<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): October 31, 1997
BECKMAN INSTRUMENTS, INC.
- --------------------------------------------------------------------------------
(Exact Name of Registrant as Specified in its Charter)
Delaware
- --------------------------------------------------------------------------------
(State or other Jurisdiction of Incorporation)
001-10109 95-104-0600
- ------------------------ --------------------------------
(Commission File Number) IRS Employer Identification No.)
2500 Harbor Boulevard, Fullerton, CA 92834-3100
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(Address of Principal Executive Offices) (Zip Code)
(714) 871-4848
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Registrant's Telephone Number
<PAGE> 2
INDEX
Page
----
Item 2. Acquisition of Assets 2
Item 7. Financial Statements, Pro Forma 3
Financial Information and Exhibits
Signature 5
Pro Forma Financial Statements 6
Exhibit Index 12
2
<PAGE> 3
Item 2. Acquisition of Assets
On October 31, 1997, Beckman Instruments, Inc. ("Beckman" or the
"Company") consummated its acquisition (the "Acquisition") of 100% of
the outstanding capital stock of Coulter Corporation ("Coulter")
pursuant to a definitive stock purchase agreement dated as of August
29, 1997 by and among Beckman, Coulter and The Wallace H. Coulter
Charitable Remainder Unitrust UAD 5/23/97, The Joseph R. Coulter, Jr.
Trust UAD 8/2/93, and The Coulter Family Limited Partnership
(collectively, the "Coulter Stockholders"). As a result of the
Acquisition, Coulter became a wholly owned subsidiary of Beckman.
The Acquisition purchase price was $875 million in cash (subject to
possible post-closing adjustment), plus the assumption of approximately
$180 million of indebtedness (net of cash on hand) and of approximately
$100 million of other obligations of Coulter. The Acquisition purchase
price was determined by arms-length negotiations among the parties.
There is no material relationship between Coulter or the Coulter
Stockholders, on the one hand, and Beckman or any of its directors,
officers, or affiliates (or any of the affiliates or associates of any
of Beckman's directors of officers), on the other hand.
Concurrently with the Acquisition, Beckman entered into a new $1.3
billion unsecured credit facility (the "New Credit Facility") with a
syndicate of financial institutions for which Citicorp USA, Inc. acts
as agent. To finance the Acquisition, Beckman borrowed approximately
$600 million under the revolving credit portion of the New Credit
Facility and approximately $500 million under the term loan portion of
the New Credit Facility. Beckman continues to evaluate other potential
debt financing sources. If Beckman were to obtain any additional debt
financing, the proceeds therefrom would be used to pay down borrowings
under the New Credit Facility and complete its recently announced plans
for existing debt.
Coulter Corporation is a leading manufacturer of IVD systems for blood
and other cell analysis. Coulter's headquarters are located in the
Coulter Technology Center in Miami, Florida, which is owned by Coulter.
Coulter's primary instrument assembly and manufacturing facilities are
located in Hialeah, Opa Locka and Miami Lakes, Florida as well as one
facility in Luton, England. Coulter owns six of its facilities in
Hialeah and leases another eight there. Coulter leases its facilities
in Opa Locka and Miami Lakes. Coulter's principal reagent manufacturing
facility is located in Florence, Kentucky, which Coulter leases.
Coulter also has reagent manufacturing facilities in Germany, France,
Japan, Brazil, Australia, Argentina and Hong Kong, all of which are
owned by Coulter with the exception of the facilities in Argentina and
Hong Kong. The Company intends to enter into certain sale-leaseback
transactions with third parties with respect to some of Coulter's
properties, including the Technology Center in Miami, but expects to
continue to use them for their present purposes for the near future.
This Report contains forward looking statements regarding, among other
things, the Company's intention to enter into sale-leaseback
transactions, to consider other debt financing sources, and the use of
the proceeds from such other debt financings. These forward-looking
statements are based largely on the Company's current expectations and
are subject to a number of risks and uncertainties, many of which are
beyond the Company's control. Actual results could differ materially
from those anticipated by these forward-looking statements as a result
of factors described in the Company's reports filed with the Securities
and Exchange Commission, including its Report on Form 8-K dated October
15, 1997, and as a result of other factors.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
(a) Financial statements of business acquired:
The financial statements for Coulter Corporation and its
Subsidiaries are incorporated by reference to the Company's
Report on Form 8-K dated October 15, 1997.
(b) Pro Forma financial information
Pro Forma Financial Statements
Pro Forma Balance Sheet
Pro Forma Statement of Earnings
Notes to Pro Forma Financial Information
3
<PAGE> 4
(c) Exhibits
2.1 Stock Purchase Agreement among Coulter Corporation, the
Stockholders of Coulter Corporation and Beckman Instruments,
Inc., dated as of August 29, 1997. [Note: Confidential
treatment has been requested for portions of this document.]
2.2 First Amendment to Stock Purchase Agreement, dated as
of October 31, 1997, among Coulter Corporation, the
Stockholders of Coulter Corporation, and Beckman
Instruments, Inc.
2.3 Second Amendment to Stock Purchase Agreement, dated
as of November 6, 1997, among Coulter Corporation,
the Stockholders of Coulter Corporation, and Beckman
Instruments, Inc.
10.1 Indemnity Escrow Agreement dated as of October 31,
1997, by and among the Company, the Sellers
identified in the Stock Purchase Agreement (Exhibit
2.1 herein), and The First National Bank of Chicago,
a national banking association, as escrow agent.
10.2 Noncompetition Agreement, made as of October 31, 1997, among
the Company, Coulter Corporation, Wallace H. Coulter, Joseph
R. Coulter, III and Laura G. Coulter-Jones.
10.3 Intellectual Property Agreement, made as of October 31, 1997,
among the Company, Coulter Corporation, Wallace H. Coulter,
Joseph R. Coulter, III and Laura G. Coulter-Jones.
23.1 Consent of Arthur Andersen LLP, dated November 10, 1997
99.1 Press Release, Coulter Acquisition Completes Key Beckman
Initiative, Fullerton, California, November 3, 1997.
4
<PAGE> 5
SIGNATURE
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 hereunto duly authorized.
BECKMAN INSTRUMENTS, INC.
By: /s/ JAMES T. GLOVER
---------------------------------
James T. Glover
Vice President and Controller
Dated: November 13, 1997
5
<PAGE> 6
BECKMAN COULTER
PRO FORMA FINANCIAL STATEMENTS
The following pro forma balance sheet as of June 30, 1997 and the pro forma
statements of earnings of Beckman and Coulter for the year ended December 31,
1996 and the six months ended June 30, 1997 have been prepared to illustrate the
effect of the consummation of the Acquisition, the closing and initial
borrowings under the New Credit Facility, certain repayments of indebtedness of
both Beckman and Coulter and the payment of related fees and expenses (the
"Transactions"). The Acquisition is being accounted for as a purchase and the
Transactions (including the Acquisition) are treated as if they had occurred on
June 30, 1997 in the pro forma balance sheet and as of January 1, 1996 for the
pro forma statements of earnings. Coulter's historical financial statements are
for fiscal years ended March 31, and accordingly, the pro forma statement of
earnings for the year ended December 31, 1996 includes the results of Coulter
for its fiscal year ended March 31, 1997. The pro forma adjustments also give
effect to the spin-off of Coulter Pharmaceutical and the partial spin-off of
Coulter Cellular. The pro forma adjustments, and the assumptions on which they
are based, are described in the accompanying notes to the Pro Forma Financial
Statements.
The pro forma financial statements are presented for illustrative purposes only
and are not necessarily indicative of the consolidated financial position or
consolidated results of operations of the Company that would have been reported
had the Transactions occurred on the dates indicated, nor do they represent a
forecast of the consolidated financial position of the Company at any future
date or the consolidated results of operations of the Company for any future
period. Furthermore, no effect has been given in the pro forma statements of
earnings for synergies or costs, if any, that may be realized through the
combination of Beckman and Coulter. Amounts allocated to the Company's assets
and liabilities will be based upon the estimated fair values at the completion
of the Transactions. A preliminary allocation of the acquisition costs has been
made to Coulter's major categories of assets and liabilities in the Pro Forma
Financial Statements based on estimates. The final allocations may be different
from the amounts reflected herein, however, management is of the opinion that
differences, if any, would not be material. The pro forma financial statements,
including the notes thereto, should be read in conjunction with the Consolidated
Financial Statements of Coulter included in the Company's Report on Form 8-K
dated October 15, 1997 and the Consolidated Financial Statements of Beckman
included in its Annual Report on form 10-K for the year ended December 31, 1996
and its Quarterly Report on form 10-Q for the quarter ended June 30, 1997.
6
<PAGE> 7
PRO FORMA BALANCE SHEET
(DOLLARS IN MILLIONS)
(UNAUDITED)
ASSETS
<TABLE>
<CAPTION>
BECKMAN COULTER PRO FORMA PRO FORMA
JUNE 30, 1997 JUNE 30, 1997 ADJUSTMENTS COMBINED
------------- ------------- ------------ ---------
<S> <C> <C> <C> <C>
Current assets:
Cash and equivalents $ 17.3 $ 18.9 $1,100.0 (a) $ 49.4
(875.0)(b)
(187.0)(c)
(14.2)(b)
(6.8)(a)
(3.8)(d)
Short-term investments 0.4 -- 0.4
Trade receivables and other 330.7 191.1 0.3 (d) 522.1
Inventories 211.7 121.7 17.0 (b) 350.4
Deferred income taxes 22.0 -- 6.5 (e) 28.5
Other current assets 18.0 26.9 44.9
-------- ------ -------- --------
Total current assets 600.1 358.6 37.0 995.7
Property, plant and equipment, net 295.0 131.0 50.0 (b) 476.0
Deferred income taxes 50.6 -- 115.5 (b) 175.6
9.5 (e)
Other assets 69.9 51.0 6.8 (a) 127.0
(0.7)(d)
Long-term portion of finance receivable -- 34.1 34.1
Intangible assets -- -- 610.6 (b) 610.6
Goodwill -- -- 232.0 (b) 232.0
-------- ------ -------- --------
Total assets $1,015.6 $574.7 $1,060.7 $2,651.0
======== ====== ======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Notes payable $ 28.1 $ 24.4 $ -- $ 52.5
Long-term debt current maturities -- 39.5 (39.5)(c) --
Unearned service contract revenue -- 35.9 35.9
Accounts payable and accrued expenses 196.2 132.1 195.8 (b) 568.1
44.0 (e)
Income taxes 67.9 8.7 76.6
-------- ------ -------- --------
Total current liabilities 292.2 240.6 200.3 733.1
Long-term debt, less current maturities 252.4 131.1 1,100.0 (a) 1,336.0
(147.5)(c)
Unearned service contract revenue -- long term -- 11.3 11.3
Deferred income taxes -- 4.0 232.0 (f) 261.5
25.5 (b)
Other liabilities 84.5 35.9 94.0 (b) 214.4
-------- ------ -------- --------
Total liabilities 629.1 422.9 1,504.3 2,556.3
Minority interest -- 2.3 (1.1)(d) 1.2
Stockholders' equity 386.5 149.5 (146.4)(b) 93.5
(265.0)(g)(b)
(28.0)(e)
(3.1)(d)
-------- ------ -------- --------
Total liabilities and stockholders'
equity $1,015.6 $574.7 $1,060.7 $2,651.0
======== ====== ======== ========
</TABLE>
See Notes to Pro Forma Financial Statements.
7
<PAGE> 8
PRO FORMA STATEMENT OF EARNINGS
(DOLLARS IN MILLIONS, EXCEPT AMOUNTS PER SHARE)
(UNAUDITED)
<TABLE>
<CAPTION>
BECKMAN COULTER (H)
SIX MONTHS SIX MONTHS
ENDED ENDED PRO FORMA PRO FORMA
JUNE 30, 1997 JUNE 30, 1997 ADJUSTMENTS COMBINED
------------- ------------- ------------ ---------
<S> <C> <C> <C> <C>
Sales $502.5 $362.1 $ $864.6
Operating costs and expenses:
Cost of sales 240.3 196.5 436.8
Selling, general and administrative 154.5 108.0 10.6 (i) 273.1
Research and development 52.6 40.0 (0.2)(d) 92.4
Restructuring charge -- 5.9 5.9
------ ------ ------ ------
447.4 350.4 10.4 808.2
------ ------ ------ ------
Operating income 55.1 11.7 (10.4) 56.4
Nonoperating (income) expense:
Interest income (2.2) (3.8) (6.0)
Interest expense 7.1 6.6 36.6 (j) 51.0
0.7 (k)
Other, net (1.8) (6.1) 3.0 (d) (4.9)
------ ------ ------ ------
3.1 (3.3) 40.3 40.1
------ ------ ------ ------
Earnings before income taxes 52.0 15.0 (50.7) 16.3
Income tax provision (benefit) 15.6 4.1 (13.5)(l) 5.3
(0.9)(d)
------ ------ ------ ------
Net earnings $ 36.4 $ 10.9 $(36.3) $ 11.0
====== ====== ====== ======
Weighted average common shares and
common share equivalents (in millions) 28.8 -- -- 28.8
====== ====== ====== ======
Net earnings per share $ 1.26 $ -- $ -- $ 0.38
====== ====== ====== ======
</TABLE>
See Notes to Pro Forma Financial Statements.
8
<PAGE> 9
PRO FORMA STATEMENT OF EARNINGS
(DOLLARS IN MILLIONS, EXCEPT AMOUNTS PER SHARE)
(UNAUDITED)
<TABLE>
<CAPTION>
BECKMAN COULTER
YEAR ENDED YEAR ENDED PRO FORMA PRO FORMA
DECEMBER 31, 1996 MARCH 31, 1997 ADJUSTMENTS COMBINED
----------------- -------------- ----------- ---------
<S> <C> <C> <C> <C>
Sales $1,028.0 $700.9 $ $1,728.9
Operating costs and expenses:
Cost of sales 477.8 373.5 851.3
Selling, general and administrative 319.3 217.9 21.1 (i) 558.3
Research and development 108.4 85.8 (0.2)(d) 194.0
Restructuring charge -- 5.9 5.9
-------- ------ ------ --------
905.5 683.1 20.9 1,609.5
-------- ------ ------ --------
Operating income 122.5 17.8 (20.9) 119.4
Nonoperating (income) expense:
Interest income (5.8) (9.1) (14.9)
Interest expense 18.1 13.6 69.0 (j) 102.1
1.4 (k)
Other, net (1.3) (6.8) 5.4 (d) (2.7)
-------- ------ ------ --------
11.0 (2.3) 75.8 84.5
-------- ------ ------ --------
Earnings before income taxes 111.5 20.1 (96.7) 34.9
Income tax provision (benefit) 36.8 5.5 (28.3)(l) 12.3
(1.7)(d)
-------- ------ ------ --------
Net earnings $ 74.7 $ 14.6 $(66.7) $ 22.6
======== ====== ====== ========
Weighted average common shares and
common share equivalents (in
millions) 28.9 -- -- 28.9
======== ====== ====== ========
Net earnings per share $ 2.58 $ -- $ -- $ 0.78
======== ====== ====== ========
</TABLE>
See Notes to Pro Forma Financial Statements.
9
<PAGE> 10
NOTES TO PRO FORMA FINANCIAL STATEMENTS
The pro forma financial statements and related notes give effect to the
Acquisition accounted for as a purchase. The pro forma balance sheet assumes
that the Transactions were completed as of June 30, 1997 and the pro forma
statements of earnings assume that the Transactions were completed on January 1,
1996. Coulter's historical financial statements are for fiscal years ended March
31, and accordingly, the pro forma statement of earnings for the year ended
December 31, 1996 includes the results of Coulter for its fiscal year ended
March 31, 1997. Coulter's earnings for the quarter ended March 31, 1997 are also
included in its earnings for the six months ended June 30, 1997.
All interim financial data used to develop the pro forma balance sheet and
statements of earnings are unaudited, but in the opinion of management, reflect
all adjustments necessary (consisting only of normal recurring entries) for a
fair presentation thereof.
The unaudited pro forma statements of earnings are not necessarily indicative of
operating results which would have been achieved had the Transactions been
consummated as of January 1, 1996 and should not be construed as representative
of future earnings.
Under purchase accounting, the total estimated acquisition cost will be
allocated to Coulter's assets and liabilities based on their relative fair
values. Allocations are subject to valuations as of the date of the closing of
the Acquisition based on appraisals and other studies which are not yet
completed. Accordingly, the final allocations may be different from the amounts
reflected herein. The Company's preliminary analysis resulted in an estimated
allocation of $265.0 million to in-process research and development relating to
projects that have economic value that cannot be capitalized for purposes of
generally accepted accounting principles ("in-process R&D"), which, under
generally accepted accounting principles, will be expensed immediately after the
Acquisition is completed.
For purposes of the pro forma financial statements, the preliminary allocation
of the purchase price is summarized as follows (in millions):
<TABLE>
<C> <C> <C>
Purchase price $875.0
Estimated net assets acquired:
Current assets $ 372.1
Net equipment and other assets 265.4
----------
Tangible assets acquired 637.5
Current liabilities (420.2)
Other (182.3)
----------
Liabilities assumed (602.5)
Minority interest (1.2)
Purchase liability accruals (124.4)
Deferred tax assets 115.5
Deferred tax liabilities (25.5)
In-process R&D 265.0 264.4
---------- ------
Estimated intangible assets $ $610.6
========== ======
</TABLE>
The pro forma statements of earnings for the year ended December 31, 1996 and
for the six months ended June 30, 1997 do not include the estimated $265.0
million write-off of in-process R&D, as it is a non-recurring charge. The charge
will be included in the actual consolidated statement of earnings of the Company
in the fiscal quarter in which the Acquisition closes.
The pro forma primary net earnings per share is based on the weighted average
number of common shares and common share equivalents of Beckman during the
periods ended December 31, 1996 and June 30, 1997.
10
<PAGE> 11
The following adjustments were recorded in the pro forma financial statements:
(a) Reflects gross cash proceeds from borrowings of $1.1 billion under the New
Credit Facility to consummate the Acquisition and refinance a portion of
the existing debt of Beckman and Coulter. Debt financing fees and expenses
related to the New Credit Facility are estimated to be $6.8 million, which
will be capitalized and amortized over the term of such debt.
(b) Reflects the purchase of Coulter for $875.0 million in cash and the
preliminary allocation of the purchase price based on the estimated
relative fair values of Coulter's assets and liabilities. The preliminary
purchase price allocation is as follows: $265.0 million of estimated
in-process R&D (charged to stockholder's equity), $50.0 million write-up of
land to estimated fair market value, $17.0 million write-up of inventory to
estimated fair market value, $115.5 million of deferred tax assets, $25.5
million of deferred tax liabilities, $610.6 million of intangible assets,
and $304.0 million of purchase and accrued liabilities relating to
estimated costs to effect synergies and eliminate duplicate activities.
The $304.0 million of purchase and accrued liabilities were reduced in the
pro forma financial statements by anticipated cash disbursements at closing
of $14.2 million relating to Coulter's acquisition costs. Purchase and
accrued liabilities net of such cash disbursements are reflected as
adjustments for $195.8 million in accounts payable and accrued expenses and
$94.0 million in other liabilities.
The excess of the purchase price and liabilities assumed, including
deferred tax liabilities, over the estimated fair values of tangible and
intangible assets is reflected as goodwill of $232.0 million.
The $146.4 million reflects the elimination of stockholders' equity of
Coulter, net of amounts related to the spin-offs described in note (d).
(c) To refinance a portion of the existing debt of Beckman and Coulter.
(d) Reflects the elimination of the assets, liabilities, equity and results of
operations of Coulter Pharmaceutical and Coulter Cellular (net of the
portion of Coulter Cellular which will be retained). Prior to the
Acquisition, Coulter spun-off to its stockholders 100% of Coulter
Pharmaceutical and two-thirds of its 68% equity interest in Coulter
Cellular.
(e) To reflect a tax-effected restructuring charge of $28.0 million ($44.0
million pretax) in the fiscal quarter in which the Acquisition closes for
estimated costs for closing duplicate facilities of Beckman which, in the
opinion of management, will have no further useful life as a result of the
Acquisition, and implementation of operating efficiencies, and certain
other costs.
(f) Reflects deferred tax liabilities recorded as a result of the intangible
assets recognized in connection with the Acquisition.
(g) Reflects one-time write-off of $265.0 million of estimated in-process R&D
identified in the preliminary purchase allocation.
(h) Reflects six months of operations for the period ended June 30, 1997.
Operations for the three months ended March 31, 1997 are reflected in these
financial statements as well as in the twelve months ended March 31, 1997.
The following are the summary results of operations of Coulter for the
three months ended March 31, 1997:
AMOUNT
------
(IN MILLIONS)
Sales $202.4
Operating income $ 7.6
Net income $ 10.4
(i) To record the amortization of intangible assets and goodwill discussed in
footnote (b) above. Amortization was calculated on a straight-line basis
over the estimated useful life of 40 years.
(j) Reflects interest expense at an assumed average rate of 7.25% on $1,388.5
million of outstanding debt. For each 0.25% change in assumed average
interest expense on the outstanding indebtedness, annual pro forma interest
expense would change by $3.5 million.
(k) Reflects the amortization of debt financing fees and expenses over the
average five-year term of the New Credit Facility.
(l) Reflects the tax effect of the amortization of intangible assets, goodwill
and interest expense related to the New Credit Facility. Goodwill
amortization of $2.9 million for the six months ended June 30, 1997 and
$5.8 million for the year ended December 31, 1996 is not deductible for tax
purposes. The effective tax rates of 30% for the six months ended June 30,
1997 and 33% for the year ended December 31, 1996 were applied to the pro
forma adjustments described.
11
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EXHIBIT INDEX
FORM 8-K
Exhibit
Number
- -------
2.1 Stock Purchase Agreement among Coulter Corporation, the Stockholders of
Coulter Corporation and Beckman Instruments, Inc., dated as of August
29, 1997. [Note: Confidential treatment has been requested for portions
of this document.]
2.2 First Amendment to Stock Purchase Agreement, dated as of October 31,
1997, among Coulter Corporation, the Stockholders of Coulter
Corporation, and Beckman Instruments, Inc.
2.3 Second Amendment to Stock Purchase Agreement, dated as of November 6,
1997, among Coulter Corporation, the Stockholders of Coulter
Corporation, and Beckman Instruments, Inc.
10.1 Indemnity Escrow Agreement dated as of October 31, 1997, by and among
the Company, the Sellers identified in the Stock Purchase Agreement
(Exhibit 2.1 herein), and The First National Bank of Chicago, a national
banking association, as escrow agent.
10.2 Noncompetition Agreement, made as of October 31, 1997, among the
Company, Coulter Corporation, Wallace H. Coulter, Joseph R. Coulter, III
and Laura G. Coulter-Jones.
10.3 Intellectual Property Agreement, made as of October 31, 1997, among the
Company, Coulter Corporation, Wallace H. Coulter, Joseph R. Coulter, III
and Laura G. Coulter-Jones.
23.1 Consent of Arthur Andersen LLP, dated November 10, 1997.
99.1 Press Release, Coulter Acquisition Completes Key Beckman Initiative,
Fullerton, California, November 3, 1997.
<PAGE> 1
CONFIDENTIAL TREATMENT REQUESTED
- --------------------------------
The asterisked portions of this document have been
omitted and are filed separately with the Commission.
EXHIBIT 2.1
================================================================================
STOCK PURCHASE AGREEMENT
among
COULTER CORPORATION,
THE STOCKHOLDERS OF COULTER CORPORATION
and
BECKMAN INSTRUMENTS, INC.
