other information appearing in
writing and relating primarily to the Business and which is in
any Share Seller's or Asset Seller's possession and the minute
books and share registers of the Companies (it being understood
that, subject to the provisions of Section 7.12, the Asset
Sellers and the Share Sellers shall be entitled to retain copies
of any of the foregoing, but only to the extent the retention of
such copies is reasonably necessary for the Asset Sellers and the
Share Sellers to comply with applicable tax, securities,
accounting or other laws, rules or regulations and their
obligations hereunder).
2.7 Further Assurances. At the Closing and at any time or
from time to time thereafter, at the request of the Buyer and
without further consideration, the Seller shall, and shall cause
each Share Seller and Asset Seller to: (i) take such action as
the Buyer may reasonably determine is necessary to put the Buyer
in actual possession and operating control of the Business and
(ii) execute, acknowledge and deliver such further instruments
of conveyance, sale, transfer and assignment as the Buyer may
reasonably request, including, without limitation, deeds of
assignment in the forms attached hereto as Exhibit E, and take
such other action as the Buyer may reasonably request, in order
to convey, sell, transfer and assign to the Buyer the Assets and
the Shares, to evidence the Buyer's rights to, title in and
ownership of the Assets and the Shares and to consummate the
transactions contemplated hereby. At the Closing and at any time
and from time to time after the Closing, at the request of the
Seller and without further consideration, the Buyer shall, and
shall cause each of its Subsidiaries to, take such action and
execute, acknowledge and deliver such further instruments as the
Seller may reasonably determine is necessary to consummate the
transactions contemplated hereby.
2.8 Restricted Assets.
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(a) The Seller shall use all reasonable efforts, and the
Buyer shall cooperate reasonably with the Seller, (i) to
promptly obtain the consents and waivers necessary to convey or
cause to be conveyed to the Buyer all of the Restricted Assets,
and (ii) as of and subject to the occurrence of the Closing, to
promptly convey or cause to be conveyed to the Buyer the
Restricted Assets for which the Seller has received the
necessary consents and waivers; provided, however, that the
Seller shall not, and shall cause the Asset Sellers not to,
amend or change any Restricted Asset without the prior written
consent of the Buyer unless the Seller reasonably deems it
necessary to preserve the value of the Restricted Asset. The
Seller shall, and shall cause the Asset Sellers to, cooperate
with the Buyer in making applications and filings or taking any
other action necessary for the Buyer to obtain such franchises,
licenses, permits or other instruments or agreements, if any, as
are substantially equivalent to any Restricted Assets that are
not assignable to Buyer as a matter of law. In no event shall
the Buyer's cooperation hereunder require the Buyer to make any
payments or incur any out-of-pocket expenses, except that the
Buyer shall reimburse the Seller on an equitable basis for any
consideration paid, with the prior approval of the Buyer, to any
person from whom a consent or waiver is requested.
(b) To the extent that the consents and waivers necessary
to assign, transfer, sublease or sublicense any of the Restricted
Assets are not obtained, the Seller shall, commencing on the
Closing Date and continuing for the duration of each such
Restricted Asset, use reasonable efforts to (i) provide to the
Buyer the benefits of any such Restricted Asset not assigned,
transferred or subleased due to the Seller's failure or
inability to obtain such consent or waiver, (ii) cooperate with
the Buyer to reach a reasonable and lawful arrangement designed
to provide such benefits to the Buyer during such period and
(iii) enforce at the request of the Buyer, or allow the Buyer to
enforce (and, solely for such purpose, the Seller hereby
constitutes and appoints the Buyer as its true and lawful
attorney-in-fact until revoked in a writing delivered by the
Seller to the Buyer), any rights of the Seller under any such
Restricted Asset against the issuer thereof or the other party
or parties thereto (including the right to elect to terminate
such of the foregoing in accordance with the terms thereof upon
the request of the Buyer); provided, however, that the reasonable
costs and expenses of the Seller (including reasonable
professional fees and expenses) incurred at the Buyer's request
with respect to any of the actions contemplated under (iii)
above shall be promptly paid or reimbursed by the Buyer to the
Seller. At the end of each such period, the Seller shall have
no further duties or obligations under this Section 2.8 with
respect to such Restricted Asset and the failure or inability to
obtain any necessary consent or waiver with respect thereto
shall not be a breach of this Agreement so long as the Seller
has carried out its obligations under this Section 2.8.
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(c) To the extent that the Buyer is provided the benefits
of any Restricted Asset pursuant to clause (b) of this Section
2.8, the Buyer shall perform for the benefit of the issuer
thereof, or the other party or parties thereto, the obligations
of any Asset Seller thereunder or in connection therewith, but
only to the extent that (i) such action by the Buyer would not
result in any default thereunder or in connection therewith and
(ii) such obligation would have been an Assumed Liability but for
the non-assignability or non-transferability thereof; provided,
however, that if the Buyer shall fail to perform to the extent
required herein, the Seller shall thereafter cease to be
obligated under this Section 2.8 to provide the Buyer with any
benefits in respect of the Restricted Asset which is the subject
of such failure to perform unless and until such situation is
remedied or, at the sole option of the Seller, the Buyer shall
promptly pay or reimburse the Seller to remedy such failure to
perform during such period of failure of performance.
2.9 UK Property. In addition to the terms and conditions
hereof, the terms and conditions set forth on Exhibit B shall
apply to the sale of the UK Property. At the Closing the Buyer
shall pay to the Seller the aggregate of the following sums in
connection with the disposal of Unit 4 Aston Way, Middlewich and
dealings with Units 1 and 2 Aston Way, Middlewich: (i) the sum
of #950 plus VAT in respect of setting up a temporary electricity
supply, (ii) the sum of #7,650 plus VAT in respect of the
Seller's surveyors fees; and (iii) the sum of #4,000 plus VAT in
respect of the Seller's solicitors fees.
2.10 Intercompany Accounts. Prior to or on the Closing
Date, the Seller shall, and shall cause its Affiliates to,
eliminate, to the extent legally possible, all intercompany
accounts related to the Business between (a) the Seller and
Affiliates which are not constituents of the Business and
(b) the Asset Sellers or the Companies, except for trade payables
or receivables related to the provision of goods or services to
or by the Business in the Ordinary Course of Business.
3. ASSUMPTION OF CERTAIN LIABILITIES.
3.1 Liabilities Assumed. On the Closing Date, subject to
the terms and conditions herein set forth, the Seller shall
assign or cause to be assigned to the Buyer, and the Buyer shall
assume all liabilities of each Asset Seller of any nature, known
or unknown, fixed, accrued, contingent or otherwise, arising out
of or relating primarily to the Business, except for the Excluded
Liabilities (collectively, the "Assumed Liabilities"). The
Assumed Liabilities shall include, without limitation, the U.K.
Property Liabilities.
3.2 Liabilities Not Assumed. The Buyer shall not assume
any liabilities or obligations of any Asset Seller of any nature,
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known or unknown, fixed, contingent or otherwise, arising out of
or relating to the following, all of which shall remain
obligations of such Asset Seller (the "Excluded Liabilities"):
(a) any Environmental Liability;
(b) any legal suit, action or proceeding of any kind filed
and commenced against any Asset Seller prior to the Closing Date,
or the commencement of which was, to the Seller's Knowledge,
threatened in writing prior to the Closing Date, including,
without limitation, those described on Schedule 5.15 or Schedule
5.19 (regardless of whether or not threatened in writing);
(c) any and all Taxes with respect to Pre-Closing Periods
to the extent the Seller is liable for such Taxes under Section
7.9;
(d) any overdraft facility, bank credit line or third party
indebtedness for money borrowed to the extent not listed on
Schedule 5.26;
(e) Subject to Section 7.7(b), (i) any claims against, or
liabilities or obligations of or in connection with, any Plans or
Foreign Plans not specifically assumed by the Buyer pursuant to
this Agreement, (ii) any claims for severance pay, termination
pay, redundancy pay, pay in lieu of notice or any other claim
for similar compensation or damages relating to the termination
of any employee prior to the Closing Date or relating to any
Australian employee that does not accept the Buyer's offer of
employment given in accordance with Section 7.6(a), (iii) any
claims for compensation by any employee for services rendered
prior to the Closing Date or (iv) any liability in connection
with regulation 11 of the Transfer Regulations; provided that the
foregoing clauses (ii) and (iii) shall not include claims for
severance, termination or redundancy pay or pay in lieu of notice
relating to the termination of any Continuing Employee on or
after the Closing Date;
(f) any product liability claims asserted on or prior to
the fifth anniversary of the Closing Date arising out of or
related to the sale of any products of the Business prior to the
Closing Date to the extent such claims exceed the accruals and
reserves therefor on the Closing Balance Sheet;
(g) liabilities and obligations under Restricted Assets to
the extent the Seller does not obtain the consents and waivers
necessary to assign, transfer, sublease (subject in the case of
the UK Properties to the provisions of Exhibit B) or sublicense
such Restricted Assets to the Buyer and the Seller does not
provide to the Buyer the benefits of such Restricted Assets
pursuant to Section 2.8(b);
(h) any claim, suit or proceeding relating to the actual
or alleged infringement by any of the Asset Sellers of the
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Proprietary Rights of any third party, which infringement is
alleged to have commenced prior to the Closing Date, including,
without limitation, any claim, suit or proceeding relating to any
of the matters described in Schedule 5.15;
(i) any liabilities or obligations arising out of or
relating to the violation of any Laws and Regulations that
occurred prior to the Closing Date;
(j) the cost of fulfilling any bona fide warranty
obligations undertaken by the Asset Sellers with respect to
products sold prior to the Closing Date, except to the extent of
warranty reserves on the Closing Balance Sheet;
(k) liabilities or obligations under foreign currency
contracts to which any Asset Seller is a party;
(l) any liability of any Asset Seller to the Seller or
any of its Affiliates that is not a constituent of the Business,
except for trade payables or receivables related to the provision
of goods or services to or by the Business in the Ordinary Course
of Business;
(m) agreements relating to the sale or other
disposition of any business or real property prior to the Closing
Date save in respect of the U.K. Property Liabilities; and
(n) for the avoidance of doubt, any liability or
obligation whatsoever of any Asset Seller arising out of or
relating to the Excluded Product Lines or the sale of the
Excluded Product Lines, including, without limitation, any
liability or obligation to any person listed on Schedule 3.2(n),
all of whom are employed in the business of the Excluded Product
Lines.
3.3 Documents of Assumption. At the Closing, the
assumption of the Assumed Liabilities by the Buyer shall be
evidenced by the execution and delivery to the Asset Sellers of
instruments of assumption and such other instruments as the
Seller may reasonably request in order to effect the assumption
by the Buyer of the Assumed Liabilities. After the Closing, the
Buyer shall, at the written request of Seller, use reasonable
efforts to arrange over time for the substitution of the Buyer
for the Seller and its Subsidiaries and Affiliates that are not
constituents of the Business on the agreements, obligations and
liabilities in respect of the Business which are obligations of
the Seller and its Subsidiaries and Affiliates that are not
constituents of the Business, including, without limitation,
those agreements, obligations and liabilities listed on Schedule
5.26.
3.4 Risk of Loss. The risk of loss of any of the Assets or
the Company Assets shall be the responsibility of the Buyer as of
the Closing Date. All casualty or other losses of Assets or
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Company Assets or to the Business occurring after such time shall
be the responsibility of the Buyer, whether or not the Buyer has
purchased or obtained any insurance coverage.
4. PURCHASE PRICE MATTERS.
4.1 Post-Closing Adjustment. The amount paid at the
Closing pursuant to Section 2.1 shall be subject to adjustment
after the Closing Date as follows:
(a) Within 60 days after the Closing Date, the Seller shall
prepare and deliver to the Buyer a consolidated balance sheet of
the Business reflecting the assets and liabilities of the
Business as of the Closing Date without giving effect to the
transactions contemplated by this Agreement, which shall consist
only of the Assets (other than the Excluded Assets), the Company
Assets, the Assumed Liabilities and the Company Liabilities (the
"Draft Closing Balance Sheet"). The Seller shall prepare the
Draft Closing Balance Sheet in accordance with English generally
accepted accounting principles ("GAAP") and the Accounting
Principles and in such detail as the Buyer shall reasonably
request. The Draft Closing Balance Sheet shall include
appropriate accruals for (x) liabilities of the Business incurred
prior to the Closing Date but for which invoices have not been
received as of the Closing Date and (y) prepayments in respect of
the Business.
(b) The Buyer shall deliver to the Seller within 60 days
after receiving the Draft Closing Balance Sheet a detailed
statement describing its objections (if any) thereto. Failure of
the Buyer so to object to the Draft Closing Balance Sheet shall
constitute acceptance thereof, whereupon the Draft Closing
Balance Sheet shall be deemed to be the "Closing Balance Sheet".
The Buyer and the Seller shall use reasonable efforts to resolve
any such objections, but if they do not reach a final resolution
within 30 days after the Seller has received the statement of
objections, the Buyer and the Seller shall select an accounting
firm mutually acceptable to them (the "Neutral Auditors") to
resolve any remaining objections. If the Buyer and the Seller
are unable to agree on the choice of Neutral Auditors, they shall
select as Neutral Auditors an internationally-recognized
accounting firm by lot (after excluding their respective regular
independent accounting firms and RPR's regular independent
accounting firm). The Draft Closing Balance Sheet shall be
adjusted by the Neutral Auditors only to conform to GAAP and the
Accounting Principles and, as so adjusted, shall be the Closing
Balance Sheet. Such determination by the Neutral Auditors shall
be conclusive and binding upon the Buyer and the Seller, absent
fraud or manifest error. Notwithstanding anything to the
contrary in this Section 4.1, if any objection of Buyer to the
Draft Closing Balance Sheet relates to the value given to any
real property included within the Assets, and if Buyer and Seller
cannot resolve such objection within the period provided in this
Section 4.1(b), then the value of such real property shall be
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determined by a nationally (in the country where the property is
located) recognized commercial real estate broker designated by
the Buyer and Seller (the "Neutral Broker"), rather than by the
Neutral Auditors, and as so determined shall be used in the
Closing Balance Sheet.
(c) During the preparation of the Draft Closing Balance
Sheet by the Seller and the period of any dispute referred to
above, the Buyer shall promptly disclose to the Seller, the
Seller's independent accountants and, if applicable, the Neutral
Auditors and the Neutral Broker all relevant facts and
information, give them full access to books, records, facilities
and employees of the Business and cooperate fully with the
Seller, the Seller's accountants and, if applicable, the Neutral
Auditors and the Neutral Broker in order to prepare the Draft
Closing Balance Sheet or the Closing Balance Sheet, as the case
may be; provided, however, that any such access shall be allowed
only in such manner as not to interfere unreasonably with the
operation of the Business.
(d) The Buyer and the Seller shall share equally the fees
and expenses of the Neutral Auditors and the Neutral Broker.
(e) If the Net Book Value (as defined below) as shown on
the Closing Balance Sheet is less than #101,200,000 the Seller
shall pay to the Buyer, by wire transfer or other delivery of
immediately available funds, within three business days after the
date on which the Closing Balance Sheet is finally determined
pursuant to this Section 4.1, an amount equal to such deficiency
(plus interest thereon from the Closing Date at the rate of the
one-month London Interbank Offered Rate in effect from time to
time as reported in The Wall Street Journal ("LIBOR") plus 1%).
Interest shall be computed for all purposes of this Agreement on
a daily basis, with a year being deemed to consist of 365 days.
"Net Book Value" shall mean the excess of (A) the combined
tangible Assets and Company Assets (other than the Excluded
Assets, and other than cash and cash equivalents (collectively,
"Cash")) over (B) the combined Assumed Liabilities and Company
Liabilities (other than indebtedness for borrowed money
(collectively, "Indebtedness")). Indebtedness less Cash shall be
referred to herein as "Net Debt".
(f) If the Net Book Value as shown on the Closing Balance
Sheet exceeds #101,200,000, the Buyer shall pay to the Seller, by
wire transfer or other delivery of immediately available funds,
within three business days after the date on which the Closing
Balance Sheet is finally determined pursuant to this Section 4.1,
an amount equal to such excess (plus interest thereon from the
Closing Date at the rate equal to LIBOR plus 1%).
(g) In addition to the adjustment in Section 4.1(e) or (f),
if Net Debt as shown on the Closing Balance sheet (A) exceeds
#23,642,000, the Seller shall pay to the Buyer, by wire transfer
or other delivery of immediately available funds, within three
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business days after the date on which the Closing Balance Sheet
is finally determined pursuant to this Section 4.1, an amount
equal to such excess (plus interest thereon from the Closing Date
at the rate equal to LIBOR plus 1%) or (B) is less than
#23,642,000, the Buyer shall pay to the Seller, by wire transfer
or other delivery of immediately available funds, within three
business days after the date on which the Closing Balance Sheet
is finally determined pursuant to this Section 4.1, an amount
equal to such deficiency (plus interest thereon from the Closing
Date at the rate equal to LIBOR plus 1%).
4.2 Allocation of Purchase Price. The allocation of the
Purchase Price to the shares of the Companies listed on Schedule
4.2 is as shown on such schedule. The parties shall use
reasonable efforts to agree after the Closing on an allocation of
the remainder of the Purchase Price (and all other capitalizable
costs).
4.3 Transaction Taxes. Any and all federal, state, county,
local or foreign sales, use, value added, excise, stamp,
transfer and other taxes not in the nature of income taxes, fees
and duties (including any interest, additions to tax and
penalties with respect thereto) and any and all transfer,
recording or similar fees and charges (collectively,
"Transaction Taxes") imposed in connection with the consummation
of the transactions contemplated hereunder shall be borne equally
by the Buyer and the Seller, provided, however, that this Section
4.3 shall not apply to any VAT, which shall be borne by the
Buyer, subject to Section 7.9(h).
5. REPRESENTATIONS AND WARRANTIES BY THE SELLER.
The Seller, on behalf of itself, each Share Seller and each
Asset Seller, represents and warrants to the Buyer as set forth
in this Section 5. The Buyer may rely upon the representations
and warranties contained herein, notwithstanding any
investigation of the Business made by the Buyer prior to the
Closing or the knowledge of the officers, directors,
stockholders, employees or agents of the Buyer. OTHER THAN AS
EXPRESSLY SET FORTH HEREIN, NO ASSET SELLER OR SHARE SELLER MAKES
ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE. THE WARRANTIES CONTAINED IN THIS SECTION 5 ARE THE ONLY
WARRANTIES, EXPRESSED OR IMPLIED, GIVEN WITH RESPECT TO THE
BUSINESS.
5.1 Organization, Good Standing and Qualification. The
Seller, each Share Seller, each Asset Seller and each Company is
a corporation or other form of limited liability company duly
incorporated or otherwise duly organized, validly existing and
in good standing (in such jurisdictions where such concept is
applicable) under the laws of its respective jurisdiction of
incorporation or organization as set forth on Schedule 5.1.
Each Share Seller, each Asset Seller and each Company has all
requisite corporate power and authority to own or lease its
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properties and carry on its business as presently conducted.
Each Asset Seller and each Company is in good standing as a
foreign corporation and licensed or qualified to transact
business in each jurisdiction in which the nature of the
properties owned or leased by it or the business transacted by
it requires it to be so licensed or qualified, except those
jurisdictions, if any, in which the failure so to qualify would
not result in a Material Adverse Effect.
5.2 Capital Stock and Ownership.
(a) The total number of shares of capital stock, and the
classes and par values thereof, which each Company is authorized
to issue, the number of such shares which are issued and
outstanding and the number of such outstanding shares owned,
directly or indirectly, legally or beneficially by the Seller (or
any subsidiary or Affiliate of the Seller, including without
limitation, the Share Sellers), the number of shares owned by the
other stockholders and the identities of the such stockholders,
are as set forth in Schedule 5.2.
(b) Except as set forth in Schedule 5.2, there are not
outstanding any (i) securities of any Company convertible into
or exchangeable for any shares of capital stock or other
securities of any such Company; (ii) subscriptions, options,
warrants or other rights, contingent or otherwise, obligating any
Company to issue or purchase or entitling any third party to
acquire from any Company any shares of capital stock or other
securities of such Company, other than directors' qualifying
shares or shares required to be held by foreign nationals, if
any; or (iii) agreements or understandings with respect to the
voting, sale, transfer or other restriction on shares of capital
stock of any Company to which any Share Seller, any Asset Seller
or any Company is a party, other than this Agreement and
Permitted Encumbrances.
(c) The shares of capital stock of each Company that are
owned, directly or indirectly, by each Share Seller have been
duly authorized and validly issued, are fully paid,
non-assessable and free of preemptive rights.
(d) Each Share Seller holds good title to the Shares being
sold by it, free and clear of all Encumbrances other than
Permitted Encumbrances. The transfer of the Shares to the Buyer
pursuant to this Agreement will vest, subject only to
recordation on the books of the respective Companies, in the
Buyer good title to the Shares, free and clear of all
Encumbrances (other than Permitted Encumbrances), except for any
Encumbrances resulting from any action taken or omitted to be
taken by Buyer or any of its Subsidiaries or Affiliates.
(e) Except as set forth in Schedule 5.2, no Company holds
any direct or indirect equity interest in any other corporation
or other entity, except for another Company.
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5.3 Authority.
(a) The Seller has all requisite corporate right, power,
capacity and authority to enter into, deliver and perform this
Agreement, each Share Seller and each Asset Seller has all
requisite corporate right, power, capacity and authority to
consummate the transactions contemplated hereby; and this
Agreement has been, and any agreement, instrument or document
executed pursuant to Section 2.6(a) will be as of the Closing
Date, duly and validly executed and delivered by the Seller (or
each Share Seller or Asset Seller, as applicable) pursuant to
all necessary corporate action on the part of the Seller (or
each Share Seller or Asset Seller, as applicable).
(b) This Agreement is, and any agreement, instrument or
document executed pursuant to Section 2.6(a) will be as of the
Closing Date, legal, valid and binding upon and enforceable
against the Seller (or each Share Seller or Asset Seller, as
applicable) in accordance with its terms.