Dated as of August 29, 1997
================================================================================
<PAGE> 2
TABLE OF CONTENTS
ARTICLE IDEFINITIONS
<TABLE>
<CAPTION>
<S> <C>
Section 1.1 Specific Definitions .................................... 1
Section 1.2 Other Terms ............................................. 8
Section 1.3 Other Definitional Provisions ........................... 8
ARTICLE II
PURCHASE AND SALE OF SHARES
Section 2.1 Purchase and Sale of Shares ............................. 9
Section 2.2 Closing; Delivery and Payment ........................... 9
Section 2.3 Actions by Sellers ...................................... 10
Section 2.4 Adjustment Amount ....................................... 10
Section 2.5 Adjustment Procedure .................................... 10
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE
SELLERS REGARDING THE COMPANY
Section 3.1 Organization and Authority .............................. 12
Section 3.2 Approval and Validity ................................... 12
Section 3.3 Subsidiaries of the Company ............................. 13
Section 3.4 Capitalization .......................................... 13
Section 3.5 Company Financial Information ........................... 14
Section 3.6 Absence of Certain Changes or Events .................... 15
Section 3.7 Title to Properties; Absence of Liens and
Encumbrances, etc. ...................................... 17
Section 3.8 Company Material Contracts .............................. 18
Section 3.9 No Conflict ............................................. 20
Section 3.10 Governmental Filings; No Violations ..................... 20
Section 3.11 Litigation and Liabilities .............................. 21
Section 3.12 Compliance with Law; Permits ............................ 21
Section 3.13 Tax Matters ............................................. 22
Section 3.14 Labor Matters ........................................... 25
Section 3.15 Employee Matters ........................................ 26
Section 3.16 Environmental Matters ................................... 27
Section 3.17 Intellectual Property ................................... 29
Section 3.18 Insurance ............................................... 31
Section 3.19 Brokers and Finders ..................................... 31
Section 3.20 No Other Liabilities .................................... 31
Section 3.21 Books and Records ....................................... 31
Section 3.22 Leased Systems .......................................... 32
Section 3.23 Certain Arrangements with Employees ..................... 32
Section 3.24 Key Employees ........................................... 33
Section 3.25 Condition and Sufficiency of Assets ..................... 33
</TABLE>
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<TABLE>
<CAPTION>
<S> <C>
Section 3.26 ISO Certification ....................................... 33
Section 3.27 No Other Representations or Warranties .................. 33
ARTICLE IV
ADDITIONAL REPRESENTATIONS
AND WARRANTIES OF THE SELLERS
Section 4.1 Execution, Delivery, Validity and
Enforceability of Agreements ............................ 34
Section 4.2 Ownership of Shares ..................................... 34
Section 4.3 Brokers and Finders ..................................... 35
Section 4.4 Foreign Person .......................................... 35
Section 4.5 No Withholding .......................................... 35
Section 4.6 No Other Representations or Warranties .................. 35
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF BUYER
Section 5.1 Organization, Authority and Qualification;
Certificate and By-laws ................................. 36
Section 5.2 Approval and Validity ................................... 36
Section 5.3 No Conflict ............................................. 37
Section 5.4 Governmental Filings; No Violations ..................... 37
Section 5.5 Brokers and Finders ..................................... 38
Section 5.6 Financial Capability .................................... 38
Section 5.7 Securities Act .......................................... 38
Section 5.8 No Other Representations or Warranties .................. 38
ARTICLE VI
TAX MATTERS
Section 6.1 Tax Indemnification ..................................... 39
Section 6.2 Tax Returns ............................................. 39
Section 6.3 Information to be Provided by Buyer ..................... 40
Section 6.4 Transfer Taxes .......................................... 40
Section 6.5 Contest Provisions ...................................... 41
Section 6.6 Post-Closing Actions Which May Affect the
Sellers' Liability for Taxes ............................ 42
Section 6.7 Certain Post-Closing Settlement Payments ................ 42
Section 6.8 Assistance and Cooperation .............................. 43
Section 6.9 Maintenance of Books and Records ........................ 44
Section 6.10 Characterization of Tax Indemnification ................. 44
</TABLE>
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<PAGE> 4
ARTICLE VII
CERTAIN COVENANTS AND AGREEMENTS
<TABLE>
<CAPTION>
<S> <C>
Section 7.1 Interim Operations ...................................... 45
Section 7.2 Filings; Other Actions; Notification .................... 47
Section 7.3 Access and Information .................................. 48
Section 7.4 Employee Benefits ....................................... 49
Section 7.5 Retention of Books and Records .......................... 51
Section 7.6 Publicity ............................................... 52
Section 7.7 Expenses ................................................ 53
Section 7.8 Plant Closings .......................................... 53
Section 7.9 Escrow Agreements ....................................... 54
Section 7.10 Quarterly Financial Statements .......................... 54
Section 7.11 Consents to Assignment .................................. 55
Section 7.12 Certain Deliveries at Closing ........................... 55
Section 7.13 Use and Ownership of "Coulter" Name ..................... 55
Section 7.14 Name Change ............................................. 55
Section 7.15 PYHM Arrangements ....................................... 56
Section 7.16 Further Assurances ...................................... 56
ARTICLE VIII
CONDITIONS TO CLOSING
Section 8.1 Conditions to Each Sale and Purchase Obligation ......... 56
Section 8.2 Conditions to Each Purchase Obligation .................. 57
Section 8.3 Conditions to Each Seller's Obligation .................. 59
ARTICLE IX
TERMINATION
Section 9.1 Termination ............................................. 59
Section 9.2 Termination by the Sellers .............................. 60
Section 9.3 Termination by Buyer .................................... 60
Section 9.4 Effect of Termination and Abandonment ................... 61
ARTICLE X
SURVIVAL AND INDEMNIFICATION
Section 10.1 Survival of Representations, Warranties, Covenants
and Agreements; Knowledge of Breach ..................... 61
Section 10.2 Indemnification ......................................... 63
</TABLE>
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<TABLE>
<CAPTION>
<S> <C>
Section 10.3 Method of Asserting Claims, etc. ........................ 65
Section 10.4 Tax Indemnification ..................................... 67
ARTICLE XI
MISCELLANEOUS
Section 11.1 Modification or Amendment ............................... 67
Section 11.2 Waiver of Conditions .................................... 67
Section 11.3 Assignment .............................................. 68
Section 11.4 Entire Agreement ........................................ 68
Section 11.5 Parties in Interest; No Third Party Beneficiaries ....... 68
Section 11.6 Obligations of Buyer and of the Company ................. 68
Section 11.7 Counterparts ............................................ 68
Section 11.8 Section Headings ........................................ 69
Section 11.9 Notices ................................................. 69
Section 11.10 Governing Law and Venue; Waiver of Jury Trial ........... 70
Section 11.11 Severability ............................................ 71
Section 11.12 Survival Following Termination .......................... 71
Section 11.13 Confidentiality ......................................... 72
Section 11.14 Exclusive Dealing ....................................... 72
Section 11.15 Disclosure Schedule ..................................... 74
</TABLE>
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ANNEXES
<TABLE>
<S> <C>
ANNEX A Sellers, Shares and Total Purchase
Price Allocation
ANNEX B Disclosure Schedule
ANNEX C Addresses of Sellers
EXHIBITS
Exhibit 2.4 Determination of Consolidated Net Assets
Exhibit 7.9 Form of Indemnity Escrow Agreement
</TABLE>
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STOCK PURCHASE AGREEMENT, dated as of August 29, 1997, among
Coulter Corporation, a Delaware corporation and its predecessors (the
"Company"), the stockholders of the Company listed on Annex A hereto (each, a
"Seller"; collectively, "Sellers") and Beckman Instruments, Inc., a Delaware
corporation ("Buyer").
W I T N E S S E T H:
WHEREAS, the Sellers own all of the issued and outstanding shares
of Class A common stock, par value $1.00 per share, and Class B common stock,
par value $ 1.00 per share, of the Company (collectively, "Company Common
Stock");
WHEREAS, each Seller desires to sell to Buyer, and Buyer desires
to purchase from each Seller, such Seller's shares of Company Common Stock, as
more specifically set forth herein; and
WHEREAS, the Company, as well as the Sellers and Buyer, desire
that these sales and the other transactions contemplated herein be consummated
on the terms and subject to the conditions set forth herein.
NOW, THEREFORE, in consideration of the premises and mutual
representations, warranties, covenants, agreements, undertakings and obligations
contained herein, and subject to and on the terms and conditions herein set
forth, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1 Specific Definitions. As used in this Agreement, the
following terms, when they appear with an initial capital letter, shall have the
meanings set forth or as referenced below:
"Adjustment Amount" shall have the meaning set forth in Section
2.4.
"Affiliate", as applied to any Person, means any other Person
directly or indirectly controlling, controlled by or under common control with
that Person.
<PAGE> 8
"Agreement" shall mean this Agreement, all Annexes and all
Exhibits, but such term shall not include any other agreement, even if a form of
such other agreement is set forth in an Exhibit.
"Antitrust Division" means the Antitrust Division of the
Department of Justice.
"Band Amount" shall have the meaning set forth in Section 2.4.
"Bankruptcy Exceptions" shall have the meaning set forth in
Section 3.2(a).
"Business Day" shall mean any day other than a Saturday, a Sunday
or a day on which banks in The City of New York, New York are authorized or
obligated by law or executive order to close.
"Buyer" shall have the meaning set forth in the Preamble.
"Cap" shall have the meaning set forth in Section 10.1(a).
"Claim Notice" shall have the meaning set forth in Section 10.3.
"Closing" shall have the meaning set forth in Section 2.2(a).
"Closing Date" shall have the meaning set forth in Section
2.2(a).
"Closing Financial Statements" shall have the meaning set forth
in Section 2.5.
"Closing Time" shall have the meaning set forth in Section
2.2(a).
"Code" shall mean the United States Internal Revenue Code of
1986, and the regulations promulgated thereunder, as amended from time to time.
"Company" shall have the meaning set forth in the Preamble.
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"Company Balance Sheet" shall have the meaning set forth in
Section 3.5.
"Company Common Stock" shall have the meaning set forth in the
Preamble.
"Company Compensation and Benefit Plans" shall have the meaning
set forth in Section 3.15(a).
"Company Financial Information" shall have the meaning set forth
in Section 3.5.
"Company Intellectual Property Rights" shall have the meaning set
forth in Section 3.17(b)(ii).
"Company Lease Agreements" shall have the meaning set forth in
Section 3.7(a).
"Company Material Contracts" shall have the meaning set forth in
Section 3.8.
"Company's Organizational Documents" shall mean the Company's
certificate of incorporation and by-laws, each as amended through the date
hereof.
"Company Owned Real Property" shall have the meaning set forth in
Section 3.7(a).
"Company Pension Plan" shall have the meaning set forth in
Section 3.15(b).
"Company Welfare Plans" shall have the meaning set forth in
Section 7.4(b).
"Confidentiality Agreement" shall have the meaning set forth in
Section 11.4.
"Consolidated Net Assets" shall mean the total consolidated
assets less the total consolidated liabilities of the Company and its
Subsidiaries.
"Contracts" shall have the meaning set forth in Section 3.8.
"Damage Threshold" shall have the meaning set forth in Section
10.1(a).
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"Damages" shall have the meaning set forth in Section 10.2(a).
"Deductible" shall have meaning set forth in Section 10.1(a).
"Disclosure Schedule" shall mean the disclosure schedule attached
as Annex B hereto which, as so attached, forms a part of this Agreement.
"Employees" means all current employees of the Company or any of
its Subsidiaries who are employees as of the Closing Date.
"Encumbrances" shall mean all liens, pledges, security interests,
rights of first refusal, charges, options held by third parties and claims;
provided that when used with respect to shares of stock or other securities
"Encumbrances" shall also mean voting or transfer restrictions; provided,
further, that when used with respect to interests in real property
"Encumbrances" shall also mean mortgages, private or public easements and rights
of way, encroachments, building or use restrictions, conditional sales
agreements and rights of parties in possession.
"Environmental Law" means any law, regulation, code, license,
permit, order, decree or injunction relating to the protection of the
environment (including air, water, soil and natural resources) or the use,
storage, handling, release or disposal of any hazardous or toxic substance as in
effect on the date hereof or as in effect at any time prior to the date hereof
and to which the Company or any of its Subsidiaries is or was subject.
"ERISA" shall have the meaning set forth in Section 3.15(b).
"ERISA Affiliate" shall have the meaning set forth in Section
3.15(c).
"Escrow Agent" shall have the meaning set forth in Section 7.9.
"Escrow Fund" shall have the meaning set forth in Section 7.9.
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"FTC" means the Federal Trade Commission.
"GAAP" shall mean U.S. generally accepted accounting procedures,
as in effect as of the date hereof.
"Government Antitrust Entity" shall have the meaning set forth in
Section 7.2(d).
"Governmental Consents" shall have the meaning set forth in
Section 8.1(a).
"Governmental Entity" shall mean any domestic or foreign
governmental or regulatory authority, agency, commission, court, body or other
governmental entity.
"Hazardous Substance" means any substance listed, defined,
designated or classified as hazardous, toxic or radioactive or as a pollutant or
contaminant under any applicable Environmental Law, including petroleum and any
derivative or by-products thereof.
"HSR Act" shall mean the United States Hart-Scott-Rodino
Antitrust Improvements Act of 1976 and the rules and regulations thereunder,
each as amended from time to time.
"HSR Filing" shall have the meaning set forth in Section 3.10.
"Indemnified Party" shall have the meaning set forth in Section
10.2(a).
"Indemnifying Party" shall have the meaning set forth in Section
10.2(a).
"Indemnity Escrow Agreement" shall have the meaning set forth in
Section 7.9.
"IRS" shall mean the United States Internal Revenue Service.
"Laws" shall have the meaning set forth in Section 3.12.
"Material Adverse Effect" on an entity means a material adverse
effect on the financial condition, business or results of operations of such
entity and each entity Subsidiary, taken as a whole; provided, however, that a
Material Adverse Effect shall not include an effect
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resulting from any change in general economic or business conditions or in the
health care industry specifically.
"Notice Period" shall have the meaning set forth in Section 10.3.
"Order" shall have the meaning set forth in Section 8.1(b).
"Ordinary Course of Business" means an action taken by the
Company or a Subsidiary that is
(a) consistent with the past practices of the Company or such
Subsidiary and is taken in the ordinary course of the normal
day-to-day operations of the Company or such Subsidiary;
(b) not required to be authorized by two or more Executive Vice
Presidents of the Company; and
(c) similar in nature and magnitude to actions customarily taken,
without any authorization by the board of directors (or by any
Person or group of Persons exercising similar authority), in the
ordinary course of the normal day-to-day operations of other
Persons that are companies of a similar size to the Company and
in the same line of business as the Company.
"Permitted Encumbrance" shall have the meaning set forth in
Section 3.7(a).
"Person" means any individual, corporation, partnership, firm,
joint venture, association, joint-stock company, limited liability company,
trust, estate, unincorporated organization, governmental or regulatory body or
other entity.
"Representatives" shall have the meaning set forth in Section
7.3.
"Securities Act" shall mean the United States Securities Act of
1933, and the rules and regulations promulgated thereunder, as amended from time
to time.
"Seller" shall have the meaning set forth in the Preamble.
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"Shares" shall have the meaning set forth in Section 2.1.
"Significant Subsidiary" shall mean, in the case of the Company,
each of the Subsidiaries of the Company listed in Section 1.1(a) of the
Disclosure Schedule, which include all Subsidiaries of the Company within the
meaning set forth in Rule 1-02 of Regulation S-X under the Securities Act and
which together with the Company comprise at least 90% of the net assets of the
Company and, in the case of Buyer, any Subsidiary within the meaning set forth
in such Rule 1-02.
"Special Deductible" shall have the meaning set forth in Section
10.2(b).
"Subject Litigation" shall have the meaning set forth in Section
10.2(b).
"Subsidiary" shall mean, with respect to any Person, any other
Person of which more than 50% (or, in those jurisdictions which limit the amount
of ownership by non-nationals to less than 50%, the maximum amount permitted by
law) of the securities or other ownership interests having by their terms
ordinary voting power to elect a majority of the board of directors or other
persons performing similar functions, or such other Person is directly or
indirectly owned or controlled by such Person, by one or more of such Person's
Subsidiaries or by such Person and any one or more of such Person's
Subsidiaries.
"Subsidiary Organizational Documents" shall mean the share
certificates (or equivalent document evidencing all ownership interests in the
jurisdiction of the Subsidiary), memorandum of association, articles of
association, statutes, notarial deeds, bylaws and other similar documents
evidencing or defining the formation, capacity, authority to operate and
governance of a Significant Subsidiary according to the laws, rules, regulations
and practices applicable in the jurisdiction of the Significant Subsidiary.
"Tax," "Taxes," "Taxable" and "Tax Return" shall have the
respective meanings set forth for such terms in Section 3.13.
"Tax Audit" shall have the meaning set forth in Section 6.5(a).
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"Tax Package" shall have the meaning set forth in Section 6.3.
"Third-Party Claim" shall have the meaning set forth in Section
10.3.
"Third-Party Claim Notice" shall have the meaning set forth in
Section 10.3.
"Third-Party Intellectual Property Rights" shall have the meaning
set forth in Section 3.17(b)(i).
"Total Purchase Price" shall have the meaning set forth in
Section 2.1.
"Total Shares" shall have the meaning set forth in Section 2.1.
"WARN Act" shall mean the Worker Adjustment and Retraining
Notification Act, and the rules and regulations thereunder, as amended from time
to time.
Section 1.2 Other Terms. Other capitalized terms may be defined
elsewhere in the text of this Agreement and, unless otherwise indicated, shall,
when used with an initial capital letter, have such meaning indicated throughout
this Agreement.
Section 1.3 Other Definitional Provisions.
(a) Unless the context otherwise clearly requires, the words
"hereof," "herein" and "hereunder" and words of similar import, when used in
this Agreement, shall refer to this Agreement as a whole and not to any
particular provision of this Agreement.
(b) The terms defined in the singular shall have a comparable
meaning when used in the plural, and vice versa.
(c) The terms "dollars" and "$" shall mean United States dollars.
(d) The term "Knowledge" when used in this Agreement with respect
to the Company shall mean the actual knowledge of (i) the persons classified in
Group A and Group B pursuant to the Special Incentive Plan, (ii) the Director of
Quality Management and Regulatory Affairs and (iii) the
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country managers and the financial directors of the country organizations in the
following countries: Canada, the United Kingdom, France, Japan and Germany; in
addition, the foregoing persons shall be deemed to have actual knowledge of
information in their possession as reflected in written records possessed by any
of them.
(e) Unless the context otherwise requires, any reference herein
to any "Article," "Section," "Annex" or "Exhibit" refers to an Article or
Section of, or an Annex or Exhibit attached to, this Agreement, as the case may
be.
ARTICLE II
PURCHASE AND SALE OF SHARES
Section 2.1 Purchase and Sale of Shares. On the terms and subject
to the conditions provided herein, at the Closing (as defined in Section 2.2
hereof) Buyer agrees to purchase from each Seller, and each Seller agrees,
severally and not jointly, to sell to Buyer such number of shares of Company
Common Stock (the "Shares") as are specified on Annex A with respect to such
Seller for an aggregate purchase price of $875,000,000 in cash (the "Total
Purchase Price") to be divided among the Sellers as set forth on such Annex A
and in accordance with the terms hereof. For each Seller, such number of shares
as so specified are herein called such Seller's "Shares." The aggregate of all
Sellers' Shares are herein called the "Total Shares."
Section 2.2 Closing; Delivery and Payment.
(a) The closing for the several purchases and sales provided for
in Section 2.1 hereof (the "Closing") shall take place at the offices of
Sullivan & Cromwell, 125 Broad Street, New York, New York 10004 at 10:00 A.M.
local time, on the first Business Day following the date on which all conditions
set forth in Article VIII (other than those conditions that by their nature are
to be satisfied at the Closing, but subject to the fulfillment or waiver of
those conditions) shall have been satisfied or waived, or on such other date and
at such other time and place as the Company and Buyer may hereafter mutually
agree upon in writing. The date on which the Closing is
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to occur as provided by this subsection (a) is herein called the "Closing Date"
and the time and date on which the Closing is to occur as provided in this
subsection (a) are herein called the "Closing Time."
(b) At the Closing Time, each Seller shall cause to be delivered
to Buyer certificates representing such Seller's Shares duly endorsed, or
accompanied by stock powers duly executed, and in form for transfer to Buyer,
and Buyer shall pay the Total Purchase Price for such Sellers' Shares in
accordance with the allocation to each of the Sellers set forth on Annex A, each
such payment to be made by wire transfer of such allocated amounts, in
immediately available funds, to such account as each Seller may designate not
later than the first Business Day prior to the Closing Date, less any portion of
the Total Purchase Price allocable to each such Seller that is being placed in
escrow pursuant to Section 7.9 hereof, the aggregate amount of each such portion
Buyer shall deliver to the Escrow Agent (as defined in Section 7.9).
Section 2.3 Actions by Sellers. Any and all actions to be taken
under or in connection with this Agreement or the Indemnity Escrow Agreement by
or on behalf of the Sellers shall be taken, and Buyer may rely on any such
action as having been taken, if the action being taken is memorialized in a
writing signed by each of the Sellers.
Section 2.4 Adjustment Amount. For purposes of this Agreement,
the "Adjustment Amount" will be an amount equal to the difference between: (x)
the Consolidated Net Assets as of the Closing Date determined as set forth in
Section 2.5 hereof and (y) the Consolidated Net Assets as of March 31, 1997
calculated as described in Exhibit 2.4 hereof; provided, however, that if the
absolute value of the difference between (x) and (y) is less than $10,000,000
(the "Band Amount") the Adjustment Amount shall be deemed to be zero.
Section 2.5 Adjustment Procedure.
(a) Buyer will prepare and will cause KPMG Peat Marwick LLP
("KPMG"), certified public accountants, to audit consolidated financial
statements ("Closing Financial Statements") of the Company as of the Closing
Date and for the period from April 1, 1997 through the Closing Date, including a
computation of Consolidated Net Assets as of the Closing Date in accordance with
GAAP as consistently applied by the Company since March 31, 1997 and in
accordance with Exhibit 2.4 hereof (it being understood that in the event of
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any dispute regarding the treatment of a particular item in accordance with GAAP
as consistently applied by the Company as opposed to in accordance with the
treatment described in Exhibit 2.4 hereto, Exhibit 2.4 shall be followed). Buyer
will deliver the Closing Financial Statements to Sellers within sixty days after
the Closing Date. If within thirty days following delivery of the Closing
Financial Statements, the Sellers have not given Buyer notice of their objection
to the Closing Financial Statements (such notice must contain a statement of the
basis of the Sellers' objections), then the Consolidated Net Assets as of the
Closing Date reflected in the Closing Financial Statements will be used in
computing the Adjustment Amount. If Sellers give such notice of objection, then
the issues in dispute will immediately be submitted to Ernst & Young (the
"Accountants") for resolution. If issues in dispute are submitted to the
Accountants for resolution, (i) the Sellers and the Buyer will each furnish to
the Accountants such workpapers and other documents and information relating to
the disputed issues as the Accountants may request and are available to the
Sellers or the Buyer or its Subsidiaries (or the independent public accountants
retained by either of them), and will be afforded the opportunity to present to
the Accountants any material relating to the determination and to discuss the
determination with the Accountants; (ii) the determination by the Accountants,
as set forth in a notice delivered to the Sellers and the Buyer by the
Accountants, will be binding and conclusive on the parties; (iii) an engagement
letter among the Accountants, Buyer and Sellers shall provide that the issues
submitted to the Accountants shall be resolved as promptly as practicable and in
any event within 60 days of the delivery of notice of the Sellers' objection to
the Accountants; and (iv) Buyer and the Sellers will each bear 50% of the fees
of the Accountants for such determination.
(b) Subject to the proviso in Section 2.4 hereof, on the tenth
business day following the final determination of the Adjustment Amount, if (x)
is greater than (y), as defined in Section 2.4, then Buyer will pay the Final
Payment Amount to the Sellers, and if (y) is greater than (x) then the Sellers
will pay the Final Payment Amount to Buyer. All payments from the Sellers or
Buyer will be made without regard to or deduction from the Deductible and the
Cap of Section 10.1(a). All payments will be made together with simple interest
at 6% beginning on the Closing Date and ending on the date of payment. Payments
must be made in immediately available funds. Payments to Sellers will be
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paid by wire transfer to such account as each Seller will specify pro rata in
accordance with such Sellers' respective shares of the Total Purchase Price.
Payments to Buyer must be made by wire transfer to such bank account as Buyer
will specify. The Sellers shall have the option to pay any Adjustment Amount
pursuant to this Section 2.5 either (i) directly to the Buyer or (ii) from the
Escrow Fund promptly following which the Sellers shall replenish any amounts
paid out of the Escrow Fund, in either case (i) or (ii) pro rata in accordance
with such Sellers' respective shares, of the Total Purchase Price.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE
SELLERS REGARDING THE COMPANY
The Sellers hereby represent and warrant to Buyer regarding the
Company as follows:
Section 3.1 Organization and Authority. The Company has been duly
organized, is validly existing and is in good standing under the laws of the
State of Delaware, with full corporate power and authority to own or lease its
assets and to carry on its business as currently conducted. The Company is duly
qualified as a foreign corporation to do business and is in good standing in
each jurisdiction where the ownership or operation of its properties and assets
or the conduct of its business requires such qualification, except where the
failure to be so qualified or in good standing, when taken together with all
other such failures, has not had and is not reasonably likely to have a Material
Adverse Effect on the Company. The Company has delivered to Buyer a true,
complete and correct copy of the Company's Organizational Documents.
Section 3.2 Approval and Validity.
(a) The Company has all requisite corporate power and authority
and has taken all corporate action necessary in order to execute, deliver and
perform its obligations under this Agreement and to consummate the transactions
contemplated for it hereby. This Agreement is a valid and binding agreement of
the Company enforceable against the Company in accordance with its terms,
subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and other similar laws of general applicability relating to
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or affecting creditors' rights and to general equity principles (the "Bankruptcy
Exceptions").
(b) The board of directors of the Company has approved this
Agreement and the transactions contemplated for the Company hereby.
Section 3.3 Subsidiaries of the Company. Section 3.3 of the
Disclosure Schedule lists the name of each Subsidiary of the Company, together
with the jurisdiction of its organization and the record and beneficial holder
of the shares of its capital stock. Each Subsidiary of the Company is duly
organized, validly existing and in good standing under the laws of its
jurisdiction of organization, with full corporate power and authority to own or
lease its assets and to carry on its business as it is currently being
conducted, and is duly qualified as a foreign corporation to do business and is
in good standing in each jurisdiction where the ownership or operation of its
properties and assets or the conduct of its business requires such
qualification, except where the failure to have such full corporate power and
authority or to be so qualified and in good standing, when taken together with
all other such failures, has not had and is not reasonably likely to have a
Material Adverse Effect on the Company. Prior to the Closing Date, the Company
shall have made available to Buyer a complete and correct copy of each of its
Subsidiaries' certificate of incorporation and by-laws (or analogous documents
of any foreign Subsidiaries), each as amended to date, and the Subsidiary
Organizational Documents to be so delivered are on the date of this Agreement,
and will be at the Closing Time, in full force and effect. Prior to the Closing
Date, for each Subsidiary, the Company shall have identified: (a) the location
of and the individuals possessing all minute books (or equivalent compilation of
corporate records) and seals (or other official stamp or chop); and (b) all
individuals with legal authority to represent or act on behalf of the
Subsidiary. Each of the shares of any Subsidiary held in the name of any nominee
of the Company shall, on the Closing Date be transferred, free of all
Encumbrances, to individuals or entities nominated by Buyer and all corporate
acts required to authorize and take such action will be authorized and taken
prior to the Closing Date.
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Section 3.4 Capitalization.
(a) The authorized capital stock of the Company consists of (i)
10,000 shares of Class A Common Stock, of which 9,677 shares were outstanding as
of the close of business on the date hereof and (ii) 10,000 shares of Class B
Common Stock, of which 1,060 shares were outstanding as of the close of business
on the date hereof. All of the outstanding shares of Company Common Stock have
been duly authorized and are validly issued, fully paid and nonassessable. The
Sellers' Shares, in aggregate, constitute 100% of such number of shares issued
and outstanding. No shares of Class A or Class B Common Stock are held in
treasury and the Company has no shares of capital stock reserved for issuance.
(b) Each of the outstanding shares of capital stock and other
equity interests of each of the Company's Subsidiaries is duly authorized,
validly issued, fully paid and nonassessable and is owned by the Company or a
direct or indirect wholly owned Subsidiary of the Company, free and clear of all
Encumbrances.
(c) Except as set forth in Section 3.4 of the Disclosure
Schedule, there are no preemptive or other outstanding rights, options,
warrants, conversion rights, stock appreciation rights, redemption rights,
repurchase rights, agreements, arrangements or commitments, contingent or
otherwise, under which the Company or any of its Subsidiaries is or may become
obligated to issue or sell, or giving any Person a right to subscribe for or
acquire, any shares of the capital stock, or any securities or obligations
exercisable or exchangeable for or convertible into any shares of the capital
stock, of the Company or any of its Subsidiaries, and no securities or
obligations evidencing such rights are authorized, issued or outstanding. No
stock of any Subsidiary was issued in violation of law.
Section 3.5 Company Financial Information. (a) Set forth in
Section 3.5 of the Disclosure Schedule is a copy of (a) the audited consolidated
balance sheet of the Company and its Subsidiaries as of March 31, 1997, 1996 and
1995 (the "Company Balance Sheet") and (b) the audited consolidated statements
of income, changes in stockholders' equity
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and cash flows of the Company and its Subsidiaries for the fiscal years ended
March 31, 1997, 1996 and 1995 (such statements of income, changes in
stockholders' equity and cash flows with the notes thereto, together with the
Company Balance Sheet, the "Company Financial Information"). The Company
Financial Information has been prepared in accordance with GAAP applied on a
consistent basis (except as may be noted therein or in the auditor's opinion
letter), and presents fairly, in all material respects, the consolidated
financial position of the Company and its Subsidiaries as of March 31, 1997,
1996 and 1995, and the consolidated statements of income, changes in
stockholders' equity and cash flows of the Company and its Subsidiaries for the
fiscal years ended March 31, 1997, 1996 and 1995, subject, in each case, to the
notes regarding the matters reflected therein.
(b) The Company Financial Information reflects the consistent
application of GAAP throughout the periods involved (except as may be disclosed
in the notes or auditor's opinion letter to such financial statements). No
financial statements of any entity other than the Company and its Subsidiaries
included therein are required by GAAP to be included in the Company Financial
Information. The Company has applied GAAP since the date of its last audit with
reserves, accruals and provisions required in accordance with GAAP having been
made (except as may be disclosed in the notes or auditor's opinion letter to
such financial statements). The interim monthly financial statements prepared by
the Company accurately reflect the activity of the Company and its Subsidiaries
since March 31, 1997 consistent with accounting principles consistently applied.
All material transactions between Sellers or any of their Affiliates or
beneficiaries, on the one hand, and the Company or any of its Subsidiaries, on
the other hand, have been disclosed in Section 3.5 of the Disclosure Schedule
and, subject to the transition of certain services contemplated by Section 7.15,
each such transaction, whether or not material, has either been settled or
terminated or will be settled or terminated prior to the Closing Time including
guarantees by or on behalf of the Company or Sellers. Appropriate reserves have
been made for all pending and threatened litigation and environmental risks in
accordance with Statement of Financial Accounting Standards No. 5, "Accounting
for Contingencies," and American Institute of Certified Public Accountants
Statement of Position No. 96-1, "Environmental Remediation Liabilities," as
appropriate. Since March 31, 1997, no consigned materials or equipment has been
held and recorded on the books of the Company.
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Section 3.6 Absence of Certain Changes or Events. Except as set
forth in Section 3.6 of the Disclosure Schedule and except as may be reflected
in the Company Financial Information, and except as to transactions specifically
contemplated by this Agreement, since March 31, 1997 (a) as of the date hereof
the consolidated stockholders' equity of the Company has not been reduced by
greater than $10,000,000, (b) there has not been any change in the Company's
authorized or issued capital stock, grant of any stock option or right to
purchase shares of capital stock of the Company or any of its Subsidiaries,
contingent or otherwise, issuance of any security convertible into such capital
stock, grant of any registration rights, or purchase, redemption, retirement or
other acquisition by the Company or any of its Subsidiaries of any shares of any
such capital stock; (c) there has not been any amendment to the Company
Organizational Documents or to the Subsidiary Organizational Documents; (d) the
Company and its Subsidiaries have each conducted their respective businesses
only in, and have not engaged in any transaction other than according to, the
Ordinary Course of Business and (e) there has not been (i) any Material Adverse
Effect on the Company resulting from a change in the financial condition,
business or results of operations of the Company or its Subsidiaries; (ii) any
damage, destruction or other casualty loss with respect to any asset or property
owned, leased, or otherwise used by the Company or any of its Subsidiaries
whether or not covered by insurance which has had or is reasonably likely to
have a Material Adverse Effect on the Company; (iii) any declaration, setting
aside or payment of any dividend or other distribution in respect of the capital
stock of the Company or any of its Significant Subsidiaries; (iv) any material
change by the Company in accounting principles, practices or methods other than
a change required by law or GAAP; (v) except for increases or amendments in the
Ordinary Course of Business or as required by law, any material increase in the
compensation payable or that could become payable by the Company or any of its
Subsidiaries to any of their directors, officers or Employees or former
employees or any material increase in the benefits under, or adoption of, any
bonus, insurance, pension, deferred compensation, stock purchase, 401(k) or
other employee compensation or benefit plan, payment or arrangement, for or with
any such directors, officers or Employees or former employees; (vi) any
forgiveness or cancellation of any material debt, guarantees or claims or waiver
of any material rights, except in the Ordinary Course of Business; (vii) any
entering into of any employment
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agreement lasting longer than 12 months outside the Ordinary Course of Business
or any employment agreement providing for annual compensation in excess of
$250,000 or any collective bargaining agreement; (viii) any entering into,
termination or breach of any Company Material Contract, license or other
instrument, except in the Ordinary Course of Business or as has not had and is
not reasonably likely to have, individually or in the aggregate, a Material
Adverse Effect on the Company; (ix) any material capital expenditures made or
any acquisition or disposal of any material assets or properties or any
agreement or other arrangement entered into for such acquisition or disposition
other than in the Ordinary Course of Business; or (x) any commitment to do any
of the foregoing.
Section 3.7 Title to Properties; Absence of Liens and
Encumbrances, etc.
(a) Section 3.7(a)(i) of the Disclosure Schedule lists (i) all
material real property leases to which the Company or any of its Subsidiaries is
a party as a lessee as of the date hereof (the "Company Real Property Lease
Agreements"), setting forth the location of such real property, and (ii) all
material real properties owned by the Company or any of its Subsidiaries as of
the date hereof (the "Company Owned Real Property"). Each of the Company or its
Subsidiaries, as applicable, has good and marketable and, in the case of the
Company Owned Real Property located in the United States, insured fee simple
title to, and, in the case of the Company Owned Real Property located outside
the United States and in jurisdictions where title insurance is customary,
insurable title to, or a valid and binding leasehold interest in, all of the
Company Owned Real Property or the property that is the subject of the Company
Real Property Lease Agreements, as the case may be, free and clear of all
Encumbrances, whether voluntarily incurred or arising by operation of law, and
including without limitation any agreement to place any Encumbrance on the
applicable property in the future and each of the Company or its Subsidiaries,
as applicable, has good and marketable title to the material buildings,
fixtures, improvements and equipment of the Company in the Company Owned Real
Property and good and marketable title to the material equipment, fixtures and
improvements (other than any fixtures and improvements owned by the owner of the
Company leased property) located in or on the Company leased property, except
for: (i) any Encumbrances reflected in the Company Financial Information; (ii)
any Encumbrances or failures to
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<PAGE> 24
have good and marketable title which, alone or in the aggregate, have not had
and are not reasonably likely to have a Material Adverse Effect on the Company;
(iii) zoning laws and other land use restrictions that do not impair and are not
violated by the present or anticipated use or occupancy of the property subject
thereto; (iv) any Encumbrances for Taxes, assessments and other governmental
charges not yet due and payable or due but not delinquent or due and being
contested in good faith; and (v) any mechanics', workmen's, repairmen's,
warehousemen's, carriers' or other similar liens and encumbrances arising in the
Ordinary Course of Business or being contested in good faith; (each of the
encumbrances listed in clauses (i)-(v) above, a "Permitted Encumbrance"); and
(vi) any Encumbrances which are matters of public record or would be shown by a
current title report or survey or physical inspection, such as easements, quasi
easements, covenants, licenses, rights of way, land use, zoning or other legal
requirements, ordinances or plans. There are no outstanding options or rights of
first refusal to purchase any of the Company Owned Real Property or any material
portion thereof or any material interest therein. Section 3.7(a)(ii) of the
Disclosure Schedule lists all leases of personal property having cumulatively a
value in excess of $2,000,000 to which the Company or any of its Subsidiaries is
a party as a lessee as of the date hereof (the "Company Personal Property
Leases"). The Company and its Subsidiaries own all of the properties and assets
that they purport to own (as reflected in the Company's books and records)
including all of the properties and assets in the Company Financial Information,
free and clear of all Encumbrances, other than Permitted Encumbrances and those
of the type described in clause (vi) above, and except for (i) assets held under
capitalized leases, (ii) leased assets not required to be disclosed in
accordance with this Section 3.7, (iii) personal property sold since the date of
the Company Financial Information in the Ordinary Course of Business, and (iv)
personal property acquired since the date of the Company Financial Information.
(b) None of the Company and its Subsidiaries is in default and no
event has occurred that, after notice or lapse of time or both, would constitute
a default under any lease under which it is the lessee of real or personal
property, except for such defaults which, alone or in the aggregate, have not
had and are not reasonably likely to have a Material Adverse Effect on the
Company.
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Section 3.8 Company Material Contracts. Except for this Agreement
and as listed in Section 3.8 of the Company Disclosure Schedule, neither the
Company nor any of its Subsidiaries is a party to or bound by any contract,
license with respect to patents, trademarks, copyrights or other intellectual
property, collective bargaining agreement, joint venture, partnership, power of
attorney, agreement, lease, mortgage, indenture, note or other obligation
(collectively, "Contracts") which are to be performed or as to which the Company
or any of its Subsidiaries may have any right or obligation after the Closing
Time other than Contracts (i) which have been entered into in the Ordinary
Course of Business and (ii) pursuant to which the Company or its Subsidiaries,
as the case may be, is or would be obligated to expend, or entitled to receive,
less than $2,000,000 in any 12-month period or which is subject to cancellation
by the Company or such Subsidiary, as
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the case may be, upon less than three (3) months' notice, without incurring any
material expenditure and without any material penalty or increased cost (such
Contracts required to be listed in Section 3.8 of the Disclosure Schedule being
referred to herein as the "Company Material Contracts"). Except for any failure
to be valid, binding and in full force and effect, event, circumstance, or
attempt that has not had and is not reasonably likely to have, alone or in the
aggregate, a Material Adverse Effect on the Company: (i) all of the Company
Material Contracts are valid, binding and in full force and effect; (ii) in the
two years immediately preceding the Closing Date the Company or the applicable
Subsidiary, as the case may be, and, to the Knowledge of the Company, the other
party to each Company Material Contract have each been in substantial compliance
with all the material terms of such Company Material Contracts; (iii) no event
has occurred or circumstances exist that (with or without notice or lapse of
time) may contravene, conflict with or result in a violation or breach of or
give the Company or the applicable Subsidiary, as the case may be, or the other
party to any Company Material Contract the right to declare a default or
exercise any remedy under, or to accelerate the maturity or performance of, or
to cancel, terminate or modify any Company Material Contract; (iv) neither the
Company or the applicable Subsidiary, as the case may be, nor the other party to
any Company Material Contract has attempted to renegotiate its terms; and (v) no
Seller or Employee or former employee has or may acquire any rights to, in or
under any Company Material Contract. No default, or event which, after notice or
lapse of time or both, would constitute a default, has occurred and is existing
under any Company Material Contract, except for such defaults or events which,
alone or in the aggregate, have not had and are not reasonably likely to have a
Material Adverse Effect on the Company.
Section 3.9 No Conflict. Except as set forth in Section 3.9 of
the Disclosure Schedule: The execution, delivery and performance of this
Agreement and the Indemnity Escrow Agreement by the Company (as applicable) and
the Sellers do not, and the consummation by the Company and the Sellers of the
transactions contemplated hereby and thereby will not, constitute or result in
(a) a breach or violation of, or a default under, the Company's Organizational
Documents, or the Subsidiary Organizational Documents, (b) a breach or violation
of or default under, or the acceleration of any obligation or the creation of
any Encumbrance on the assets of the Company or any of its Subsidiaries pursuant
to, any Company Material Contracts binding upon the Company or any of its
Subsidiaries (in each case with or without notice, lapse of time or both) or any
Law or governmental or non-governmental permit or license to which the Company
or any of its Subsidiaries is subject or (c) any change in the rights or
obligations of any party under any of the Company Material Contracts specified
in clause (b) above, except, in the case of clauses (b) and (c) above, for any
breaches, violations, defaults, accelerations, creations or changes that,
individually or in the aggregate, have not had and are not reasonably likely to
have a Material Adverse Effect on the Company or prevent, materially burden or
materially impair the ability of the Company and the Sellers to consummate the
transactions contemplated by this Agreement and subject, in the case of clause
(b) above, to the matters referred to in Section 3.10 hereof and set forth in
Section 3.10 of the Disclosure Schedule.
Section 3.10 Governmental Filings; No Violations. Except as set
forth in Section 3.10 to the Disclosure Schedule and except for the notification
and report form required to be filed with the FTC and the Antitrust Division
under the HSR Act (such filing, the "HSR Filing") and similar filings and
approvals which may be required by foreign Governmental Entities, no notices,
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reports or other filings are required to be made by the Company or its
Subsidiaries or the Sellers with, nor are any consents, registrations,
approvals, permits or authorizations required to be obtained by the Company or
its Subsidiaries or the Sellers from, any Governmental Entity, in connection
with the execution and delivery of this Agreement by the Company and the Sellers
and the consummation by the Company and the Sellers of the transactions
contemplated hereby, except those that the failure to make or obtain are not,
individually or in the aggregate, reasonably likely to have a Material Adverse
Effect on the Company or prevent, materially delay or materially impair the
ability of the Company and the Sellers to consummate the transactions
contemplated by this Agreement.
Section 3.11 Litigation and Liabilities. Except as disclosed in
the Company Financial Information and except as set forth in Section 3.11 of the
Disclosure Schedule: There are no (a) civil, criminal or administrative actions,
suits, claims, hearings, investigations, audits or proceedings pending or, to
the Knowledge of the Company, threatened against the Company or any of its
Subsidiaries or (b) obligations or liabilities, whether or not accrued,
contingent or otherwise, including those relating to matters involving any
Environmental Law, or any other facts or circumstances of which the Company has
Knowledge that could result in any claims against or obligations or liabilities
of the Company or any of its Subsidiaries, except, in the case of clauses (a)
and (b), for those that, individually or in the aggregate, have not had and are
not reasonably likely to have a Material Adverse Effect on the Company or
prevent, materially burden or materially impair the ability of the Company and
the Sellers to consummate the transactions contemplated by this Agreement.
Neither the Company nor any of its Subsidiaries is subject to any judgment,
order, decree or arbitration award of any Governmental Entity that, individually
or in the aggregate, is reasonably likely to have a Material Adverse Effect on
the Company or prevent, materially burden or materially impair the ability of
the Company and the Sellers to consummate the transactions contemplated by this
Agreement.
Section 3.12 Compliance with Law; Permits. Except as set forth in
Section 3.12 of the Disclosure Schedule: The businesses of each of the Company
and its Subsidiaries have not been, and are not being, conducted in violation of
any law, ordinance, regulation, judgment,
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grant, order, decree, arbitration award, license or permit of any Governmental
Entity (collectively, "Laws"), except for violations or possible violations
that, individually or in the aggregate, have not had and are not reasonably
likely to have a Material Adverse Effect on the Company or prevent, materially
burden or materially impair the ability of the Company and the Sellers to
consummate the transactions contemplated by this Agreement. No investigation,
audit or review by any Governmental Entity with respect to the Company or any of
its Significant Subsidiaries is pending or, to the Knowledge of the Company,
threatened, nor has any Governmental Entity indicated an intention to conduct
the same, except for those the outcome of which, individually or in the
aggregate, are not reasonably likely to have a Material Adverse Effect on the
Company or prevent, materially burden or materially impair the ability of the
Company and the Sellers to consummate the transactions contemplated by this
Agreement. The Company has not received any notice of violation of law or permit
from a third party or from a Governmental Entity except for notice of such
violations as are not reasonably likely to have a Material Adverse Effect on the
Company. The Company and its Subsidiaries each has and for the two years
immediately preceding the Closing has had all permits, licenses, franchises,
variances, exemptions, orders and other governmental authorizations, consents
and approvals necessary to conduct its business as currently conducted except
those the absence of which, individually or in the aggregate, are not reasonably
likely to have a Material Adverse Effect on the Company or prevent, materially
burden or materially impair the ability of the Company and the Sellers to
consummate the transactions contemplated by this Agreement.
Section 3.13 Tax Matters. (a) Except as set forth in Section 3.13
of the Disclosure Schedule, as reflected in the Company Financial Information or
as is not reasonably likely to have a Material Adverse Effect on the Company:
(i) the Company and each of its Subsidiaries (A) have prepared in good faith and
in correct form and have duly and timely filed (taking into account any
extension of time within which to file) all Tax Returns required to be filed by
any of them, either separately or as a member of a group of corporations, and
all such filed Tax Returns are true, complete and accurate, (B) have paid or
made provisions for the payments of all Taxes that are required to be paid to
Tax authorities or others or that the Company or any of its Subsidiaries are
obligated to withhold from amounts owing to any employee, creditor or third
party,
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except with respect to matters contested in good faith, and (C) have not waived
any statute of limitations with respect to Taxes or agreed to any extension of
time with respect to a Tax assessment or deficiency or executed any waiver of
restrictions on assessment or collection of any Tax or entered into or amended
any agreement or settlement with any Tax authority, and (iii) there are not
pending or, to the Knowledge of the Company, threatened, any audits,
examinations, investigations or other proceedings in respect of Taxes or Tax
matters. There are no unresolved questions or claims concerning the Company's or
any of its Subsidiaries' Tax liability that, if resolved unfavorably to the
Company or its Subsidiaries, are reasonably likely to have a Material Adverse
Effect on the Company. The Company has made available to Buyer true and correct
copies of the United States consolidated federal income Tax Return filed by the
Company on its behalf and on behalf of its United States Subsidiaries for each
of the fiscal years ended March 31, 1996, 1995 and 1994. Neither the Company nor
any of its Subsidiaries has any liability with respect to Taxes in excess of the
amounts that are reflected in the Company Financial Information, except where
the failure to be so reflected is not reasonably likely to have a Material
Adverse Effect on the Company. Prior to the Closing, the Company or any of its
Subsidiaries will have either (i) paid, (ii) reflected as a liability in the
Company Financial Information or (iii) established a reserve on the books of the
Company or its Subsidiaries for the payment of any material Taxes imposed with
respect to the Company or any of its Subsidiaries for the taxable periods, or
portions thereof, ended on or before the Closing Date including, with respect to
taxable periods beginning before the Closing but ending thereafter, the portion
of such taxable period ending on the Closing Date. Whenever it is necessary to
determine the Taxes for a portion of a taxable year or period that begins before
and ends after the Closing Date, the determination shall be made by assuming
that the taxable year or period ended at the close of business on the Closing
Date, except that exemptions, allowances or deductions that are calculated on an
annual basis shall be apportioned on a time basis.
(b) As used in this Agreement, (i) the term "Tax" (including,
with correlative meaning, the terms "Taxes" and "Taxable") includes all federal,
state, local, municipal and foreign taxes, including without limitation, income,
windfall, profits, gains, franchise, gross receipts, alternative, minimum,
estimated, transfer, license,
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environmental, customs duty, capital stock, wealth, welfare severance, stamp,
payroll, sales, employment, unemployment, disability, use, property,
withholding, excise, production, occupation, value added, goods and services,
occupancy and other taxes, duties or assessments of any nature whatsoever,
together with all interest, penalties and additions imposed with respect to such
amounts and any interest in respect of such penalties and additions, and
including any transferee or secondary liability in respect of any Tax (whether
imposed by law, contractual agreement or otherwise), and (ii) the term "Tax
Return" includes all returns and reports (including elections, declarations,
disclosures, schedules, estimates and information returns) required to be
supplied to a Tax authority relating to Taxes as well as any claims for refunds
of Taxes including any amendments or supplements to the foregoing.
(c) Safe Harbor Lease Property. None of the assets of the Company
or any of its United States Subsidiaries is property which the Company or its
United States subsidiaries is required to treat as being owned by any other
person pursuant to the so-called "safe harbor lease" provisions of former
section 168((f)(8) of the Code.
(d) Security for Tax Exempt Obligations. None of the assets of
the Company or its Subsidiaries directly or indirectly secures any debt the
interest on which is tax exempt under section 103(a) of the Code.
(e) Tax Exempt Use Property. None of the assets of the Company or
any of its Subsidiaries is "tax-exempt use property" within the meaning of
section 168(h) of the Code.
(f) Parachute Payment. The Company is not a party to any
agreement, contract, arrangement or plan that has resulted or would result,
separately or in the aggregate, in the payment of any "excess parachute
payments", within the meaning of section 280G of the Code or any similar
provision of foreign, state or local law. To this end, prior to the Closing Date
the stockholders of the Company shall have taken the appropriate action to
satisfy the requirements of Section 280G(b)(5)(B) of the Code.
(g) US Real Property Holding Corporation. The Company is not, and
has not been, a United States real property holding corporation (as defined in
section 897(c)(2) of the Code) during the applicable period specified in section
897(c)(1)(A)(ii) of the Code.
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(h) Existing Partnerships. Neither the Company nor any of its
subsidiaries is a party to any joint venture, partnership, or other arrangement
or contract which could be treated as a partnership for federal income tax
purposes. None of the Company's Subsidiaries has made a so-called check-the-box
election under section 7701 of the Code.
(i) Tax Ownership. Each asset with respect to which the Company
and its Subsidiaries claims depreciation, amortization or similar expense for
Tax purposes is owned for Tax purposes by either the Company or its
Subsidiaries.
(j) Excess Loss Accounts. Neither the Company nor any of its
United States Subsidiaries has any excess loss account (as defined in Treasury
Regulation Section 1.1502-19) with respect to the stock of any Subsidiary.
(k) Prior Ownership Changes. There have been no prior ownership
changes as defined in section 382 of the Code with respect to the Company.
(l) Collapsible Corporation. The Company has not filed a consent
pursuant to the collapsible corporation provisions of section 341 (f) of the
Code (or any corresponding provision of state or local Law) or agreed to have
section 341 (f)(2) of the Code (or any corresponding provision of state or local
Law) apply to any disposition of, any asset owned by it.
Section 3.14 Labor Matters. Except as set forth in Section 3.14
of the Disclosure Schedule: Neither the Company nor any of its Subsidiaries is a
party to or otherwise bound by any collective bargaining agreement, contract or
other agreement or understanding with a labor union or labor organization. As of
the date hereof,neither the Company nor any of its Subsidiaries is the subject
of any material proceeding asserting that the Company or any of its Subsidiaries
has committed an unfair labor practice or is seeking to compel it to bargain
with any labor union or labor organization nor is there pending or, to the
Knowledge of the Company, threatened, nor has there been for the past five
years, any labor strike, dispute, walkout, work stoppage, slow-down or lockout
involving the Company or any of its Subsidiaries. Excepted from the foregoing
representations are any (i) agreement, contract or understanding, or (ii) any
proceeding, or (iii) any labor strike, dispute, walkout, work stoppage,
slow-down or lockout which has not had or is not reasonably likely to
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have a Material Adverse Effect on the Company. The Company has previously made
available to Buyer correct and complete copies of any material labor and
collective bargaining agreements to which the Company or any of its Subsidiaries
is party or by which any of them are otherwise bound. Since March 31, 1997, all
commissions, salaries, bonuses and payments of any kind due to Employees have
been paid in the Ordinary Course of Business or have been withheld in good faith
in connection with a bona fide dispute over the amount of any such commissions,
salaries, bonuses and payments, and all payroll taxes and insurance payments
made on behalf of Employees have been appropriately withheld and deposited, as
appropriate, with the appropriate Tax authorities or others on a timely basis.