5.4 No Conflict; No Consents or Approvals.
(a) The execution and delivery by the Seller of this
Agreement, the execution and delivery by any Asset Seller or
Share Seller of any agreement, instrument or document
contemplated hereby, the consummation of the transactions
contemplated herein or therein by any Share Seller or any Asset
Seller and the compliance by any Share Seller or any Asset
Seller with any of the provisions hereof or thereof will not
(i) conflict with, result in a violation or breach of or
constitute a default under (or would result in a violation,
breach or default with the giving of notice or the passage of
time or both) (A) the certificate of incorporation or bylaws (or
other similar charter or governing documents) of any Share
Seller, any Asset Seller or any Company, (B) except as set forth
in Schedule 5.4, any contract, understanding, commitment or
agreement referred to in Schedule 5.17, except any such
violation, breach or default of any such contract, understanding,
commitment or agreement which (together with all other such
violations, breaches or defaults) would not have a Material
Adverse Effect, or (C) any law, statute, ordinance, writ,
injunction, decree, rule, regulation or court or administrative
order by which any Share Seller, any Asset Seller or any Company
(or any of the Assets or the Company Assets) is subject or bound;
(ii) result in the creation or imposition of, or give any party
the right to create or impose, any Encumbrance (other than
Permitted Encumbrances) upon any of the Shares, the Assets or the
Company Assets, (iii) terminate, modify or cancel, or give any
other party the right to terminate, modify or cancel, or require
any notice, consent or waiver under, any contract,
understanding, commitment or agreement referred to in
Schedule 5.17 or (iv) entitle any employee of the Business to any
severance or other payment or benefit except as provided by
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applicable law.
(b) Except as set forth on Schedule 5.4, no consent or
approval of any Governmental Body or waiting period imposed by
law is required in connection with the execution, delivery or
performance of this Agreement and the consummation of the
transactions contemplated hereby by any Share Seller, any Asset
Seller or any Company.
(c) No litigation, claim, administrative proceeding or
other proceeding or governmental investigation or inquiry is
pending or, to the Seller's Knowledge, has been threatened which
would prevent or delay the execution, delivery or performance of
this Agreement or the consummation by any Share Seller or any
Asset Seller of the transactions contemplated hereby (except for
any such litigation, claim, administrative proceeding or other
proceeding or governmental investigation or inquiry that also
relates to the Buyer's ability to execute, deliver or perform
this Agreement or consummate the transactions contemplated
hereby).
(d) To Seller's Knowledge, there are no Restricted Assets
as to which the failure to obtain all necessary consents and
waivers for the assignment, transfer, sublease or sublicense
thereof as of the Closing would have a Material Adverse Effect.
5.5 Undisclosed Liabilities. To the Seller's Knowledge, no
Company or, with respect to the Business, Asset Seller or Share
Seller has any liability or obligation of any nature, fixed,
contingent, accrued or otherwise, liquidated or unliquidated, and
whether due or to become due, except for:
(a) liabilities and obligations reflected on the Balance
Sheet, other than those discharged since the Balance Sheet Date;
(b) liabilities and obligations incurred in the Ordinary
Course of Business since the Balance Sheet Date and that have not
been discharged;
(c) liabilities and obligations under any contract, lease
or other agreement to which a Company is a party (except for any
liabilities or obligations resulting from any breach thereof by
such Company);
(d) liabilities and obligations under any contract, lease
or other agreement which is part of the Assets (except for any
liabilities or obligations resulting from any breach thereof by
any Asset Seller);
(e) the Excluded Liabilities; and
(f) the Excluded Company Liabilities.
5.6 No Termination of Relationships. To the Seller's
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Knowledge, the relationship of any material distributor, agent,
representative, customer or supplier of the Business will not be
terminated or adversely affected as a result of the execution of
this Agreement or the consummation of the transactions
contemplated hereby.
5.7 Financial Statements. Attached hereto as Exhibit C
are the Financial Statements. The Financial Statements present
fairly the financial condition and results of operations of the
Business as of the date and for the period indicated, have been
prepared in accordance with GAAP and the Accounting Principles
applied on a basis consistent with prior periods, and are
consistent with the books and records of the Business. Attached
hereto as Exhibit C1 are the Interim Financial Statements. The
Interim Financial Statements present fairly, in all material
respects, the financial condition and results of operations of
the Business as of the date and for the periods presented
therein.
5.8 Tax Matters. Except as set forth in Schedule 5.8:
(a) Each Company and, with respect to the Business, each
Asset Seller, has accurately prepared and duly and timely filed
all material Tax Returns that it was required to file. All such
material Tax Returns were correct and complete in all material
respects. All material Taxes owed by a Company and, with respect
to the Business, any Asset Seller, (whether or not shown on any
Tax Return) have been paid when due, other than those for which
adequate reserves have been established on the Balance Sheet. No
Company is currently the beneficiary of any extension of time
within which to file any material Tax Return. No written claim
or inquiry with respect to any material amount of Taxes has ever
been made by an authority in a jurisdiction where any Company or,
with respect to the Business, any Asset Seller, did not file Tax
Returns that such Company or, with respect to the Business, such
Asset Seller, is or may be subject to any Tax by that
jurisdiction. There are no liens or other security interests
(other than Permitted Encumbrances) on any of the Assets or the
Company Assets that arose in connection with any failure (or
alleged failure) to pay any Tax.
(b) All Taxes of any Company attributable to Tax periods or
portions thereof ending on or prior to the Balance Sheet Date,
including Taxes that may become payable by any such Company in
future periods in respect of any transactions or sales occurring
on or prior to the Balance Sheet Date, that have not yet been
paid have, in the aggregate, been adequately reflected as a
liability on the Balance Sheet in accordance with GAAP
consistently applied.
(c) Without limiting the generality of the foregoing, each
Company has withheld or collected and duly paid all material
Taxes required to have been withheld or collected and paid in
connection with amounts paid or owing to or from any employee,
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independent contractor, creditor, stockholder, or other third
party.
(d) To the Seller's Knowledge, there is no dispute or claim
concerning any material Tax liability of any of the Companies
pending. Schedule 5.8 lists all income Tax Returns filed with
respect to any of the Companies for taxable periods ended on or
after December 31, 1990, indicates those Tax Returns that have
been audited, and indicates those Tax Returns that are currently
the subject of audit. To the Seller's Knowledge, the Seller (or
its Affiliate) has delivered or made available to the Buyer (or
the Buyer's representative) true and complete copies of the
material income, franchise, excise, sales, use, property and
employment Tax Returns (or relevant portions thereof) filed by
any of the Companies or, with respect to the Business, any Asset
Seller, together with all material examination reports (or
relevant portions thereof) and statements of deficiencies
assessed, proposed in writing to be assessed against, or agreed
to with respect thereto by any such Company or, with respect to
the Business, such Asset Seller, since January 1, 1988.
(e) None of the Companies has made a currently effective
waiver of any statute of limitations in respect of material Taxes
or agreed to any currently effective extension of time with
respect to a material Tax assessment or deficiency.
(f) None of the Companies has filed a consent under Code
Section 341(f) concerning collapsible corporations. None of the
Companies has made any payments, is obligated to make any
payments, or is a party to any agreement that could obligate it
to make any payments that will be an "excess parachute payment"
under Code Section 280G. None of the Companies has been a United
States real property holding corporation within the meaning of
Code Section 897(c)(2) during the applicable period specified in
Code Section 897(c)(1)(A)(ii). None of the Companies has any
liability for any Taxes of any person (other than such Company)
under Treas. Reg. S 1.1502-6 (or any similar provision of
federal, state, local, or foreign law), as a transferee or
successor, by contract, or otherwise.
(g) To the Seller's Knowledge, Schedule 5.8 sets forth the
following information with respect to each of the Companies as of
December 31, 1994: (i) the tax basis of the Company in the
Company Assets, and (ii) the amount of any net operating loss
carryforward of the Company.
(h) To the Seller's Knowledge, while an Affiliate of the
Seller, none of the Companies is or has ever been: resident for
purposes of United Kingdom legislation in the United Kingdom;
engaged in any trade or other business within the United Kingdom;
in receipt of any income that is or should have been subject to
United Kingdom taxation; in the position of having a "tax
presence" in the United Kingdom as that expression is understood
for the purposes of United Kingdom Laws and Regulations relating
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to Taxes.
5.9 Title to Properties.
(a) The Asset Sellers and Companies are the true and lawful
owners of, and have good title to, the Assets and the Company
Assets, respectively, in each case free and clear of all
Encumbrances other than Permitted Encumbrances. Upon execution
and delivery by the Seller to the Buyer of the instruments of
conveyance referred to in Sections 10(b)(iii) and (iv), or,
where applicable, physical delivery of Assets pursuant to Section
2.6(a), the Buyer will receive all of Seller's title to, and
interest in, the Assets and the Company Assets, free and clear of
all Encumbrances other than Permitted Encumbrances. In the
event of any inconsistency between the representations and
warranties in either this Section 5.9 or Section 5.10, and the
provisions of any documents, such as deeds, conveying Owned Real
Estate in Valencia, California, the representations and
warranties in this Agreement shall prevail.
(b) Other than the Leased Real Estate and equipment held
under leases entered into in the Ordinary Course of Business,
none of the assets in possession of the Business but owned by
third parties is material to the Business.
5.10 Real Estate. Schedule 5.10 lists and describes the
location of all owned real property included in the Assets or the
Company Assets. Except as set forth on Schedule 5.10 or Exhibit
B, with respect to each parcel of Owned Real Estate:
(a) the identified owner has good title to such parcel,
insurable by a recognized national title insurance company (in
the U.S. and such other jurisdictions where the concept of title
insurance is applicable) at standard rates, free and clear of
all Encumbrances, except for Permitted Encumbrances which do not
impair the use, occupancy or value of such parcel as heretofore
used by the Seller and its Subsidiaries;
(b) there are no (i) condemnation proceedings pending or,
to the Seller's Knowledge, threatened in writing relating to
such parcel, or (ii) litigation or administrative actions pending
or, to the Seller's Knowledge, threatened in writing relating to
such parcel;
(c) to the Seller's Knowledge, the legal description for
such parcel contained in the deed thereof describes such parcel
fully and adequately; the buildings and improvements located
thereon are located within the boundary lines of the described
parcels of land, are not in violation of current setback
requirements, zoning laws and ordinances and do not encroach on
any easement which may materially burden the land; the land does
not serve any adjoining property for any purpose inconsistent
with the use of the land as heretofore used; and such parcel is
not subject to any restriction for which any permits or licenses
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necessary to the use thereof as heretofore used have not been
obtained;
(d) there are no leases, subleases, licenses or agreements
granting to any party or parties the right of use or occupancy
of any portion of such parcel;
(e) there are no outstanding options or rights of first
refusal to purchase such parcel, or any portion thereof or
interest therein;
(f) all facilities located on such parcel are supplied with
utilities and other services necessary for the operation of such
facilities as heretofore operated, including gas, electricity,
water, telephone, sanitary sewer and storm sewer, all of which
services are adequate for their current uses and, to Seller's
Knowledge, are in accordance with all applicable Laws and
Regulations;
(g) such parcel has direct access to a public road or
access to a public road via an easement benefiting such parcel;
(h) there is no pending or, to the Seller's Knowledge, any
threatened proceeding to change or redefine the zoning
classification of all or any portion of the parcel in a manner
that would materially interfere with the use of such parcel as
heretofore used;
(i) All of the material buildings and improvements
constructed on the parcel are in serviceable condition and
repair, subject to ordinary wear and tear, and are free of
material construction defects, and all mechanical and utility
systems servicing such improvements are in serviceable condition
and repair, subject to ordinary wear and tear, and are free of
material defects;
(j) to the Seller's Knowledge, each parcel is an
independent unit which does not rely on any facilities (other
than the facilities of public utility and water companies)
located on any other property (i) to fulfill any zoning,
building code or other municipal or governmental requirement;
(ii) for structural support or the furnishing of any essential
building systems or utilities, including but not limited to
electric, plumbing, mechanical, heating, ventilating, and air
conditioning systems; or (iii) to fulfill the requirements of
any lease. To the Seller's Knowledge, no building or other
improvement not included in the parcel relies on any part of the
parcel to fulfill any zoning, building code or other municipal
or governmental requirement or for structural support or the
furnishing of any essential building systems or utilities. Such
parcel is assessed by local property assessors as a tax parcel
or parcels separate from all other tax parcels; and
(k) there are no pending agreements relating to any
material construction or alteration of any buildings on any
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parcel.
5.11 Real Property Leases. Schedule 5.11 lists all real
property leased or subleased as of the date hereof to a Company
or, in the conduct of the Business, to an Asset Seller. The
Seller has delivered to the Buyer correct and complete copies of
the leases and subleases (as amended to date) listed in
Schedule 5.11. With respect to each lease and sublease of
Leased Real Estate:
(a) the lease or sublease is legal, valid, binding,
enforceable and in full force and effect with respect to each
Asset Seller and each Company which is a party thereto;
(b) except as set forth on Schedule 5.11A or Exhibit B,
each lease or sublease to which an Asset Seller is a party is
assignable by the Asset Seller to the Buyer without the consent
or approval of or any payment to any party, no lease or sublease
to which a Company is a party requires any permission or consent
upon a change in control of such company, all such leases or
subleases (whether the lessee is an Asset Seller or Company)
will continue to be legal, valid, binding, enforceable and in
full force and effect immediately following the Closing in
accordance with the terms thereof as in effect immediately prior
to the Closing, and the consummation of the transactions
contemplated herein will not conflict with, result in a
violation or breach of or constitute a default under (or would
result in a violation, breach or default with the giving of
notice or the passage of time or both) any such lease or
sublease;
(c) neither any Asset Seller nor any Company is in breach
or default in any material respect under any such lease or
sublease, and no event has occurred which, with notice and/or
lapse of time, would constitute such a breach or default;
(d) to the Seller's Knowledge, there are no disputes or
forbearance programs in effect as to the lease or sublease;
(e) neither any Asset Seller nor any Company has assigned,
transferred, conveyed, mortgaged, deeded in trust or encumbered
any interest in the leasehold or subleasehold;
(f) to the Seller's Knowledge, all facilities leased or
subleased thereunder are supplied with utilities and other
services necessary for the operation of said facilities;
(g) with respect to each parcel of Leased Real Estate
located in a jurisdiction that recognizes leasehold interests in
land as distinct ownership interests (including, without
limitation, England and Australia), all of the statements set
forth in Section 5.10 are true; and
(h) none of such leases or subleases have been capitalized
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on the Balance Sheet.
5.12 Equipment Leases. Schedule 5.12 contains a list of all
equipment leases involving an annual expense per lease in excess
of #100,000 to which a Company is a lessee or an Asset Seller
is a lessee with respect to a lease which is part of the Assets,
and (other than with respect to motor vehicle leases) lists the
term of such lease and the rent payable thereunder. With respect
to each equipment lease listed in Schedule 5.12:
(a) the lease is legal, valid, binding, enforceable and in
full force and effect with respect to each Asset Seller and each
Company which is a party thereto;
(b) except as set forth in Schedule 5.12A, each lease to
which an Asset Seller is a party is assignable by the Asset
Seller to the Buyer without the consent or approval of or any
payment to any party, no lease or sublease to which a Company is
a party requires any permission or consent upon a change in
control of such Company, all such leases (whether the lessee is
an Asset Seller or Company) will continue to be legal, valid,
binding, enforceable and in full force and effect immediately
following the Closing in accordance with the terms thereof as in
effect immediately prior to the Closing, and the consummation of
the transactions contemplated herein will not conflict with,
result in a violation or breach of or constitute a default under
(or would result in a violation, breach or default with the
giving of notice or the passage of time or both) any such lease;
and
(c) neither any Asset Seller nor any Company is in breach
or default in any material respect under any such lease, and no
event has occurred which, with notice and/or lapse of time,
would constitute such a breach or default.
5.13 Assets Used in the Business. The Assets and the
Company Assets are sufficient for the conduct of the Business as
heretofore conducted by the Companies and the Asset Sellers.
The Assets and the Company Assets are in good operating condition
and repair (subject to normal wear and tear).
5.14 Accounts Receivable. All accounts receivable of the
Business reflected on the Balance Sheet are valid receivables,
arose in the Ordinary Course of Business, are collectible and, to
the Seller's Knowledge, are subject to no setoffs or
counterclaims, net, in the aggregate, of an applicable reserve
for doubtful accounts shown on the Balance Sheet. All accounts
receivable reflected in the financial or accounting records of
the Business that have arisen since the Balance Sheet Date are
valid receivables, arose in the Ordinary Course of Business, are
collectible and, to the Seller's Knowledge, are subject to no
setoffs or counterclaims net, in the aggregate, of a reserve for
doubtful accounts proportionate to that shown on the Balance
Sheet.
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5.15 Intellectual Property.
(a) Schedule 5.15 contains a list of all of the following
that are owned by any Company or, in the conduct of the Business,
by any Asset Seller: (i) patents and patent applications; (ii)
registered trademarks, registered tradenames and registered
service marks and applications therefor; and (iii) registered
licenses relating to any of the foregoing. Schedule 5.15
identifies the owner of each item listed thereon and, in the
case of registrations and applications, the application or
registration number and date.
(b) The Asset Sellers and the Companies own or have the
right to use all Proprietary Rights used in the operation of the
Business as heretofore conducted or necessary for the operation
of the Business as heretofore conducted (collectively,
"Intellectual Property"). Upon execution and delivery by the
Seller to the Buyer of the instruments of conveyance referred to
in Sections 10(b)(iii) and 10(b)(iv), each item of Intellectual
Property owned or used by the Asset Sellers and the Companies
in the operation of the Business as of the Closing will be owned
or available for use by the Buyer or the Companies on
substantively identical terms and conditions immediately
following the Closing, except as otherwise indicated on Schedule
5.15 or except as such ownership or use is affected by the Shared
Intellectual Property Licenses. Each of the Asset Sellers and
the Companies has taken reasonable measures to protect the
proprietary nature of the Intellectual Property and to maintain
in confidence the trade secrets and confidential information
that it owns or uses in, and that are material to, the Business.
Except as provided in the Shared Intellectual Property Licenses,
no other person or entity has any rights to any of the
Intellectual Property owned or used by the Asset Sellers or the
Companies that is material to the Business, except that the
Intellectual Property identified on Schedule 5.15 as licensed to
the Companies or, in the conduct of the Business, to the Asset
Sellers, is owned by the respective owners identified on
Schedule 5.15. Except as set forth on Schedule 5.15, to the
Seller's Knowledge, no person or entity is infringing, violating
or misappropriating any of the Intellectual Property. Except as
set forth on Schedule 5.15, no Asset Seller or Company has
agreed, except in the Ordinary Course of Business in conjunction
with product sales, to indemnify any person or entity for or
against any infringement, misappropriation or other conflict
with any Intellectual Property.
(c) Except as set forth on Schedule 5.15, to the Seller's
Knowledge, none of the activities or business presently conducted
by the Business infringes or violates, or constitutes a
misappropriation of, any Proprietary Rights of any other person
or entity (including, without limitation, the Seller or any
Subsidiary or Affiliate of the Seller). Except as set forth on
Schedule 5.15, no Company, or, in the conduct of the Business,
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Asset Seller, has received since January 1, 1992, any complaint,
claim or notice in writing alleging any such infringement,
violation or misappropriation, which complaint, claim or notice
has not been resolved to the mutual satisfaction of the parties
involved in a manner which involves no future obligations of the
Seller.
(d) Except as set forth on Schedule 5.15A, with respect to
each item of Intellectual Property owned by a third party and
used by a Company or, in the conduct of the Business, an Asset
Seller:
(i) the license, sublicense or other agreement covering
such item is legal, valid, binding, enforceable and in full force
and effect with respect to the Asset Seller or Company which is
a party thereto;
(ii) such license, sublicense or other agreement to which an
Asset Seller is a party is assignable by the Asset Seller to
the Buyer without the consent or approval of or any payment to
any party and the consummation of the transactions contemplated
herein will not conflict with, result in a violation or breach
of or constitute a default under (or would result in a
violation, breach or default with the giving of notice or the
passage of time or both) any such license, sublicense or other
agreement which violation, breach or default (together with all
other such violations, breaches or defaults) would have a
Material Adverse Effect;
(iii) neither any Asset Seller or Company nor, to the
Seller's Knowledge, any other party is in breach or default
under any such license, sublicense or other agreement, and no
event has occurred which, with notice and/or lapse of time,
would constitute such a breach or default or permit a
termination, modification or acceleration thereunder;
(iv) to the Seller's Knowledge, the underlying item of
Intellectual Property is not subject to any outstanding
judgment, order, decree, stipulation or injunction; and
(v) no Asset Seller or Company has agreed, except in the
Ordinary Course of Business in conjunction with product sales,
to indemnify any person or entity for or against any
interference, infringement, misappropriation or other conflict
with respect to such item.
(e) The disclaimers of warranties contained in the Shared
Intellectual Property Licenses shall not affect any of the
representations and warranties contained in this Section 5.15.
5.16 Insurance Policies.
(a) Schedule 5.16 sets forth a list (including the name of
the insurer, the amount of total annual premiums, and the type
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and amount of coverages) of all material policies of fire,
theft, casualty, liability, burglary, fidelity, workers
compensation, business interruption, environmental, product
liability, automobile and other forms of insurance under which
any Company or, with respect to the Business, an Asset Seller, is
a named insured or otherwise the beneficiary of coverage.
Neither any Share Seller, any Asset Seller nor any Company has,
with respect to the Business, received any notice from the
insurer under any such policy disclaiming coverage, reserving
rights with respect to a particular claim or such policy in
general, or canceling or materially amending any such policy.
(b) All premiums due and payable for such insurance
policies have been duly paid, and such policies or extensions or
renewals thereof in the amounts described will be outstanding and
duly in full force without interruption until the Closing Date.
5.17 Contracts. Schedule 5.17 contains a list of the
following written contracts, understandings, commitments and
agreements relating to the Business:
(a) all contracts, leases, understandings or commitments,
whether in the Ordinary Course of Business or not: (i) involving
a present or future obligation to purchase, lease or deliver
goods or services of an amount or value in excess of #200,000
each; or (ii) which limit or restrict the ability of the
Business to compete anywhere in the world; or (iii) which
establish a partnership or joint venture;
(b) all bonus, incentive or deferred compensation
arrangements relating to the Business, all profit sharing,
pension, multi-employer pension, vacation, group insurance or
employee welfare plans or other similar plans or fringe benefits
which could result in a cost to the Business of more than
#100,000 per annum;
(c) all collective bargaining agreements or other contracts
or commitments to or with any labor union, employee
representative or group of employees, and the Seller has made
available to the Buyer all employment manuals, booklets and the
like setting forth the terms of employment and labor policies and
practices (whether or not legally binding) that are of general
application to employees or employees of a certain type of the
Business or of any section or part of the Business;
(d) any changes since February 1, 1995 to each employment
contract, and to each other contract, agreement or commitment to
or with an individual employee, agent, representative or
consultant for a remuneration which exceeds or will exceed in
accordance with its terms #50,000 per annum or which cannot be
terminated at any time without liability to the employer, upon no
more than six months notice;
(e) any arrangement under which any Company or, in the
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conduct of the Business, any Asset Seller, has created, incurred,
assumed or guaranteed indebtedness for borrowed money involving
more than #200,000;
(f) each sales representative, distributorship or other
agreement providing for the distribution or marketing of
products (i) under which revenue to the Business during its year
ended December 31, 1995 exceeded #200,000 or (ii) which is not
terminable by the constituent of the Business which is a party
thereto without penalty or breach upon no more than six months
prior notice to the other party thereto;
(g) any agreement concluded within the past five years
relating to the acquisition or disposition of significant assets,
businesses or companies other than in the Ordinary Course of
Business (whether by sale of assets, sale of stock, merger or
otherwise);
(h) any other arrangement under which the consequences of a
default or termination would have a Material Adverse Effect, or
which gives or could give any other party thereto the right to
cause the transactions contemplated by this Agreement to be
rescinded following consummation, or which involves more than
#300,000 in the aggregate; and
(i) any agreement, other than the Shared Intellectual
Property Licenses, with any purchaser of the Excluded Product
Lines under which the Buyer, the Parent or any Company could have
any liability or obligation after the Closing Date.
The Seller has delivered or made available to the Buyer a
correct and complete copy of (i) each written arrangement (as
amended to date) listed in Schedule 5.17 and (ii) a list as of
December 31, 1995 of each employment contract, and each other
contract, agreement or commitment to or with an individual
employee, agent, representative or consultant for a remuneration
which exceeds or will exceed in accordance with its terms #50,000
per annum or which cannot be terminated at any time without
liability to the employer, upon no more than six months notice.
With respect to each written arrangement so listed: (i) the
written arrangement is legal, valid, binding and enforceable and
in full force and effect with respect to each Asset Seller and
Company which is a party thereto and, to the Seller's Knowledge,
with respect to every other party thereto; (ii) each written
arrangement to which an Asset Seller is a party is assignable by
the Asset Seller to the Buyer without the consent or approval of
or any payment to any party (except as set forth in Schedule
5.17A), and the consummation of the transactions contemplated
herein will not conflict with, result in a violation or breach
of or constitute a default under (or would result in a
violation, breach or default with the giving of notice or the
passage of time or both) any such written arrangement which
violation, breach or default (together with all other such
violations, breaches or defaults) would have a Material Adverse
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Effect; and (iii) neither any Asset Seller or Company nor, to
the Seller's Knowledge, any other party thereto is in breach or
default, and no event has occurred which, with notice and/or
lapse of time, would constitute such a breach or default or
permit a termination, modification or acceleration, under the
written arrangement, which breach or default would have a
Material Adverse Effect. No Asset Seller or Company is a party
to any oral contract, agreement or other arrangement which, if
reduced to written form, would be required to be listed in
Schedule 5.17 under the terms of this Section 5.17. Assuming
Seller's shares were still listed on the London Stock Exchange,
none of the contracts, understandings, commitments and agreements
listed on Schedule 5.17 is (or would be if entered into today
and if the Seller's only business were the Business and the
Seller's only assets were the Shares and the Assets): such as to
require an announcement as a Super Class 1 transaction under
Chapter 10 of the London Stock Exchange Listing Rules (the
"Yellow Book"); or a material contract not entered into in the
ordinary course of business under paragraph 6.C.20 of the Yellow
Book.
5.18 Inventory. The value of the inventory as stated on the
Balance Sheet reflects the lower of cost or market for such
inventory as applied in accordance with GAAP and the Accounting
Principles. All inventory reflected on the Balance Sheet
consists of a quality and quantity usable and salable in the
Ordinary Course of Business, except for scrap, excess or obsolete
items and items that are of below-standard quality or broken
before completion of final manufacture, all of which have been
written-off or written-down to net realizable value on the
Balance Sheet. For purposes of the preceding sentence, "excess"
inventory means inventory that is not saleable within 12 months
after the date of the Balance Sheet. All inventory of the
Business purchased since the Balance Sheet Date consists of a
quality and quantity usable and salable in the Ordinary Course of
Business, except for scrap, excess or obsolete items and items
that are of below-standard quality or are broken before
completion of final manufacture, all of which have been
written-off or written-down to net realizable value on the books
of the Business.
5.19 Litigation. Schedule 5.19 describes all suits,
actions, proceedings, investigations, inquiries, claims,
complaints and accusations pending or, to the Seller's
Knowledge, threatened in writing against the Business, the
Assets, the Company Assets or the Shares and to which any Asset
Seller or Company is or would be a party, in any court or before
any industrial tribunal or arbitration panel of any kind or
before or by any federal, provincial, state, local, foreign,
regulatory or other government, governmental agency, department,
commission, board, bureau, instrumentality, authority or body
("Governmental Body"). There is no outstanding (i) injunction,
decree, judgment, award, fine or penalty by any court,
arbitration panel, industrial tribunal or Governmental Body
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against or affecting the Business, the Assets, the Company Assets
or the Shares or (ii) writ or order of any such entity against or
affecting the Business, the Assets, the Company Assets or the
Shares which would have a Material Adverse Effect.
5.20 Compliance with Law. Except as set forth in
Schedule 5.20, (a) each Company and, with respect to the
Business, each Asset Seller and Share Seller has complied, in all
material respects, and is in compliance, in all material
respects, with all U.S. and foreign laws (including without
limitation the U.S. Foreign Corrupt Practices Act and the U.S.
Occupational Safety and Health Act and regulations thereunder),
rules, decrees, regulations, ordinances and orders ("Laws and
Regulations") that affect or relate to this Agreement, the
transactions contemplated hereby or the conduct of the Business,
the Assets, the Company Assets or the Shares; (b) each Share
Seller, each Asset Seller and each Company has filed with the
proper authorities all material statements and reports required
by all applicable Laws and Regulations relating to the Business,
the Assets, the Company Assets or the Shares; (c) none of the
Share Sellers, Asset Sellers or Companies has received notice or
inquiry relating to any actual or alleged violation of any
material Laws and Regulations relating to the Business, the
Assets, the Company Assets or the Shares and (d) no Company or,
with respect to the Business, Asset Seller is party to any
agreement or arrangement (whether or not intended to be legally
binding) or is in the pursuit of any course of conduct which is
registrable under the United Kingdom Restrictive Trade Practices
Acts 1976 and 1977 or prohibited by or capable of giving rise to
an investigation by the United Kingdom Director-General of Fair
Trading or a reference to the United Kingdom Monopolies and
Mergers Commission or is in material contravention or breach of
any of the following European Union or United Kingdom Laws and
Regulations: The Treaty of Rome 1957; the Fair Trading Act
1973; the Consumer Credit Act 1974; the Health and Safety at Work
etc. Act 1974; the Trade Descriptions Acts 1968 and 1972; the
Restrictive Trade Practices Act 1976 and 1977; the Competition
Act 1980; the Data Protection Act 1984 or any regulations,
orders, notices or directions made under any of the foregoing.
5.21 Absence of Subsequent Actions. Except as set forth in
Schedule 5.21, since the Balance Sheet Date, no Company or, with
respect to the Business, Asset Seller, has:
(a) incurred any liability, including without limitation any
liability for or in respect of borrowed money, in excess of
#200,000 in the aggregate, except current liabilities incurred,
and liabilities under contracts entered into, in the Ordinary
Course of Business;
(b) purchased any shares of capital stock or other equity
securities of any party unaffiliated with the Seller;
(c) mortgaged, pledged or subjected to any material claim
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any portion of its assets, tangible or intangible, other than
Permitted Encumbrances;
(d) acquired or sold, assigned, transferred or otherwise
disposed of a material amount of tangible assets, except in each
case in the Ordinary Course of Business or as contemplated by
Section 2.5;
(e) sold, assigned, licensed, sublicensed or transferred any
material Intellectual Property, except for licenses of
Intellectual Property in the Ordinary Course of Business in
conjunction with product sales;
(f) made any single capital expenditure or commitment
therefor in excess of #200,000;
(g) suffered any non-operating loss in excess of #100,000;
(h) made any change in compensation of any director or
executive officer (or employee of similar station) except for
increases which are in the Ordinary Course of Business;
(i) changed its credit policy as to sale of inventories or
collection of receivables;
(j) decreased in any material respect expenditures with
respect to promotion and advertising or maintenance and repairs;
(k) entered into any joint venture, partnership or similar
arrangement;
(l) amended, modified or terminated any contract,
understanding, commitment or agreement referred to in
Schedule 5.17 other than in the Ordinary Course of Business,
except for any such item that terminated in accordance with its
terms;
(m) authorized or issued any recall notice for any of its
products or initiated any safety inquiry or investigation other
than in the Ordinary Course of Business;
(n) received notice of any warranty claim (other than in the
Ordinary Course of Business) or any products liability claim;
(o) experienced any material reduction in the rate of, or
gross margins associated with, firm bookings or orders for the
products and services of the Business, or any material
deterioration in the backlog level of the Business;
(p) changed its accounting methods, principles or practices
other than as required by GAAP;
(q) taken any of the other actions set forth in
Section 7.1(a); or
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(r) agreed to do any of the things listed in clauses (a)
through (q) of this Section 5.21.
5.22 No Material Adverse Change. Since the Balance Sheet
Date, there has not been any material adverse change in the
business, results of operations or prospects of the Business as
heretofore conducted.
5.23 Labor Matters.
(a) The Seller has provided to the Buyer a list of all
employees of the Business as of December 31, 1995. To the
Seller's Knowledge, except as listed on Schedule 5.23A, no
employee of any Company and no employee of any Asset Seller
employed in the Business has any plans to terminate employment
(other than for the purpose of accepting employment with the
Buyer following the Closing). Except as set forth in
Schedule 5.23, no Company or, in the conduct of the Business,
Asset Seller, has, since December 31, 1992, experienced any
strikes, material grievances, material claims of unfair labor
practices or other collective bargaining disputes. To the
Seller's Knowledge, there is no organizational effort presently
being made or threatened by or on behalf of any labor union with
respect to any employees of the Business.
(b) With respect to the Companies and, in the conduct of
the Business, the Asset Sellers, there are not in existence and,
to the Seller's Knowledge, there are not threatened any material
(i) work stoppages or strikes, (ii) grievance, arbitration
proceedings or proceedings before any industrial tribunal
arising out of collective bargaining agreements, national labor
union agreements or otherwise covering employees of the
Business, or (iii) unfair labor practice complaints.
(c) No Asset Seller or Company recognizes (expressly or
impliedly) any trade union. No claims are being made by any
trade union for recognition and no claim for recognition of which
Seller has received written notice has been referred to the
United Kingdom Advisory Conciliation & Arbitration Service or to
the United Kingdom Central Arbitration Committee.
(d) Except for statements made to employees'
representatives in connection with its obligations under
Regulation 10 of the Transfer Regulations, full details of which
have been provided to Buyer, the Seller has not made any
representations or statements to any of its employees or any
employee engaged in the Business in any way connected with or
concerning employment with the Buyer or any of the Buyer's
Affiliates which representation or statement conflicts with, or
is additional to, the terms of this Agreement.
(e) Except as set forth on Schedule 5.23, there are no
requirements or arrangements (whether or not intended to be
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legally binding) on the part of any Asset Seller or Company to
pay any employee of the Business any sums on redundancy other
than under any applicable Laws and Regulations.
(f) The Seller has transferred all of its employees that
are employed in the business of the Excluded Product Lines to the
Seller's Tudor Road and Floats Road facilities.
5.24 U.S. Employee Benefit Plans.
(a) Schedule 5.24 lists all employee benefit plans (as
defined in Section 3(3) of ERISA), and all compensation plans,
agreements or arrangements, including without limitation
insurance coverage, disability benefits, bonus, deferred
compensation, incentive compensation, severance or termination
pay, post-retirement compensation, change in control
compensation, death benefit, stock purchase, phantom stock,
stock appreciation and stock option plans or arrangements and
vacation, which obligate, or may reasonably be expected to
obligate, the Business to provide a value of more than # 100,000
annually, maintained or contributed to by or on behalf of the
Asset Sellers, the Share Sellers or the Companies applicable to
employees of the Business employed in the U.S. (the "Plans").
The Fisons Instruments Savings Incentive Plan including the
related trust (the "Savings Plan") has received a favorable
determination letter from the IRS and, to the Seller's Knowledge,
no event has occurred and no condition exists which could
reasonably be expected to result in the revocation of any such
determination. Each of the Plans has been administered in
compliance with its terms and the requirements of all applicable
Laws and Regulations, including without limitation ERISA and the
Code, and all required contributions to each Plan have been
made, in each case, except where the failure to do so would not
have a Material Adverse Effect. The Seller has heretofore
delivered or made available to the Buyer true and complete copies
of all of the Plans and, where applicable, related trusts and
contracts, including all amendments.
(b) Except as described in Schedule 5.24, there are no
inquiries or investigations by the IRS, the U.S. Department of
Labor, no termination proceedings and no actions, suits or
claims (other than claims for benefits in the Ordinary Course of
Business) pending or, to the Seller's Knowledge, threatened
against the Savings Plan (or any Company, Share Seller or Asset
Seller with respect thereto) or the assets thereof which would
have a Material Adverse Effect.
(c) No Company has ever maintained an employee benefit plan
subject to Section 412 of the Code or Title IV of ERISA.
(d) Neither any Asset Seller, any Share Seller, any Company
nor any ERISA Affiliate contributes to, has within the past five
years had an obligation to contribute to, or is subject to a
liability to, a "multi-employer plan" as defined in
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Section 4001(a)(3) of ERISA.
(e) Except as set forth in Schedule 5.24, there are no
unfunded obligations under any Plan providing benefits after
termination of employment to any employee or former employee of
the Business (or to any beneficiary of any such employee or
former employee), including but not limited to retiree health
coverage and deferred compensation, but excluding continuation
of health coverage required to be continued under Section 4980B
of the Code and insurance conversion privileges under state law.
(f) Except as set forth in Schedule 5.24, no act or
omission has occurred and no condition exists with respect to
any employee benefit plan maintained by any Asset Seller, any
Share Seller, any Company or any ERISA Affiliate that would
subject any Company or the Assets to any fine, penalty, tax or
liability of any kind imposed under ERISA or the Code, in each
case, that would have a Material Adverse Effect.
(g) Schedules 5.24 and 5.25 disclose each: (i) agreement,
plan or arrangement under which any person may receive payments
from a Company or from any Share Seller or Asset Seller with
respect to any employee of the Business, that may be subject to
the tax imposed by Section 4999 of the Code or included in the
determination of such person's "parachute payment" under
Section 280G of the Code; and (ii) agreement or plan binding any
Company or, with respect to any employee of the Business, any
Share Seller or Asset Seller, including without limitation any
stock option plan, stock appreciation right plan, restricted
stock plan, stock purchase plan, severance benefit plan or
employee benefit plan, any of the benefits of which will be
increased, or the vesting of the benefits of which will be
accelerated, by the occurrence of any of the transactions
contemplated by this Agreement or the value of any of the
benefits of which will be calculated on the basis of any of the
transactions contemplated by this Agreement.
5.25 Foreign Employee Benefit Plans. Schedule 5.25 lists
(i) each retirement plan that is not statutorily required
(disregarding for this purpose the United Kingdom Statutory
requirement for any contracted-out schemes to provide guaranteed
minimum pensions under the United Kingdom Pension Schemes Act
1993) that is maintained or contributed to by or on behalf of any
Asset Seller, Share Seller or Company applicable to employees of
the Business located outside of the U.S. (a "Foreign Retirement
Plan") and (ii) each welfare benefit plan that is not required by
statute or applicable national industry-wide agreement maintained
or contributed to by or on behalf of any Asset Seller, Share
Seller or Company applicable to employees of the Business located
outside of the U.S. and which, in the case of clause (ii),
obligates or may reasonably be expected to obligate the Business
to provide a value of more than #100,000 annually (a "Foreign
Welfare Plan"). Except as set forth in Schedule 5.25, each such
Foreign Retirement Plan and Foreign Welfare Plan (collectively,
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the "Foreign Plans") is fully funded, has been administered, in
all material respects, in compliance with its terms and the
requirements of all applicable Laws and Regulations (including,
without limitation, Article 119 of the Treaty of Rome), and all
required contributions to each Foreign Plan have been made. The
books and records of the Companies and, with respect to the
Business, the Asset Sellers, accurately reflect the obligations
and liabilities of the Companies and the Asset Sellers under the
Foreign Plans. The Seller has heretofore delivered to the Buyer
true and complete copies of all of the written Foreign Plans and
written summaries of the oral Foreign Plans and, where
applicable, related trusts and contracts, including all
amendments. There are no inquiries or investigations by any
foreign Governmental Body, no termination proceedings and no
actions, suits or claims (other than claims for benefits)
pending or, to the Seller's Knowledge, threatened against any
Foreign Plan (or any Company, Share Seller or Asset Seller with
respect thereto) or the assets thereof. Except as set forth in
Schedule 5.25, there are no unfunded obligations under any
Foreign Plan providing benefits after termination of employment
to any employee or former employee of the Business (or to any
beneficiary of any such employee or former employee), including
but not limited to retiree health coverage and deferred
compensation, but excluding insurance conversion privileges
under applicable foreign law. No Foreign Plan, plan
documentation or agreement, summary plan description or other
written communication distributed generally to employees of the
Business by its terms prohibits the amendment or termination of
any such Foreign Plan. All reports, forms and other documents
required to be filed or advisable to be filed with any
governmental entity with respect to each Foreign Plan have been
timely filed and are complete and accurate in all material
respects.
5.26 Indebtedness and Guaranties. Schedule 5.26 sets forth
a true and complete list (indicating the obligor, the
beneficiary, the amount and the date of maturity or expiration),
including the names of the parties thereto, of all debt
instruments, loan agreements, indentures, guaranties or other
written obligations which relate to (i) indebtedness for
borrowed money or (ii) money loaned to others, provided that the
Seller shall not be required to list any such obligations which
(a) include less than #100,000 or (b) are general corporate
obligations of the Seller, which are not secured by any of the
Assets, the Company Assets or the Shares and which do not
constitute an Assumed Liability or Company Liability. All of the
aforesaid items were entered into in the Ordinary Course of
Business, are valid and binding, in full force and effect and
are enforceable in accordance with their respective terms; there
exists no breach or default, or any event which with notice or
lapse of time or both, would constitute a breach or default by
any party thereto; and there are no prepayment penalties
associated therewith.
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5.27 Product Warranty. The standard terms and conditions of
sale or lease of each Division, Business Seller and Company have
been provided by the Seller to the Buyer.
5.28 Environmental Matters.
(a) Except as set forth in Schedule 5.28, each Share
Seller, each Asset Seller and each Company is in compliance in
all material respects with all Environmental Laws applicable to
the Business. Except as set forth in Schedule 5.28, there is
no pending or, to the Seller's Knowledge, threatened civil or
criminal litigation, written notice of violation, formal
administrative proceeding or investigation, inquiry or
information request by any Governmental Body under any
Environmental Law involving or relating to the Business. For
purposes of this Agreement, "Environmental Law" means any
federal, state, foreign or local law or statute, or any rule or
regulation implementing such law or statute, in each case
existing and in effect on the date hereof relating to pollution
or protection of the environment, including without limitation
any statute or regulation pertaining to (i) treatment, storage,
disposal, generation or transportation of Materials of
Environmental Concern; (ii) air, water and noise pollution;
(iii) groundwater and soil contamination; (iv) the release or
threatened release into the environment of hazardous substances,
or solid or hazardous waste, including without limitation
emissions, discharges, injections, spills, escapes or dumping of
Materials of Environmental Concern; (v) the protection of
wildlife, marine sanctuaries and wetlands, including without
limitation all endangered and threatened species; (vi) above
ground or underground storage tanks, vessels and containers;
(vii) abandoned, disposed or discarded barrels, tanks, vessels,
containers and other closed receptacles; and (viii) manufacture,
processing, use, distribution, treatment, storage, disposal,
transportation or handling of Materials of Environmental
Concern. As used herein, the terms "release" and "environment"
shall have the meaning set forth in the federal Comprehensive
Environmental Compensation, Liability and Response Act of 1980,
as amended ("CERCLA").
(b) Except as set forth in Schedule 5.28, to the Seller's
Knowledge, there has been no release of any Materials of
Environmental Concern in amounts above reportable quantities
under applicable Environmental Laws into the environment at any
parcel of real property or any facility (i) currently owned or
operated by any Share Seller or any Asset Seller relating to the
Business, (ii) currently owned or operated by any Company, (iii)
formerly owned, operated or controlled by any Share Seller or any
Asset Seller in the conduct of the Business during the period of
its ownership, operation or control or (iv) formerly owned,
operated or controlled by any Company during the period of its
ownership, operation or control, that, in each case, would have a
Material Adverse Effect. For purposes of this Agreement,
"Materials of Environmental Concern" means any pollutants or
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contaminants, hazardous substances (as such term is defined
under CERCLA), solid wastes and hazardous wastes (as such terms
are defined under the federal Resources Conservation and
Recovery Act of 1976, as amended), radioactive materials, toxic
materials, oil or petroleum and petroleum products.
(c) To the Seller's Knowledge, set forth in Schedule 5.28
is a list of all environmental reports, investigations and audits
relating to premises (i) currently owned or operated by any
Share Seller or any Asset Seller in the conduct of the Business
or (ii) currently owned or operated by any Company, in each of
the foregoing cases whether conducted by or on behalf of any
Share Seller, Asset Seller, any Company or a third party, and
whether done at the initiative of the Seller, any Share Seller,
any Asset Seller or any Company or directed by a Governmental
Body or other third party. Copies of each such report, or the
results of each such report, investigation or audit in the
possession of any Asset Seller, Share Seller or Company, have
been provided or made available to the Buyer (except that only
summaries of the results of statistical information resulting
from physical monitoring or testing have been provided to the
Buyer).
(d) The Seller has provided or made available to the Buyer
a list of, to the Seller's Knowledge, all of the solid and
hazardous waste transporters and treatment, storage and disposal
facilities that have been utilized by any Share Seller or any
Asset Seller in the conduct of the Business since January 1, 1980
or by any Company at any time. Neither any Share Seller, any
Asset Seller nor any Company has received written notice of any
liability under any Environmental Law of any such transporter or
facility which would have a Material Adverse Effect.