Section 3.15 Employee Matters. Except as set forth in Section
3.15 of the Disclosure Schedule:
(a) Each material bonus, deferred compensation, pension,
retirement, profit-sharing, thrift, savings, employee stock ownership, stock
bonus, stock purchase, restricted stock, stock option, employment, termination,
severance, compensation, medical, health or other plan, agreement, policy or
arrangement that is maintained or contributed to by the Company or its
Subsidiaries and that covers Employees, directors, former employees or former
directors of the Company and its Subsidiaries (the "Company Compensation and
Benefit Plans") is listed in Section 3.15(a) of the Disclosure Schedule. Prior
to the Closing Date, the Company shall have given or made available to Buyer a
true, correct and complete copy of: (i) each Company Compensation and Benefit
Plan, as amended through the date hereof; (ii) the most recent summary plan
description (if any) for each Company Compensation and Benefit Plan, or if no
summary plan description is available, the most recent written description (if
any) provided to Employees; and (iii) for each Company Compensation and Benefit
Plan, the two most recently filed annual reports on Form 5500 (if any).
(b) The Company has caused each of the Company Compensation and
Benefit Plans to be operated and administered in substantial compliance with all
applicable laws, including the Code and the Employee Retirement Income Security
Act of 1974, and the regulations promulgated thereunder as amended ("ERISA").
Each Company Compensation and Benefit Plan that is an "employee pension benefit
plan" within the meaning of Section 3(2) of ERISA (a "Company
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<PAGE> 33
Pension Plan") and that is intended to be qualified under Section 401(a) of the
Code has received a favorable determination letter from the Internal Revenue
Service ("the IRS"), and the Company is not aware of any circumstances
reasonably likely to result in revocation of any such favorable determination
letter. In the 2 years preceding the Closing, there has been no pending or, to
the Knowledge of the Company, threatened material litigation relating to the
Company Compensation and Benefit Plans. Neither the Company nor any Subsidiary
has engaged in a transaction with respect to any Company Compensation and
Benefit Plan that, assuming the taxable period of such transaction expired as of
the date hereof, would subject the Company or any of its Subsidiaries to a
material Tax or penalty imposed by either Section 4975 of the Code or Section
502 of ERISA. No Company Compensation and Benefit Plan is subject to any Tax
under Section 511 of the Code.
(c) As of the date hereof, no liability under Title IV of ERISA
has been and remains outstanding or is expected to be incurred by the Company or
any Subsidiary with respect to any ongoing, frozen or terminated
"single-employer plan," within the meaning of Section 4001(a)(15) of ERISA,
currently or formerly maintained by any of them, or the single-employer plan of
any entity which is considered one employer with the Company under Section 4001
of ERISA or Section 414 of the Code (an "ERISA Affiliate"). The Company and its
Subsidiaries have not contributed, or been obligated to contribute, to a
multiemployer plan under Subtitle E of Title IV of ERISA at any time since
September 26, 1980.
(d) All contributions required to be made under the terms of any
Company Compensation and Benefit Plan as of the date hereof have been timely
made or have been reflected in the Company Financial Information. Neither any
Company Pension Plan nor any single-employer plan of an ERISA Affiliate has an
"accumulated funding deficiency" (whether or not waived) within the meaning of
Section 412 of the Code or Section 302 of ERISA.
(e) The Company does not currently maintain or contribute to any
Company Pension Plan which is subject to Title IV of ERISA.
(f) Neither the Company nor its Subsidiaries have any obligations
for retiree health and life benefits under any Company Compensation and Benefit
Plan other than as required by Section 4980B of the Code.
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(g) All Company Compensation and Benefit Plans covering current
or former non-U.S. employees of the Company and its Subsidiaries comply in all
material respects with applicable local law.
Section 3.16 Environmental Matters. Except as set forth in
Section 3.16 of the Disclosure Schedule:
(a) Except for such matters that, alone or in the aggregate: are
not reasonably likely to result in the refusal, suspension or revocation of any
permit issued pursuant to any Environmental Law which would impair the ability
of any facility of the Company or any of its Subsidiaries from conducting
operations material to the Company in accordance with practices and procedures
in existence as of the Closing Date; to result in the imposition of damages,
penalties or assessments against the Company in excess of $1,500,000; or to
require the submission and performance by the Company of a plan for remediation
reasonably expected to result in charges to the Company in excess of $1,500,000,
each of the Company and its Subsidiaries and any person or entity they have
indemnified for environmental liabilities or have other transferor liabilities
in connection with the transfer of any real property: (i) is in compliance with
Environmental Laws; (ii) has not violated nor been liable for any breach of any
Environmental Law; (iii) has not received any written notices from any private
citizen acting in the public interest or any present owner of a former Company
facility or former owner of a present Company facility or any Governmental
Entity alleging the actual or potential violation of any Environmental Law; (iv)
is not the subject of any order, injunction or decree of any Governmental Entity
arising under any Environmental Law; and (v) has not generated, transported,
treated, stored, used, emitted, discharged or disposed of any Hazardous
Substance except as permitted under applicable Environmental Laws.
(b) There are no pending or, to the Knowledge of the Company,
threatened claims, Encumbrances or other restrictions of any nature resulting
from or arising under or pursuant to any Environmental Law with respect to or
affecting any of the properties or assets of the Company or its Subsidiaries
which claims are reasonably likely to result in liability for the Company or its
Subsidiaries in excess of $1,500,000.
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(c) Neither the Company nor any of its Subsidiaries has received
any written communication relating to Hazardous Substances alleging an actual or
potential violation of any Environmental Law or an actual or potential
obligation to undertake or bear the cost of any environmental remediation which
is reasonably likely to exceed $1,500,000 with respect to any properties or
assets (whether real, personal or mixed) in which the Company has any interest
or with respect to any property or facility to which Hazardous Substances
generated, transferred, used or processed by the Company or any Subsidiary or
any person or entity for whose conduct they are contractually responsible, have
been transported, treated, stored, handled, transferred, recycled, or received.
Section 3.17 Intellectual Property. Except as set forth in
Section 3.17 of the Disclosure Schedule:
(a) The Company and/or each of its Subsidiaries owns, or is
licensed or otherwise possesses legally enforceable rights to use all patents
(and applications therefor), trademarks (and applications therefor), inventions,
improvements, customer lists, brand names, house marks, labels, service marks,
trade dress, logos, compilations and databases, trade names, copyrights (and
applications therefor), technology, know-how, computer software programs or
applications; and tangible and intangible proprietary information or materials
that are used in the business of the Company and its Subsidiaries as currently
conducted and all rights granted or retained in licenses under any of the
foregoing except for any such failures to own, be licensed or possess that,
individually or in the aggregate, are not reasonably likely to have a Material
Adverse Effect on the Company, and to the Knowledge of the Company, all patents
(and applications therefor), trademarks (and applications therefor), trade
names, service marks and copyrights held and used in the business currently
conducted by the Company and/or its Subsidiaries are valid and subsisting and no
such patents, applications or registrations are subject to any pending or
threatened opposition, cancellation, interference or similar proceeding before
any registration authority, except for any such failures to be valid and
subsisting that or proceedings the outcome of which individually or in the
aggregate, have not had and are not reasonably likely to have a Material Adverse
Effect on the Company. All of the know how, data, information and specifications
(without regard to whether any of the foregoing is proprietary to the Company or
any of
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its Subsidiaries or confidential), necessary to manufacture, quality control,
package, store and ship the products of the Company and its Subsidiaries have
been handled in the same manner as is customary with respect to those companies
handling similar know how, data, information and specifications.
(b) Except as has not had or is not reasonably likely to have a
Material Adverse Effect on the Company:
(i) the Company is not, nor will it be as a result of the
execution, delivery or performance of this Agreement by it or the
Sellers, in violation of any licenses, sublicenses and other agreements
as to which the Company is a party and pursuant to which the Company is
authorized to use any third-party patents, trademarks, service marks or
copyrights ("Third-Party Intellectual Property Rights");
(ii) no claims with respect to (A) the patents, registered and
unregistered trademarks and service marks, registered and unregistered
copyrights, trade names, and any applications therefor owned by the
Company or any of its Subsidiaries (the "Company Intellectual Property
Rights"); (B) any trade secret material to the Company or any of its
Subsidiaries; or (C) patents, patent applications, copyrights and trade
secrets owned by third parties are currently pending or, to the
Knowledge of the Company, threatened by any Person;
(iii) to the Knowledge of the Company, there are no valid grounds
for any bona fide claims (A) to the effect that the use, sale or
licensing of any product as now used, sold or licensed or proposed for
use, sale or license by the Company or any of its Significant
Subsidiaries, infringes on any copyright, patent, trademark, service
mark or trade secret; (B) against the use by the Company or any of its
Subsidiaries, of any trademarks, trade names, trade secrets, copyrights,
patents, technology, know-how or computer software programs and
applications used in the business of the Company or any of its
Subsidiaries as currently conducted or as proposed to be conducted; (C)
challenging the ownership, validity or effectiveness of any of the
Company Intellectual Property Rights or other trade secret material to
the Company; or (D) challenging the license or legally
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enforceable right to use of the Third-Party Intellectual Property
Rights by the Company or any of its Subsidiaries; and
(iv) to the Knowledge of the Company, there is no unauthorized
use, infringement or misappropriation of any of the Company Intellectual
Property Rights by any third party, including any Employee or former
employee of the Company or any of its Subsidiaries.
Section 3.18 Insurance. Section 3.18 of the Disclosure Schedule
lists all material insurance policies maintained by or on behalf of the Company
or any of its Subsidiaries as of the date hereof and, except as is not
reasonably likely to have a Material Adverse Effect on the Company, such
insurance policies are (i) issued by insurers that are financially sound and
reputable, (ii) taken together and including such insurance policies as were in
effect during the five years prior to Closing provide adequate insurance
coverage for the assets and operations of the Company and its Subsidiaries for
all risks to which the Company and such Subsidiaries are normally exposed, (iii)
will continue in full force and effect for at least one year subsequent to the
Closing, (iv) are valid, enforceable and in full force and effect and (v) the
Company or its Subsidiary, as the case may be, is not in default thereunder.
Section 3.19 Brokers and Finders. Neither the Company, nor has
its officers, directors and Employees on behalf of the Company, employed or
engaged any broker or finder or has incurred any liability of the Company for
any brokerage fees, commissions or finders fees in connection with the
transactions contemplated in this Agreement except that the Company has employed
BA Partners, a division of BancAmerica Securities, Inc. ("BA Partners"), and
Goldman, Sachs & Co. ("Goldman Sachs") as its financial advisors, the engagement
of which has been disclosed to the Buyer prior to the date hereof.
Section 3.20 No Other Liabilities. The Company has no liabilities
or obligations of any nature (whether absolute, accrued, contingent or
otherwise) that will have a Material Adverse Effect on the Company except for
the liabilities or obligations reflected or reserved against in the Company
Financial Information or liabilities or obligations specifically represented by
the items listed in any Section of the Disclosure Schedule and current
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liabilities incurred in the Ordinary Course of Business since the date of the
Company Financial Information. As of the Closing Date, the Company will not be a
guarantor of any obligations of nor will it be responsible at any time after the
Closing Date for any of the liabilities of Coulter Pharmaceutical, Inc. or
Coulter Cellular Therapies, Inc. or any persons or entities which are not
Subsidiaries.
Section 3.21 Books and Records. The books of account, minute
books, stock record books and other records of the Company, all of which have
been made available to Buyer, are materially complete and correct and have been
maintained in accordance with sound business practices and the requirements of
Section 13(b)(2) of the Securities Exchange Act of 1934, as amended, including
the maintenance of an adequate system of internal controls. The minute books of
the Company contain accurate and complete records in all material respects of
all meetings held of, and corporate actions taken by, the stockholders and the
Board of Directors of the Company and no meetings of any such stockholders or
Board of Directors has been held for which minutes have not been prepared and
are not contained in such minute books. At the Closing all of these books and
records will be in the possession of the Company.
Section 3.22 Leased Systems. The Company or its Subsidiaries have
good and marketable title and perfected first security interests (recorded or
registered in accordance with all statutes requiring the filing, recording or
registration thereof) for all systems, equipment and instruments leased to third
parties or consigned to third parties or otherwise in the possession of third
parties where title has not passed from Company or a Subsidiary to such third
party, except where the failure to have such good and marketable title and
perfected security interest has not had and is not reasonably likely to have a
Material Adverse Effect on the Company. The documentation relating to each such
lease is valid, binding and enforceable upon such leasees, in all material
respects, in accordance with its terms.
Section 3.23 Certain Arrangements with Employees. The gross
payments to be made by the Company to Employees, including any applicable
gross-up payments in connection with any Taxes to be paid by Employees, in
respect of the exercise by all of the recipients of the change of control
severance agreements will not exceed $23,000,000. Except as set forth in Section
3.23 of the
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Disclosure Schedule, the aggregate cost to the Company, including all related
Taxes and Tax deductions available to the Company, of the Company's Long Term
Incentive Plan and Supplemental Executive Retirement Plan have been accrued for
in the Company Financial Information. The gross payments to be made by the
Company to Employees in respect of the Company's Special Incentive Plan
including the Sharing Bonus Plan will not exceed $100,000,000.
Section 3.24 Key Employees. None of the direct labor or
supervisory Employees employed in the design, specification, fabrication,
manufacture, grinding, polishing or quality control of the Company's wafers,
apertures, valves and glass products are covered by or eligible to receive a
change in control severance agreement.
Section 3.25 Condition and Sufficiency of Assets. The buildings,
plants, structures and equipment of the Company and its Subsidiaries are
structurally sound, are in good operating condition and repair, and are adequate
for the uses to which they are being put, and none of such buildings, plants,
structures or equipment is in need of maintenance or repairs except for
ordinary, routine maintenance and repairs that are not material in nature or
cost, including those repairs for normal wear and tear. The assets and equipment
used in the manufacture, grinding or polishing of wafers, apertures, valves and
glass products are in good operating condition and repair and are adequate for
the Company's present and anticipated needs for such products.
Section 3.26 ISO Certification. All locations of the Company in
the United States and all Subsidiary sites outside of the United States where
manufacturing is conducted are ISO 9000 certified.
Section 3.27 No Other Representations or Warranties. Except for
the representations and warranties contained in this Article III and in Article
IV, neither the Sellers with regard to the Company nor any of the Sellers, nor
any other Person makes any other express or implied representation or warranty
on behalf of or with respect to the Company, any Company Subsidiary or the
business of any of them, and the Company hereby disclaims any such
representation or warranty, whether by the Company, any of the Sellers or any of
their respective Representatives or any other Person, with respect to the
execution and delivery of this Agreement, the consummation of the transactions
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contemplated herein or the Company, notwithstanding the delivery or disclosure
to Buyer or any of its Representa tives or any other Person of any documentation
or other information by the Company, any of the Sellers or any of their respec
tive Representatives or any other Person with respect to any one or more of the
foregoing.
ARTICLE IV
ADDITIONAL REPRESENTATIONS
AND WARRANTIES OF THE SELLERS
Each Seller, solely as to itself, represents and warrants to
Buyer as follows:
Section 4.1 Execution, Delivery, Validity and Enforceability of
Agreements.
(a) This Agreement has been duly executed and delivered by such
Seller and constitutes a legal, valid and binding obligation of such Seller,
enforceable against such Seller in accordance with its terms, subject to the
Bankruptcy Exceptions.
(b) The Indemnity Escrow Agreement to which each Seller will
become a party at the Closing pursuant to this Agreement, when executed and
delivered by or on behalf of such Seller, will have been duly executed and
delivered by such Seller and will constitute a legal, valid and binding
obligation of such Seller, enforceable against such Seller in accordance with
its terms, subject to the Bankruptcy Exceptions.
(c) The Sellers have all requisite power and authority to execute
and deliver this Agreement and the Indemnity Escrow Agreement and have taken all
trust and other actions necessary in order to execute, deliver and perform their
obligations under this Agreement and the Indemnity Escrow Agreement and to
consummate the transactions contemplated in this Agreement and the Indemnity
Escrow Agreement.
Section 4.2 Ownership of Shares. Except as disclosed in Section
4.2 of the Disclosure Schedule: (a) Immediately prior to Closing such Seller
will have good and valid title to the Shares to be sold by such Seller
hereunder, free and clear of all Encumbrances, and upon
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delivery of such Shares by such Seller and payment therefor by Buyer at the
Closing pursuant hereto, good and valid title to such Seller's Shares, free and
clear of all Encumbrances (other than those that do not arise by action of or
with respect to such Seller) will pass to Buyer; (b) the Total Shares represents
all of the issued and outstanding Shares of the Company; there are no
outstanding debentures, warrants, options or other instruments, of any kind or
nature, convertible into Shares of the Company; and (c) Annex A is true,
complete and correct; provided, however, that subject to Section 6.1(a) the
parties hereto (i) recognize that the Shares to be sold by the Joseph R.
Coulter, Jr. Trust are, and following transfer thereof to Buyer pursuant to this
Agreement such Shares will continue to be subject, by operation of law, to both
a federal and a Florida estate tax lien unless releases of such liens are
obtained prior to the Closing Date and (ii) agree that such federal and Florida
estate tax liens are permitted encumbrances, the existence of which would not
materially or adversely affect the Joseph R. Coulter, Jr. Trust's ability to
execute deliver or perform its obligations under this Agreement.
Section 4.3 Brokers and Finders. None of the Sellers, nor any
general partner, trustee or other Representative of any of them, has employed
any broker or finder or has incurred any liability for any brokerage fees,
commissions or finders fees in connection with transactions contemplated in this
Agreement, except that the Sellers have employed BA Partners and Goldman Sachs
as their financial advisors, the engagement of which has been disclosed to the
Buyer prior to the date hereof.
Section 4.4 Foreign Person. Sellers are United States Persons
within the meaning of the Code.
Section 4.5 No Withholding. The transactions contemplated herein
are not subject to the tax withholding provisions of section 3406 of the Code or
of subchapter A of chapter 3 of the Code or of any other provision of Tax Law.
Section 4.6 No Other Representations or Warranties. Except for
the representations and warranties contained in this Article IV and in Article
III, none of the Sellers nor the Company or any other Person makes any other
express or implied representation or warranty on behalf of or with respect to,
any of the Sellers, and each Seller hereby disclaims any such representation or
warranty,
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whether by such Seller, any other Seller, the Company or any of their respective
Representatives or any other Person, with respect to the execution and delivery
of this Agreement, the consummation of the transactions contemplated herein or
any of the Sellers, notwithstanding the delivery or disclosure to Buyer or any
of its representatives or any other Person of any documentation or other
information by any of the Sellers, the Company or any of their respective
representatives or any other Person with respect to any one or more of the
foregoing.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to the Company and each of the
Sellers as follows:
Section 5.1 Organization, Authority and Qualification;
Certificate and By-laws. Each of Buyer and its Significant Subsidiaries has been
duly organized, is validly existing and is in good standing under the laws of
the State of Delaware, in the case of Buyer, or their jurisdictions of
organization, in the case of Buyer's Significant Subsidiaries, with full power
and authority to own or lease its assets and to carry on its business as
currently conducted. Each of Buyer and its Significant Subsidiaries is duly
qualified as a foreign corporation to do business and is in good standing in
each jurisdiction where the ownership and operation of its properties and assets
or the conduct of its business requires such qualification, except where the
failure to be so qualified or in good standing, when taken together with all
other such failures, would not prevent, materially delay or materially impair
the ability of the Buyer to consummate the transactions contemplated by this
Agreement.
Section 5.2 Approval and Validity.
(a) Buyer has all requisite corporate power and authority and has
taken all corporate action necessary in order to execute, deliver and perform
its obligations under each of this Agreement and the Indemnity Escrow Agreement
and to consummate the transactions contemplated for it hereby and thereby, and
no vote of the holders of the capital stock of Buyer is necessary under any Law
(or rule of or listing or other agreement with any securities
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exchange), any Contract or Buyer's certificate of incorporation and by-laws in
connection with such execution, delivery, performance and consummation. Each of
this Agreement is, and the Indemnity Escrow Agreement to which Buyer will become
a party at the Closing pursuant to this Agreement will be, a valid and binding
agreement of Buyer enforceable against Buyer in accordance with its terms,
subject to the Bankruptcy Exceptions.
(b) The board of directors of Buyer has approved each of this
Agreement and the Indemnity Escrow Agreement and the transactions contemplated
for Buyer hereby and thereby.
Section 5.3 No Conflict. The execution, delivery and performance
of each of this Agreement and the Indemnity Escrow Agreement by Buyer do not,
and the consummation by Buyer of the transactions contemplated for it hereby and
thereby will not, constitute or result in (a) a breach or violation of, or a
default under, Buyer's certificate of incorporation and by-laws, or the
certificate and by-laws (or comparable governing instruments) of any of Buyer's
Subsidiaries, (b) a breach or violation of or default under, or the acceleration
of any obligation pursuant to, any Contracts binding upon Buyer or any of its
Subsidiaries (in each case, with or without notice, lapse of time or both) or
any Law or governmental or non-governmental permit or license to which Buyer or
any of its Subsidiaries is subject or (c) any change in the rights or
obligations of any party under any of the Contracts specified in clause (b)
above, except, in the case of clause (b) or (c) above, for any breaches,
violations, defaults, accelerations, creations or changes that, individually or
in the aggregate, are not reasonably likely to prevent, materially burden or
materially impair the ability of Buyer to consummate the transactions
contemplated by this Agreement and the Indemnity Escrow Agreement and subject,
in the case of clause (b) above, to the matters referred to in Section 5.4
hereof.
Section 5.4 Governmental Filings; No Violations. Except for the
HSR Filing and similar filings and approvals which may be required by foreign
Governmental Entities, no notices, reports or other filings are required to be
made by Buyer and its Subsidiaries with, nor are any consents, registrations,
approvals, permits or authorizations required to be obtained by Buyer and its
Subsidiaries from, any Governmental Entity, in connection with the
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execution and delivery of this Agreement and the Indemnity Escrow Agreement by
Buyer and the consummation by Buyer of the transactions contemplated hereby and
thereby, except those that the failure to make or obtain are not, individually
or in the aggregate, reasonably likely to prevent, materially burden or
materially impair the ability of Buyer to consummate the transactions
contemplated by this Agreement and the Indemnity Escrow Agreement.
Section 5.5 Brokers and Finders. None of Buyer and its officers,
directors and employees has employed any broker or finder or incurred any
liability for any brokerage fees, commissions or finders fees in connection with
the transactions contemplated in this Agreement, except that Buyer has employed
Merrill Lynch & Co. as its financial advisor, the engagement of which has been
disclosed to the Company prior to the date hereof.
Section 5.6 Financial Capability. As of the date hereof Buyer has
access to, and at the Closing Time Buyer will have, sufficient funds to purchase
the Shares and satisfy all of its obligations under this Agreement and the
Indemnity Escrow Agreement and the transactions contemplated hereby and thereby.
Buyer's obligations hereunder are not subject to any conditions regarding
Buyer's ability to obtain financing for the consummation of the transactions
contemplated herein.
Section 5.7 Securities Act. Buyer is acquiring the Shares solely
for the purpose of investment and not with a view to, or for sale in connection
with, any distribution thereof in violation of the Securities Act. Buyer
acknowledges that the Shares are not registered under the Securities Act or any
applicable state securities law, and that such Shares may not be sold or
otherwise transferred except pursuant to the registration provisions of the
Securities Act or an applicable exemption therefrom and pursuant to any
applicable state and other securities laws. Buyer further acknowledges that the
Shares will bear a restrictive legend as provided in the Company Organizational
Documents.
Section 5.8 No Other Representations or Warranties. Except for
the representations and warranties contained in this Article V, neither Buyer
nor any other Person makes any other express or implied representation or
warranty on behalf of or with respect to Buyer and Buyer and each of its
Representatives hereby disclaim any such repre-
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sentation or warranty, whether by Buyer or any of its Representatives or any
other Person, with respect to the execution and delivery of this Agreement, the
consummation of the transactions contemplated herein or Buyer, notwithstanding
the delivery or disclosure to Seller or any of its Representatives or any other
Person of any documentation or other information by Buyer or any of its
Representatives or any other Person with respect to any one or more of the
foregoing.
ARTICLE VI
TAX MATTERS
Section 6.1 Tax Indemnification.
(a) If prior to the Closing Date releases of the federal and
Florida estate tax liens to which the Shares of the Joseph R. Coulter, Jr. Trust
are subject have not been obtained, then the Joseph R. Coulter, Jr. Trust hereby
agrees to defend, indemnify and hold harmless Buyer from, against and in respect
of, any federal and state estate taxes owed by it and any expenses incurred by
Buyer, to the extent that federal or state authorities collect, or attempt to
collect, from Buyer or any of its Subsidiaries any such taxes by imposition of
or exercise of the tax liens to which, by operation of federal and state estate
tax law, the Shares owned by the Joseph R. Coulter, Jr. Trust are subject.
(b) The Joseph R. Coulter, Jr. Trust shall provide Buyer with
copies of all notices of deficiency and demands for payment of estate tax
assessments issued by the federal and state tax authorities within 15 Business
Days of receipt thereof.
(c) Whenever it is necessary to determine the Taxes for a portion
of a taxable year or period that begins before and ends after the Closing Date,
the determination shall be made by assuming that the taxable year or period
ended at the close of business on the Closing Date, except that exemptions,
allowances or deductions that are calculated on an annual basis shall be
apportioned on a time basis.
(d) Sellers will indemnify Buyer for any Tax imposed upon Company
resulting from any dividends or
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distributions of the shares or other transfer of the shares or assets of Coulter
Pharmaceutical, Inc. or Coulter Cellular Therapies, Inc. owned by the Company at
or prior to the Closing.
Section 6.2 Tax Returns.
The Company and its Subsidiaries shall file all Tax Returns
related to income that are required to be filed with respect to the Company and
its Subsidiaries for taxable years or periods ending on or before the Closing
Date and shall, subject to Sellers' indemnification obligations contained
herein, pay any Taxes due in respect of such Tax Returns. Such Tax Returns will
be prepared consistently with the Tax practices following previously filed Tax
Returns of the Company and its Subsidiaries and in accordance with the most
recent Tax practices as to elections and accounting methods of the Company and
its Subsidiaries, to the extent permissible under applicable Tax Law. Buyer
shall file or cause to be filed when due all Tax Returns that are required to be
filed by or with respect to the Company and its Subsidiaries for taxable years
or periods ending after the Closing Date and shall, subject to the
indemnification obligations of Seller, pay or cause to be paid any Taxes due in
respect of such Tax Returns. With respect to Tax Returns related to income to be
filed by the Company pursuant to this Section 6.2, not less than sixty (60) days
prior to the date on which such Tax Returns are due to be filed (taking into
account any applicable extensions) the Buyer shall deliver or shall cause to be
delivered a copy of such Tax Returns to Sellers for their review and approval,
which may not be unreasonably withheld or delayed. Notwithstanding the
foregoing, Buyer shall file all such Tax Returns in a timely manner.
Section 6.3 Information to be Provided by Buyer. With respect to
Tax Returns to be filed by the Company pursuant to Section 6.2 hereof, Buyer
shall promptly cause the Company to prepare and provide to the Sellers a package
of tax information materials (the "Tax Package"), which shall be completed in
accordance with past practice including past practice as to providing the
information, schedules and work papers and as to the method of computation of
separate taxable income and other relevant measures of income of the Company and
its Subsidiaries. Buyer shall cause the Tax Package for the portion of the
taxable period ending on the Closing Date to be delivered to
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the Sellers no later than sixty (60) days in advance of the applicable filing
date, as it may be extended.
Section 6.4 Transfer Taxes. The liability for all excise, sales,
use or transfer taxes arising from the sale of Shares shall be borne equally by
Buyer and the Sellers.
Section 6.5 Contest Provisions.
(a) Notice Requirement. Buyer shall promptly notify the Sellers
in writing upon receipt by Buyer, any of its Affiliates, or the Company or any
of its Subsidiaries of notice of any pending or threatened audits, adjustments
or assessments related to income (a "Tax Audit") which may materially affect the
liability for Taxes related to income of the Company or any of its Subsidiaries
for which the Sellers would be required to indemnify Buyer. If Buyer fails to
give such prompt notice to the Sellers, Buyer shall not be entitled to
indemnification for any Taxes arising in connection with such Tax Audit to the
extent that such failure to give notice materially adversely affects any rights
of the Sellers. Sellers shall have the sole right to represent the interests of
the Company and any of its Subsidiaries in any Tax Audit or administrative or
court proceeding involving Taxes related to income relating to taxable periods
ending on or before the Closing Date, and to employ counsel of their choice at
the Sellers' expense. Notwithstanding the preceding sentence, Buyer shall be
entitled to participate, at Buyer's expense, in any Tax Audit or administrative
or court proceedings relating to tax periods ending on or before the Closing
Date and to employ counsel of its choice at its expense. Notwithstanding the
foregoing, Sellers shall not be entitled to settle, either administratively or
after the commencement of litigation, any claim for Taxes related to income
which would adversely affect the liability for Taxes of the Buyer or the Company
or any of its Subsidiaries for any period after the Closing Date to any extent
without the prior written consent of Buyer. Such consent shall not be
unreasonably withheld, and shall not be necessary to the extent that Sellers
have indemnified the Buyer against the effects of any such settlement.
Buyer shall control the administration of any Tax Audit for any
year or period ending after the Closing Date, provided, however, Sellers shall
be entitled to participate at the Sellers' expense in the defense of any claim
for
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Taxes related to income for any year or period ending after the Closing Date
which may be the subject of indemnification by Seller with the written consent
of Buyer, and at its sole expense, may assume the entire defense of such tax
claim. Neither Buyer nor the Company or any of its Subsidiaries may agree to
settle any income tax claim for the portion of the year or period ending on the
Closing Date which may be the subject of indemnification by Sellers without the
prior written consent of Sellers, which may not be unreasonably withheld or
delayed.
Section 6.6 Post-Closing Actions Which May Affect the Sellers'
Liability for Taxes.
(a) Buyer shall not take, and shall not permit the Company or any
of its Subsidiaries to take, any action, other than any action required by law,
that is materially inconsistent with the manner in which Tax Returns have been
filed by the Company with respect to taxable periods ending on or before the
Closing if such action materially increases the Sellers' liability for Taxes for
which the Sellers are required to indemnify Buyer or materially reduces any
refund or overpayment due to Sellers with respect to Taxes for a period ending
on or before the Closing Date.
(b) Except to the extent required by law, neither Buyer, the
Company nor any of its Subsidiaries shall, without the prior written consent of
the Sellers, (1) amend any Tax Return filed by, or with respect to, the Company
or any of its Subsidiaries for any taxable period, or portion thereof, beginning
before the Closing Date, or (ii) carryback any net operating loss, capital loss,
excess foreign tax credit, or other similar losses, deductions or credits
derived with respect to any period beginning after the Closing Date to any
taxable year, or portion thereof, of the Company or any of its Subsidiaries
ending on or before the Closing Date.
Section 6.7 Certain Post-Closing Settlement Payments.
(a) Buyer's Claiming, Receiving or Using of Refunds and
Overpayments. If, after the Closing Date, Buyer or its Subsidiaries (a) receive
any refund of Taxes, or (b) apply any overpayment of Taxes with respect to a
taxable period ending on or before the Closing (except to the extent reflected
in the Company Financial Information as a current asset) which, in either case
(a) and (b), (i) relate to a
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Tax paid by the Company or any of its Subsidiaries or (ii) is the subject of
indemnification by the Sellers hereunder, Buyer shall promptly pay, or cause to
be paid, to the Sellers an amount in aggregate equal to the refund or
overpayment (including interest if included in the refund of Taxes) received or
applied by Buyer or its Subsidiaries . Buyer agrees to notify the Sellers
promptly of both the discovery of a right to claim any such refund or
overpayment and the receipt of any such refund or application of any such
overpayment. Buyer agrees to claim any such refund or to apply any such
overpayment as soon as possible and to furnish to the Sellers all information,
records and assistance necessary to verify the amount of the refund or
overpayment.
(b) Subsequent Adjustment. In the event that any Tax refund,
benefit or savings described in any clause of this Section 6.7 is subsequently
reduced as a result of any adjustment required by any Tax authority, this
Section 6.7 shall be applied, taking into account such reduction. If the
Sellers, on the one hand, or Buyer or its Subsidiaries, on the other hand, have
paid any amount to the other on the basis of the application of this Section 6.7
prior to such subsequent reduction (a "subsequent event") and the amount due
pursuant to this Section 6.7 taking into account such subsequent event is
determined to have changed as a result of such subsequent event, the parties
agree to make any payment necessary to settle the difference between the amount
previously paid and the amount subsequently determined to be due.
Section 6.8 Assistance and Cooperation. The Sellers and Buyer
agree that, after the Closing Time:
(A) each party shall assist (and cause its Subsidiaries to
assist) the other in preparing any Tax Returns which the other is
responsible for preparing and filing;
(B) the parties shall cooperate fully in preparing for any audits
of, or disputes with taxing authorities regarding, any Tax Returns and
payments in respect thereof;
(C) the parties shall make available to each other and to any
taxing authority as reasonably requested all relevant books and records
relating to Taxes;
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(D) the parties shall provide timely notice to the other in
writing of any pending or proposed audits or assessments with respect to
Taxes for which the other may have an indemnification obligation under
this Agreement;
(E) the parties shall furnish each other with copies of all
relevant correspondence received from any Tax authority in connection
with any audit or information request with respect to any Taxes referred
to in subsection (D) above; and
(F) except as otherwise provided herein, the party requesting
assistance or cooperation shall bear the other's out-of-pocket expenses
in complying with such request to the extent that those expenses are
attributable to fees and other costs of unaffiliated third-party service
providers other than attorneys' fees.
Section 6.9 Maintenance of Books and Records. Until the
applicable statute of limitations (including periods of waiver) has run for any
Tax Returns filed or required to be filed covering the periods up to and
including the Closing Date, Buyer shall retain all books and records in
existence on the Closing Date and after the Closing Date will provide the
Sellers access to such books and records for inspection and copying by the
Sellers and their representatives during normal business hours upon reasonable
request and upon reasonable notice solely for the purpose of obtaining
information to assist Sellers in settlement of Tax disputes for periods ending
on or prior to the Closing Date. After the expiration of such period, no such
books and records shall be destroyed by Buyer without first advising the Sellers
in writing detailing the contents of any such books and records and giving the
Sellers at least 120 days to obtain possession thereof.
Section 6.10 Characterization of Tax Indemnification. All amounts
paid by the Sellers to Buyer or by Buyer to the Sellers pursuant to this Article
VI shall be treated as adjustments to the Total Purchase Price for all Tax
purposes.
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ARTICLE VII
CERTAIN COVENANTS AND AGREEMENTS
Buyer covenants and agrees with each of the Company and each of
the Sellers, and the Company and the Sellers covenant and agree with Buyer as
follows:
Section 7.1 Interim Operations. The Company covenants and agrees
as to itself and its Subsidiaries and the Sellers covenant and agree (severally
and not jointly) that, after the date hereof and prior to the Closing (unless
Buyer shall otherwise approve in writing, which approval or disapproval shall
not be unreasonably delayed, and except as otherwise expressly contemplated by
this Agreement and the Indemnity Escrow Agreement or set forth in the Disclosure
Schedule, as the case may be):
(a) the business of the Company and its Subsidiaries shall be
conducted in the Ordinary Course of Business and, to the extent consistent
therewith, the Company and its Subsidiaries shall use their respective
reasonable best efforts to preserve intact its and its Subsidiaries business
organization and maintain its existing relations and goodwill with customers,
suppliers, distributors, creditors, lessors, Employees and business associates;
(b) the Company and its Subsidiaries shall not (i) issue, sell,
pledge, dispose of or encumber any capital stock owned by it in any of its
Subsidiaries; (ii) amend its Corporate or Subsidiary Organizational Documents,
including such documents of its Subsidiaries that are not Significant
Subsidiaries, as the case may be; (iii) split, combine or reclassify its
outstanding shares of capital stock; (iv) declare, set aside or pay any dividend
or other distribution payable in cash, stock, rights or other securities or
property in respect of any capital stock; or (v) repurchase, redeem or otherwise
acquire, or permit any of its Subsidiaries to purchase or otherwise acquire, any
shares of its capital stock or any securities convertible into or exchangeable
or exercisable for any shares of its capital stock;
(c) neither the Company nor any of its Subsidiaries shall (i)
issue, sell, pledge, dispose of or encumber any shares of its capital stock, or
any securities convertible into or exchangeable or exercisable for, or
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options, warrants, calls, commitments or rights of any kind to acquire, directly
or indirectly, any shares of its capital stock of any class or any other
property or assets; (ii) other than in the Ordinary Course of Business,
transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of or
encumber any other property or assets (including capital stock of any of its
Subsidiaries) or incur or modify any material indebtedness or other liability;
or (iii) make any commitments for, make or authorize any capital expenditures
other than in the Ordinary Course of Business or, with respect to capital
expenditures not in excess of $300,000 in accordance with the Company's
Proposals for Major Expenditures policy, or, by any means, make any acquisition
of, or investment in, assets or stock of any other Person or entity in excess of
$500,000 in the aggregate;
(d) neither the Company nor any of its Subsidiaries shall (i)
enter into any covenant not to sue, settle or compromise any material claims or
litigation having a value in excess of $500,000 or the Subject Litigation (as
defined in Section 10.2(b) hereof); (ii) except in the Ordinary Course of
Business, modify, amend or terminate any of the Company Material Contracts; or
(iii) waive, release or assign any material rights or claims having a value in
excess of $500,000;
(e) neither the Company nor any of its Subsidiaries shall (i)
make, revoke or amend any Tax election, (ii) execute any waiver of restrictions
on assessments or collection of any Tax, (iii) enter into or amend any agreement
or settlement with any Tax authority, or (iv) permit any insurance policy naming
it as a beneficiary or loss-payable payee to be canceled or terminated except in
the Ordinary Course of Business;
(f) neither the Company nor any of its Subsidiaries shall
knowingly take any action or omit to take any action that would cause any of its
representations and warranties herein to become untrue in any material respect;
(g) neither the Company nor any of its Subsidiaries shall take
any action to increase the compensation of any Employee (except for such
compensation increases as are consistent with the Ordinary Course of Business),
and neither the Company nor any of its Subsidiaries shall amend any of the
Company Compensation and Benefit Plans in a
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manner which would increase benefits thereunder, except for such amendments as
are required by law; and
(h) neither the Company nor any of its Subsidiaries will
authorize or enter into an agreement to do any of the foregoing.
Section 7.2 Filings; Other Actions; Notification.
(a) The Sellers, the Company and Buyer shall cooperate with each
other and use (and shall cause their respective Subsidiaries to use) their
respective best efforts to take or cause to be taken all actions, and do or
cause to be done all things, necessary, proper or advisable under this Agreement
and applicable Laws to consummate the transactions contemplated by this
Agreement as soon as practicable, including preparing and filing as promptly as
practicable all documentation to effect all applications, notices, petitions,
filings and other documents, and obtaining as promptly as practicable all
permits, consents, approvals and authorizations, necessary or advisable to be
made to or with or obtained from any third party and/or any Governmental Entity
in order to consummate the transactions contemplated by this Agreement. Subject
to applicable laws relating to the exchange of information, Buyer, Sellers and
the Company shall have the right to review in advance (or promptly in the case
of filings or submissions made prior to the date hereof), and to the extent
practicable each will consult the other on, all the information relating to
Buyer, Sellers or the Company, as the case may be, and any of their respective
Subsidiaries, that appear in any filing made with, or written materials
submitted to, any third party and/or any Governmental Entity in connection with
the transactions contemplated by this Agreement. In exercising the foregoing
right, each of the Company, Sellers and Buyer shall act reasonably and as
promptly as practicable.
(b) The Company, Sellers and Buyer each shall, upon request by
the other, as soon as practicable, furnish the other with all information
concerning itself, its Subsidiaries, directors, officers and stockholders and
such other matters as may be reasonably necessary or advisable in connection
with any statement, filing, notice or application made by or on behalf of any of
Buyer and the Company and their respective Subsidiaries, or by or on behalf of
any Seller, to any third party and/or any Governmental Entity in
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connection with the transactions contemplated by this Agreement.
(c) The Company, Sellers and Buyer each shall keep the other
apprised of the status of matters relating to completion of the transactions
contemplated hereby, including promptly furnishing the other with copies of
notices or other communications received by Buyer or by the Company or any
Seller, as the case may be, or any of its Subsidiaries, from any third party
and/or any Governmental Entity with respect to the transactions contemplated by
this Agreement.
(d) Without limiting the generality of the undertakings pursuant
to this Section 7.2, the Sellers, the Company and Buyer agree to take or cause
to be taken the following actions: (i) provide promptly to any and all federal,
state, local or foreign court or Government Entity with jurisdiction over
enforcement of any applicable antitrust laws ("Government Antitrust Entity")
information and documents requested by any Government Antitrust Entity or
necessary, proper or advisable to permit consummation of the transactions
contemplated by this Agreement; and (ii) take promptly, in the event that any
permanent or preliminary injunction or other order is entered or becomes
reasonably foreseeable to be entered in any proceeding that would make
consummation of the transactions contemplated by this Agreement in accordance
with the terms of this Agreement unlawful or that would prevent or delay
consummation of the transactions contemplated by this Agreement, any and all
commercially reasonable steps, including, if commercially reasonable, the appeal
thereof, necessary to vacate, modify or suspend such injunction or order so as
to permit such consummation on a schedule as close as possible to that
contemplated by this Agreement.
(e) Each of the Sellers identified in Annex A, severally and not
jointly, covenants and agrees with the Company and Buyer to use its best efforts
to cooperate with the Company and Buyer in the preparation and filing of such
notices and other documentation with, and in obtaining any such consent or
approval from, any Governmental Entity as may be necessary to be filed or
obtained under the HSR Act and similar acts, regulations or provisions of
foreign governments in order to consummate the sale of such Seller's Shares to
Buyer as contemplated herein, in each case as soon as practicable.
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Section 7.3 Access and Information.
Between the date of this Agreement and the Closing Date, upon
reasonable notice, and except as may otherwise be required by applicable law,
the Company shall (and shall cause its Subsidiaries to) afford Buyer's officers,
employees, counsel, accountants and other authorized representatives
("Representatives") access, during normal business hours, to its Employees,
officers, counsel, accountants and other representatives and advisors, and its
properties, books, contracts and records and, during such period, shall (and
shall cause its Subsidiaries to) furnish promptly to Buyer all information
concerning its business, properties and personnel as may reasonably be requested
in connection with the Company, its Subsidiaries and the transactions
contemplated by this Agreement; provided that the foregoing shall not require
the Company to permit any inspection, or to disclose any information, that in
the reasonable judgment of the Company would result in the disclosure of any
trade secrets of third parties or violate any of its obligations with respect to
confidentiality; provided further that the Company shall use reasonable efforts
to obtain the consent of such third party to such inspection or disclosure.
Except as is specifically provided in Section 10.1(b) hereof, no investigation
pursuant to this Section 7.3 shall affect or be deemed to modify any
representation or warranty made by the Company or Sellers. All requests for
information made pursuant to this Section 7.3 shall be directed to an executive
officer of the Company or such Person as may be designated by its officers.
Section 7.4 Employee Benefits.
(a) Buyer shall maintain until December 31, 1998, employee
compensation and benefit plans, programs, and policies for Employees that are no
less favorable, in the aggregate, to either (i) employee compensation and
benefit plans, programs, and policies for other employees of Buyer offered by
the Buyer from time to time or (ii) the Company's current employee compensation
and benefit plans, programs, and policies. Notwithstanding the foregoing
aggregation, until December 31, 1998, Buyer will continue to provide severance
benefits in the amounts and according to the eligibility criteria specified in
the Company's severance policy; provided, however, that Buyer may provide such
benefits through its own severance pay plan to the extent that such plan is no
less favorable, in the aggregate, than the Company's severance policy, in the
aggregate; and
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CONFIDENTIAL TREATMENT REQUESTED
- --------------------------------
The asterisked portions of this document have been omitted and are filed
separately with the Commission.
provided, further, that Buyer shall not be obligated to provide severance
benefits to (1) any Employee who obtains employment with a successor employer as
a result of a corporate transaction, (2) any Employee who is entitled to
severance, salary continuation or similar payments under a contract entered into
between the Employee and the Company (including, but not limited to, change in
control severance agreements), (3) any employee who is terminated for gross
misconduct in connection with his employment, and (4) any non-U.S. Employee who
is entitled to severance, salary continuation or similar payments under
applicable foreign law. Buyer agrees to honor all Company Compensation and
Benefit Plans pursuant to their terms, including without limitation the
Company's change in control severance agreements and the Company's Special
Incentive Plan including the Sharing Bonus Plan contemplated thereby (the
"Special Incentive Plan"), and to ensure that a full allocation of the "pool"
under the Special Incentive Plan is made to Employees. With respect to the
Special Incentive Plan and the Sharing Bonus Plan, Buyer shall cause the Company
to make all payments thereunder pursuant to its terms without amendment or
modification thereof unless in respect of a payment to any particular
participant in the Special Incentive Plan such participant shall agree to any
such amendment or modification. Sellers recognize and will use their reasonable
best efforts consistent with the terms of the Special Incentive Plan to
encourage essential managers of the Company and its Subsidiaries to remain to
ensure an orderly transition for the long-term success of the combined
organization of the Buyer and the Company. *******************************
*******************************************************************************
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**************** Employees who continue employment shall be given credit for all
service with the Company or any Subsidiary (or service credited by the Company
or any Subsidiary for similar plans, programs or policies) under (i) all
employee benefit and fringe benefit plans, programs and policies of the Company
or Buyer in which they become participants for purposes of eligibility, vesting
and
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benefit accrual (other than benefit accrual under tax qualified defined benefit
plans) and (ii) severance plans for purposes of calculating the amount of each
such Employee's severance benefits.
(b) If Employees become eligible to participate in a medical,
dental or health plan of Buyer or its Affiliates, Buyer shall cause such plan to
(i) waive any preexisting condition limitations for conditions covered under the
applicable medical, health or dental plans of the Company or any Company
Subsidiary (the "Company Welfare Plans") and (ii) honor any deductible and
out-of-pocket expenses incurred by the Employees and their beneficiaries under
the Company Welfare Plans during the portion of 1997 preceding the Closing. If
Employees become eligible to participate in a group term life insurance plan
maintained by Buyer or its Affiliates, Buyer shall cause such plan to waive any
medical certification for such Employees up to the amount of coverage the
Employees had under the life insurance plan of the Company or any Company
Subsidiary (but subject to any limits on the maximum amount of coverage under
Buyer's life insurance plan).
(c) Sellers, the Company and Buyer acknowledge and agree that
upon the Closing a "change in control" of the Company shall have occurred for
purposes of the Company'schange in control severance agreements, the Special
IncentivePlan, the Company's Long-Term Incentive Plan and the Company's
Supplemental Executive Retirement Plan. The Company and Sellers shall cooperate
in good faith in connection with any effort by Buyer to obtain noncompetition
agreements with certain key Employees of the Company to be identified by Buyer.
(d) Effective as of the Closing Date, each of the Sellers, for
itself and on behalf of each of its beneficiaries, hereby waives and releases
the Company and its Subsidiaries from any claims they may have against the
Company or any such Subsidiary arising in such Seller's capacity as a
stockholder of the Company.
(e) Immediately prior to the Closing, the Company shall cease,
and shall cause its employee benefit plans to cease, providing any health
insurance or other benefits to any employees of the Plantation Yacht Harbor
Motel ("PYHM"). Buyer and its employee benefit plans shall not be obligated to
provide health insurance or other benefits to any employees of the Plantation
Yacht Harbor Motel.
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(f) Neither the provisions of this Section 7.4, nor this
Agreement in general, are intended to confer any rights or remedies upon any
Employees, any former employee, or any other agent or representative of the
Company or any of its Subsidiaries, or any of their beneficiaries or dependents.
Section 7.5 Retention of Books and Records.
(a) Buyer shall retain, and cause the Company and each Company
Subsidiary to retain, all books and records relating to the benefit plans,
accounting or legal matters prior to the Closing for six (6) years from the date
hereof. Sellers shall have the right during business hours, upon reasonable
notice to Buyer or the Company, to access, inspect and make copies of any such
records reasonably necessary to the Sellers in connection with the enforcement
of their rights and the performance of their obligations under this Agreement
and the Indemnity Escrow Agreement.
(b) Subject to Section 11.3 hereof, Sellers may retain (i) one
photocopy of the materials included in the data room organized by the Company in
connection with the purchase and sale of the Shares, together with a copy of all
documents referred to in such materials, (ii) photocopies of all internal
correspondence and memoranda, valuations, investment banking presentations and
bids received from others in connection with the sale of the Shares, (iii)
photocopies of all consolidating and consolidated financial information and all
other accounting records prepared or used in connection with the preparation of
the Company Financial Information and (iv) photocopies of all other books and
records that the Sellers deem necessary or important in connection with the
enforcement of any of their rights or the performance of any of their
obligations under this Agreement. All original documents of whatever kind or
nature and all books and records relating to the Company and each Company
Subsidiary shall be delivered to Buyer; by way of example only and not
limitation, such books and records shall include all environmental
investigations, studies, audits, tests, reviews or other analyses conducted by,
or relating to, the Company or any Company Subsidiary or relating to any of the
properties owned or used by the Company or any Company Subsidiary.
(c) Notwithstanding Section 7.5(a) hereof, after the Closing,
Buyer shall maintain all books and records
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related to any Tax Returns in accordance with Section 6.9 hereof.
Section 7.6 Publicity. The initial press release regarding the
transactions contemplated by this Agreement shall be a joint press release
issued by the Company and Buyer, provided, however, that the Company shall be
able to inform its Employees or any works council representing any such
Employees of the transactions contemplated by this Agreement immediately prior
to the issuance of such initial press release. Thereafter, the Company and Buyer
shall each consult with the other prior to issuing any press release or
otherwise making a public announcement with respect to the transactions
contemplated by this Agreement and prior to making any filings with any third
party or Governmental Entity (including any securities exchange) with respect to
such transactions, except to the extent that any such issuance, announcement or
filing is required by Law (or by obligation pursuant to any listing agreement
with or rule of any national securities exchange).
Section 7.7 Expenses. Whether or not the transactions
contemplated hereby are consummated, costs and expenses (including fees and
expenses of counsel and financial advisors) incurred in connection with such
transactions (i) if incurred by the Company or any Seller shall be paid by the
Company; provided, that if the Closing occurs such expenses shall not exceed
$15,000,000 and (ii) if incurred by Buyer, by Buyer. Notwithstanding the
foregoing, Buyer shall pay the full amount of the HSR Filing fee. In the event
of termination of this Agreement, the obligation of each party to pay its own
expenses will be subject to any rights of such party arising from a breach of
this Agreement by another party.