(e) Without limiting the generality of the foregoing
paragraphs of this Section 5.28, none of the Companies or, with
respect to the Business, the Asset Sellers or Share Sellers is,
except as set forth in Schedule 5.28, in violation in any
material respect of any of the following United Kingdom Laws and
Regulations: the Clean Air Acts 1956 and 1968; the Control of
Pollution Act 1974; the Health and Safety at Work etc. Act 1974;
the Water Act 1989; and the Environmental Protection Act 1990;
and all statutory instruments, regulations and orders made under
each of the foregoing.
(f) To the Seller's Knowledge, none of the Companies or,
with respect to the Business, Asset Sellers or Share Sellers
produces or uses any substances, or uses any processes in the
manufacture or processing of its products, which are currently
proscribed by the United Kingdom Secretary of State for the
Environment, the United Kingdom Inspectorate of Pollution, the
United Kingdom National Rivers Authority or any United Kingdom
local authority under any applicable Environmental Law.
5.29 Permits. The Companies, Asset Sellers and Share
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Sellers currently hold all permits that are required for the
operation of the Companies as heretofore operated or for the
conduct of the Business as heretofore conducted, except for any
such permits the failure to hold which would not have a Material
Adverse Effect (all of such permits being referred to herein as
"Material Permits"). Each Material Permit is in full force and
effect and no suspension or cancellation of such Permit has been,
to the Seller's Knowledge, threatened in writing. Except as set
forth in Schedule 5.29, each such Material Permit held by an
Asset Seller is assignable by the Asset Seller to the Buyer
without the consent or approval of or any payment to any party,
all such Material Permits (whether held by an Asset Seller or
Company) will continue to be in full force and effect
immediately following the Closing in accordance in all
substantive respects with the terms thereof as in effect
immediately prior to the Closing, and the consummation of the
transactions contemplated herein will not conflict with, result
in a violation or breach of or constitute a default under (or
would result in a violation, breach or default with the giving
of notice or the passage of time or both) any such Material
Permit. To the Seller's Knowledge, there is no proposed or
contemplated change in the terms of any Material Permit.
5.30 Certain Business Relationships. Except as set forth on
Schedule 5.30, no Affiliate of the Seller (other than any Asset
Seller, Share Seller or Company) (a) owns any property or right,
tangible or intangible, which is necessary to operate the
Business or is reflected on the Balance Sheet, (b) has any claim
or cause of action against the Assets, any Company or any Company
Assets other than with respect to receivables related to the
provision of goods or services to the Business in the Ordinary
Course of Business, or (c) other than with respect to trade
payables related to the provision of goods or services by the
Business in the Ordinary Course of Business, owes any money to
any Company or, in connection with the Business, to any Asset
Seller.
5.31 Books and Records. The books, records, accounts,
ledgers and files of each Asset Seller with respect to the
Business and each Company are accurate and complete in all
material respects and have been maintained in accordance with
good business and bookkeeping practices in all material
respects. The minute books and other similar records of each
Company of actions taken at any meetings of such Company's
stockholders, Board of Directors, Managing Board, Supervisory
Board or any committee thereof and of all written consents
executed in lieu of the holding of any such meeting are true and
complete in all material respects. The stock certificate books,
stock ledgers and/or share registers of each Company are complete
and correct in all material respects.
5.32 Customers and Suppliers. No unfilled customer orders
or commitments obligating any Division, Business Seller or
Company to process, manufacture or deliver products or perform
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services, which orders or commitments are material, individually
or in the aggregate, to the Business will result in a material
loss to the Business upon completion of performance. To the
Sellers' Knowledge, no purchase orders or commitments of any
Division, Business Seller or Company, which orders or
commitments are material, individually or in the aggregate, to
the Business are materially in excess of normal requirements of
the Business, nor are prices provided therein materially in
excess of current market prices for the products or services to
be provided thereunder. No material supplier of the Business
has indicated within the past year that it will stop, or
materially decrease the rate of, supplying materials, products,
or services to the Business and no material customer of the
Business has indicated within the past year that it will stop,
or materially decrease the rate of, buying materials, products
or services from the Business. Schedule 5.32 sets forth a list
of (a) each customer that accounted for more than 1% of the
combined revenues of the Business during the 1995 fiscal year and
(b) each supplier that is the sole supplier of any significant
product or component to the Business. Except as set forth on
Schedule 5.32, there are no suppliers to the Business of
significant goods or services with respect to which practical
alternative sources of supply, or comparable products, are not
available on comparable terms and conditions.
5.33 Government Contracts. No Division, Business Seller or
Company is, or since December 31, 1992 has been, suspended or
debarred from bidding on contracts or subcontracts with any
Governmental Body; no such suspension or debarment has been
initiated or, to the Seller's Knowledge, threatened in writing;
and the consummation of the transactions contemplated by this
Agreement will not result in any such suspension or debarment
(assuming that no such suspension or debarment will result
solely from the identity of the Buyer). Except as set forth on
Schedule 5.33, no Division, Business Seller or Company has, since
December 31, 1992, been audited or investigated or is now being
audited or, to the Seller's Knowledge, has been threatened in
writing with an investigation by the U.S. Government Accounting
Office, the U.S. Department of Defense or any of its agencies,
the Defense Contract Audit Agency, the U.S. Department of
Justice, the Inspector General of any U.S. Governmental Body,
any similar agencies or instrumentalities of any foreign
Governmental Body, or any prime contractor with a Governmental
Body nor, to the Seller's Knowledge, has any such audit or
investigation been threatened in writing. To the Seller's
Knowledge, there is no valid basis for (a) the suspension or
debarment of any Division, Business Seller or Company from
bidding on contracts or subcontracts with any Governmental Body
or (b) any claim pursuant to any audit by any Governmental Body
in connection with any contracts or subcontracts relating to the
provision of products or services to or for the benefit of a
Governmental Body. Except as set forth on Schedule 5.33, no
Division, Business Seller or Company has any agreements,
contracts or commitments which require it to obtain or maintain
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a security clearance with any Governmental Body.
5.34 Recalls. To the Seller's Knowledge, there is no basis
for the recall, withdrawal or suspension of any approval by any
Governmental Body with respect to any product or service sold
by the Business. None of the products or services of the
Business is subject to any recall proceedings and, to the
Seller's Knowledge, no such proceedings have been threatened in
writing. Since January 1, 1990 no product or service of the
Business has been recalled.
5.35 Broker's or Finder's Fees. The Seller has no knowledge
of, and has taken no action which would give rise to, any claim
(or the reasonable basis therefor) for a broker's or finder's fee
to be paid by the Buyer or the Parent in connection with the
consummation of the transactions contemplated hereby.
5.36 Sale of Excluded Product Lines. The Seller has
completed the sale of the Excluded Product Lines.
5.37 Disclosure. No statement contained in the Schedules
contains any untrue statement of a material fact or omits to
state any material fact necessary, in light of the circumstances
under which it was made, in order to make such statements not
misleading.
6. REPRESENTATIONS AND WARRANTIES BY THE BUYER.
Each of the Parent and the Buyer, jointly and severally,
represents and warrants to the Seller as set forth in this
Section 6. The Seller may rely upon the representations and
warranties contained herein, notwithstanding any investigation
of the Buyer or the Parent made by the Seller prior to the
Closing or the knowledge of the officers, directors,
stockholders, employees or agents of the Seller.
6.1 Organization and Good Standing. Each of the Parent and
the Buyer is a corporation duly incorporated, validly existing
and in good standing under the laws of Delaware. As of the
Closing Date, each Designated Transferee of the Buyer will be a
corporation duly incorporated and validly existing and, where
such concept exists will, be in good standing under the laws of
its jurisdiction of incorporation.
6.2 Authority.
(a) Each of the Parent and the Buyer has all requisite
corporate right, power, capacity and authority to enter into,
deliver and perform this Agreement and each of the Parent and the
Buyer has, and each Designated Transferee as of the Closing Date
will have, all requisite right, power, capacity and authority to
consummate the transactions contemplated hereby. This Agreement
has been, and any agreement, instrument or document executed
pursuant to Section 3.3 will be as of the Closing Date, duly and
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validly executed and delivered by each of the Buyer and the
Parent, pursuant to all necessary corporate action on the part of
each of the Buyer and the Parent.
(b) This Agreement is legal, valid and binding upon and
enforceable against each of the Parent and the Buyer in
accordance with its terms.
6.3 No Conflict; No Consents or Approvals.
(a) The execution and delivery by each of the Parent and
the Buyer of this Agreement, the execution and delivery by the
Parent and the Buyer of any agreement, instrument or document
contemplated hereby, the consummation of the transactions
contemplated herein or therein by each of the Parent and the
Buyer and the compliance by each of the Parent and the Buyer with
any of the provisions hereof will not conflict with, result in a
violation or breach of or constitute a default under (or would
result in a violation, breach or default with the giving of
notice or the passage of time or both) (i) the certificate of
incorporation or bylaws (or other similar charter or governing
documents) of the Parent or the Buyer or any Designated
Transferee, (ii) any material contract, agreement, indenture,
note, license or other instrument or obligation of the Parent or
the Buyer or any Designated Transferee or (iii) any law,
statute, ordinance, writ, injunction, decree, rule, regulation
or court or administrative order by which the Parent or the Buyer
or any Designated Transferee (or any of the properties or assets
of the Parent, the Buyer or any Designated Transferee) is
subject or bound.
(b) Except as set forth on Schedule 6.3, no consent or
approval of any Governmental Body or waiting period imposed by
law is required in connection with the execution, delivery or
performance of this Agreement by the Parent or the Buyer and the
consummation of the transactions contemplated hereby by the
Parent , the Buyer or any Designated Transferee.
(c) No litigation, claim, administrative proceeding or
other proceeding or governmental investigation or inquiry is
pending or, to the actual knowledge of any executive officer of
the Buyer or the Parent after reasonable inquiry, has been
threatened which would prevent or delay the execution, delivery
or performance of this Agreement or the consummation of the
transactions contemplated hereby by the Parent, the Buyer or any
Designated Transferee (except for any such litigation, claim,
administrative proceeding or other proceeding or governmental
investigation or inquiry that also relates to the Seller's
ability to execute, deliver or perform this Agreement or
consummate the transactions contemplated hereby).
6.4 Broker's or Finder's Fees. The Buyer has no knowledge
of, and has taken no action which would give rise to, any claim
(or the reasonable basis therefor) for a broker's or finder's fee
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to be paid by any Asset Seller, any Share Seller or any Company
in connection with the consummation of the transactions
contemplated hereby.
6.5 Solvency of Buyer. On the Closing Date upon
consummation of the transactions contemplated hereby, the Buyer
will be solvent and will have adequate working capital to pay,
discharge or perform the Assumed Liabilities as such become due
and payable.
6.6 No Additional Warranties. Except for the express
representations, warranties and undertakings of the Asset Sellers
and Share Sellers in this Agreement, the Buyer is relying for
purposes of acquiring the Business upon its own independent
investigation and examination, and not upon any other
representation, warranty, covenant or agreement of any Asset
Seller or any Share Seller, whether express or implied.
6.7 Investment Intent. The Buyer is acquiring the Shares
not with a view to, for resale in connection with, or with an
intent to participate, directly or indirectly, in, any
distribution of such securities within the meaning of foreign,
federal or state securities laws, if applicable.
7. OTHER AGREEMENTS.
7.1 Conduct of Business.
(a) Except to the extent waived or consented to in writing
by the Buyer, during the period from the date of this Agreement
to the Closing, the Seller shall, and shall cause each Share
Seller, each Asset Seller and each Company to, conduct the
Business only in the Ordinary Course of Business and in
compliance with all applicable Laws and Regulations and, to the
extent consistent therewith, use all reasonable efforts to
preserve intact the current business organization of the
Business, keep the physical assets of the Business in
serviceable condition, keep available the services of the
current officers and employees of the Business and preserve the
relationships of the Business with customers, suppliers and
others having business dealings with the Business. Without
limiting the generality of the foregoing, prior to the Closing,
without the written consent of the Buyer, the Seller shall not,
and shall cause each Share Seller, each Asset Seller and each
Company not to, with respect to the Business:
(i) acquire, sell, lease, encumber or dispose of any assets
or any shares or other equity interests in or securities of any
corporation, partnership, association or other business
organization or division thereof, other than purchases and sales
of assets in the Ordinary Course of Business;
(ii) except in the Ordinary Course of Business: (A) create,
incur or assume any debt not currently outstanding (including
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obligations in respect of capital leases); (B) assume,
guarantee, endorse or otherwise become liable or responsible
(whether directly, contingently or otherwise) for the
obligations of any other person; or (C) make any loans, advances
or capital contributions to, or investments in, any other
person;
(iii) enter into, adopt or amend any Plan or Foreign
Plan or any employment or severance agreement or arrangement of
the type described in Section 5.24(i) (other than such amendments
as are required to comply with applicable law) or increase in any
manner the compensation or fringe benefits of, or modify the
employment terms of, its directors, officers or employees,
generally or individually, or pay any benefit not required by
the terms in effect on the date hereof of any existing Plan or
Foreign Plan or, except in the Ordinary Course of Business, hire
any new employees or consultants;
(iv) change its accounting methods, principles or practices,
except insofar as may be required by a change in GAAP;
(v) mortgage or pledge any of its property or assets
relating to the Business or subject any such assets to any
Encumbrance other than Permitted Encumbrances;
(vi) sell, assign, transfer or license any Intellectual
Property, except for licenses of Intellectual Property in the
Ordinary Course of Business in conjunction with product sales;
(vii) enter into, amend, terminate, take or omit to take
any action that would constitute a violation of or default under,
or waive any rights under, any contract or agreement listed on
Schedule 5.17 or any Material Permit;
(viii) make or commit to make any capital expenditure in
excess of #500,000; or
(ix) take any action or fail to take any reasonable action
permitted by this Agreement if such action or failure to take
action would result in (a) any of the representations and
warranties of the Seller set forth in this Agreement becoming
untrue in any material respect or (b) any of the conditions to
the Closing set forth in Section 8 not being satisfied.
(b) The Seller shall promptly notify the Buyer of any
lawsuits, claims, proceedings, investigations or inquiries
against the Business, any Share Seller, any Asset Seller or any
Company or their respective stockholders, officers or directors
between the date of this Agreement and the Closing Date which
(i) to the Seller's Knowledge, are commenced or threatened and
may affect the transactions contemplated by this Agreement or
(ii) to the Seller's Knowledge, are commenced or threatened in
writing and may have a Material Adverse Effect.
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(c) During the period from the date of this Agreement to
the Closing, the Seller shall, and shall cause each Share Seller,
Asset Seller and Company to, (i) accept customer orders in the
Ordinary Course of Business, and (ii) cooperate with the Buyer
in communicating with suppliers and customers to accomplish the
transfer of the Assets to and the purchase of the Business by
the Buyer on the Closing Date.
7.2 Full Access and Supplying of Information. Prior to the
Closing, the Seller shall (and shall cause each Share Seller,
each Asset Seller and each Company to) permit representatives of
the Buyer to have full access to all premises, properties,
financial, tax and accounting records, contracts, other records
and documents and personnel of or pertaining to the Business;
provided, however, that such access shall be allowed only during
normal business hours, with reasonable advance notice and in
such manner as not to interfere unreasonably with the normal
business operations of the Business. Prior to the Closing, the
Seller shall also furnish to the Buyer or its representatives
such information as the Buyer may reasonably request in
connection with any review, investigation or examination of the
books and records, accounts, contracts, properties, assets,
operations and facilities of or relating to the Business. In
connection therewith, the Seller shall direct and authorize its
independent public accountants to make available to the Buyer
and to the independent public accountants representing the Buyer
all working papers pertaining to the examination and audit by
such accountants of the Business. Costs reasonably incurred by
the Seller to third parties at the Buyer's request arising from
or due to the Buyer's review of the Business shall be paid by
the Buyer.
7.3 Filings and Authorizations.
(a) Each of the Seller and the Buyer, as promptly as
practicable after the date hereof, (i) shall make, or cause to be
made, all such filings and submissions required under Laws and
Regulations applicable to it, or to its Subsidiaries and
Affiliates, as may be required for it to consummate the purchase
and sale of the Assets and the Shares in accordance with the
terms of this Agreement, including, without limitation, the
filings and submissions listed on Schedules 5.4 and 6.3 hereof,
except for those filings or submissions that have already been
made or obtained; (ii) shall use its best efforts to obtain, or
cause to be obtained, all authorizations, approvals, consents
and waivers from all persons and Governmental Bodies necessary
to be obtained by it, or its Subsidiaries or Affiliates, in
order for it so to consummate such transfer; and (iii) shall use
its best efforts to take or cause to be taken all other actions
necessary, proper or advisable in order for it to fulfill its
obligations hereunder. Notwithstanding the foregoing, the
Buyer shall not be required to sell or dispose of or hold
separately (through a trust or otherwise) any assets or
businesses of the Buyer, its Affiliates or the Business, or make
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any other change in any portion of its business or incur any
other limitation on the Buyer's conduct of its business to obtain
such authorizations, approvals, consents and waivers.
(b) With respect to the filings and actions, if any,
necessary to comply with all applicable provisions and
requirements of the Industrial Site Recovery Act, N.J.S.A.
C.13:1K-6 ("ISRA"), pertaining to any Assets located in the
State of New Jersey that are subject to ISRA requirements, such
actions and filings shall include, but are not limited to,
submission of (i) a notice to the New Jersey Department of
Environmental Protection and Energy ("NJDEPE") regarding the
transfer of ownership and operations of Assets or Company Assets
located in the State of New Jersey, and (ii) a remediation
agreement, including a demonstration that a remediation funding
source has been established. Such submissions shall be made
unless the Seller reasonably demonstrates that an alternative
method of compliance with ISRA's requirements will ensure an
earlier Closing Date. Regardless of the method of ISRA
compliance chosen, the Seller shall obtain from the NJDEPE, prior
to the Closing, all consents, approvals, authorizations and
waivers required by ISRA covering the transactions contemplated
by this Agreement. Notwithstanding any other provision of this
Agreement, the Seller shall retain, at its sole cost and
expense, all responsibility for compliance with any and all ISRA
obligations required by the NJDEPE for the transfer of the
Assets or Company Assets located in the State of New Jersey from
and after the Closing, except to the extent that any cost,
expense or obligation is attributable to acts or omissions of the
Buyer subsequent to the Closing.
(c) Subject to Section 7.3(a), the Buyer and the Seller shall
cooperate in taking such actions as shall be necessary or
desirable to satisfy the Buyer that the United Kingdom Secretary
of State for Trade and Industry will not refer the proposed
acquisition of the Shares and the Assets by the Buyer hereunder
to the United Kingdom Monopolies and Mergers Commission.
7.4 Exclusivity. Prior to the termination of this
Agreement pursuant to Section 12 hereof, except as may be
required by fiduciary duties of the Board of Directors of the
Seller under applicable law as advised in writing by counsel to
the Seller, the Seller shall not and shall cause the Asset
Sellers, the Share Sellers, the Companies and the Seller's other
Affiliates not to, and shall cause each of its and their
respective officers, directors, employees, representatives and
agents not to, directly or indirectly, (a) encourage, solicit,
initiate, engage or participate in discussions or negotiations
with any person or entity (other than the Buyer) concerning any
merger, consolidation, sale of assets, tender offer,
recapitalization, accumulation of shares of stock, proxy
solicitation or other business combination involving the
Business, any Division, any Business Seller or any Company or any
material portion thereof or (b) except as may otherwise be
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required by applicable law or Governmental Body, provide any
non-public information concerning the Business to any person or
entity (other than the Buyer, the Seller and the Seller's
Subsidiaries). Except as may otherwise by required by applicable
law or Governmental Body, the Seller shall immediately notify the
Buyer of, and shall disclose to the Buyer all details of, any
inquiries, discussions or negotiations of the nature described
in this Section 7.4.
7.5 Bulk Sales. It may not be practicable to comply or
attempt to comply with the procedures of the bulk sales or bulk
transfers acts or laws of any or all of the states or other
jurisdictions in which the Assets are situated (or of any state
or jurisdiction) which may be asserted to be applicable to the
transactions contemplated hereby. The Buyer and the Seller
therefore waive any requirements for compliance with any or all
of such laws.
7.6 Employment of Business Work Force.
(a) Prior to the Closing, but effective as of and
conditioned on the occurrence of the Closing, the Buyer shall
make an offer of employment to each employee of the Asset
Sellers employed in the Business (except the UK Employees
employed in that part of the Business that is situated in the
United Kingdom (the "UK Business")) who on the Closing Date is
actively at work or absent due to short-term disability (as
defined in the plan covering the employee), parental leave, jury
duty, vacation, military service, or similar short-term leave
and, upon acceptance by such employee, enter into an at will
employer-employee relationship with such employee. The terms
of said offer of the Buyer to each such employee shall include
the payment of cash compensation which is substantially
equivalent to that provided to such employee immediately prior to
the Closing Date, and benefits, in the aggregate, on a basis
substantially consistent with the Buyer's normal practices for
its existing comparable employees; provided, however, that the
Buyer shall have complete discretion to change any of the terms
or conditions of employment, compensation or benefits at any
time after the Closing Date.
(b) (i) The Seller and the Buyer anticipate that the United
Kingdom Transfer of Undertakings (Protection of Employment)
Regulation 1981 (the "Transfer Regulations") will apply to the
sale and purchase under this Agreement of the UK Business; the
Seller and the Buyer acknowledge and agree that under the
Transfer Regulations, the contracts of employment between the
Seller and the UK Employees will have effect after the Closing
Date as if originally made between the Buyer and the UK
Employees. The Buyer shall not assume any employment contracts
with employees in Australia.
(c) The Buyer agrees that the service of Continuing
Employees with the Seller or its Affiliates or predecessors prior
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to the Closing Date shall be taken into account for all relevant
purposes under the Buyer's employee benefit plans, including
credit for eligibility, vesting and benefit accrual. The Seller
shall provide the Buyer with copies of records reasonably
required to establish each such employee's service prior to the
Closing Date. The Buyer shall (i) allocate to such employees a
number of days of vacation equal to the number of accrued and
deferred vacation days that would be due such employees as of the
Closing Date if such employees were voluntarily terminating their
employment with the Seller as of the Closing Date and (ii) pay
such employees who terminate their employment with the Buyer for
their accrued and deferred vacation allocations existing at the
time of their termination. The Seller shall provide the Buyer
with records showing the amount of accrued and deferred vacation
due and owing to each such employee as of the Closing Date and an
accrual therefor will be recorded on the Closing Balance Sheet.