Section 7.8 Plant Closings. (a) Buyer shall not, and shall cause
the Company and each Company Subsidiary not to, at any time prior to the 61st
day following the Closing Date, without fully complying with the notice and
other requirements of the WARN Act, effectuate (i) a "plant closing" (as defined
in the WARN Act) affecting any site of employment or one or more facilities or
operating units within any site of employment of the Company or any Company
Subsidiary, or (ii) a "mass layoff" (as defined in the WARN Act) affecting any
site of employment of the Company or any Company Subsidiary. If Buyer takes any
action within 180 days after the Closing Date which independently, or in
connection with any reduction in the size of the Company's
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work force occurring within the ninety day period prior to the Closing Date,
could be construed as a "plant closing" or "mass layoff," as those terms are
defined in the WARN Act, Buyer shall be solely responsible for providing any
notice required by the WARN Act and for making payments, if any, and paying all
penalties and costs, if any, which may result from any failure to provide such
notice. In connection with any reduction of the Company's non-U.S. Employees,
Buyer shall be solely responsible for providing any notice required by any
applicable law of any foreign jurisdiction that is similar in intent, scope or
purpose to the WARN Act and for making payments, if any, and paying all
penalties and costs, if any, which may result from any failure to provide such
notice.
(b) Buyer agrees to maintain, for at least two (2) years after
the Closing Date, a significant presence in Dade County, Florida through the
continuing conduct of the Company's business.
Section 7.9 Escrow Agreements. At the Closing, Buyer, Sellers and
the escrow agent (the "Escrow Agent") shall enter into an escrow agreement
substantially in the form of Exhibit 7.9 hereto (the "Indemnity Escrow
Agreement"). Buyer shall designate the Escrow Agent subject to deposited by
approval which shall not be unreasonably withheld. At the Closing, Buyer will
deliver an amount equal to $50,000,000 in cash to be deposited in an account
funded by Sellers as provided below with the Escrow Agent in accordance with the
terms of the Indemnity Escrow Agreement. The Escrow Fund shall secure certain
obligations of the Sellers pursuant to this Agreement. As is set forth with more
particularity in the Indemnity Escrow Agreement, the Escrow Agent shall
distribute to the Sellers one-half (1/2) of the amount of the Escrow Fund on the
second anniversary of the Closing Date, less any amounts reserved pursuant to
Section 3(b) of the Indemnity Escrow Agreement, and shall distribute to the
Sellers the remaining amount of the Escrow Fund on the third anniversary of the
Closing Date, less any amounts reserved pursuant to Section 3(b) of the
Indemnity Escrow Agreement, and subject to asserted claims for indemnification,
it will thereafter release the Escrow Fund to the Sellers. Interests in the
Escrow Fund will be attributed ratably to each Seller in an amount equal to such
Seller's proportionate interest in the Total Purchase Price. In respect of the
cash deposited in the Escrow Fund, the amount of the Total Purchase Price
deliverable hereunder to each Seller will be reduced by the amount to be
deposited by
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Buyer with the Escrow Agent as part of the Escrow Fund, in each case as such
amounts are set forth on Annex A.
Section 7.10 Quarterly Financial Statements. Not later than 45
days after the end of any fiscal quarter, unless the Closing shall have
occurred, the Company will provide to Buyer the balance sheet, statement of
income, changes in stockholders' equity and statement of cash flows for such
fiscal quarter. Such quarterly financial statements will be prepared in
accordance with GAAP applied on a basis consistent with the Company Financial
Information, and will present fairly, the consolidated financial position of the
Company and its Subsidiaries as of last day of such quarter, and the
consolidated statements of income, changes in stockholders' equity and cash
flows of the Company and its Subsidiaries for the quarter then ended.
Section 7.11 Consents to Assignment. After the date hereof, and
prior to the Closing Date, the Sellers and the Company will use reasonable
efforts to cooperate with the Buyer to attempt to secure the agreement of the
counterparties to the Company's Material Contracts that require consents to
continue such Company Material Contracts following the Closing.
Section 7.12 Certain Deliveries at Closing. Prior to the Closing
Date, the Sellers shall deliver to the Buyer a list of all of the Company's and
its Subsidiaries': (i) real property leases and the location of each subject
parcel of real property; (ii) mortgage loans outstanding on the Company Owned
Real Property; and (iii) personal property leases for individual items of
personal property having a value in excess of $100,000.
Section 7.13 Use and Ownership of "Coulter" Name. Prior to the
Closing Date, the Sellers, the Company, Coulter Pharmaceutical, Inc. and Coulter
Cellular Therapies, Inc. shall have entered into an intellectual property
agreement among them with respect to the "Coulter" name (and variants thereof),
which agreement shall provide that: (a) the ownership of that name is vested in
the Company and will remain so vested after the Closing; (b) Coulter
Pharmaceutical, Inc. and Coulter Cellular Therapies, Inc. shall receive a
perpetual, royalty-free license from the Company to use that name in their
respective operations following the Closing; provided, that such name may not be
used by either of those entities in association with any business or operations
competitive to the businesses or
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operations of Buyer, the Company and their respective Subsidiaries; and (c)
without limiting the provisions of the Non-Competition Agreements, none of the
Sellers may use that name in association with any business or operation
competitive to the businesses or operation of Buyer, the Company or their
respective Subsidiaries.
Section 7.14 Name Change. Buyer has informed the Sellers that its
Board of Directors has determined to change the name of Buyer to
Beckman/Coulter, Inc., or a name substantially identical to Beckman/Coulter,
Inc., and agrees with the Sellers that at the first annual meeting of its
shareholders which follows the Closing Date, it will recommend and propose such
name change to its shareholders and use its commercially reasonable efforts to
cause such name change to be approved by its shareholders.
Section 7.15 PYHM Arrangements. At or prior to Closing, the
Sellers will cause the Company and PYHM to terminate or settle all guarantees,
loans or other such financial commitments between the Company on the one hand
and PYHM on the other hand. At closing, the Company shall enter into a
transition services agreement with PYHM pursuant to which the Company will
continue to provide the services currently being provided to PYHM until the
earliest practicable date by which PYHM can make alternative arrangements for
such services; provided, that the term of such transition services agreement
shall not be longer than six months.
Section 7.16 Further Assurances. At any time and from time to
time after the Closing Date, the parties hereto agree to (a) furnish upon
request to each other such further assurances, information, documents,
instruments of transfer or assignment, files and books and records, (b) promptly
execute, acknowledge, and deliver any such further assurances, documents,
instruments of transfer or assignment, files and books and records, and (c) do
all such further acts and things, all as such other party may reasonably request
for the purpose of carrying out the intent of this Agreement and the documents
referred to herein. In connection with any subsequent public filings or
securities offerings that Buyer may do that include a description of or
financials with respect to the operations of the Company, Sellers will use their
best efforts to cause the auditors of the Company to cooperate with Buyer in all
respects including, but not limited to, encouraging them to
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provide customary comfort letters with respect to the audits they have
conducted.
ARTICLE VIII
CONDITIONS TO CLOSING
Section 8.1 Conditions to Each Sale and Purchase Obligation. The
obligation of each Seller to sell his Shares, and the obligation of Buyer to
purchase such Seller's Shares, are subject to the satisfaction or waiver at or
prior to the Closing Time of each of the following conditions:
(a) Regulatory Consents. All waiting periods applicable under the
HSR Act or pursuant to the applicable law enforced by or rules and regulations
of any Government Antitrust Entity to the consummation of the sales of the Total
Shares shall have expired or been terminated. In addition, all filings required
by Law to be made prior to the Closing Time by the Company or Buyer or any of
their respective Subsidiaries or by any Seller with, and all consents, approvals
and authorizations required by Law to be obtained prior to the Closing Time by
the Company or Buyer or any of their respective Subsidiaries or by any Seller
from, any Governmental Entity (collectively, "Governmental Consents") in order
to consummate the sales of the Total Shares shall have been made or obtained (as
the case may be), except where the failure to obtain any such Governmental
Consents, individually or in the aggregate, is not reasonably likely to have a
Material Adverse Effect on the Company or Buyer or materially impair the ability
of Buyer or Sellers or the Company to consummate the transactions contemplated
by this Agreement or provide a reasonable basis to conclude that the parties
hereto or any of their respective Representatives would be subject to the risk
of criminal liability if the sales of the Total Shares were consummated.
(b) Litigation. No court or Governmental Entity of competent
jurisdiction shall have enacted, issued, promulgated, enforced or entered any
statute, rule, regulation, judgment, decree, injunction or other order (whether
temporary, preliminary or permanent) that is in effect and restrains, enjoins or
otherwise prohibits consummation of the transactions contemplated by this
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Agreement and the Indemnity Escrow Agreement (collectively, an "Order").
Section 8.2 Conditions to Each Purchase Obligation. The
obligation of Buyer to purchase the Shares of all the Sellers is also subject to
the satisfaction or waiver by Buyer prior to the Closing Time of the following
conditions:
(a) Representations and Warranties. The representations and
warranties of the Sellers with regard to the Company set forth in Article III
hereof and the representations and warranties of the Sellers set forth in
Article IV hereof that are qualified by materiality shall be true and correct as
of the date of this Agreement and as of the Closing Time as though made on and
as of the Closing Time (except to the extent any such representation or warranty
expressly speaks as of an earlier time) and the representations and warranties
of the Sellers on behalf of the Company set forth in Article III hereof and the
representations and warranties of the Sellers set forth in Article IV hereof
that are not qualified by materiality shall be true and correct as of the date
of this Agreement and as of the Closing Time (except to the extent any such
representation or warranty expressly speaks as of an earlier time), except for
such failures to be so true and correct which have not had, or are not
reasonably likely to have, a Material Adverse Effect on the Company, and Buyer
shall have received a certificate signed on behalf of the Sellers by the
Sellers' Assignees and on behalf of the Company by an Executive Vice President
of the Company and dated as of the Closing Date to such effect with respect to
the Seller's representations and warranties in Article III and Article IV
hereof.
(b) Performance of Obligations. The Company and the Sellers shall
have performed in all material respects all obligations required to be performed
by them under this Agreement at or prior to the Closing Time, and Buyer shall
have received a certificate signed on behalf of the Company by an Executive Vice
President of the Company and dated as of the Closing Date to such effect with
respect to the Company's obligations and from the Sellers.
(c) Receipt of Shares. Buyer shall have received from Sellers a
certificate or certificates evidencing all of the then issued and outstanding
Shares, duly endorsed in blank or accompanied by stock powers duly executed in
blank,
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in proper form for transfer, with all signatures guaranteed and with any
requisite stock transfer tax stamps properly affixed thereto. There shall not
have been made by any Person any claim asserting that such Person (i) is the
holder or the beneficial owner of, or has the right to acquire or to obtain
beneficial ownership of, any stock of, or any other voting, equity, or ownership
interest in, the Company or any Company Subsidiary, or (ii) is entitled to all
or any portion of the Total Purchase Price payable for the Shares.
(d) The Joseph R. Coulter Jr. Trust shall have obtained a
certificate of release from the Federal Government and a similar release
document from the State of Florida such that the trust shall be released from
all Federal and State of Florida estate tax liens to which the Shares owned by
the trust are or may be subject.
(e) Each Seller shall have furnished to Buyer an affidavit
stating, under penalty of perjury, such Seller's United States taxpayer
identification number and that Seller is not a foreign person pursuant to
section 1445(b)(2) of the Code.
(f) Buyer shall have received from Wallace H. Coulter, Joseph R.
Coulter III and Laura G. Coulter-Jones signed copies of a noncompete agreement
including customary terms and providing for a term of three (3) years.
Section 8.3 Conditions to each Seller's Obligation. The
obligation of each Seller to sell its Shares is also subject to the satisfaction
or waiver prior to the Closing Time of the following conditions:
(a) Representations and Warranties. The representations and
warranties of Buyer set forth in Article V that are qualified by materiality
shall be true and correct as of the date of this Agreement and as of the Closing
Time as though made on and as of the Closing Time (except to the extent any such
representation and warranty expressly speaks as of an earlier time) and the
representations and warranties of Buyer set forth in Article V hereof that are
not qualified by materiality shall be true and correct as of the date of this
Agreement and as of the Closing Time (except to the extent any such
representation or warranty expressly speaks as of an earlier time), except for
such failures to be so true and correct which have not had, or are not
reasonably likely to have, a Material
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Adverse Effect on the Buyer, and the Sellers shall have received a certificate
signed on behalf of Buyer by the Chief Financial Officer of Buyer and dated as
of the Closing Date to such effect.
(b) Performance of Obligations. Buyer shall have performed in all
material respects all obligations required to be performed by it under this
Agreement and the Indemnity Escrow Agreement at or prior to the Closing Time,
and the Sellers shall have received a certificate signed on behalf of Buyer by
the Chief Financial Officer of Buyer and dated as of the Closing Date to such
effect.
(c) Receipt of Total Purchase Price. The Sellers shall have
received from Buyer payment of the Total Purchase Price in the amount and
proportion required to be made pursuant to Section 2.1 hereof.
ARTICLE IX
TERMINATION
Section 9.1 Termination. Notwithstanding anything in this
Agreement to the contrary, this Agreement and the transactions contemplated
herein may, by written notice given at any time prior to the Closing, be
terminated:
(a) by Buyer and the Sellers, upon the mutual written consent of
both Buyer and the Sellers;
(b) by either Buyer or the Sellers, without liability to the
terminating party on account of such termination if the Closing has not
occurred (other than through the failure of any party seeking to
terminate this Agreement to fully comply with its obligations hereunder)
on or before December 31, 1997; provided, that if the Company and/or
Buyer shall receive a request for additional information from any
Governmental Antitrust Entity such date shall be extended to March 31,
1998; and
(c) by either Buyer or the Sellers, if any Governmental Entity
shall have issued, enacted, entered, promulgated or enforced any Order,
or taken any other action restraining, enjoining or otherwise
prohibiting the sales of the Shares or the consummation
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of the Indemnity Escrow Agreement contemplated herein and such Order or
other action shall have become final and non-appealable; provided, that
the right to terminate this Agreement pursuant to this Section 9.1(c)
shall not be available to any party that has failed to fully comply
with its obligations hereunder, including its obligation under Section
7.2 hereof, in any manner that shall have proximately contributed to
the occurrence of such Order.
Section 9.2 Termination by the Sellers. This Agreement may be
terminated and the transactions contemplated by this Agreement may be abandoned
by action of the Sellers at any time before the Closing if there has been a
material breach by Buyer of any representation, warranty, covenant or agreement
contained in this Agreement that is not curable or, if curable, is not cured
within 15 days after written notice of such breach is given by the Sellers to
the party committing such breach; provided, however, that termination pursuant
to this Section 9.2 shall not relieve the breaching party of liability for such
breach or otherwise.
Section 9.3 Termination by Buyer. This Agreement may be
terminated and the transactions contemplated by this Agreement may be abandoned
by Buyer at any time before the Closing if there has been a material breach by
the Sellers or the Company (considered as a whole) of any representation,
warranty, covenant or agreement contained in this Agreement that is not curable
or, if curable, is not cured within 15 days after written notice of such breach
is given by Buyer to the Company or Sellers, as the case may be, committing such
breach; provided, however, that termination pursuant to this Section 9.3 shall
not relieve the breaching party of liability for such breach or otherwise.
Section 9.4 Effect of Termination and Abandonment. In the event
of termination of this Agreement and the abandonment of the transactions
contemplated by this Agreement pursuant to this Article IX, this Agreement
(other than as set forth in Section 11.12 hereof) shall become void and of no
effect and no party hereto (or any of their respective Representatives or
stockholders) shall have any liability or further obligation to any other party
hereto, except as provided in this Section 9.4; provided, however, that if this
Agreement is terminated by a party because of the breach of this Agreement by
the other party or because
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one or more of the conditions to the terminating party's obligations under this
Agreement is not satisfied as a result of the other party's failure to fully
comply with its obligations under this Agreement, the terminating party's rights
to pursue all legal remedies will survive such termination unimpaired.
ARTICLE X
SURVIVAL AND INDEMNIFICATION
Section 10.1 Survival of Representations, Warranties, Covenants
and Agreements; Knowledge of Breach. (a) Subject to the proviso hereafter and
notwithstanding any otherwise applicable statute of limitations, the
representations and warranties included or provided for herein shall survive the
Closing until the second anniversary of the Closing Date; provided, however,
that any representation or warranty contained in Article IV hereof and all
claims and causes of action with respect thereto shall survive forever, any
representations and warranties contained in Sections 3.2, 3.4, 3.13 and 3.19
shall survive until the expiration of the applicable statute of limitations
including any waivers or extensions thereof, and any representations and
warranties contained in Section 3.16 and all claims and causes of action with
respect thereto shall survive for three (3) years from the Closing Date. The
covenants and other agreements of the Buyer and Seller contained in this
Agreement shall survive the Closing until the date or dates specified therein or
the expiration of the applicable statute of limitations (including any waivers
or extensions thereof) with respect to such matters, whichever is later (it
being understood that any covenant or agreement contained in Articles II, IV and
VI hereof shall survive the Closing until the expiration of the applicable
statute of limitations (including any waivers or extensions thereof) with
respect to such matters). Except with respect to the representations,
warranties, covenants or agreements contained in Article II, Sections 3.2, 3.4,
3.19, Article IV, Article VI and the proviso in the first sentence of Section
7.7 hereof (as to which the Cap and the Deductible shall not apply) and Section
3.13 (as to which the Deductible shall not apply), in no event shall Buyer be
liable to Sellers or Sellers be liable to Buyer, as the case may be, for any
breach of the representations, warranties, covenants and agreements included or
provided for herein or in any schedule or certificate or other document
delivered
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pursuant to this Agreement, unless and until all claims for which damages are
recoverable hereunder by Buyer or Seller, as the case may be, exceed $10,000,000
(the "Deductible"), in which case Buyer or Seller, as the case may be, shall be
entitled to damages in the amount up to $60,000,000 in the aggregate (inclusive
of any claims which are covered in whole or in part by the Deductible)(the
"Cap"); provided, however, that Buyer or Seller, as the case may be, shall
(subject to the exceptions provided herein) be liable only in respect of
recoverable damages for claims that exceed the Deductible and are less than the
Cap; provided, further, that exclusively for purposes of this Article X, in
determining whether there is a breach of, or action or state of facts
inconsistent with, any representation or warranty, each such representation
shall be read without regard to any terms such as "material", "materiality" and
"Material Adverse Effect", but no breach of any such representation or warranty
shall be deemed to have occurred unless the actual losses or damages incurred as
a result thereof is in excess of $1,000,000 (the "Damage Threshold") (other than
a representation or warranty contained in Section 3.13 as to which the Damage
Threshold shall not apply) for each individual proven actual loss or damage
incurred (or group of actual losses or damages incurred arising from the same
event, condition or course of conduct) for which indemnification is being sought
(whether or not such claim is being made against the Deductible). The
termination of any representation, warranty, covenant or agreement as provided
above shall not affect the rights of a Person seeking the recovery of Damages
hereunder in respect of any claims made by such Person prior to the expiration
of the applicable survival period provided herein (or the appropriate statute of
limitations period, as applicable).
(b) No party hereto shall be deemed to have breached any
representation, warranty, covenant or agreement if (i) such party shall have
notified the other parties hereto in writing, not less than 3 Business Days
prior to the Closing Date (except that with respect to any facts and
circumstances which become known after 3 Business Days prior to the Closing
Date, notice shall be deemed timely if given as promptly as practicable), of the
breach of, or inaccuracy in, or of any facts or circumstances constituting or
resulting in the breach of or inaccuracy in, such representation, warranty,
covenant or agreement, specifically referring to the provisions of this
Agreement so breached or rendered inaccurate, and (ii) such other parties have
permitted the Closing to occur and, for
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CONFIDENTIAL TREATMENT REQUESTED
- --------------------------------
The asterisked portions of this document have been omitted and are filed
separately with the Commission.
purposes of this Agreement, are thereby deemed to have waived such breach or
inaccuracy; provided, however, that a disclosure pursuant to this Section
10.1(b) shall not prejudice the rights of the parties pursuant to Article VIII
hereof not to consummate the transactions contemplated by this Agreement or to
recover Damages incurred as a result of such breach or inaccuracy.
Section 10.2 Indemnification.
(a) For a period commencing on the Closing Date and ending, as
the case may be, upon the expiration of the periods specified in Section 10.1(a)
hereof, Sellers on the one hand, or Buyer, on the other hand (the "Indemnifying
Party"), shall, subject to the limitations set forth in Sections 10.1(a) and
10.1(b) hereof, indemnify respectively Buyer, on the one hand, or Sellers, on
the other hand, as the case may be (the "Indemnified Party"), against and in
respect of all losses, damages, liabilities, costs and expenses (including
reasonable attorneys' fees and expenses incurred in investigating, preparing or
defending any claims covered hereby) ("Damages") sustained or incurred by the
Buyer or the Sellers or any of their respective Subsidiaries, directors and
Representatives arising out of any breaches of the Indemnifying Party's or the
Company's representations, warranties, covenants and agreements set forth in
this Agreement. Any payments pursuant to this Section 10.2 shall be treated as
an adjustment to the Total Purchase Price for all Tax purposes.
(b) In addition to the indemnification provided for in Section
10.2(a) hereof, Sellers shall indemnify Buyer and the Company against and in
respect of all Damages sustained or incurred or arising out of that certain
*******************************************************************************
******************************************************************************
********************************************************************************
*************************************** that is described in *******************
*******************; provided, that in no event shall the Sellers be liable to
Buyer or the Company, as the case may be, in respect of the indemnity provided
for in this Section 10.2(b) (A) unless and until all claims for Damages which
are recoverable under this Section 10.2(b) (i) exceed $5,000,000 (the "Special
Deductible") and (ii) exceed, when taken together with all other applicable
indemnification obligations of the Company, the Deductible and (B) to the extent
that any such claims for Damages exceed the Cap; provided, further, **********
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CONFIDENTIAL TREATMENT REQUESTED
- --------------------------------
The asterisked portions of this document have been omitted and are filed
separately with the Commission.
********************************************************************* during and
for such times as the Sellers are not liable for Damages under this Section
10.2(b) on account of the Special Deductible or the Deductible not having been
exceeded or the Cap having been exceeded. The indemnity provided in this Section
10.2(b) shall survive until sixty (60) days after ******************************
*************************** or 60 days after ***********************************
********************************************************************************
****************************************************************.
(c) In addition to the indemnification provided for in Sections
10.2(a) and 10.2(b) hereof, Sellers shall indemnify Buyer or the Company against
and in respect of (i) environmental liabilities sustained or incurred or
resulting from any heavy metal soil contamination at the Company's printed
circuit lab facility located at 1130-40 West 23rd Street, Hialeah, Florida and
(ii) any groundwater contamination caused by the underground storage tanks
located (A) between buildings 4 and 5 of the Coulter Technology Center at 11800
S.W. 147th Ave., Miami, Florida; (B) at the Company's Education Center located
at 14175 N.W. 60th Avenue, Miami Lakes, Florida; and (C) the Immunotech facility
in Marseilles, France, each of which items is disclosed in Section 3.16 to the
Disclosure Schedule; provided, that in no event shall the Sellers be liable to
Buyer or the Company, as the case may be, in respect of the indemnity provided
for in this Section 10.2(c) (X) unless and until all claims which are
recoverable under this Section 10.2(c) exceed, when taken together with all
other applicable indemnification obligations of the Company, the Deductible and
(Y) to the extent that any such claims for Damages exceed the Cap. The indemnity
provided in this Section 10.2(c) shall survive until the third anniversary of
the Closing Date, and claims may be made under this Section 10.2(c) until such
third anniversary of the Closing Date.
(d) Each of the Sellers for itself on behalf of its beneficiaries
releases and waives any right of indemnity and contribution from the Company and
its Subsidiaries.
(e) Subject to the exceptions which follow, the indemnity
provided herein as it relates to this Agreement and the transactions
contemplated by this Agreement shall be the sole and exclusive remedy of the
parties hereto, their
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Affiliates, successors and assigns with respect to any and all claims for
Damages sustained or incurred arising out of this Agreement and the transactions
contemplated by this Agreement, except for (i) the right of the parties hereto
to seek specific performance of the Indemnity Escrow Agreement, the
Noncompetition Agreements and the obligations set forth in Article II, Sections
7.4, 7.5, 7.8 and 7.9 of this Agreement. Any and all amounts applied to the
Deductible or payments to Buyer hereunder in respect of any Damages shall be
deducted from the Cap and Buyer's sole recourse to the Sellers hereunder shall
be to the cash deposited in the Escrow Fund pursuant to Section 7.9 hereof,
except for (i) claims with respect to breaches of the representations,
warranties, covenants and agreements set forth in Articles II, IV and VI hereof,
Sections 3.2, 3.4 and 3.19 hereof and the proviso in the first sentence of
Section 7.7 hereof, with respect to which Buyer's first recourse shall be to the
cash deposited in such Escrow Fund and thereafter shall be to the Sellers
directly and (ii) claims with respect to Section 6.1(a) hereof, with respect to
which Buyer's only recourse shall be the Joseph R. Coulter, Jr. Trust directly.
Section 10.3 Method of Asserting Claims, etc. All claims for
indemnification by any Indemnified Party hereunder shall be asserted and
resolved as set forth in this Section 10.3. In the event that any written claim
or demand for which an Indemnifying Party could be liable to any Indemnified
Party hereunder is asserted against or sought to be collected from any
Indemnified Party by a third party (a "Third Party Claim"), such Indemnified
Party shall promptly, but in no event more than 15 days following such
Indemnified Party's receipt of such claim or demand, notify the Indemnifying
Party of such claim or demand and the amount or the estimated amount thereof to
the extent then feasible (which estimate shall not in any manner prejudice the
right of the Indemnified Party to indemnification to the fullest extent provided
hereunder) (the "Third Party Claim Notice") and in the event that an Indemnified
Party shall assert a claim for indemnity under this Article X, not including a
third party claim, the Indemnified Party shall notify the Indemnifying Party
promptly following its discovery of the facts or circumstances giving rise
thereto (together, with a Third Party Claim Notice, a "Claim Notice"); provided,
that no such notice need be provided to an Indemnifying Party if the Deductible
has not been exceeded and will not be exceeded by such claim or demand; and
provided, further, that the failure to notify on the
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part of the Indemnified Party in the manner set forth herein shall not foreclose
any rights otherwise available to such Indemnified Party hereunder, except to
the extent that the Indemnifying Party is prejudiced by such failure to notify.