(d) The parties hereto do not intend to create any
third-party beneficiary rights respecting any employee as a
result of the provisions herein and specifically hereby negate
any such intention.
(e) The Seller and each Asset Seller hereby consent to the
hiring by the Buyer of employees of the Asset Sellers as
contemplated by this Section 7.6 and waive, with respect to the
employment of such employees, any claims or rights that the
Seller or any Asset Seller may have against the Buyer or any
such employee under any non-competition, confidentiality or
employment agreement.
(f) Except as specifically required by applicable law
(including, without limitation, the Transfer Regulations) or as
provided in this Section 7.6, the Buyer shall not have any
obligation to employ or offer employment to any employees of the
Asset Sellers employed in the Business.
7.7 Employee Benefit Matters. Contingent upon the
occurrence of the Closing:
(a) Transition Period for Foreign Retirement Plans. The
Seller shall make such arrangements as may be necessary and
possible for the Continuing Employees located outside of the U.S.
to remain in the Foreign Retirement Plans for such period as the
Buyer shall elect, of up to one year after the Closing Date (the
"Foreign Transition Period"), and the Buyer shall bear the cost
of such coverage for the Continuing Employees during the
Foreign Transition Period at the contribution rate for each such
Foreign Retirement Plan being paid by the Seller on the date of
this Agreement, unless such rate is changed (upward or downward)
by the Buyer after the date hereof, in which event the Buyer
shall bear the cost of such coverage for the Continuing
Employees during the Foreign Transition Period at the changed
contribution rate. Notwithstanding the foregoing sentence,
continued coverage of those Continuing Employees who are UK
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Employees in the Fisons UK Pension Fund shall be as set forth in
Exhibit D. In the event of any conflict between the terms and
conditions hereof and the terms and conditions set forth in
Exhibit D, the terms and conditions set forth in Exhibit D shall
prevail. The Seller and the Buyer shall observe and perform the
provisions of Exhibit D to be performed by the Seller and the
Buyer, respectively, in relation to the Fisons UK Pension Fund.
The foregoing provision of this Section 7.7(a) shall not apply to
those Foreign Retirement Plans maintained by a Company solely for
its employees.
(b) Welfare Plans.
(i) Benefits Continuation. Except as provided in Sections
7.7 (b)(ii), (iii), (iv), (v), (vi), (vii) and (viii) below,
effective as of the Closing, (A) the Seller shall cause each
Continuing Employee to cease to participate in each welfare
benefit plan sponsored by the Asset Sellers, the Share Sellers
and/or their Affiliates (the "Seller's Welfare Plans") and
(B) the Buyer shall cause each such Continuing Employee to be
covered by Buyer's welfare benefit plans.
(ii) Disability and Certain Other Benefits. The Seller
shall be liable for claims for benefits (other than for
short-term disability, workers' compensation and medical
(including vision care and prescription drugs) and dental
benefits) by employees of the Business (active or inactive) and
by terminated employees previously employed in the Business
under the Seller's Welfare Plans arising out of occurrences
prior to the Closing Date. In this regard, but not by way of
limiting the foregoing, the Seller shall be liable for the
long-term disability benefits for those employees of the Business
receiving or qualified to receive long- term disability benefits
under the Seller's disability programs as of the Closing Date,
including without limitation those employees of the Business in
the long-term disability elimination period (which employees
shall receive long-term disability benefits from the Seller upon
the conclusion of the applicable elimination period); provided,
however, that the Seller's obligation to provide long-term
disability benefits shall cease with respect to any such employee
of the Business who subsequently becomes employed by the Buyer.
(iii) Workers' Compensation Benefits. The Seller shall
be liable for claims for workers' compensation benefits under
the Seller's Welfare Plans by employees of the Business (active
or inactive) and by terminated employees previously employed in
the Business with respect to injuries or illnesses prior to the
Closing Date. The Buyer shall be liable for claims for workers'
compensation benefits by Continuing Employees with respect to
claims for injuries or illnesses that occur on or after the
Closing Date.
(iv) Short-Term Disability Benefits. The Seller shall be
liable for claims for short-term disability benefits under the
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Seller's Welfare Plans by employees of the Business (active or
inactive) with respect to payments due prior to the Closing Date
and by terminated employees previously employed in the Business.
The Buyer shall be liable for claims for short-term disability
benefits under the Buyer's welfare plans by Continuing Employees
with respect to payments due on or after the Closing Date.
(v) Medical and Dental Benefits. The Seller shall be
liable for claims for medical (including vision care and
prescription drugs) and dental benefits incurred by employees of
the Business (active or inactive) and their respective covered
dependents with respect to services and treatment rendered prior
to the Closing Date under the Seller's Welfare Plans; provided,
however, that the preceding provisions shall not alter any
deadlines for submission of claims set forth in the Seller's
Welfare Plans or increase any benefits, rights or remedies of the
Continuing Employees under the Seller's Welfare Plans. The Buyer
shall be liable for claims for medical (including vision care and
prescription drugs) and dental benefits incurred by Continuing
Employees and their respective covered dependents under the
Buyer's welfare plans with respect to services and treatment
rendered on or after the Closing Date. The Buyer shall cause
each of the Continuing Employees to be granted credit under the
Buyer's medical and dental plans, for the year during which the
Closing Date occurs, with any deductibles or copayments already
incurred by such Continuing Employees for such year under the
plans of the Asset Sellers, the Share Sellers and/or their
Affiliates, but only if and to the extent that the amount of such
incurred deductibles or copayments has been provided to the
Buyer within 180 days after the Closing Date, and the Buyer shall
cause to be waived any pre-existing condition restrictions under
the Buyer's medical and dental plans to the extent necessary to
provide immediate coverage under the Buyer's medical and dental
plans. The Buyer shall make available to the Continuing
Employees (and their covered dependents) a group health plan (or
plans) having a level of benefits such that the actual coverage
of a Continuing Employee (or any of his or her covered
dependents) under such group health plan (or plans) would, if the
Continuing Employee had made an election under Section 4980B(f)
of the Code or Part 6 of Title I of ERISA with respect to any
group health plan maintained by any Asset Seller or any Share
Seller, constitute an event described in Section
4980B(f)(2)(B)(iv) of the Code and Section 602(2)(D) of ERISA.
The Buyer shall have no obligation to provide health benefits to
any Continuing Employee who declines to be covered under such
group health plan (or plans) and, if the Buyer complies with the
requirements of the preceding sentence, the Buyer shall have no
further obligation or responsibility to any Asset Seller or any
Share Seller under Section 4980B of the Code or Part 6 of Title I
of ERISA with respect to the transactions contemplated by this
Agreement.
(vi) Transition Period. Notwithstanding the
foregoing, the Seller shall make such arrangements as may be
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necessary for the UK Employees to remain as participants of the
Seller's private health insurance scheme after the Closing for a
period of up to 90 days after the Closing Date (as the Buyer
shall elect) and the Buyer shall pay the premium cost for the
participating UK Employees (and their covered dependents)
incurred and paid after the Closing Date under the Seller's
private health insurance scheme plus an administrative fee of 5%
of such cost.
(vii) Retiree Medical, Dental and Life
Benefits. The Seller shall be liable for medical, dental and
life insurance coverage under the Seller's Welfare Plans after
termination of employment to employees of the Business whose
employment terminated prior to the Closing Date and to those
employees of the Business who are eligible therefor as of the
Closing Date. Prior to the Closing Date, the Seller agrees to
notify (A) employees of the Business other than those described
in clause (B) below that such coverage (including coverage under
the Fisons Post-Retirement Medical Savings Plan) for employees of
the Business will be terminated upon the Closing Date and (B) it
will notify Continuing Employees who are eligible as of the
Closing Date for retiree medical coverage under such retiree
plans that coverage for such Continuing Employees under such
plans as in effect from time to time will be provided by the
Seller upon retirement from the Buyer and/or its affiliates.
The Buyer agrees to provide notice to the Seller of such
retirements for purposes of the preceding sentence.
(viii) COBRA. The Seller shall be responsible
for providing benefits pursuant to Section 4980B of the Code to
employees of the Business who cease to be employed by any Company
or Asset Seller prior to the Closing Date.
(ix) Limitation on Buyer's Liability.
Except as provided in this Section 7.7(b), the Buyer shall
have no liability with respect to any claims for benefits under
the Seller's Welfare Benefit Plans. The Seller shall have no
liability with respect to claims for benefits under the Buyer's
welfare benefit plans.
. (c) Multi-employer Plans. The Buyer, the Companies and/or
their affiliates shall not assume any obligation or liability
imposed under Section 4201 of ERISA. The Buyer, the Companies
and/or their affiliates shall not be obligated under any
agreement described in Section 4204 of ERISA.
(d) Savings Plans. The Buyer shall allow U.S. Continuing
Employees to make direct cash rollovers under Section 402(c) of
the Code of their account balances from the Savings Plan to a
savings plan intended to be qualified under Section 401(a) of the
Code maintained by the Buyer. Any loans outstanding to U.S.
Continuing Employees under the Savings Plan shall be transferred
to the Buyer's Savings Plan.
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(e) Information. The Buyer agrees that, commencing no
later than sixty (60) days after the Closing Date, it will
forward to the Seller (ATTN: Manager, Retirement Programs)
within ten (10) days after the end of each month a written list,
prepared by the Buyer's payroll department of all Continuing
Employees who have terminated employment during the month. The
list shall contain the Continuing Employee's name, last known
address, Social Security Number and date of termination.
7.8 Retention of Records and Sharing of Data.
(a) The Buyer shall retain for a period of seven years
after the Closing Date (or longer if required by any applicable
statute of limitations) the books and records relating to the
Business transferred pursuant to this Agreement (unless the
Seller requests a longer period, in which case such books and
records shall be stored by the Buyer at the Seller's expense),
and, during normal business hours, with reasonable advance
notice and in such manner as not to interfere unreasonably with
the normal business operations of the Buyer, shall (i) give the
Seller and its authorized representatives reasonable access to
the books, records, offices and other facilities and properties
relating to the operation of the Business prior to the Closing
Date, (ii) permit the Seller to make such inspections (and
copies of any documents at the Seller's expense) thereof as the
Seller may reasonably request, and (iii) furnish the Seller with
such financial and operating data and other information relating
to the Business as the Seller may from time to time reasonably
request, in order to comply with applicable securities, tax,
environmental, employment or other Laws and Regulations.
(b) The Seller shall and shall cause each Share Seller and
Asset Seller to retain for a period of seven years after the
Closing Date (or longer if required by any applicable statute of
limitations) the books and records relating to the Business that
are retained by the Seller, any Share Seller or any Asset Seller
pursuant to the terms of this Agreement (unless the Buyer
requests a longer period, in which case such books and records
shall be stored by the Seller at the Buyer's expense), and,
during normal business hours, with reasonable advance notice and
in such manner as not to interfere unreasonably with the normal
operations of the business of the Seller, Share Sellers and
Asset Sellers, shall (i) give the Buyer and its authorized
representatives reasonable access to (A) such books, records,
offices and other facilities and properties and (B) the work
papers of its accountants relating to the operation of the
Business prior to the Closing Date, (ii) permit the Buyer to
make such inspections (and copies of any documents at the
Buyer's expense) thereof as the Buyer may reasonably request,
and (iii) furnish the Buyer with such financial and operating
data and other information as the Buyer may from time to time
reasonably request in order to comply with its obligations under
applicable securities, tax, environmental, employment or other
Laws and Regulations. Without limiting the generality of the
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foregoing, the Seller shall make available to the Buyer such
financial information and reasonable assistance with respect to
the Business as is reasonably necessary for the Buyer to prepare
on a timely basis the financial statements required by Item 2 of
Form 8-K to be filed by Buyer under the U.S. Securities Exchange
Act of 1934 with respect to the transactions contemplated by this
Agreement, which shall include audited financial statements
prepared in accordance with U.S. generally accepted accounting
principles for the fiscal years of the Business ended December
31, 1994 and 1995.
(c) Promptly upon request by the Buyer made at any time
during the three-year period following the Closing Date, the
Seller shall authorize the release to the Buyer of all files
pertaining to the Business held by any Governmental Body.
7.9 Tax Matters.
(a) Any and all agreements among any Company and any Seller,
Asset Seller, Share Seller or Company or any Affiliate thereof
regarding allocation or payment of Taxes or amounts in lieu of
Taxes with respect to the Business shall be terminated at and as
of, or prior to, the Closing.
(b) Except as provided in Sections 4.3 and 7.9(c) hereof:
(i) The Seller shall be liable for any and all claims, losses,
liabilities, obligations, damages, impositions, assessments,
demands, judgments, settlements, costs and expenses (including
reasonable attorneys', accountants' and experts' fees and
expenses and any applicable assessments of interest and
penalties) with respect to Taxes attributable to the Business or
for which any Company may be liable with respect to any and all
periods, or portions thereof, ending before the Closing Date
("Pre-Closing Periods"); provided, however, that Seller shall
only be liable for any such Taxes to the extent that the
aggregate amount of such Taxes exceeds the aggregate amount of
the reserves and accruals for Taxes set forth on the Closing
Balance Sheet.
(ii) The Buyer shall be liable for any and all claims, losses,
liabilities, obligations, damages, impositions, assessments,
demands, judgments, settlements, costs and expenses (including
reasonable attorneys', accountants' and experts' fees and
expenses and any applicable assessments of interest and
penalties) with respect to (A) Taxes attributable to the Business
or for which any Company may be liable with respect to any and
all periods, or portions thereof, beginning on or after the
Closing Date ("Post-Closing Periods"), and (B) Taxes attributable
to the Business or for which any Company may be liable with
respect to any and all Pre-Closing Periods to the extent that the
aggregate amount of such Taxes is equal to or less than the
aggregate amount of the reserves and accruals for Taxes set forth
on the Closing Balance Sheet.
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(iii) For purposes of this Section 7.9, any and all
transactions or events contemplated by this Agreement that occur
at or prior to the Closing shall be deemed to have occurred in
the Pre-Closing Period.
(c) In the case of any Tax that is attributable to a taxable
period which begins before the Closing Date and ends on or after
the Closing Date, the amount of Taxes attributable to the
Pre-Closing Period shall be determined as follows:
(i) In the case of ad valorem Taxes imposed on the Assets or any
Asset Seller or any Company and franchise or similar Taxes
imposed on any Company based on capital (including net worth or
long-term debt) or number of shares of stock authorized, issued
or outstanding, the portion attributable to the Pre-Closing
Period shall be the amount of such Taxes for the entire taxable
period multiplied by a fraction, the numerator of which is the
number of days in the Pre-Closing Period and the denominator of
which is the number of days in the entire taxable period.
(ii) In the case of all other Taxes, the portion attributable to
the Pre-Closing Period shall be determined on the basis of an
interim closing of the books of the Company or Asset Seller as of
the Closing, and the determination of the hypothetical Tax for
such Pre-Closing Period, determined on the basis of such interim
closing of the books, without annualization. The hypothetical
Tax for any period shall in no case be less than zero.
(d) The Buyer and the Seller shall cooperate fully, as and to
the extent reasonably requested by the other party, in connection
with the filing of Tax Returns and any audit, litigation or other
proceeding with respect to Taxes. Such cooperation shall include
the retention and (upon the other party's request) the provision
of records and information which are reasonably relevant to any
such audit, litigation or other proceeding and making employees
available on a mutually convenient basis to provide additional
information and explanation of any material provided hereunder;
provided that the party requesting assistance shall pay the
reasonable out-of-pocket expenses incurred by the party providing
such assistance; and provided further that no party shall be
required to provide assistance at times or in amounts that would
interfere unreasonably with the business and operations of such
party. The Buyer agrees to retain all books and records with
respect to Tax matters pertinent to the Companies or the Business
relating to any Tax periods ending on or prior to the Closing
Date and any Tax periods beginning before the Closing Date and
ending after the Closing Date until the expiration of any
applicable statute of limitations or extensions thereof. The
Seller and Buyer acknowledge the difficulty of providing such
cooperation; accordingly, the Seller and Buyer agree to use
reasonable efforts to request any assistance pursuant to this
Section 7.9(d) within the first six months following the Closing
Date. Without limiting the generality of the foregoing
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provisions of this Section 7.9(d), the Seller (and each Share
Seller and Asset Seller) and the Buyer shall cooperate and
consult in good faith with each other during the course of the
preparation of foreign, federal, state and local income Tax
Returns which include Pre-Closing Periods and to the extent
appropriate shall use their best efforts to agree on the
inclusion of items of income, deduction, gain, loss and credit
for each Pre-Closing Period so as to properly reflect such items
attributable to such Pre-Closing Period in a manner consistent
with past practices.
(e) The Buyer and Seller agree that to the maximum extent
permitted by applicable law, neither the Buyer nor any of the
Buyer's affiliates or subsidiary corporations (including, with
respect to Post-Closing Periods, the Companies) will carry back
to any taxable period of the Seller or any of its Subsidiaries or
Affiliates (including, with respect to Pre-Closing Periods, the
Companies) any loss, credit or deduction incurred or generated
in, or attributable to, any Post-Closing Period that would affect
any Tax Return of the Seller or any of its Subsidiaries or
Affiliates, and the Buyer agrees to make or exercise, or cause to
be made or exercised, any and all necessary or permitted
elections or options available under applicable law to avoid any
such carryback.
(f) Notice and indemnification in connection with Taxes
shall be governed by Section 11 of this Agreement.
(g) All indemnification payments under Section 11 shall be
deemed adjustments to the Purchase Price.
(h) United Kingdom Value Added Tax
(i) The Seller and the Buyer intend that article 5 of the United
Kingdom Value Added Tax (Special Provisions) Order 1992 (the "VAT
Order") shall apply to the sale of the Assets located in the
United Kingdom (the "UK Assets") under this Agreement, so that
the sale is treated as neither a supply of goods nor a supply of
services.
(ii) If nevertheless any United Kingdom VAT ("UK VAT") is
chargeable on any supply by the Seller under this Agreement, the
Buyer shall pay to the Seller the amount of that UK VAT (and
indemnify it for any related interest and penalties) and the
Seller shall issue to the Buyer a proper tax invoice in respect
of that UK VAT.
(iii) Without limiting clause (ii) above, UK VAT shall be
treated as chargeable if HM Customs & Excise rule that it is
chargeable. If they have done so before Closing, the UK VAT
shall be payable by the Buyer on Closing subject to delivery at
Closing by the Seller to the Buyer of the appropriate tax
invoice. If they do so on or after Closing, the UK VAT shall be
payable by the Buyer within five days after the Seller gives the
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Buyer notice of the ruling together with the appropriate tax
invoice.
(iv) If the Buyer fails to pay the amount of the UK VAT on the
due date under clause (iii) above, it shall pay interest on that
amount from the due date until actual payment (excluding any
period for which interest indemnified under clause (ii) runs) at
an interest rate equal to one percent above LIBOR, as in effect
from time to time.
(v) With a view to ensuring that article 5 of the VAT Order
applies, the Buyer:
(a) shall ensure that the Buyer is registered in the United
Kingdom for UK VAT not later than the Closing Date;
(b) warrants that the UK Assets are to be used by the Buyer in
carrying on the same kind of business as that carried on by the
Seller in relation to the UK Assets; and
(c) warrants that the Buyer has, or will by the relevant date
have, properly made an election to waive exemption in respect of
Unit TX, Churchfields Industrial Estate, Sydney Little Road, East
Sussex, England, United Kingdom, with effect from a day not later
than the relevant date (having obtained the written permission of
HM Customs and Excise if necessary) which it will not revoke
within three months of the Closing Date and has, or will by that
date have, duly given to HM Customs and Excise the written
notification of the election required to make the election
effective. In this paragraph "relevant date" has the same
meaning as article 5(2) of the VAT Order.
(vi) In respect of each property mentioned in clause (v)(c),
without prejudice to that subclause, the Buyer shall on or before
the Closing give to the Seller evidence reasonably satisfactory
to the Seller that the election has been made and written
notification duly given in accordance with that subclause.
(vii) References in clauses (v)(a) and (c) to the Buyer shall
be construed as references to the transferee within the meaning
of the corresponding provision of article 5 of the VAT Order.
(viii) The Seller and the Buyer intend that Section 49 of
the Value Added Tax Act 1994 shall apply to the sale of the
Assets under this Agreement. The Buyer will allow the Seller
access to and copies of any UK VAT records of the Business which
are preserved by the Buyer pursuant to Section 49(1)(b) of the
United Kingdom Value Added Tax Act 1994 in accordance with
Section 7.8 of this Agreement.
7.10 Certain Trademark Matters.
(a) The Buyer shall not, and shall cause its Subsidiaries
not to, put into use after the Closing Date any products, signs,
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purchase orders, invoices, sales orders, labels, letterheads,
shipping documents and other materials not in existence on the
Closing Date that bear any of the Retained Names and Logos or any
name, mark or logo similar thereto. The Buyer shall be entitled
to use any products, signs, purchase orders, invoices, sales
orders, labels, letterheads, shipping documents or other
materials in existence as of the Closing Date that bear any of
the Retained Names and Logos or any name, mark or logo similar
thereto for such period after the Closing Date, not exceeding 180
days, as the Buyer reasonably requires in order to (i) sell, in
the Ordinary Course of Business, the inventory purchased by the
Buyer hereunder and (ii) effect an orderly transition of the
Business; provided, however, that (x) any such use shall be
subject to such control policies and mechanisms as the Seller may
reasonably impose and (y) the Seller shall be entitled to conduct
such investigations of such use as it may reasonably deem
necessary to protect its interests in the Retained Names and
Logos and to satisfy itself of the Buyer's compliance with the
provisions of this Section 7.10(a). The Buyer shall change the
names of the Companies to the extent necessary to remove the name
"Fisons" therefrom within 180 days after the Closing Date. The
Buyer agrees that the Seller shall have no responsibility for
claims by third parties arising out of, or relating to, the use
by the Buyer or any successor thereof of any of the Retained
Names and Logos or the use of the name "Fisons" in any Company
name after the Closing Date.
(b) The Seller agrees, for itself and on behalf of its
Subsidiaries and Affiliates, not to use, after the Closing Date,
any trademark (other than the Retained Names and Logos) conveyed
by the Seller to the Buyer hereunder or any trademark or name
confusingly similar to any of the foregoing. The Seller shall
promptly amend the certificate of incorporation and other
corporate records of its Subsidiaries as necessary to comply with
this provision or, in the United Kingdom, change the name of
such Subsidiaries.
7.11 Notice of Breaches; Updates.
(a) The Seller shall promptly deliver to the Buyer written
notice of any event or development that would (i) render any
statement, representation or warranty of the Seller in this
Agreement (including exceptions set forth in the Schedules)
inaccurate or incomplete in any material respect, or
(ii) constitute or result in a breach by the Seller of, or a
failure by the Seller to comply in any material respect with,
any agreement or covenant in this Agreement applicable to the
Seller. No such disclosure shall be deemed to avoid or cure
any such misrepresentation or breach.
(b) The Buyer shall promptly deliver to the Seller written
notice of any event or development that would (i) render any
statement, representation or warranty of the Buyer in this
Agreement inaccurate or incomplete in any material respect, or
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(ii) constitute or result in a breach by the Buyer of, or a
failure by the Buyer to comply with, any agreement or covenant
in this Agreement applicable to the Buyer. No such disclosure
shall be deemed to avoid or cure any such misrepresentation or
breach.
(c) The Seller shall deliver to the Buyer, as promptly as
practicable following the end of each calendar month ending after
the date of this Agreement and prior to the Closing Date, an
unaudited combined statement of operations of the Business, and
such other internal financial information as is ordinarily
prepared by the Seller with respect to the Business, for such
month, in each case prepared in accordance with past practices.
7.12 Proprietary Information. From and after the Closing,
the Seller shall, and shall cause the Asset Sellers, the Share
Sellers and its other Subsidiaries and Affiliates to, hold in
confidence all knowledge, information and documents of a
confidential nature or not generally known to the public with
respect to the Business or the Buyer or the Buyer's business
(including without limitation the financial information,
technical information or data relating to the products of the
Business and the names of customers of the Business) and shall
not disclose or make use of the same without the written consent
of the Buyer, except (i) as may be required by applicable law,
(ii) that the Seller may disclose any such information to its
professional advisors who need to know such information to assist
Seller in complying with applicable tax, accounting, securities
or other laws, rules or regulations and who agree to be bound by
the provisions of this Section 7.12, (iii) as may be required by
reporting requirements of any stock exchange or any lawful
proceeding of a Governmental Body, provided that the Seller shall
provide the Buyer with notice of any such disclosure as far in
advance of such disclosure as is reasonable under the
circumstances and that the Seller will cooperate reasonably with
the Buyer to minimize the scope of such disclosure, and (iv) to
the extent that such knowledge, information or documents shall
have become public knowledge other than through a breach of this
Agreement by the Seller, its Subsidiaries or Affiliates.
7.13 Solicitation. For a period of two years after the
Closing Date, the Seller shall not, and shall cause its
Subsidiaries and Affiliates not to, either directly or indirectly
as a stockholder, investor, partner, director, officer, employee
or otherwise, solicit or attempt to induce any Restricted
Employee to terminate his or her employment with the Buyer or any
Affiliate of the Buyer; provided, however, that it shall not be a
breach of this Section 7.13 for the Seller to solicit Restricted
Employees by means of general public advertisements or
recruitment through an employment agency. For purposes of this
Agreement, a "Restricted Employee" shall mean any person, other
than employees terminated involuntarily by the Buyer, who (i)
either (A) hold or have access to trade secrets or other
confidential information relating to the Business or (B) had
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annual base salary in 1995 of at least #75,000, and (ii) either
(X) was an employee of the Buyer or any Affiliate of the Buyer
on either the date of this Agreement or the Closing Date or
(Y) was an employee of any Asset Seller (employed primarily in
the Business) or Company on either the date of this Agreement or
the Closing Date and who is employed by the Buyer immediately
after the Closing.
7.14 Non-Competition.
(a) For a period of five years after the Closing Date, the
Seller shall not, and shall cause its Subsidiaries and Affiliates
not to, either directly or indirectly as a stockholder, investor,
partner, director, officer, employee, consultant or otherwise,
engage in a Competitive Business in any territory. For purposes
of this Agreement, a "Competitive Business" means (i) the
development, manufacture, marketing or sale of any product which
is competitive with any product manufactured, sold or developed
(or under development) by the Business on or prior to the
Closing Date or (ii) the rendering of or marketing of any
service which is competitive with any service rendered or
marketed (or proposed to be rendered or marketed) by the Business
on or prior to the Closing Date; provided, however, that the
Seller shall not be prohibited from (1) the acquisition by asset
purchase, stock purchase, merger, consolidation or otherwise of
any Person partially engaged in a Competitive Business if the
Seller uses its best efforts to dispose of the portion of such
Person engaged in the Competitive Business within 12 months after
such acquisition and, if such portion has not been disposed of
within such 12-month period, the Seller continues to use all
reasonable efforts to dispose of such portion, (2) the ownership
of not more than 10% of any class of debt or equity securities of
any Person engaged in a Competitive Business or (3) continuing to
conduct and develop its Pharmaceuticals and Laboratory Supplies
Divisions, the latter of which distributes or may distribute
products for third parties that are or may be competitive with
products manufactured or sold by the Business, provided, however,
that such Divisions shall not in any event manufacture
instruments of the type manufactured by the Business as of the
Closing.
(b) The Seller agrees that the duration and geographic
scope of the non-competition provision set forth in this
Section 7.14 are reasonable. In the event that any court
determines that the duration or the geographic scope, or both,
are unreasonable and that such provision is to that extent
unenforceable, the parties agree that the provision shall remain
in full force and effect for the greatest time period and in the
greatest area that would not render it unenforceable. The
parties intend that this non-competition provision shall be
deemed to be a series of separate covenants, one for each and
every county of each and every state of the U.S. and each and
every political subdivision of each and every country outside
the U.S. where this provision is intended to be effective.
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7.15 Cooperation in Litigation. From and after the Closing
Date, each party shall fully cooperate with the other in the
defense or prosecution of any litigation or proceeding already
instituted or which may be instituted hereafter against or by
such other party relating to or arising out of the conduct of the
Business by the Seller or the Buyer or their respective
Affiliates prior to or after the Closing Date (other than
litigation among the Seller and the Buyer and/or their respective
Subsidiaries, Affiliates or parent companies arising out the
transactions contemplated by this Agreement). The party
requesting such cooperation shall pay the reasonable
out-of-pocket expenses incurred in providing such cooperation
(including legal fees and disbursements) by the party providing
such cooperation and by its officers, directors, employees and
agents, but shall not be responsible for reimbursing such party
or its officers, directors, employees and agents for their time
spent in such cooperation.
7.16 Collection of Accounts Receivable.
(a) The Seller agrees that it shall, and shall cause the
Share Sellers and the Asset Sellers to, forward promptly to the
Buyer any moneys, checks or instruments received by any of them
after the Closing Date with respect to the accounts receivable
purchased by the Buyer pursuant to this Agreement. The Seller
shall, and shall cause the Share Sellers and the Asset Sellers
to, provide to the Buyer such reasonable assistance as the Buyer
may request with respect to the collection of any such accounts
receivable, provided the Buyer pays the reasonable out-of-pocket
expenses of the Seller and its officers, directors and employees
incurred in providing such assistance.
(b) For a period of 12 months after the Closing Date (the
"Collection Period"), the Buyer shall use its reasonable efforts
to collect the accounts receivable shown on the Closing Balance
Sheet (the "Accounts Receivable"). The Buyer may, but shall not
be obligated to, use a collection agency or commence legal
actions in connection with such collection efforts. Promptly
after the expiration of the Collection Period, the Buyer shall
give notice to the Seller designating those Accounts Receivable
which have not been collected as of the end of the Collection
Period and which the Buyer wishes the Seller to purchase. Within
ten days after the receipt of such notice from the Buyer, the
Seller shall purchase (without recourse to the Buyer) such
designated Accounts Receivable then remaining unpaid for a
purchase price equal to the value of such Accounts Receivable
recorded on the Closing Balance Sheet less the reserve for
doubtful accounts shown on the Closing Balance Sheet. References
to Seller shall include, for purposes of Sections 7.16(b)-(f), an
Affiliate of Seller nominated by Seller.
(c) Upon the Seller's repurchase of any unpaid Account
Receivable pursuant to this Section 7.16, the Buyer shall
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promptly deliver to the Seller any tangible evidence of such
Account Receivable then in the possession of the Buyer or under
its control but in any event the Buyer shall preserve and make
available to the Seller all documentation in relation to such
Account Receivables received by the Buyer from the Seller at
Closing.
(d) In the event that any payment received by the Buyer
during the Collection Period is remitted by a customer which is
indebted under both Accounts Receivable and an account receivable
arising out of the sale of inventory in the Ordinary Course of
Business after the Closing Date (a "New Receivable"), such
payments shall first be applied to the Accounts Receivable due
from such customer and the balance remaining after payment in
full of all Accounts Receivable due from such customer shall be
applied to the New Receivable; provided, however, that (i) with
respect to any Account Receivable being contested or disputed by
the payor thereof, no portion of the amount in dispute shall be
deemed to have been collected by the Buyer in respect of such
Account Receivable (unless otherwise directed by the customer)
until all amounts owed by such customer to the Buyer for New
Receivables have been paid or such dispute has been resolved,
whichever occurs first (it being understood that undisputed
amounts of Accounts Receivable shall be applied in accordance
with the priorities set forth above) and (ii) the foregoing
priorities shall not apply to sums received by the Buyer which
are specifically identified by the customer as being tendered in
payment of a New Receivable. The Buyer agrees not to induce any
customer to identify any payment as being in respect of a New
Receivable, except in the event the Buyer reasonably determines
to sell to said customer on a C.O.D. basis only.
(e) The Buyer will reasonably cooperate, at the Seller's
expense, with the Seller in collecting any Accounts Receivable
which are repurchased by the Seller pursuant to this Section
7.16; provided, however, that the foregoing shall not require the
Buyer to be a party to any action brought by the Seller to
collect such Accounts Receivable unless the conveyance of the
Account Receivable to Seller is ineffective and Buyer is deemed
to hold title thereto.
(f) Any sums received by the Buyer in respect of Accounts
Receivable after their repurchase by the Seller pursuant to this
Section 7.16 shall be promptly transmitted by the Buyer to the
Seller. In addition, if receipt by the Buyer of unidentified
sums of money from an account debtor who owes any Account
Receivable repurchased by the Seller pursuant to this Section
7.16 results in such account debtor having an aggregate credit
balance with the Buyer, the Buyer shall promptly transmit to the
Seller an amount of money equal to the lesser of (a) such
aggregate credit balance or (b) the remaining unpaid balance of
all Accounts Receivable which have been repurchased by the Seller
and are payable by such account debtor to the Seller.
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7.17 Shared Intellectual Property.
(a) The parties acknowledge that certain Intellectual
Property is used in the operation of both the Business and the
business of the Excluded Product Lines ("Shared Intellectual
Property"). Title to any Shared Intellectual Property that is
used primarily in the Business shall be transferred to the Buyer
as provided herein and shall not be transferred to any purchaser
of the Excluded Product Lines. However, the transfer of the
Shared Intellectual Property to the Buyer as provided herein
shall be subject to a license held by the purchaser of the
Excluded Product Lines in the form attached hereto as Exhibit E
(the "Shared Intellectual Property License"). Title to any
Shared Intellectual Property that is used primarily in the
business of the Excluded Product Lines shall be transferred to
the purchaser thereof, subject to a license held by the Buyer in
the form of the Shared Intellectual Property License. Such
licenses are referred to collectively herein as the "Shared
Intellectual Property Licenses".
(b) Nothing contained in this Section 7.17 shall
relieve the Seller from any liability under Section 11.1(a) with
respect to the breach of any representation or warranty relating
to Shared Intellectual Property contained in Section 5.
7.18 Bank Accounts. Prior to Closing, Seller shall provide
Buyer with a complete list and description of all bank accounts,
brokerage accounts, marketable securities, lines of credit,
guaranties, foreign exchange option or forward contracts, and
letters of credit held by any of the Companies or, in the conduct
of the Business, the Asset Sellers or to which the Companies, or
in the conduct of the Business, the Asset Seller are parties.
Buyer and Seller will cooperate so that, as of the Closing, Buyer
shall have the benefit of any such assets and, except as
otherwise provided herein, shall (if permitted) be substituted
for the Asset Sellers on any such contracts or agreements.
7.19 Sale of Excluded Product Lines. After the Closing,
each of the Buyer and the Seller shall reasonably cooperate with
the other to achieve the separation of the business of the
Excluded Product Lines from the Business and the conveyance of
the Excluded Product Lines to the purchaser thereof. Buyer shall
provide Seller reasonable access upon reasonable notice to such
of Buyer's files, records and properties as Seller shall
reasonably require to allow it to prepare a closing net asset
statement for the Excluded Product Lines; provided that Buyer
shall have no responsibility for the preparation or accuracy of
such net asset statement. Any out-of-pocket expenses incurred in
connection with providing the cooperation described in this
Section 7.19 shall be borne by the party requesting such
cooperation.
7.20 Guarantee. The Parent hereby guarantees the prompt and
complete performance by the Buyer of all of the Buyer's covenants
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and conditions hereunder, which guarantee shall continue until
all of the terms of this Agreement to be performed by the Buyer
have been performed or otherwise discharged.
7.21 Employee Notices. The Seller shall make or shall cause
the Companies and Asset Sellers to make, such notices to
employees as shall be required by applicable law or agreement
(including any notices required to be given to any union, works
council or similar representative body).
7.22 Seller's Disclosure. The Seller has provided the
Buyer with reasonable access to (i) copies of all agreements or
documents described in the Schedules and (ii) reasonably detailed
descriptions of all claims, proceedings or other matters
described in the Schedules.
7.23 Certain Employment Arrangements. The Seller will use
its best efforts to retain David Richardson, the principal
executive officer of the Seller's Scientific Instruments
Division, in the employment of the Business until the Closing
Date. The Seller shall ensure that Mr. Richardson's employment
in the Business shall be terminated at the Closing. If Mr.
Richardson's employment shall transfer to any of the Thermo
Parties by reason of the operation of the Transfer Regulations,
the relevant Thermo Party shall be entitled to terminate the
same. The Seller shall indemnify the Thermo Parties against any
costs, liabilities or expenses incurred as a result of his
employment or the termination thereof (including under any
employment agreement, severance agreement or benefit or welfare
plan of any kind, or under applicable law).
7.24 Restrictive Trade Practices Act 1976. Notwithstanding
any other provision of this Agreement, no Party which carries on
business within the United Kingdom shall give effect to, or
enforce or purport to enforce any restriction contained in this
Agreement or in any arrangement of which this Agreement forms
part and by virtue of which this Agreement is subject to
registration under the Restrictive Trade Practices Act 1976 until
the day after particulars of this Agreement and any such
arrangement shall have been furnished to the Office of Fair
Trading pursuant to section 24 of that Act.
8. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF THE BUYER TO
CLOSE.
The obligation of the Buyer to close the transactions
contemplated by this Agreement shall be subject to the
satisfaction of each of the following conditions precedent (it
being understood that any such condition may be waived by the
Buyer in whole or in part at any time and from time to time at
its sole discretion):
8.1 Fulfillment of the Seller's Covenants. The Seller
shall have fulfilled or complied in all material respects with
each covenant, obligation and agreement required to be fulfilled
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or complied with by it prior to the Closing Date under this
Agreement.
8.2 Accuracy of the Seller's Representations. No event
shall have occurred at any time and no condition shall exist
which makes any of the representations or warranties of the
Seller contained in this Agreement untrue or incorrect on the
date when made or on the Closing Date (or if a representation or
warranty is made as of a specific date, untrue or incorrect as of
such date) except any such event or condition that would not
(together with all other such events or conditions) be a Material
Event; provided, however, that if any event or condition shall
exist which makes any of the representations or warranties of the
Seller contained in this Agreement untrue or incorrect on the
date when made or on the Closing Date (or, if a representation or
warranty is made as of a specific date, untrue or incorrect as of
such date), and such event or condition would not (together with
all other such events or conditions) be a Material Event, then
the Seller shall indemnify the Buyer for any Loss resulting from
such event or condition pursuant to Section 11.
8.3 Authorizations and Consents. The Seller, each
Company, each Asset Seller and each Share Seller shall have
obtained all necessary consents and waivers for the assignment,
transfer, sublease or sublicense of the Restricted Assets listed
on Schedule 8.3.
8.4 No Litigation. No injunction shall be outstanding
which would prevent consummation of the transactions contemplated
by this Agreement. No legal action, suit, proceeding,
investigation or inquiry shall be pending wherein an unfavorable
judgment, order, decree, stipulation, ruling, decision or
injunction would (i) prevent consummation of the sale of any
material portion of the Assets or Shares as contemplated by this
Agreement, (ii) cause the sale of any material portion of the
Assets or Shares as contemplated by this Agreement to be
rescinded following consummation, or (iii) be a Material Event.
8.5 Seller's Certificate. The Seller shall have delivered
to the Buyer a certificate dated the Closing Date and executed
by an executive officer of the Seller to the effect that each
of the conditions specified in Sections 8.1, 8.2, 8.3, and 8.4 is
satisfied in all respects to the knowledge of such executive
officer.
8.6 Resignations. The Buyer shall have received the
resignations of each of the directors and officers of each
Company whose resignation has been requested by the Buyer at
least ten business days prior to the Closing Date.
8.7 Certain Consents. All authorizations, approvals,
consents, permits or waivers listed on Schedule 8.7 shall have
been obtained.
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8.8 Legal Opinions. The Buyer shall have received such
opinions from counsel to the Seller in the U.S., U.K., Germany,
Switzerland and Italy as the Buyer shall reasonably request.
9. CONDITIONS PRECEDENT TO THE SELLER'S OBLIGATION TO
CLOSE.
The obligation of the Seller to close the transactions
contemplated by this Agreement shall be subject to the
satisfaction of each of the following conditions precedent (it
being understood that any such condition may be waived by the
Seller in whole or in part at any time and from time to time at
is sole discretion):
9.1 Fulfillment of the Buyer's Covenants. The Buyer shall
have fulfilled or complied in all material respects with each
covenant, obligation and agreement required to be fulfilled or
complied with by it prior to the Closing Date under this
Agreement.
9.2 Accuracy of the Buyer's Representations. No event
shall have occurred at any time and no condition shall exist
which makes any of the representations or warranties of the
Buyer or the Parent contained in this Agreement untrue or
incorrect on the date when made or on the Closing Date (or if a
representation or warranty is made as of a specific date, untrue
or incorrect as of such date), except any such event or condition
that would not reasonably be expected to have a material adverse
effect on the ability of either the Buyer or the Parent to
consummate the transactions contemplated hereby.
9.3 No Litigation. No injunction shall be outstanding
which would prevent consummation of the transactions contemplated
by this Agreement. No legal action, suit or proceeding,
investigation or inquiry shall be pending wherein an unfavorable
judgment, order, decree, stipulation, ruling, decision or
injunction would (i) prevent the consummation of the sale of any
material portion of the Assets or Shares as contemplated hereby
or (ii) cause the sale of any material portion of the Assets or
Shares as contemplated by this Agreement to be rescinded
following consummation.
9.4 Buyer's Certificate. The Buyer shall have delivered
to the Seller a certificate dated the Closing Date and executed
by an executive officer of the Buyer to the effect that each of
the conditions specified in Sections 9.1 through 9.3 is
satisfied in all respects to the knowledge of such executive
officer.
9.5 Certain Consents. All authorizations, approvals,
consents, permits or waivers listed on Schedule 9.5 shall have
been obtained.
9.6 Legal Opinions. The Seller shall have received an
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opinion from (i) the General Counsel of the Buyer and the Parent,
and (ii) Warner Cranston, counsel to the Buyer in the United
Kingdom, each of which shall be in such form as the Seller shall
reasonably request.
10. CLOSING.
(a) Subject to the conditions set forth in Sections 8 and
9, the consummation of the transactions contemplated by this
Agreement (the "Closing") shall take place at the offices of
Cahill Gordon & Reindel, 80 Pine Street, New York, New York,
10005 at 9:00 a.m., local time, on the later of (i) March 29,
1996 or (ii) the fifth business day following satisfaction or
waiver of each of the conditions contained in this Agreement, or
on such other date as the Buyer and the Seller may mutually
agree (such date being herein called the "Closing Date").
Failure to close on such date shall not relieve either party
hereto of its obligations under this Agreement. All
transactions at the Closing shall be deemed to take place
simultaneously at 12:01 p.m. U.S. Eastern Time on the Closing
Date, and no transaction shall be deemed to have been completed
and no document or certificate shall be deemed to have been
delivered until all other transactions are completed and all
other documents and certificates are delivered.
(b) At the Closing:
(i) the Seller shall deliver to the Buyer the various
certificates, instruments and documents referred to in Section 8;
(ii) the Buyer shall deliver to the Seller the various
certificates, instruments and documents referred to in Section 9;
(iii) the Seller shall cause each Share Seller to
execute and deliver to the Buyer the certificates, stock powers,
share transfer forms, deeds of transfer and other documents
referred to in Sections 2.2 and 2.6(a);
(iv) the Seller shall cause each Asset Seller to execute and
deliver to the Buyer the Bills of Sale and other documents
referred to in Sections 2.3 and 2.6(a) or, as applicable, effect
physical delivery pursuant to Section 2.6(a);
(v) the Buyer shall execute and deliver to the Seller the
instruments of assumption and other documents referred to in
Section 3.3;
(vi) the Buyer and the Seller shall execute and deliver the
Transition Services Agreement;
(vii) the Buyer shall pay to the Seller the portion of
the Purchase Price as specified in Section 2.1;
(viii) the Seller shall deliver to the Buyer, or
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otherwise put the Buyer in possession and control of, all of the
assets of the Business of a tangible nature; and
(ix) the Buyer and the Seller shall execute and deliver to
each other a cross-receipt evidencing the transactions referred
to above.