The Indemnifying Party shall have 30 days from the personal delivery or mailing
of the Third Party Claim Notice (except that such a period shall be decreased to
a time 10 days before a scheduled appearance date in a litigated matter) (the
"Notice Period") to notify the Indemnified Party (i) whether or not the
Indemnifying Party disputes the liability of the Indemnifying Party to the
Indemnified Party hereunder with respect to such claim or demand and (ii)
whether or not it desires to defend the Indemnified Party against such claim or
demand, which it shall not be entitled to do until the Deductible (if
applicable) is exceeded. All costs and expenses incurred by the Indemnifying
Party in defending such claim or demand shall be a liability of, and shall be
paid by, the Indemnifying Party; provided, however, that the amount of such
expenses shall be a liability of the Indemnifying Party hereunder, subject to
the limitations set forth in Section 10.1 hereof. In the event that the
Indemnifying Party notifies the Indemnified Party within the Notice Period that
it desires to defend the Indemnified Party against such claim or demand, which
it shall not be entitled to do until the Deductible (if applicable) is exceeded
and except as hereinafter provided, the Indemnifying Party shall have the right
to defend the Indemnified Party by appropriate proceedings and by counsel
reasonably acceptable to the Indemnified Party. If any Indemnified Party desires
to participate in, but not control, any such defense or settlement it may do so
at its sole cost and expense. The Indemnified Party shall not settle a claim or
demand without the consent of the Indemnifying Party, which consent shall not be
unreasonably denied or delayed. The Indemnifying Party shall not, without the
prior written consent of the Indemnified Party, settle, compromise or offer to
settle or compromise any such claim or demand on a basis which would result in a
settlement agreement or the imposition of a consent order, injunction or decree
which would restrict the future activity or conduct of, mandate the exchange or
licensing of intellectual property by, or which would otherwise have a Material
Adverse Effect on, the Indemnified Party or any subsidiary or Affiliate thereof.
If the Indemnifying Party elects not to defend the Indemnified Party against
such claim or demand, whether by not giving the Indemnified Party timely notice
as provided above or otherwise, then the amount of any such claim or demand, or,
if the same be
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contested by the Indemnified Party, then that portion of any such
claim or demand as to which such defense is unsuccessful (and all reasonable
costs and expenses pertaining to such defense) shall be the liability of the
Indemnifying Party hereunder, subject to the limitations set forth in Section
10.1 hereof. To the extent the Indemnifying Party shall control or participate
in the defense or settlement of any third party claim or demand, the Indemnified
Party will give to the Indemnifying Party and its counsel reasonable access to
all business records and other documents relevant to such defense or settlement,
and shall permit them to consult with the employees and counsel of the
Indemnified Party. The Indemnified Party shall use its reasonable best efforts
in the defense of all such claims, and in connection therewith shall be entitled
to reimbursement by the Indemnifying Party of expenses directly related to
efforts undertaken at the specific request of the Indemnifying Party. All
actions to be taken by any of the Sellers hereunder shall be taken in accordance
with Section 2.3 hereof.
Section 10.4 Tax Indemnification. To the extent the procedures
relating to Taxes in Article VI hereof are more specific to or in conflict with
the indemnification procedures in Section 10.3 hereof, the Article VI procedures
shall govern any claim for indemnification which relates to any Taxes or Tax
Returns.
ARTICLE XI
MISCELLANEOUS
Section 11.1 Modification or Amendment. This Agreement may be
modified or amended only by written agreement executed and delivered by the
Sellers, Company and Buyer. Any such modification or amendment shall be binding
on all parties hereto.
Section 11.2 Waiver of Conditions. The conditions to each of the
parties' obligations to consummate the sales of Shares are for the sole benefit
of such party. Such conditions may be waived only by the Sellers, with respect
to any condition to the Sellers' obligations, or by Buyer, with respect to any
condition to its obligations, in whole or in part to the extent permitted by
applicable law.
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Section 11.3 Assignment. This Agreement shall be binding upon,
and inure to the benefit of, the parties hereto and their respective successors
and permitted assigns, but, except as is permitted in the following sentence,
may not be assigned by either party without the prior written consent of the
other party hereto. So long as Buyer shall agree to continue to be bound hereby
and fully liable for all its obligations hereunder, Buyer may assign its rights
hereunder to a wholly owned Subsidiary of Buyer.
Section 11.4 Entire Agreement. This Agreement, the other
agreements referred to herein, and the Confidentiality Agreement, dated as of
April 28, 1997, between the Company and Buyer (the "Confidentiality Agreement")
constitute the entire agreement, and supersede all prior agreements,
understandings, representations and warranties, both oral and written, among the
parties hereto with respect to the subject matter hereof.
Section 11.5 Parties in Interest; No Third Party Beneficiaries.
This Agreement shall inure to the benefit of and be binding upon the parties
hereto and their respective successors and permitted assigns. This Agreement is
not intended to confer upon any Person other than the parties hereto any rights
or remedies hereunder.
Section 11.6 Obligations of Buyer and of the Company. Whenever
this Agreement requires a Subsidiary of Buyer to take any action, such
requirement shall be deemed to include an undertaking on the part of Buyer to
cause such Subsidiary to take such action. Whenever this Agreement requires a
Subsidiary of the Company to take any action, such requirement shall be deemed
to include an undertaking on the part of the Company to cause such Subsidiary to
take such action.
Section 11.7 Counterparts. This Agreement and any amendments
hereto may be executed in one or more counterparts, each of which shall be
deemed to be an original instrument, and all such counterparts shall together
constitute the same agreement.
Section 11.8 Section Headings. The section and paragraph headings
and table of contents contained in this Agreement are for reference purposes
only and shall not in any way affect the meaning or interpretation of this
Agreement.
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Section 11.9 Notices. Any notice, request, instruction or other
document to be given hereunder by any party (or other Person referred to herein)
shall be deemed given if in writing and delivered personally or sent by
facsimile (if a facsimile number for the intended recipient is provided in this
Section or in a notice given as provided in this Section), by registered or
certified mail (return receipt requested) or by national courier service:
(a) if to the Company, to:
Coulter Corporation
Coulter Technology Center
11800 Southwest 147th Avenue
Miami, Florida 33196-2500
Telephone: (305) 380-5000
Facsimile: (305) 380-8312
Attention: All Executive Vice Presidents
With a copy (prior to the Closing) to:
Sullivan & Cromwell
125 Broad Street
New York, New York 10004
Attention: Francis J. Aquila
Telephone: 212-558-4000
Facsimile: 212-558-3588
(b) if to any Seller, to:
The address specified for such Seller in Annex C
With a copy to:
Sullivan & Cromwell
125 Broad Street
New York, New York 10004
Attention: Francis J. Aquila
Telephone: 212-558-4000
Facsimile: 212-558-3588
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(c) if to Buyer, to:
Beckman Instruments, Inc.
2500 Harbor Boulevard
Fullerton, California 92834
Attention: President
With a copy to:
Beckman Instruments, Inc.
2500 Harbor Boulevard
Fullerton, California 92834
Attention: General Counsel
Facsimile: (714) 773-7936
or to such other Persons or addresses as may be designated in writing by the
party to receive such notice as provided above. Any notice given by mail,
national courier service or telegram shall be effective when received. Any
notice given by facsimile shall be effective when the appropriate facsimile
answerback is received.
SECTION 11.10 GOVERNING LAW AND VENUE; WAIVER OF JURY TRIAL. (a)
THIS AGREEMENT SHALL BE DEEMED TO BE MADE IN AND IN ALL RESPECTS SHALL BE
INTERPRETED, CONSTRUED AND GOVERNED BY AND IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK, WITHOUT GIVING EFFECT TO PRINCIPLES OF CONFLICTS OF
LAWS THEREOF. The parties hereby irrevocably submit to the jurisdiction of the
Federal courts of the United States of America located in The Borough of
Manhattan, The City of New York solely in respect of the interpretation and
enforcement of the provisions of this Agreement, and in respect of the
transactions contemplated hereby, and hereby waive, and agree not to assert, as
a defense in any action, suit or proceeding for the interpretation or
enforcement hereof, that it is not subject thereto or that such action, suit or
proceeding may not be brought or is not maintainable in said courts or that the
venue thereof may not be appropriate or that this Agreement may not be enforced
in or by such courts, and the parties hereto irrevocably agree that all claims
with respect to such action or proceeding shall be heard and determined in such
Federal court. The parties hereby consent to and grant any such court
jurisdiction over the person of such parties and over the subject matter of such
dispute and agree that mailing of process or other papers in connection with any
such action or proceeding in the manner provided in Section 11.9 hereof
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or in such other manner as may be permitted by law shall be valid and sufficient
service thereof.
(b) EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH
MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT
ISSUES, AND THEREFORE EACH SUCH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY
WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY
LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT,
OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. EACH PARTY CERTIFIES AND
ACKNOWLEDGES THAT (i) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY
HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE
EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (ii) EACH SUCH PARTY
UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (iii) EACH SUCH
PARTY MAKES THIS WAIVER VOLUNTARILY AND (iv) EACH SUCH PARTY HAS BEEN INDUCED TO
ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION 11.10.
Section 11.11 Severability. The provisions of this Agreement
shall be deemed severable and, to the fullest extent permitted by applicable
law, the invalidity or unenforceability of any provision shall not affect the
validity or enforceability of the other provisions hereof. If any provision of
this Agreement, or the application thereof to any Person or circumstance, is
invalid or unenforceable, then, to the fullest extent permitted by applicable
law, (a) a suitable and equitable provision shall be substituted therefor in
order to carry out, so far as may be valid and enforceable, the intent and
purpose of such invalid or unenforceable provision and (b) the remainder of this
Agreement and the application of such provision to other Persons or
circumstances shall not be affected by such invalidity or unenforceability, nor
shall such invalidity or unenforceability affect the validity or enforceability
of such provision, or the application thereof, in any other jurisdiction.
Section 11.12 Survival Following Termination This Article XI, the
agreements contained in Section 7.7 hereof (Expenses), Section 9.4 hereof
(Effect of Termination and Abandonment) and the Confidentiality Agreement shall
survive the termination of this Agreement pursuant to Article IX hereof.
-72-
<PAGE> 79
Section 11.13 Confidentiality. Sellers on behalf of themselves
and their trustees, employees, attorneys, auditors, bankers, advisors and
consultants (jointly "Sellers' Representatives") agree to and shall maintain in
confidence and not use, except for purposes specifically authorized by this
Agreement, any information obtained from the Company or any of its Subsidiaries
subsequent to the Closing Date. Sellers agree to and shall be liable for any
unauthorized disclosure or use of such information by Sellers or the Sellers'
Representatives.
Section 11.14 Exclusive Dealing. During the period from the date
of this Agreement to the Closing Date, none of Sellers nor any of the Sellers'
Representatives shall take any action to, directly or indirectly, encourage,
initiate, respond to inquiries or engage in discussions or negotiations with, or
provide any information to, any person, other than Buyer and its
representatives, concerning any purchase of the stock of the Company or any of
its subsidiaries or any merger, sale of substantial assets or similar
transaction involving the Company or any of its subsidiaries.
Section 11.15 Disclosure Schedule. The Disclosure Schedule
attached as Annex B is incorporated by reference in this Agreement and shall
form a part hereof as though set forth in full herein. If a disclosure is made
in one Section of the Disclosure Schedule, such disclosure will be deemed to
have been made also in any other Section of the Disclosure Schedule to the
extent that either (a) the relevance of such disclosure to such other Section or
Sections is reasonably apparent based upon the nature of the disclosure or the
description of the particular item in the Disclosure Schedule, or (b) there is a
specific cross-reference to such other Section or Sections as set forth in
Section 11.15 of the Disclosure Schedule hereto. The fact that any item or
information has been included in the Disclosure Schedule shall not be construed
to establish, in whole or in part, any standard of materiality, including any
standard of what constitutes a Material Adverse Effect, for purposes of the
Disclosure Schedule or this Agreement.
-73-
<PAGE> 80
IN WITNESS WHEREOF, this Agreement has been signed on behalf of
each of the parties hereto as of the date first written above.
COULTER CORPORATION
By: /s/ LAURA COULTER-JONES
-----------------------------------
Name: Laura Coulter-Jones
Title: Executive Vice President
By: /s/ SUE VAN
-----------------------------------
Name: Sue Van
Title: Executive Vice President
By: /s/ J. R. COULTER III
-----------------------------------
Name: Joseph R. Coulter III
Title: Executive Vice President
THE WALLACE H. COULTER CHARITABLE
REMAINDER TRUST UAD 5/23/97
By: /s/ SUE VAN
-----------------------------------
Name: Sue Van
Title: Trustee
THE JOSEPH R. COULTER, JR. TRUST
UAD 8/2/93
By: /s/ LAURA COULTER-JONES
-----------------------------------
Name: Laura Coulter-Jones
Title: Co-Trustee
By: /s/ J. R. COULTER III
-----------------------------------
Name: Joseph R. Coulter III
Title: Co-Trustee
<PAGE> 81
THE COULTER FAMILY LIMITED PARTNERSHIP
By: THE WALLACE H. COULTER TRUST
UAD 8/2/93,
as General Partner
By: /s/ SUE VAN
-----------------------------------
Name: Sue Van
Title: Successor Trustee
By: THE JOSEPH R. COULTER, JR. TRUST
UAD 8/2/93,
as General Partner
By: /s/ LAURA COULTER-JONES
-----------------------------------
Name: Laura Coulter-Jones
Title: Co-Trustee
By: /s/ J. R. COULTER III
-----------------------------------
Name: Joseph R. Coulter III
Title: Co-Trustee
BECKMAN INSTRUMENTS, INC.
By: /s/ LOUIS T. ROSSO
-----------------------------------
Name: Louis T. Rosso
Title: Chairman and Chief Executive Officer
<PAGE> 82
SCHEDULES AND EXHIBITS TO STOCK PURCHASE AGREEMENT
Annex A Sellers, Shares and Total Purchase Price Allocation
Annex B Disclosure Schedule
Section 1.1(a) Significant Subsidiaries of Coulter
Section 3.3 Subsidiaries of Coulter
Section 3.4 Capitalization of Coulter -- rights of certain persons
to purchase Coulter capital stock and restrictions on
the transfer of certain shares of capital stock.
Section 3.5 Audited Consolidated Balance Sheet of Coulter and its
Subsidiaries as of March 31, 1997 and March 31, 1996.
Note: With the exception of the consolidated balance
sheet as of March 31, 1995, the information provided in
Section 3.5 can be found in the Company's Report on
Form 8-K dated October 15, 1997.
Section 3.6 Absence of Certain Changes or Events: A list of certain
changes or events since March 11, 1997.
Section 3.7 Title to Properties; Absence of Liens and Encumbrances,
etc.: A list of material real property owned and
material real property and personal property leased by
Coulter and its Subsidiaries.
<PAGE> 83
Section 3.8 Material Contracts: A list of the material contracts
of Coulter and its Subsidiaries.
Section 3.9 No Conflict: A list of agreements, obligations,
encumbrances, and plans of Coulter that the execution
and performance of the Stock Purchase Agreement would
cause a breach or default thereof.
Section 3.10 Required Government Approvals, Consents and Filings:
A list of required government approvals, consents and
filings.
Section 3.11 Litigation: A list of material litigation of Coulter
and its Subsidiaries.
Section 3.12 Regulatory Compliance: A list of regulatory issues that
Coulter and its Subsidiaries are addressing.
Section 3.13 Tax Matters: A list of pending tax matters of Coulter
and its Subsidiaries.
Section 3.14 Labor Matters: A list of national collective labor
agreements and labor organizations to which Coulter and
its Subsidiaries are subject.
Section 3.15 Employee Matters: A list of employee compensation and
benefit plans of Coulter and its Subsidiaries.
<PAGE> 84
Section 3.16 Environmental Matters: A list of environmental matters
that Coulter and its Subsidiaries are addressing.
Section 3.17 Intellectual Property: A list of intellectual property
issues that Coulter and its Subsidiaries are
addressing.
Section 3.18 Insurance: A list of the material insurance policies of
Coulter and its Subsidiaries.
Section 3.23 Certain Accruals: Certain costs of the Long Term
Incentive Plan and the Supplemental Executive
Retirement Plan not necessarily accrued for.
Section 3.24 Certain Employees: A list of certain employees.
Section 3.26 Certain Manufacturing Facilities: A list of
manufacturing facilities of Coulter Subsidiaries which
are not ISO-9000 certified.
Section 4.2 Seller's Title to Shares: Exceptions to Seller's good
and valid title to the Shares free of all encumbrances.
Section 7.1 Interim Operations: Exceptions to operating Coulter in
the ordinary course of business in the interim between
the execution of the Stock Purchase Agreement and the
Closing.
Section 11.15 A table cross-referencing the various sections of
Annex B.
Annex C Addresses of Sellers
Note: The Company will furnish supplementally to the Securities
and Exchange Commission a copy of any omitted schedule upon
request.
Exhibit 2.4 Determination of Consolidated Net Assets
Exhibit 7.9 Form of Indemnity Escrow Agreement
<PAGE> 85
EXHIBIT 2.4
Determination of Consolidated Net Assets
For purposes of determining the Adjustment Amount in accordance with
Sections 2.4 and 2.5 of the Agreement, KPMG and the Accountants shall calculate
the Consolidated Net Assets, determined as if the Closing Date were the
Company's normal year end, in accordance with GAAP. The Company's accounting
policies and procedures, such as use of estimates for determining inventory
reserves, allowance for doubtful accounts, valuation allowances for deferred
taxes, accruals and liabilities shall be applied on a consistent basis for the
period April 1, 1997 to the Closing Date when compared with the methodology
employed in the audited financial statements as of March 31, 1997. The
foregoing shall be subject to the following:
(i) changes to the Consolidated Net Assets as of the Closing Date
that result from changes in additional non-cash contributions of capital shall
be excluded;
(ii) any issues related to open tax audits not agreed upon by the
Company, or not already accrued, shall be excluded;
(iii) the following plans and other arrangements with Employees the
payment of which are triggered by the sale, shall not be considered and shall be
excluded from the calculation:
a) Change in Control Agreements;
b) Special Incentive Plan;
c) Sharing Bonus Plan;
(iv) changes in any acccruals with respect to the following plans
which shall be triggered by the sale, shall not be considered and shall be
excluded from the calculation:
a) Long Term Incentive Plan ("LTIP"); provided, that changes in
the accrual with respect to LTIP shall not be excluded to
the extent that the accrual reflects payments to be made to
LTIP participants in excess of the 100% payment level;
b) Supplemented Employee Retirement Plan; and
(v) the Consolidated Net Assets as of the Closing Date shall reflect
the distribution to the Sellers of 100% of the shares of Coulter
Pharmaceutical, Inc. and 67% of the shares of Coulter Cellular Therapies, Inc.
owned by the Company.
<PAGE> 86
Applying the foregoing principles and exclusions, the calculation of the
Consolidated Net Assets as of March 31, 1997 (excluding (v) above) would be in
the form attached as Annex 2.4 hereto. The Consolidated Net Assets as of the
Closing Date shall be determined on the same basis as is reflected in this
Exhibit 2.4.
<PAGE> 87
ANNEX 2.4
COULTER CORPORATION AND SUBSIDIARIES
------------------------------------
CONSOLIDATED NET ASSETS
-----------------------
MARCH 31, 1997
--------------
EXCLUDING 100% OF COULTER PHARMACEUTICAL, INC.
----------------------------------------------
AND 67% OF COULTER CELLULAR THERAPIES, INC.
-------------------------------------------
(In thousands)
<TABLE>
<S> <C>
Total Assets $593,930
Total Liabilities 451,987
--------
Net Assets $141,943
--------
</TABLE>
<PAGE> 88
EXHIBIT 7.9
INDEMNITY ESCROW AGREEMENT
INDEMNITY ESCROW AGREEMENT, dated as of _________, 1997 (this "Escrow
Agreement"), by and among Beckman Instruments, Inc., a Delaware corporation
("Buyer"), the Persons listed on Annex A hereto ("Sellers") and [Escrow Agent],
a _________ banking corporation, as escrow agent (the "Escrow Agent").
Capitalized terms used and not otherwise defined herein shall have the meaning
ascribed to them in that certain Stock Purchase Agreement (the "Agreement"),
dated as of August 29, 1997, by and among Buyer, Sellers and Coulter
Corporation, a Delaware corporation (the "Company").
W I T N E S S E T H
- - - - - - - - - -
WHEREAS the Agreement provides, among other things, for the purchase by
Buyer from each of the Sellers of all outstanding shares of common stock of the
Company owned by such Seller;
WHEREAS, pursuant to the Agreement, Sellers and Buyer have agreed to enter
into this Escrow Agreement with the Escrow Agent for the purposes of securing
certain of Buyer's rights under the Agreement;
WHEREAS, pursuant to the terms of the Agreement, Buyer is depositing
$50,000,000 (the "Escrow Deposit" and together with all interest thereon not
paid from the escrow pursuant hereto, the "Escrow Fund") with the Escrow Agent
on the Closing Date, to be held in escrow pursuant to the terms and subject to
the conditions set forth in this Escrow Agreement; and
NOW, THEREFORE, in consideration of the consummation of the transactions
contemplated by the Agreement and the mutual covenants and agreements set forth
herein and therein, each of the Sellers and Buyer agree as follows, and, in
consideration of the mutual covenants set forth herein, the Escrow Agent agrees
as follows:
1. The Escrow Fund.
Set forth opposite each Seller's name on Annex A is a dollar amount equal
to such Seller's portion of the
<PAGE> 89
Escrow Deposit. Upon the execution of this Escrow Agreement, Buyer is delivering
to the Escrow Agent $50,000,000, constituting, in the aggregate, the Escrow
Deposit. The receipt of the Escrow Deposit will be acknowledged by the Escrow
Agent in the form of a receipt. An additional amount may be deposited in the
Escrow Fund by each of the Sellers in the proportions set forth on Annex A
hereto to replenish any payment pursuant to the purchase price adjustment set
forth in the Agreement. The Escrow Agent will acknowledge any such deposit in
the form of a receipt.
2. Investments.
The Escrow Agent will hold the Escrow Fund. Each of the Sellers shall be
responsible for and shall pay any and all tax liabilities arising with respect
to the Escrow Deposit, if any, and income generated by the Escrow Fund pro rata
in proportion to such Seller's percentage interest in the Total Purchase Price
as set forth on Annex A. The Escrow Deposit shall be invested only in money
market funds invested exclusively in U.S. Government securities.
3. Release of the Escrow Fund. The Escrow Agent will hold the Escrow
Fund in its possession until authorized hereunder to distribute any specified
portion thereof, as follows:
(a) On the second anniversary of the Closing Date, the Escrow Agent
shall distribute to the Sellers in accordance with each such Sellers' pro rata
share of the Total Purchase Price one-half (1/2) of the amount of the funds in
the Escrow Fund, and on the third anniversary of the Closing Date, the Escrow
Agent shall distribute to the Sellers in accordance with each such Sellers' pro
rata share of the Total Purchase Price the total amount remaining in the Escrow
Fund, in each case less any amounts then reserved pursuant to clause (b) below
with respect to any unresolved or disputed claims for Damages made by Buyer
hereunder.
(b) Notwithstanding the provisions of Section 3(a) hereof, upon written
notice from Buyer to the Escrow Agent and the Sellers that, pursuant to Section
10.2 of the Agreement, Buyer is asserting against Sellers a right of indemnity
with respect to Damages (which notice shall state whether or not such Damages
arise from the assertion of liability by a third party (a "Third Party Claim"))
(each a "Claim for Damages"), the Escrow Agent shall reserve an
2
<PAGE> 90
amount of the Escrow Fund as shall be reasonably necessary (taking into account
the potential amount of the likely exposure) to pay the Damages as so specified
in the Claim for Damages (or, if such amount exceeds the remaining balance in
the Escrow Fund, the entire balance of the Escrow Fund) and continue to hold
such amount in escrow in accordance with paragraphs (c) and (d) below. Buyer
shall deliver any notice hereunder to the Sellers in accordance with Section 9
hereof and with the notice provisions in Section 11.9 of the Agreement.
(c) Upon delivery by Buyer of a Claim for Damages to the Escrow Agent
and the Sellers in accordance with paragraph (b) above, the Sellers shall have
ten Business Days from the date such notice is deemed to be received hereunder
to notify the Escrow Agent and Buyer that the Sellers dispute (i) whether the
Agreement provides Buyer with a contractual right to indemnity for the claims
asserted in such Claim for Damages and (ii) in the case of a claim other than a
Third Party Claim, the amount of Damages set forth in such Claims for Damages.
Notwithstanding the foregoing, any notice by the Sellers under clause (i)
shall be deemed withdrawn if the Sellers deliver notice to Buyer of their intent
to undertake, conduct or control the proceedings related to the Third Party
Claim which is the subject of such Claim for Damages. The Escrow Agent shall
keep reserved, and not distribute, that part of the Escrow Fund equal to the
amount reserved pursuant to paragraph (b) above with respect to any Claims for
Damages until such dispute has been resolved in accordance with Section 5 hereof
or there has been a Final Determination, as applicable, and notice of such
resolution or Final Determination, as the case may be, including the amount, if
any, to be distributed or remain reserved in respect of such disputed Claim for
Damages, has been delivered to the Escrow Agent.