11. INDEMNIFICATION.
11.1 By the Seller. The Seller shall indemnify the Buyer in
respect of, and hold the Buyer harmless against, any and all
liabilities, damages, losses and expenses (including without
limitation amounts paid in settlement, interest, court costs,
costs of investigators, reasonable fees and expenses of
attorneys, accountants, financial advisors and other experts, and
other expenses of litigation, investigations, inquiries by
Governmental Bodies or related proceedings) ("Losses") incurred
or suffered by the Buyer or any Affiliate of the Buyer resulting
from, relating to or constituting:
(a) any breach of any representation or warranty of the
Seller contained in this Agreement;
(b) any failure to perform any covenant or agreement of the
Seller contained in this Agreement;
(c) any Excluded Liabilities;
(d) any Excluded Company Liabilities;
(e) any and all Taxes to the extent specified in Section
7.9(b)(i);
(f) the German reorganization, consisting of the
liquidation of Haake Verwaltung GmbH & Co. KG and transfer of
those entities' assets related to the Business to Gebruder Haake
GmbH;
(g) any underfunding of any Foreign Retirement Plan other
than the Fisons UK Pension Fund; and
(h) subject to the Buyer's compliance after the Closing
with all applicable requirements, any failure by the Seller to
have obtained prior to the Closing all third party consents
necessary for the assignment to the Buyer of the Assets listed on
Schedule 8.3.
11.2 By the Buyer and the Parent. The Buyer and the Parent,
jointly and severally, shall indemnify the Seller in respect of,
and hold the Seller harmless against, any and all Losses incurred
or suffered by the Seller or any Affiliate thereof resulting
from, relating to or constituting:
(a) any breach of any representation or warranty of the
Buyer or the Parent contained in this Agreement;
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(b) any failure to perform any covenant or agreement of the
Buyer or the Parent contained in this Agreement;
(c) any Assumed Liabilities;
(d) the use of the Retained Names and Logos by the Buyer or
the Parent or any Subsidiary or successor thereof, whether or not
in accordance with this Agreement;
(e) any and all Taxes to the extent specified in Section
7.9(b)(ii) hereof;
(f) any claim for severance pay, termination pay,
redundancy pay, pay in lieu of notice or any other claim for
similar compensation or damages relating to the termination of
any Continuing Employee on or after the Closing Date; however,
this paragraph (f) shall not apply to any Loss pertaining to the
Fund (as defined in Exhibit A); and
(g) (expressions used in this paragraph (g) have the same
meanings as in Exhibit D) any claim which arises in consequence
of Regulation 7 of the Transfer Regulations causing liabilities
relating to the Fund not to transfer to the Buyer as mentioned in
that Regulation and which relate to a UK Employee (or to any
spouse or dependent of a UK Employee) who has not been provided
with the whole or any part of any benefit as provided under the
Fund (whether in relation to employment before or after the
Closing Date) or any claim relating to the cost of such benefit,
but excluding any claim arising out of (i) a breach of contract
by the Seller (other than a claim in consequence of the Buyer not
providing benefits which are equivalent to those provided under
the Fund); (ii) a breach of trust in relation to the Fund; and
(iii) any claim by a Consenting Member in relation to the amount
of the Transfer Amount determined by the Seller's Actuary as
attributable to him. To the extent that a claim relates to a
period of employment before the Closing Date, this indemnity is
subject to payment of the Transfer Amount in accordance with
Exhibit D.
11.3 Limitations on Indemnification.
(a) Except as provided in Section 11.3(c)(ii) or Section
8.2, each party's obligation to indemnify the other for Losses
arising under Section 11.1(a) or Section 11.2(a), as the case may
be, shall be limited as to amount, as follows:
(i) The Indemnitor shall not be required to indemnify the
Indemnitee for any Loss except to the extent that the amount of
such Loss, when added to the aggregate amount of all other Losses
indemnifiable under this Section 11, exceeds #1,600,000 (the
"Indemnification Threshold");
(ii) The Indemnitor shall not be required to indemnify the
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Indemnitee for any Losses which, when added to the aggregate
amount of all other Losses indemnifiable under this Section 11,
exceed one-half (1/2) of the Purchase Price in the aggregate; and
(iii) The Indemnitor shall not be required to indemnify
the Indemnitee for Losses indemnifiable under this Section 11 if
the claim for indemnification involves less than #80,000 (the
"Minimum Claim Amount"); provided, however, that (W) until the
Indemnification Threshold is exceeded, the Minimum Claim Amount
shall be reduced to #5,000 for purposes of the application of
otherwise indemnifiable Losses toward the Indemnification
Threshold, (X) for purposes of determining whether the Minimum
Claim Amount has been exceeded, all claims arising out of the
same or similar circumstances shall be treated as a single claim,
and (Y) after the Indemnification Threshold has been exceeded,
with respect to any indemnifiable claim that exceeds the Minimum
Claim Amount, the entire claim (not just the amount in excess of
#80,000) shall be indemnifiable.
(b) Except as provided in Section 11.3(c)(i), neither the
Seller nor the Buyer shall be entitled to make any claim for
indemnification arising under Section 11.1(a) or Section 11.2(a),
as the case may be, after the date that is 18 calendar months
after the Closing Date, unless the Seller or the Buyer, as the
case may be, shall have asserted such claim for indemnification
prior to such date, stating with reasonable specificity the
nature, facts and circumstances of such claim, in which event
such claim shall survive until the resolution thereof. If a
claim for indemnification is asserted prior to the applicable
expiration date, then (notwithstanding the expiration of such
time period) the representation or warranty applicable to such
claim shall survive until the resolution of such claim.
(c) Notwithstanding any other provision to the contrary
herein:
(i) the representations contained in Section 5.2,
Section 5.3, Section 5.4 (to the extent that any breach of
representation or warranty arising under Section 5.4 relates to
the right of any person or entity, including, without limitation,
any Governmental Body, to cause the transactions completed by
this Agreement to be rescinded following consummation), and
Section 5.9(a) shall survive without time limit;
(ii) none of the provisions of Section 11.3(a) shall apply
with respect to Losses arising from breaches of the
representations described in Section 11.3(c)(i), and the maximum
amount of Losses for which an Indemnitor shall be liable with
respect to such Losses shall be equal to the Purchase Price; and
(iii) the Buyer and the Parent shall not be required to
indemnify the Seller and its Affiliates under Section 11.2(g) for
Losses, which when added to the aggregate amount of all other
Losses indemnifiable under Section 11.2(g), exceeds #1,000,000.
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(d) Except with respect to claims based on actual fraud,
the rights of the Buyer and the Seller under this Section 11
shall be the exclusive remedy of the Buyer and the Seller,
respectively, with respect to claims resulting from or relating
to (X) any breach of representation or warranty or failure to
perform any covenant or agreement of the Seller or the Parent or
Buyer, respectively, contained in this Agreement, or (Y) any
Excluded Liabilities.
(e) Notwithstanding Section 1.3, all Losses indemnifiable
under Section 11 shall be indemnified in the currency in which
such Losses were incurred.
11.4 Third-Party Claims.
(a) In the event that any legal proceedings shall be
instituted or any claim or demand shall be asserted by any Person
other than a party hereto, any Affiliate of a party hereto or
any officer, director or holder of more than 10% of the stock of
any such party (a "Third-Party Claim") in respect of which
indemnification may be sought by any party or parties from any
other party or parties under the provisions of this Section 11,
the party or parties that may seek indemnification (collectively,
the "Indemnitee") shall cause written notice in reasonable detail
of the assertion of any Third-Party Claim of which it has
knowledge that is covered by this indemnity to be forwarded
promptly to the party from which indemnification may be sought
(the "Indemnitor"); provided that, if any taxing authority
proposes an adjustment, questions the treatment of any item, or
commences an examination or audit, which adjustment, question,
examination or audit could, if pursued successfully, reasonably
be expected to give rise to a claim relating to Section 5.8 or
Section 7.9 (a "Tax Dispute"), then such Tax Dispute shall
constitute a Third-Party Claim under this Section 11.4, and the
party hereto first receiving notice of such Tax Dispute shall
promptly notify in writing the other party hereto; provided
further that the failure of an Indemnitee to give timely notice
shall not affect rights to indemnification hereunder except to
the extent that the Indemnitor has been damaged by such failure.
The Indemnitor shall have the right, at its option and at its
own expense, to be represented by counsel of its choice and to
participate in the defense, negotiation and/or settlement of any
Third-Party Claim.
(b) In connection with any Third-Party Claim, the
Indemnitor, at the sole cost and expense of the Indemnitor, may,
upon written notice to the Indemnitee, assume the defense of any
such Third-Party Claim if (i) the Indemnitor acknowledges in
writing the obligation of the Indemnitor to indemnify in
accordance with the terms of this Agreement the Indemnitee with
respect to such Third-Party Claim, (ii) the Third-Party Claim
seeks monetary damages solely or is a Tax Dispute and (iii) an
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adverse resolution of the Third-Party Claim would not have a
material adverse effect on the goodwill or reputation of or the
future conduct of the business of the Indemnitee; provided,
however, that the Indemnitee may participate in any such
proceeding with counsel of its choice and at its own expense;
and provided further, however, that if the Indemnitor assumes
control of such defense and the Indemnitee reasonably concludes
that the Indemnitor and the Indemnitee have conflicting
interests or different defenses available with respect to such
action, suit or proceeding, or if the Indemnitor elects not to
assume such defense, then the reasonable fees and expenses of
counsel to the Indemnitee shall be considered "Losses" for
purposes of this Agreement. The party controlling such defense
shall keep the other party advised of the status of such action,
suit or proceeding and the defense thereof and shall consider in
good faith recommendations made by the other party with respect
thereto.
(c) The Indemnitee shall not agree to any settlement of
such action, suit or proceeding without the prior written consent
of the Indemnitor, which shall not be unreasonably withheld,
unless the Indemnitee waives any right to indemnity therefor by
the Indemnitor. Notwithstanding the foregoing, if a customer
or a supplier of the Business asserts that the Buyer is liable
to such customer or supplier for a monetary or other obligation
which may constitute or result in Losses for which the Buyer may
be entitled to indemnification pursuant to this Section 11 and
the Buyer reasonably determines that it has a valid business
reason to fulfill such obligations, then (i) the Buyer shall be
entitled to satisfy such obligation without prior notice to or
consent from the Seller, (ii) the Buyer may make a claim for
indemnification pursuant to this Section 11 and (iii) the Buyer
shall be reimbursed, in accordance with the provisions of this
Section 11, for any such Losses for which it is entitled to
indemnification pursuant to the provisions of this Section 11;
provided, however, that if the Buyer makes a claim for
indemnification in accordance with this sentence the Seller
shall not be deemed to have waived any defense to such claim by
the Buyer, notwithstanding the Buyer's prior satisfaction of the
obligation for which indemnification is sought, and it shall not
be a defense to the Buyer's claim for indemnification that the
Buyer has satisfied the obligation for which indemnification is
sought.
(d) After final judgment or award shall have been rendered
by a court, arbitration board or administrative agency of
competent jurisdiction and the expiration of the time in which
to appeal therefrom, or a settlement shall have been
consummated, or the Indemnitee and the Indemnitor shall have
arrived at a mutually binding agreement with respect to each
separate matter indemnified by the Indemnitor, the Indemnitee
shall forward to the Indemnitor notice of any sums due and owing
hereunder by the Indemnitor with respect to such matter and the
Indemnitor shall pay all of the sums so owing to the Indemnitee
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by check within 30 days after the date of such notice. Any
payment not made when due under this Section 11 shall bear
interest, compounded monthly on the last day of each calendar
month, from the due date, at an interest rate equal to one
percent above LIBOR, as in effect from time to time.
12. TERMINATION.
12.1 Termination Events. Subject to the other provisions of
this Section 12, this Agreement may, by written notice given at
or prior to the Closing in the manner hereinafter provided, be
terminated and abandoned:
(a) By either the Seller or the Buyer if a material default
or breach shall be made by the other with respect to (i) the due
and timely performance of any of its covenants and agreements
contained herein, or (ii) the due compliance with any of its
representations and warranties contained in Sections 5 or 6, as
the case may be, except (in the case of Seller) for any lack of
compliance that arises from an event or condition that (together
with all other events or conditions) would not be a Material
Event, and such breach or default has not been (i) cured within
15 days after notice thereof is given to the breaching party or
(ii) waived by the non-breaching party;
(b) (i) by the Buyer if all of the conditions set forth in
Section 8 shall not have been satisfied on or before the
Termination Date, other than through failure of the Buyer to
fully comply with its obligations hereunder, or shall not have
been waived by it on or before such dates; or (ii) by the
Seller, if all of the conditions set forth in Section 9 shall
not have been satisfied on or before the Termination Date, other
than through failure of the Seller to fully comply with its
obligations hereunder, or shall not have been waived by it on or
before such dates; or
(c) by mutual written consent of the Seller and the Buyer.
12.2 Effect of Termination. In the event this Agreement is
terminated pursuant to Section 12.1, all further obligations of
the parties hereunder shall terminate; provided, however, that
if this Agreement is so terminated by one party pursuant to
Section 12.1(a) or 12.1(b)(i) or (ii) because one or more of the
conditions to such party's obligations hereunder is not
satisfied as a result of the other party's failure to comply
with its obligations under any provision of this Agreement, it
is expressly agreed and understood that such party's right to
pursue all legal remedies for breach of contract or otherwise,
including, without limitation, damages relating thereto, shall
also survive such termination unimpaired. No termination of this
Agreement shall act to terminate or otherwise impair the
obligations set forth in Sections 13.3, 13.12 and 13.13.
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13. MISCELLANEOUS.
13.1 Amendments. This Agreement may be amended only by a
written agreement signed by the Seller, the Buyer and the Parent.
13.2 Notices. All notices, requests, demands and other
communications made in connection with this Agreement shall be in
writing and shall be deemed to have been duly given on the date
delivered if delivered personally or sent by facsimile to the
persons identified below, or three days after mailing if mailed
by certified or registered U.S mail, postage prepaid, return
receipt requested, addressed as follows, or two business days
after mailing by nationally recognized express courier, addressed
as follows:
(a) if to the Buyer:
Thermo Instrument Systems Inc.
81 Wyman Street
Waltham, Massachusetts 02254
Attention: General Counsel
Facsimile: (617) 622-1283
(b) if to the Parent:
Thermo Electron Corporation
81 Wyman Street
Waltham, Massachusetts 02254
Attention: General Counsel
Facsimile: (617) 622-1283
(c) if to the Seller:
Fisons plc
Fison House Princes Street
Ipswich Suffolk IP1 1QH
England
Attention: John M. Bailey
Facsimile: (44)-0473-231540
with a copy to:
Cahill Gordon & Reindel
80 Pine Street
New York, New York 10005
Attention: John P. Mitchell, Esq.
Facsimile: (212) 269-5420
Such addresses may be changed, from time to time, by means of a
notice given in the manner provided in this Section 13.2.
13.3 Expenses. Except as otherwise provided herein
(including, without limitation, Sections 4.3), each party to
this Agreement shall pay its own costs and expenses (including
all legal, accounting, broker, finder and investment banker
fees) relating to this Agreement, the negotiations leading up to
this Agreement and the transactions contemplated by this
Agreement.
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<PAGE>
13.4 Waiver. Waiver of any term or condition of this
Agreement by any party shall only be effective if in writing and
shall not be construed as a waiver of any subsequent breach or
failure of the same term or condition, or a waiver of any other
term or condition of this Agreement.
13.5 Headings. The headings contained in this Agreement are
for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement.
13.6 Severability. Any term or provision of this Agreement
that is invalid or unenforceable in any situation in any
jurisdiction shall not affect the validity or enforceability of
the remaining terms and provisions hereof or the validity or
enforceability of the offending term or provision in any other
situation or in any other jurisdiction. If the final judgment of
a court of competent jurisdiction declares that any term or
provision hereof is invalid or unenforceable, the parties agree
that the court making the determination of invalidity or
unenforceability shall have the power to reduce the scope,
duration or area of the term or provision, to delete specific
words or phrases, or to replace any invalid or unenforceable term
or provision with a term or provision that is valid and
enforceable and that comes closest to expressing the intention of
the invalid or unenforceable term or provision, and this
Agreement shall be enforceable as so modified after the
expiration of the time within which the judgment may be appealed.
13.7 Entire Agreement. This Agreement, including the
Exhibits and Schedules hereto, constitutes the entire agreement,
and supersedes all other prior agreements and undertakings, both
written and oral, among the parties, or any of them, with
respect to the subject matter hereof, including, without
limitation, the confidentiality undertaking dated as of October
3, 1994, as amended, and the 1995 Agreement.
13.8 Assignment. This Agreement shall not be assigned by
the Parent, the Buyer, the Seller or by operation of law or
otherwise, except that the Buyer may assign some or all of its
rights, interests and/or obligations hereunder to one or more
affiliates of the Buyer ("Designated Transferees"); provided,
however, that any such assignment shall not relieve either the
Buyer or the Parent of its respective obligations hereunder. If
the Buyer assigns any of its rights, interests and/or
obligations hereunder to one or more Designated Transferees,
then, unless the context otherwise requires, all references
herein to the Buyer shall mean and include the respective
Designated Transferees. It is the intention of the parties that
the Assets of Fisons Instruments (S.E.A.) Pty. Ltd. shall be
acquired by Thermo SID (Australia) Pty. Ltd., which shall be
considered a Designated Transferee hereunder.
13.9 Governing Law; Time of the Essence. This Agreement
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<PAGE>
shall be governed by, and construed in accordance with, the laws
of the State of New York (without regard to principles of
conflicts of law) as to all matters and issues relating to the
transactions contemplated by this Agreement, including but not
limited to, matters and issues of validity, construction,
effect, performance and remedies; provided, however, that the
terms and conditions set forth in Exhibit B and Exhibit D shall
be governed by the law of England. Time is of the essence in the
performance of this Agreement.
13.10 Counterparts. This Agreement may be executed in
one or more counterparts, and by the different parties hereto in
separate counterparts, each of which when executed shall be
deemed to be an original but all of which shall constitute one
and the same agreement.
13.11 Conditions and Documents. All parties shall use
their best efforts to satisfy the conditions to Closing and
otherwise consummate the transactions contemplated by this
Agreement, including the execution of such documents as may be
reasonably necessary to effectuate the purposes of this
Agreement. Without limiting the generality of the foregoing,
the Seller shall cause each Share Seller and Asset Seller to
execute such documents, and to take such actions, as may be
necessary to enable the Seller to carry out its obligations
hereunder and to consummate the transactions contemplated
hereby.
13.12 Publicity. Until the business day after the
Closing Date and except for any public disclosure which the
Buyer or the Seller in good faith believes is required by law or
applicable stock exchange rules, neither party shall issue any
press release or make any other public announcement regarding the
transactions contemplated hereby, without the prior written
approval of the other party, which shall not be unreasonably
withheld. The parties hereto shall issue a mutually acceptable
press release as soon as practicable after the execution of this
Agreement and as soon as practicable after the Closing.
13.13 Confidential Information. In connection with the
negotiation of this Agreement and the consummation of the
transactions contemplated hereby, each party hereto will have
access to data and confidential information relating to the other
party. Each party hereto shall treat such data and information
as confidential, preserve the confidentiality thereof and not
duplicate or use such data or information, except in connection
with the transactions contemplated hereby, and in the event of
the termination of this Agreement for any reason whatsoever, each
party hereto shall return to the other all documents, work
papers and other material (including all copies thereof)
obtained in connection with the transactions contemplated hereby
and will use reasonable efforts, including instructing its
employees who have had access to such information, to keep
confidential and not to use any such data or information;
70
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<PAGE>
provided, however, that such obligations shall not apply to any
data and information (i) which, at the time of disclosure, is
available publicly, (ii) which, after disclosure, becomes
available publicly through no fault of the receiving party,
(iii) which the receiving party knew or to which the receiving
party had access (without violating any right of the disclosing
party) prior to disclosure by the disclosing party, (iv) which
is required by law, regulation or stock exchange rule, or in
connection with legal process, to be disclosed, or (v) which is
disclosed by a receiving party to its attorneys or accountants,
who shall respect the above restrictions.
13.14 Submission to Jurisdiction and Venue. Any legal
suit, action, or proceeding arising out of or relating in any way
to this Agreement, any other agreement or instrument contemplated
herein or the transactions contemplated hereby, including but not
limited to actions seeking specific performance of the terms of
this Agreement, actions for indemnity, actions seeking
declaratory relief regarding the terms of this Agreement or
actions for breach of this Agreement, shall be institute
exclusively in the United States District Court for the Southern
District of New York, United States of America (the "Southern
District Court"), or if such court shall not have subject matter
jurisdiction over such action, a court of general jurisdiction of
the State of New York located in the City of New York, Borough of
Manhattan (a "New York Court"). Each party hereby waives any
objection whatsoever that it may have now or hereafter to the
laying of the venue of any such suit, action or proceeding
exclusively in the Southern District Court or a New York Court,
as the case may be, and irrevocably submits to the exclusive
jurisdiction of the Southern District Court in any such suit,
action or proceeding or, if such court shall not have subject
matter jurisdiction over such action, the New York Courts. In
the event that any legal suit, action or proceeding of any kind
is commenced in or brought in any court other than in the
Southern District Court (or, if the Southern District Court shall
not have subject matter jurisdiction over such action, a New York
Court), the parties agree to, and shall cause their respective
Subsidiaries and Affiliates that they control to, transfer and/or
remove any such legal suit, action or proceeding to the Southern
District Court (or, if the Southern District Court shall not have
subject matter jurisdiction over such action, a New York Court),
or to immediately dismiss without prejudice such legal suit,
action or proceeding. Each of the Seller and the Buyer hereby
designates CT Corporation System (the "Agent") as its authorized
agent to accept and acknowledge on its behalf service of any and
all process that may be served in any such suit, action or
proceeding in any such court. Each of the Seller and the Buyer
agrees that service of process upon the Agent at its office at
1633 Broadway, New York, New York 10009 (or at such other address
in New York County, New York as such agent may designate by
written notice to the parties) and written notice of said service
air mailed or delivered to a party hereto at the address for
notice established pursuant to Section 13.2 shall be deemed in
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every respect effective service of process upon such party in any
such suit, action or proceeding and shall be taken and held to be
valid personal service upon such party whether or not such party
shall then be doing, or at any time shall have done, business
within the State of New York, and that any such service of
process shall be of the same force and validity as if service
were made upon such party according to the laws governing the
validity and requirements of such service in such State, and
waives all claim of error by reason of any such service. Nothing
in this Section 13.14, however, shall affect the right of either
party to serve legal process in any other manner permitted by
law.
13.15 Construction. The language used in this Agreement
shall be deemed to be the language chosen by the parties hereto
to express their mutual intent, and no rule of strict
construction shall be applied against either party. Any
reference to any federal, state, local or foreign statute or law
shall be deemed also to refer to all rules and regulations
promulgated thereunder, unless the context requires otherwise.
[Remainder of this page intentionally left blank.]
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed on the day and year first above written.
THERMO INSTRUMENT
SYSTEMS INC.
By: ______________________________
Name: ____________________________
Title: _____________________________
THERMO ELECTRON CORPORATION
By:____________________________
Name:__________________________
Title:_________________________
FISONS plc
By:____________________________
Name:__________________________
Title:_________________________
AA960880072
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<PAGE>
Exhibit A
---------
"Accounting Principles" means the accounting principles
---------------------
set forth on Schedule 5.7A.
--------------
"Accounts Receivable" shall have the meaning given
-------------------
such term in Section 7.16(b).
"Affiliate" shall mean, with respect to any Person,
---------
any other Person that directly, or indirectly, through one
or more intermediaries, is controlled by such Person and,
with respect to Seller, shall include RPR and any other
Person that is, directly or indirectly, through one or more
intermediaries, controlled by RPR.
"Agent" shall have the meaning given such term in
-----
Section 13.14.
"Assets" means all of the assets, properties and
------
rights, whether real, personal, tangible or intangible, of
every kind, nature and description, owned or held by the
Asset Sellers relating primarily to the Business, including
without limitation (i) all trade and other accounts
receivable and notes receivable; (ii) all inventories of
raw materials, work in process, finished goods, supplies,
packaging materials, spare parts and similar items; (iii)
all machinery, equipment, tools and tooling, furniture,
fixtures, leasehold improvements and motor vehicles; (iv)
all real property, leaseholds and subleaseholds in real
property, and easements, rights-of-way and other
appurtenants thereto; (v) all Proprietary Rights and
associated goodwill; (vi) all rights under contracts,
agreements or instruments (including without limitation the
Restricted Assets to the extent provided in Section 2.8);
(vii) all claims, prepayments, refunds, causes of action,
choses in action, rights of recovery, rights of setoff and
rights of recoupment, including all rights under warranties
but excluding any such items relating to Taxes for which the
Seller is liable pursuant to Section 7.9; (viii) all
permits; (ix) all books, records, accounts, ledgers, files,
documents, correspondence, lists (customer or otherwise),
product and sales literature, drawings or specifications,
employment records, manufacturing and technical manuals,
advertising and promotional materials, studies, reports and
other printed or written materials; provided, however, that
-------- -------
the Seller and its Subsidiaries shall be permitted to retain
copies of all Tax Returns and other records and documents
that may reasonably be required to comply with tax law
requirements, and (x) all claims and defenses to the extent
relating to any of the foregoing or to the Assumed
Liabilities, but excluding the Excluded Assets and any of
---------
the Shares.
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<PAGE>
"Asset Seller" and "Asset Sellers" mean, respectively,
------------ -------------
each of, and all of, the Seller, the Business Sellers and
the Division Sellers.
"Assumed Liabilities" shall have the meaning given such
-------------------
term in Section 3.1.
"Balance Sheet" means the audited combined balance
-------------
sheet of the Business as of December 31, 1994 derived from
the audited financial statements of the Seller prepared by
the Seller, which balance sheet shall be accompanied by an
unqualified opinion of Price Waterhouse.
"Balance Sheet Date" means December 31, 1994.
------------------
"Business" means the business of the Instruments
--------
Division of the Seller other than the business of the
Excluded Product Lines.
"Business Seller" and "Business Sellers" mean,
--------------- ----------------
respectively, each of, and all of, the companies designated
as such on Schedule 1, which comprise those Subsidiaries of
----------
the Seller whose sole business is the Business, and which
are selling assets to the Buyer.
"Buyer" means Thermo Instrument Systems Inc., a
-----
Delaware corporation and/or, as the context requires, any
Designated Transferee.
"Buyer's Foreign Actuary" means any actuary, benefit
-----------------------
consultant or similar qualified person retained by the Buyer
for purposes of evaluating the funding of any Foreign Plan.
"CERCLA" shall have the meaning given such term in
------
Section 5.28.
"Closing" shall have the meaning given such term in
-------
Section 10.
"Closing Date" shall have the meaning given such term
------------
in Section 10.
"Closing Balance Sheet" shall have the meaning given
---------------------
such term in Section 4.1(b).
"Code" means the U.S. Internal Revenue Code of 1986, as
----
amended and in effect.
"Collection Period" shall have the meaning given such
-----------------
term in Section 7.16(b)
"Company" and "Companies" mean, respectively, each of,
------- ---------
and all of, the companies designated as such on Schedule 1,
----------
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<PAGE>
which comprise those Subsidiaries of the Seller whose sole
business is the Business, and the shares of which are to be
sold to Buyer pursuant to the terms of this Agreement.
"Company Assets" means all of the assets, properties
--------------
and rights, whether real, personal, tangible or intangible,
of every kind, nature and description, owned or held by the
Companies.
"Company Liabilities" means all liabilities of each
-------------------
Company of any nature, known or unknown, fixed, contingent
or otherwise, arising out of or relating to the conduct of
the Business prior to the Closing Date, except for Excluded
Company Liabilities.
"Competitive Business" shall have the meaning given
--------------------
such term in Section 7.14(a).
"Continuing Employee" means each employee (i) employed
-------------------
in the Business by any of the Asset Sellers who accepts
employment with the Buyer pursuant to Section 7.6 or (ii)
who remains an employee of any of the Companies immediately
following the Closing.
"Covenants" means agreements, stipulations,
---------
restrictions, rights and other matters affecting the U.K.
Properties whether or not the same are referred to in the
registers maintained in relation to the U.K. Properties by
the English Land Registry and its Land Charges Department,
but "Covenants" does not include any mortgage, charge, lien
or other security interest whatsoever.
"Designated Transferees" shall have the meaning given
----------------------
such term in Section 13.8.
"Division Seller" and "Division Sellers" mean,
--------------- ----------------
respectively, each of, and all of , the entities designated
as such on Schedule 1, which comprise those companies
----------
affiliated with the Seller (including the Seller) that carry
on both the Business and other businesses and that are
selling all of their assets used primarily in the Business
to the Buyer.
"Division" and "Divisions" mean, respectively, each of,
-------- ---------
and all of, the divisions conducting the Business within the
Division Sellers.
"Dormant Shell" and "Dormant Shells" mean,
------------- --------------
respectively, each of, and all of, the companies designated
as such on Schedule 1, which comprise those Subsidiaries of
----------
the Seller that have no assets or operations.
"Draft Closing Balance Sheet" shall have the meaning
---------------------------
given such term in Section 4.1(a).
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<PAGE>
"Encumbrances" means claims, liens, pledges, charges,
------------
encumbrances, equities, options, calls, voting trusts,
agreements, commitments, restrictions and any other security
interests whatsoever.
"Environmental Law" shall have the meaning given such
-----------------
term in Section 5.28(a).
"Environmental Liabilities" means any and all Losses
--------------------------
incurred by the Buyer arising out of (i) any actual or
alleged release of any Materials of Environmental Concern
into the environment relating to the operation of the
Business prior to the Closing Date, (ii) any actual or
alleged release of any Materials of Environmental Concern
into the environment commencing prior to the Closing Date at
any site owned or operated by any of the Asset Sellers prior
to the Closing Date or to which any Materials of
Environmental Concern were actually or allegedly transported
by or on behalf of any of the Asset Sellers prior to the
Closing Date, or (iii) the actual or alleged violation of
any Environmental Law by any Asset Seller commencing prior
to the Closing Date; provided, however, that Environmental
Liabilities shall not include (a) with respect to any actual
or alleged release of any Materials of Environmental Concern
or any violation of any Environmental Law commencing prior
to the Closing Date and continuing after the Closing Date at
any site owned or operated by the Buyer after the Closing
and owned or operated by any Asset Seller prior to the
Closing, any Loss incurred by the Buyer arising from the
portion of such release or violation occurring after the
earlier of (1) 30 days after the Buyer's discovery of such
release or violation or (2) the first anniversary of the
Closing Date, or (b) any Loss incurred by the Buyer arising
from the performance of any remediation, or the giving of
any notice to a Governmental Body, to the extent not
required by any applicable Environmental Law or not in
response to any Third Party Claim, it being understood that
the cost of performing any study, assessment or other action
in connection with any such non-required remediation shall
not be a Loss.
"ERISA" means the Employee Retirement Income Security
-----
Act of 1974, as amended.
"ERISA Affiliate" means any entity which is or was at
---------------
any time on or after the date on which RPR's tender for
shares of the Seller became unconditional, a member of (i) a
controlled group of corporations (as defined in
Section 414(b) of the Code), (ii) a group of trades or
businesses under common control (as defined in
Section 414(c) of the Code), or (iii) an affiliated service
group (as defined in Section 414(m) of the Code or the
regulations under Section 414(o) of the Code), any of which
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<PAGE>
includes the Seller, any Share Seller, any Asset Seller or
any Company.
"Excluded Assets" shall have the meaning given such
---------------
term in Section 2.5.
"Excluded Company Liabilities" means any liabilities
----------------------------
that would be Excluded Liabilities, or would not be Assumed
Liabilities, if the Companies were Asset Sellers hereunder.
"Excluded Product Lines" means the "Business", as such
------------------------
term is defined in the Sale of Business Agreement for the
sale of a Mass Spectrometry Business of Fisons plc dated the
date hereof between the Seller and Micromass Limited.
"Excluded Liabilities" shall have the meaning given
--------------------
such term in Section 3.2.
"FTA" shall have the meaning given such term in Section
---
8.8.
"Financial Statements" means the Balance Sheet and the
--------------------
combined statements of operations of the Business for the
year ended December 31, 1994 prepared by the Seller and
derived from the audited financial statements of the Seller,
to which is attached an unqualified opinion of Price
Waterhouse.
"Foreign Plans" shall have the meaning given such term
-------------
in Section 5.25.
"Foreign Retirement Plan" shall have the meaning given
-----------------------
such term in Section 5.25.
"Foreign Transition Period" shall have the meaning
-------------------------
given such term in Section 7.7(a).
"Foreign Welfare Plan" shall have the meaning given
--------------------
such term in Section 5.25.
"GAAP" shall have the meaning given such term in
----
Section 4.1(a).
"Governmental Body" shall have the meaning given such
-----------------
term in Section 5.19.
"Income Taxes" means any Taxes assessable on, or
------------
measured with respect to, net income.
"Indemnification Threshold" shall have the meaning
-------------------------
given such term in Section 11.3(a)(i).
"Indemnitee" shall have the meaning given such term in
----------
Section 11.4.
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<PAGE>
"Indemnitor" shall have the meaning given such term in
----------
Section 11.4.
"Intellectual Property" shall have the meaning given
---------------------
such term in Section 5.15.
"Interim Financial Statements" means the unaudited
-----------------------------
balance sheet and combined statements of operations for the
Seller's Scientific Instruments Division as of and for the
year ended December 31, 1995.
"IRS" means the U.S. Internal Revenue Service.
---
"ISRA" shall have the meaning given such term in
----
Section 7.3(c).
"Laws and Regulations" shall have the meaning given
--------------------
such term in Section 5.20.
"Leased Real Estate" means the real property listed on
------------------
Schedule 5.11.
-------------
"LIBOR" shall have the meaning given such term in
-----
Section 4.1(e).
"Losses" shall have the meaning given such term in
------
Section 11.1.
"Material Adverse Effect" shall mean a Loss to the
-----------------------
Business of more than #80,000 (except to the extent such
Loss results from the actions or omissions of Buyer or its
Subsidiaries).
"Material Event" means any event or condition that
--------------
would be reasonably likely to result in a Loss to the
Business of at least #6,000,000.
"Material Permits" shall have the meaning given such
----------------
term in Section 5.29.
"Materials of Environmental Concern" shall have the
----------------------------------
meaning given such term in Section 5.28(b).
"Minimum Claim Amount" shall have the meaning given
--------------------
such term in Section 11.3(a)(iii).
"Net Book Value" shall have the meaning given such
--------------
term in Section 4.1(e).
"New Receivable" shall have the meaning given such
--------------
term in Section 7.16(d).
"New York Court" shall have the meaning given such term
--------------
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<PAGE>
in Section 13.14.
"Neutral Auditors" shall have the meaning given such
----------------
term in Section 4.1(b).
"Neutral Broker" shall have the meaning given such term
--------------
in Section 4.1(b).
"NJDEPE" shall have the meaning given such term in
------
Section 7.3(c).
"Occupation Leases" means, in respect of the U.K.
-----------------
Properties, the leases, tenancy agreements, licenses and
other rights of occupation to which the U.K Properties are
subject as referred to in Part B of Schedule 5.10, and
"Occupation Lease" means any of them, and, in relation to an
Occupation Lease, references to the landlord include the
person on which a license or rights of occupation are
binding and references to the tenant include the licensee or
person with the benefit of those rights.
"Ordinary Course of Business" means the ordinary course
---------------------------
of business of the Business consistent with past practice
and custom.
"Owned Real Estate" means the real property listed on
-----------------
Schedule 5.10.
-------------
"Parent" means Thermo Electron Corporation.
------
"Permitted Encumbrances" means any of the following,
----------------------
but only to the extent relating solely to Assumed
Liabilities: (a) liens for current Taxes and assessments
not yet delinquent or Taxes the validity of which are being
contested in good faith by appropriate proceedings, (b) such
restrictions, easements and customary utility easements, if
any, as do not materially impair the utility of the
affected properties in their current uses in the Business,
(c) liens of employees, laborers, carriers, warehousemen,
mechanics and materialmen for current wages or accounts
payable not yet delinquent, (d) liens and charges incident
to construction or maintenance, which have either not been
filed of record or have been filed of record and are being
contested in good faith by appropriate action diligently
pursued and have not yet proceeded to judgment, (e) liens
or security interests created in the Ordinary Course of
Business, (f) liens or security interests created as a
result of deposits for workers' compensation, unemployment
insurance, surety bonds and leases, (g) landlord liens for
rent not yet due and payable, (h) liens or security
interests created as a result of capitalized lease
obligations and (i) restrictions on transfer imposed by
applicable securities laws; provided that any judicial
proceedings intended to be referred to in subsections (a)
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<PAGE>
and (d) are set forth in Schedule 5.19.
-------------
"Person" means an individual, firm, corporation,
------
division, partnership, joint venture, unincorporated
association, government agency or political subdivision
thereof, or other entity.
"Plans" shall have the meaning given it in
-----
Section 5.24(a).
"Post-Closing Periods" shall have the meaning ascribed
--------------------
to such term in Section 7.9(b).
"Pre-Closing Periods" shall have the meaning given such
-------------------
term in Section 7.9(b).
"Proprietary Rights" means all (A) patents, patent
------------------
applications, patent disclosures and all related
continuation, continuation-in-part, divisional, reissue,
re-examination, utility, model, certificate of invention and
design patents, patent applications, registrations and
applications for registrations, (B) trademarks, service
marks, trade dress, logos, tradenames and corporate names
and registrations and applications for registration
thereof, (C) copyrights and registrations and applications
for registration thereof, (D) mask works and registrations
and applications for registration thereof, (E) computer
software, data and documentation, (F) trade secrets and
confidential business information, whether patentable or
nonpatentable and whether or not reduced to practice,
know-how, manufacturing and product processes and
techniques, research and development information,
copyrightable works, financial, marketing and business data,
pricing and cost information, business and marketing plans
and customer and supplier lists and information, (G) other
proprietary rights relating to any of the foregoing
(including without limitation remedies against infringements
thereof and rights of protection of interest therein under
the laws of all jurisdictions) and (H) copies and tangible
embodiments thereof.
"Property Transfer" means the document of conveyance,
-----------------
assignment or transfer of a U.K. Property to the Buyer.
"Purchase Price" shall have the meaning given such term
--------------
in Section 2.1.
"RPR" means Rhone Poulenc Rorer Inc.
-----
"Restricted Asset" means (i) any lease required to be
----------------
listed on Schedule 5.11, any equipment lease required to be
-------------
listed on Schedule 5.12, any license required to be listed
-------------
on Schedule 5.15, or any contract required to be listed on
-------------
Schedule 5.17, which lease, equipment lease, license, or
-------------
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contract cannot be validly assigned, transferred, subleased
or sublicensed without the consent or waiver of the issuer
thereof or the other party thereto or a third person
(including a Governmental Body), or with respect to which
such assignment, transfer, sublease or sublicense or
attempted assignment, transfer, sublease or sublicense could
reasonably be expected to (a) constitute a breach thereof or
a violation of any law, decree, order, regulation, rule,
ordinance or other governmental edict, or (b) entitle the
other party thereto to terminate such lease, equipment
lease, license, or contract or receive any additional
payment thereunder, or (ii) any Material Permit listed on
Schedule 5.29; and "Restricted Assets" means all of them
------------- -----------------
collectively. For purposes of this definition, "transfer"
or similar word shall include a transfer resulting or deemed
to result under the terms of the Restricted Asset as a
consequence of the transfer of Shares to the Buyer.
"Restricted Employee" shall have the meaning given such
--------------------
term in Section 7.13.
"Retained Names and Logos" shall have the meaning given
------------------------
such term in Section 2.5(e).
"Savings Plan" means the Fisons Scientific Equipment
------------
Savings Incentive Plan, including the related trust.
"Seller" means Fisons plc, a company organized under
------
the laws of England.
"Seller's Knowledge" means the actual knowledge or
------------------
awareness, after reasonable inquiry, of any person listed on
Schedule A, with respect to the area or jurisdiction of
----------
their respective responsibilities only as set forth on
Schedule A.
----------
"Seller's Welfare Plans" shall have the meaning given
----------------------
such term in Section 7.7(b).
"Shared Intellectual Property" shall have the meaning
------------------------------
given such term in Section 7.17.
"Shared Intellectual Property License" and "Shared
-------------------------------------------------
Intellectual Property Licenses" shall have the meaning
------------------------------
given such terms in Section 7.17.
"Shares" means the outstanding shares of capital stock
------
of the Companies owned by any Share Seller.
"Share Seller" and "Share Sellers" mean, respectively,
------------ -------------
each of, and all of, the Seller and the subsidiaries of the
Seller designated as such on Schedule 1.
----------
"Southern District Court" shall have the meaning given
-----------------------
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such term in Section 13.14.
"Subsidiary" means (i) any corporation with respect to
----------
which another corporation or entity, directly or
indirectly, has the power to vote or direct the voting of
sufficient securities to elect a majority of the directors
or (ii) any corporation or other entity with respect to
which another corporation or entity, directly or
indirectly, owns 50% or more of the aggregate equity
interests.
"Taxes" means any and all federal, state, provincial,
-----
local and foreign income, profits, franchise, sales, value
added, use, employment, payroll, transfer, occupation, real
property, personal property, severance, production, excise,
gross receipts, license, stamp, premium, customs, duties,
capital stock, windfall profit, environmental, withholding,
social security (or similar), unemployment, disability,
sales, use, transfer, registration, national insurance,
alternative or add-on minimum, estimated and other taxes,
assessments, imposts, fees or duties of any kind whatsoever
(including any interest, additions to tax and penalties
with respect to any such tax), whether disputed or
undisputed.
"Tax Dispute" shall have the meaning given such term in
-----------
Section 11.4(a).
"Tax Returns" means all reports, returns, declarations,
-----------
claims for refund or information returns or statements
relating to Taxes, and any schedule or attachment thereto
and any amendment thereof.
"Termination Date" means March 31, 1996.
----------------
"Third-Party Claim" shall have the meaning given such
-----------------
term in Section 11.4.
"Transaction Taxes" shall have the meaning given such
-----------------
term in Section 4.3.
"Transferor" means the estate owner of a U.K. Property
----------
and shall include the Seller where the context permits.
"Transfer Regulations" shall have the meaning given
--------------------
such term in Section 7.6(b).
"Transition Services Agreement" shall have the meaning
-----------------------------
given such term in Section 7.19.
"U.K. Assets" shall have the meaning given such term in
-----------
Section 7.9(h)(i).
"U.K. Business" shall have the meaning given such term
-------------
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<PAGE>
in Section 7.6(b).
"U.K. Employee" means any employee located in the
-------------
United Kingdom and employed by any of the Companies or the
Asset Sellers primarily in the Business, but in any event
excluding the persons listed on Schedule 3.2(n).
---------------
"U.K. Freehold Properties" means the properties located
------------------------
in the U.K. shortly described in Schedule 5.10 and "U.K.
-------------
Freehold Property" means any of them.
"U.K. Lease" means, in respect of a U.K. Leasehold
----------
Property, the lease under which it is held as referred to in
Schedule 5.11 and includes every deed varying such lease
-------------
that has been disclosed by the Seller to the Buyer in a
Schedule.
"U.K. Leasehold Properties" means the leasehold
-------------------------
properties located in the U.K. shortly described in Schedule
--------
5.10 and "U.K. Leasehold Property" means any of them.
----
"U.K. Properties" means the U.K. Freehold Properties
---------------
and the U.K. Leasehold Properties and "U.K. Property" means
any of them.
"UK Property Liabilities" means
-------------------------
(a) the liability of VG Instruments Group Limited to
Holt Jackson Book Company Limited to pay #3,437.50 plus VAT
per quarter on 25th March, June, September and December up
to and including 25th December, 1998 pursuant to an
agreement dated 5th May, 1995 made between VG Instruments
Group Limited (1), Holt Jackson Book Company Limited (2), E.
Marlborough & Co. (Holdings) Limited (3), and the Seller
(4), and an assignment dated 8th August, 1995 made between
VG Instruments Group Limited (1), Holt Jackson Book Company
Limited (2) and E. Marlborough & Co. (Holdings) Limited (3)
both relating to Unit D3, 9 Tudor Road, Hanover Business
Park, Altrincham, Cheshire WA14 5RB; and
(b) the liability of the Seller pursuant to the
agremeent and assignment referred to in (a) above in the
event that VG Instruments Group Limited shall fail to pay
the sums referred to (a) above.
"U.K. VAT" shall have the meaning given such term in
--------
Section 7.9(h)(ii).
"U.S." means the United States of America.
----
"VAT" shall mean value added taxes.
---
"VAT Order" shall have the meaning given such term in
---------
Section 7.9(h)(i).
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"would have a Material Adverse Effect" means currently
------------------------------------
has or ultimately has a Material Adverse Effect.
84