(d) Upon notice to the Escrow Agent of a Final Determination setting
forth the amount of the Damages, the Escrow Agent shall promptly distribute to
Buyer from the Escrow Fund an amount, if any, equal to such Final Determination
of Damages.
4. Final Determination. For the purpose of this Escrow Agreement, a
"Final Determination" shall mean (a) in the case of Damages resulting from a
Third Party Claim, a written compromise or settlement signed by the parties
thereto, an arbitration award, or an order, decree, or
3
<PAGE> 91
judgment of a court of competent jurisdiction, or (b) in the case of Damages
not resulting from a third Party Claim, (i) if the Sellers have not delivered a
notice of dispute of a Claim for Damages in accordance with Section 3(c) or does
not dispute a portion of the Damages set forth therein, such Claim for Damages
with respect to the Damages or portion thereof; provided that such Claim for
Damages sets forth the Damages with specificity, and if not, such later notice
which sets forth the Damages with specificity, or (ii) if the Sellers have
delivered a notice of dispute of a Claim for Damages in accordance with Section
3(c), a written compromise or settlement signed by the parties thereto, an
arbitration award, or an order, decree, or judgment of a court of competent
jurisdiction.
5. Settlement of Disputes. All disputes that may arise under this Escrow
Agreement with respect to the delivery or ownership or right of possession of
the Escrow Fund or any portion thereof, or the duties of the Escrow Agent
hereunder, shall be settled either by mutual agreement of the parties concerned
(evidenced by appropriate instructions in writing to the Escrow Agent, signed
by all such parties) or by a binding arbitration, or by a final order, decree,
or judgment of a court of competent jurisdiction in the United States of
America (the time for appeal having expired and no appeal having been taken, as
evidenced by notice of the same delivered in good faith by either the Sellers
or Buyer to the Escrow Agent), all costs and expenses of which shall be paid
one-half by Buyer and one-half by the Sellers. Such arbitration proceeding, if
mutually agreed to by Buyer and the Sellers, shall be conducted before a panel
of three arbitrators under the rules of the American Arbitration Association.
The Escrow Agent shall be under no duty whatsoever to institute or defend any
such proceedings, nor shall the Escrow Agent be required to determine any
dispute arising between the Sellers and Buyer under this Escrow Agreement or
take any other action regarding such dispute. Except as otherwise specifically
provided for in this Escrow Agreement, the Escrow Agent may hold all documents
and funds which are subject to such disputes and may wait for settlement of any
such dispute by appropriate legal proceedings or other means as, in the Escrow
Agent's discretion, it deems necessary or appropriate (without liability to
anyone), notwithstanding any provision to the contrary in this Escrow
Agreement.
4
<PAGE> 92
6. Concerning the Escrow Agent.
(a) The Escrow Agent shall be entitled to receive such fees as are
reasonable and customary as compensation for its services hereunder, and shall
be reimbursed for all reasonable expenses, disbursements, and advances incurred
or made by the Escrow Agent in performance of its duties hereunder. Such fee
and reimbursements shall be paid one-half by Buyer and one-half by the Sellers,
as per the Fee Schedule (the "Fee Schedule") attached hereto as Annex B (with
the Acceptance Fee specified in the Fee Schedule to be paid immediately by the
Sellers following the deposit of funds pursuant to Section 1 of this Escrow
Agreement).
(b) The Escrow Agent may resign and be discharged from its duties hereunder
at any time by giving notice of such resignation to Buyer and the Sellers
specifying a date when such resignation shall take effect. Upon such notice, a
successor Escrow Agent shall be appointed with the consent of Buyer and the
Sellers, such successor Escrow Agent to become Escrow Agent hereunder upon the
resignation date specified in such notice. If Buyer and the Sellers are unable
to agree upon a successor Escrow Agent within 30 days after such notice, the
Escrow Agent shall be entitled to appoint its successor. The Escrow Agent shall
continue to serve until its successor accepts the terms of the escrow and
receives the Escrow Fund. Buyer and the Sellers hereto shall have the right at
any time upon their mutual consent to substitute a new Escrow Agent by giving
notice thereof to the Escrow agent then acting.
(c) With the exception of Section 2.3 and Article X of the Agreement and
the related definitions, the Escrow Agent shall not be charged with knowledge
of the Agreement. A copy of the Agreement has been delivered to the Escrow
Agent prior to the date hereof. The Escrow Agent undertakes to perform such
duties as are specifically set forth herein and may conclusively rely, and
shall be protected in acting or refraining from acting, on any written notice,
instrument, or signature believed by it to be genuine and to have been signed
or presented by the proper party or parties duly authorized to do so; provided,
however, in accordance with Section 2.3 of the Agreement, any action taken or
decision made by Sellers hereunder shall be evidenced in a writing signed by
all of the Sellers. Buyer and the Sellers are the only authorized persons upon
which the Escrow Agent may conclusively rely for all purposes under this
Agreement; provided, however, each of the Buyer and the Sellers (in the
5
<PAGE> 93
case of the Sellers, by a writing signed by all of them) may notify the Escrow
Agent and the other party in writing that other persons are authorized to act
on behalf of Buyer or the Sellers, as the case may be. The Escrow Agent shall
have no responsibility for the contents of any writing contemplated herein and
may rely without any liability upon the contents thereof.
(d) The Escrow Agent shall not be liable for any action taken or omitted
by it in good faith and believed by it to be authorized hereby or within the
rights or power conferred upon it hereunder, nor for action taken or omitted by
it in good faith, and in accordance with advice of counsel (which counsel may be
of the Escrow Agent's own choosing), and shall not be liable for any mistake or
fact or error of judgment or for any acts or omissions of any kind unless
attributable solely to its willful misconduct or gross negligence.
(e) Each party hereto agrees to indemnify the Escrow Agent and hold it
harmless against any and all liabilities incurred by it hereunder as a
consequence of such party's action, and the parties agree jointly and severally
to indemnify the Escrow Agent and hold it harmless against any and all
liabilities incurred by it hereunder that are not a consequence of any party's
action, except in either case for liabilities incurred by the Escrow Agent
resulting solely from its own willful misconduct or gross negligence.
7. Miscellaneous.
(a) This Escrow Agreement shall be deemed to be made in and in all
respects shall be interpreted, construed and governed by and in accordance with
the laws of the State of New York, without giving effect to principles of
conflicts of laws thereof. The parties hereto consent to the jurisdiction of
and venue in the Federal courts located in the Borough of Manhattan, in New
York City.
(b) This Escrow Agreement and all of the provisions hereof shall be
binding upon and shall inure to the benefit of the parties hereto and their
respective successors and permitted assigns.
(c) This Escrow Agreement may be executed in two or more counterparts,
each of which shall be deemed an
6
<PAGE> 94
original, but all of which together shall constitute one and the same
instrument.
(d) "Business Day" shall mean any day other than a Saturday, a
Sunday or a day on which banks in New York, New York are authorized or
obligated by law or executive order to be closed.
8. Termination. This Escrow Agreement may be terminated upon the
distribution of the entire balance of the Escrow Fund pursuant to the terms
hereof, or at any other time, upon the mutual written consent of Buyer, the
Sellers and the Escrow Agent. Upon such termination, Buyer, the Sellers and the
Escrow Agent shall be discharged from all obligations under this Escrow
Agreement.
9. Notices. Any notice, request, instruction or other document to be
given hereunder by any party (or other Person referred to herein) shall be
deemed given if in writing and delivered personally or sent by facsimile (if a
facsimile number of the intended recipient is provided in this Section or in a
notice given as provided in this Section), by telegram, by registered or
certified mail (return receipt requested) or by national courier service:
(a) if to the Sellers, to their respective addresses specified on
Annex C hereto, with a copy to:
Sullivan & Cromwell
125 Broad Street
New York, New York 10004
Telephone: (212) 558-4000
Telecopy: (212) 558-3588
Attention: Francis J. Aquila
(b) if to Buyer, to:
Beckman Instruments, Inc.
2500 Harbor Boulevard
Fullerton, California 92834
Attention: President
with a copy to:
Beckman Instruments, Inc.
2500 Harbor Boulevard
Fullerton, California 92834
Attention: General Counsel
7
<PAGE> 95
Fax: (714) 773-7936
(c) if to the Escrow Agent, to:
(Insert Escrow Agent Address)
with a copy to:
(Insert Escrow Agent's Counsel Address)
or to such other Persons or addresses as may be designated in writing by the
party to receive such notice as provided above. Any notice given by mail,
national courier service or telegram shall be effective when received. Any
notice given by facsimile shall be effective when the appropriate facsimile
answerback is received.
8
<PAGE> 96
IN WITNESS WHEREOF, this Agreement has been duly executed and delivered
by Buyer, Sellers and the Escrow Agent as of the date first above written.
BECKMAN INSTRUMENTS, INC.
By:
----------------------------
Name:
Title:
THE WALLACE H. COULTER CHARITABLE
REMAINDER TRUST UAD 5/23/97
By:
----------------------------
Name: Sue Van
Title: Trustee
THE JOSEPH R. COULTER, JR. TRUST
UAD 8/2/93
By:
----------------------------
Name: Laura Coulter-Jones
Title: Co-Trustee
By:
----------------------------
Name: Joseph R. Coulter III
Title: Co-Trustee
9
<PAGE> 97
THE COULTER FAMILY LIMITED
PARTNERSHIP
By: THE WALLACE H. COULTER TRUST
UAD 8/2/93, as General Partner
By:
----------------------------
Name: Sue Van
Title: Successor Trustee
THE JOSEPH R. COULTER, JR. TRUST
UAD 8/2/93, as General Partner
By:
----------------------------
Name: Laura Coulter-Jones
Title: Co-Trustee
By:
----------------------------
Name: Joseph R. Coulter III
Title: Co-Trustee
[ESCROW AGENT],
as Escrow Agent
By: ----------------------------------
Name:
Title:
10
<PAGE> 98
ANNEX A
<TABLE>
<CAPTION>
% of
Total Purchase Amount
Number Purchase Price in
Sellers of Shares Price Payable Escrow
- ----------------------- --------- -------- ------------ ------------
<S> <C> <C> <C> <C>
THE WALLACE H.
COULTER CHARITABLE
REMAINDER UNITRUST:
- Class A Common Stock 2,250 23.35 $169,474,117 $10,271,159
- Class B Common Stock 308 $ 23,199,124 $ 1,406,007
THE JOSEPH R.
COULTER, JR. TRUST:
- Class A Common Stock 2,143 19.57 $161,414,680 $ 9,782,708
- Class B Common Stock 0 $ 0 $ 0
THE COULTER FAMILY
LIMITED PARTNERSHIP:
- Class A Common Stock 5,500 57.08 $414,270,063 $25,107,277
- Class B Common Stock 752 $ 56,642,016 $ 3,432,849
----- ----- ------------ -----------
Subtotal Class A - 9,893
Class B - 1,060
-----
Total 10,953 100.00 $825,000,000 $50,000,000
====== ====== ============ ===========
</TABLE>
A-1
<PAGE> 99
ANNEX B
FIRST CHICAGO NBD
FEE SCHEDULE
ESCROW AGENCY SERVICES
BECKMAN INSTRUMENTS, INC./THE COULTER FAMILY LIMITED PARTNERSHIP
- -------------------------------------------------------------------------------
I. Account Acceptance
A fee for services in connection with the initial set-up of this escrow
account will be charged as follows:
Account Acceptance $2,500
Legal Fee Included
The fee covers examination and execution of an escrow agreement and all
required documentation.
II. Annual Administration
A fee for ordinary administration of this escrow account will be charged at
$2,500. The fee will be payable annually in advance for the annual period
or any portion thereof.
III. Operating Services
A. Wire transfers $20.00 each
B. Purchase or sale of securities $75.00 each
There will be no transaction charge for investments made in the
Pegasus Funds.
IV. Miscellaneous
Fees for services not specifically covered in this schedule will be
assessed in amounts commensurate with the services rendered. The fees in
this schedule are subject to reasonable adjustments as changes in laws,
procedures, or costs of doing business demand. The costs of supplies and
other out-of-pocket expenses that can be directly allocated will be added
to our regular charges.
For investments in the Pegasus Funds, First Chicago NBD and/or our
affiliates may earn service fees/expenses associated with these funds as
disclosed in the mutual fund prospectus.
B-1
<PAGE> 100
ANNEX C
ADDRESSES OF SELLERS
1. If to the Wallace H. Coulter Charitable Remainder
Unitrust, to:
Sue Van
c/o H. Randolph Williams, Esq.
Williams & Lee LLC
333 North Michigan Avenue
Suite 728
Chicago, Illinois 60601
Fax: (312) 629-9020
2. If to the Joseph R. Coulter, Jr. Trust, to:
Laura G. Coulter-Jones
1121 Starling Avenue
Miami Springs, FL 33166
and to:
Joseph R. Coulter III
260 Huntinglodge Drive
Miami Springs, FL 33166
3. If to the Coulter Family Limited Partnership, to:
a) Wallace H. Coulter Trust
c/o Sue Van
c/o H. Randolph Williams, Esq.
Williams & Lee LLC
333 North Michigan Avenue
Suite 728
Chicago, Illinois 60601
Fax: (312) 629-9020
b) Joseph R. Coulter, Jr. Trust
c/o Laura G. Coulter-Jones
1121 Starling Avenue
Miami Springs, FL 33166
and to:
c/o Joseph R. Coulter III
260 Huntinglodge Drive
Miami Springs, FL 33166
C-1
<PAGE> 1
Exhibit 2.2
FIRST AMENDMENT TO STOCK PURCHASE AGREEMENT (this
"Amendment"), dated as of October 31, 1997, among Coulter Corporation, a
Delaware corporation and its predecessors (the "Company"), the stockholders of
the Company listed on Annex A to the Stock Purchase Agreement (as defined below)
(each, a "Seller"; collectively, the "Sellers") and Beckman Instruments, Inc., a
Delaware corporation ("Buyer").
WITNESSETH:
WHEREAS, the Company, the Sellers and Buyer entered into a
Stock Purchase Agreement, dated as of August 29, 1997 (the "Stock Purchase
Agreement");
WHEREAS, the Company, the Sellers and Buyer desire to effect
certain modifications (the "Modifications") to the Stock Purchase Agreement;
WHEREAS, Section 11.1 of the Stock Purchase Agreement provides
that the Stock Purchase Agreement may be modified or amended by written
agreement executed and delivered by the Company, the Sellers and Buyer; and
WHEREAS, the Company, the Sellers and Buyer desire to so
execute and deliver this Amendment to give effect to the Modifications, as set
forth in Article II below.
NOW, THEREFORE, the parties, intending to be legally bound and
in consideration of the mutual agreements contained herein, and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, agree as follows:
ARTICLE I
DEFINITIONS
Capitalized terms not expressly defined in this Amendment shall have the
meanings ascribed to them in the Stock Purchase Agreement.
ARTICLE II
CERTAIN MODIFICATIONS TO THE STOCK PURCHASE AGREEMENT
Section 2.1 Amendment to Section 7.13 of the Stock Purchase
Agreement. Section 7.13 of the Stock Purchase Agreement is hereby amended to
read in its entirety as follows:
<PAGE> 2
"Section 7.13 Use and Ownership of `Coulter' Name. Prior to
or on the Closing Date, the Sellers, the Company, Coulter
Pharmaceutical, Inc. ("CPI") and Coulter Cellular
Therapies, Inc. ("CCT") shall have entered into among them,
as applicable, an intellectual property agreement and an
agreement for use of business name (with respect to each of
CPI and CCT), each with respect to the `Coulter' name (and
variants thereof), which agreements shall provide, as
applicable, that: (a) the ownership of that name is vested
in the Company and will remain so vested after the Closing;
(b) CPI and CCT shall receive a royalty-free license from
the Company to use that name in their respective operations
following the Closing, provided, that such name may not be
used by either of those entities in association with any
business or operations competitive to the businesses or
operations of Buyer, the Company or their respective
Subsidiaries, and further provided that such license shall
replace any prior license agreements regarding the
`Coulter' name entered into among the Company, CPI and CCT,
as applicable; and (c) without limiting the provisions of
the Non-Competition Agreements, none of the Sellers may use
that name in association with any business or operation
competitive to the businesses or operation of Buyer, the
Company or their respective Subsidiaries. The foregoing
notwithstanding, the terms set forth in the executed
versions of such agreements shall constitute the sole and
exclusive agreement of the parties thereto with respect to
the subject matter thereof, and shall be binding on the
parties thereto, irrespective of any and all prior
understandings or agreements with respect to such subject
matter (including the terms of this Section 7.13) and
irrespective of whether the Sellers, the Company and Buyer
are parties to such agreements."
Section 2.2 Wallace H. Coulter Charitable Remainder Unitrust.
All references to the "Wallace H. Coulter Charitable Remainder Trust" shall be
deleted and replaced by references to the "Wallace H. Coulter Charitable
Remainder Unitrust".
ARTICLE III
MISCELLANEOUS
Section 3.1. Stock Purchase Agreement Remains in Full Force
and Effect. Except as amended hereby, all provisions in the Stock Purchase
Agreement shall remain in full force and effect, including, without limitation,
Section 11.10 thereof relating to governing law and dispute resolution. The
terms of such Section 11.10 shall apply to the construction of this Amendment.
2
<PAGE> 3
Section 3.2. Binding Effect of Amendment to Stock Purchase
Agreement. This Amendment is an amendment to the Stock Purchase Agreement and,
as provided therein, will be binding on all the parties thereto.
Section 3.3. Counterparts. This Amendment may be executed in
one or more counterparts, each of which shall be deemed to be an original
instrument, and all such counterparts shall together constitute the same
agreement.
(Signature pages follow)
3
<PAGE> 4
IN WITNESS WHEREOF, this Amendment has been signed on behalf
of each of the parties hereto as of the date first written above.
COULTER CORPORATION
By: /s/ Laura Coulter-Jones
-------------------------------
Name: Laura Coulter-Jones
Title: Executive Vice President
By: /s/ Sue Van
-------------------------------
Name: Sue Van
Title: Executive Vice President
By: /s/ Joseph R. Coulter III
-------------------------------
Name: Joseph R. Coulter III
Title: Executive Vice President
THE WALLACE H. COULTER CHARITABLE
REMAINDER UNITRUST UAD 5/23/97
By: /s/ Sue Van
-------------------------------
Name: Sue Van
Title: Trustee
THE JOSEPH R. COULTER, JR. TRUST
UAD 8/2/93
By: /s/ Laura Coulter-Jones
-------------------------------
Name: Laura Coulter-Jones
Title: Co-Trustee
By: /s/ Joseph R. Coulter III
-------------------------------
Name: Joseph R. Coulter III
Title: Co-Trustee
S-1
<PAGE> 5
THE COULTER FAMILY LIMITED
PARTNERSHIP
By: THE WALLACE H. COULTER TRUST
UAD 8/2/93
By: /s/ Sue Van
-------------------------------
Name: Sue Van
Title: Successor Trustee
By: THE JOSEPH R. COULTER, JR. TRUST
UAD 8/2/93
By: /s/ Laura Coulter-Jones
-------------------------------
Name: Laura Coulter-Jones
Title: Co-Trustee
By: /s/ Joseph R. Coulter III
-------------------------------
Name: Joseph R. Coulter, III
Title: Co-Trustee
BECKMAN INSTRUMENTS, INC.
By: /s/ William H. May
-------------------------------------
Name: William H. May
Title: Vice President, General Counsel
and Secretary
S-2
<PAGE> 1
EXHIBIT 2.3
SECOND AMENDMENT TO STOCK PURCHASE AGREEMENT (this "Amendment"),
dated as of November 6, 1997, among Coulter Corporation, a Delaware corporation
and its predecessors (the "Company"), the Sellers (as defined in the Stock
Purchase Agreement (as defined below) and listed on Annex A thereto), and
Beckman Instruments, Inc., a Delaware corporation ("Buyer").
WITNESSETH:
WHEREAS, the Company, the Sellers and Buyer entered into a Stock
Purchase Agreement, dated as of August 29, 1997, amended on October 31, 1997 (as
amended, the "Stock Purchase Agreement");
WHEREAS, the Company, the Sellers and Buyer desire to effect a
certain modification (the "Modification") to the Stock Purchase Agreement;
WHEREAS, Section 11.1 of the Stock Purchase Agreement provides
that the Stock Purchase Agreement may be modified or amended by written
agreement executed and delivered by the Company, the Sellers and Buyer; and
WHEREAS, the Company, the Sellers and Buyer desire to so execute
and deliver this Amendment to give effect to the Modification, as set forth in
Article II below.
NOW, THEREFORE, the parties, intending to be legally bound and in
consideration of the mutual agreements contained herein, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, agree as follows:
ARTICLE I
DEFINITIONS
Capitalized terms not expressly defined in this Amendment shall
have the meanings ascribed to them in the Stock Purchase Agreement.
ARTICLE II
MODIFICATION TO SECTION 2.5(a) OF THE STOCK PURCHASE AGREEMENT
Section 2.5(a) of the Stock Purchase Agreement is hereby amended
to delete the name "Ernst & Young" appearing in the twenty-fourth line thereof
and to substitute in its place the name "Deloitte & Touche LLP."
ARTICLE III
MISCELLANEOUS
Section 3.1. Stock Purchase Agreement Remains in Full Force and
Effect. Except as amended hereby, all provisions in the Stock Purchase Agreement
shall remain in full force and effect, including, without limitation, Section
<PAGE> 2
11.10 thereof relating to governing law and dispute resolution. The terms of
such Section 11.10 shall apply to the construction of this Amendment.
Section 3.2. Binding Effect of Amendment to Stock Purchase
Agreement. This Amendment is an amendment to the Stock Purchase Agreement and,
as provided therein, will be binding on all the parties thereto.
Section 3.3. Counterparts. This Amendment may be executed in one
or more counterparts, each of which shall be deemed to be an original
instrument, and all such counterparts shall together constitute the same
agreement.
(Signature pages follow)
2
<PAGE> 3
IN WITNESS WHEREOF, this Amendment has been signed on behalf of
each of the parties hereto as of the date first written above.
COULTER CORPORATION
By: /s/ Ed Vivanco
--------------------------------
Name: Ed Vivanco
Title: President
THE WALLACE H. COULTER CHARITABLE
REMAINDER UNITRUST UAD 5/23/97
By: /s/ Sue Van
--------------------------------
Name: Sue Van
Title: Trustee
THE JOSEPH R. COULTER, JR. TRUST
UAD 8/2/93
By: /s/ Laura Coulter-Jones
--------------------------------
Name: Laura Coulter-Jones
Title: Co-Trustee
By: /s/ Joseph R. Coulter III
--------------------------------
Name: Joseph R. Coulter III
Title: Co-Trustee
S-1
<PAGE> 4
THE COULTER FAMILY LIMITED
PARTNERSHIP
By: THE WALLACE H. COULTER TRUST
UAD 8/2/93
By: /s/ Sue Van
--------------------------
Name: Sue Van
Title: Successor Trustee
By: THE JOSEPH R. COULTER, JR. TRUST
UAD 8/2/93
By: /s/ Laura Coulter-Jones
--------------------------
Name: Laura Coulter-Jones
Title: Co-Trustee
By: /s/ Joseph R. Coulter, III
-----------------------------
Name: Joseph R. Coulter, III
Title: Co-Trustee
BECKMAN INSTRUMENTS, INC.
By: /s/ Louis T. Rosso
--------------------------------
Name: Louis T. Rosso
Title: Chairman & Chief
Executive Officer
<PAGE> 1
Exhibit 10.1
INDEMNITY ESCROW AGREEMENT
INDEMNITY ESCROW AGREEMENT, dated as of October 31, 1997 (this
"Escrow Agreement"), by and among Beckman Instruments, Inc., a Delaware
corporation ("Buyer"), the Persons listed on Annex A hereto ("Sellers") and The
First National Bank of Chicago, a national banking association, as escrow agent
(the "Escrow Agent"). Capitalized terms used and not otherwise defined herein
shall have the meaning ascribed to them in that certain Stock Purchase Agreement
(the "Agreement"), dated as of August 29, 1997, by and among Buyer, Sellers and
Coulter Corporation, a Delaware corporation (the "Company").
W I T N E S S E T H
WHEREAS the Agreement provides, among other things, for the
purchase by Buyer from each of the Sellers of all outstanding shares of common
stock of the Company owned by such Seller;
WHEREAS, pursuant to the Agreement, Sellers and Buyer have
agreed to enter into this Escrow Agreement with the Escrow Agent for the
purposes of securing certain of Buyer's rights under the Agreement;
WHEREAS, pursuant to the terms of the Agreement, Buyer is
depositing $50,000,000 (the "Escrow Deposit" and together with all interest
thereon not paid from the escrow pursuant hereto, the "Escrow Fund") with the
Escrow Agent on the Closing Date, to be held in escrow pursuant to the terms and
subject to the conditions set forth in this Escrow Agreement; and
NOW, THEREFORE, in consideration of the consummation of the
transactions contemplated by the Agreement and the mutual covenants and
agreements set forth herein and therein, each of the Sellers and Buyer agree as
follows, and, in consideration of the mutual covenants set forth herein, the
Escrow Agent agrees as follows:
<PAGE> 2
1. The Escrow Fund.
Set forth opposite each Seller's name on Annex A is a dollar
amount equal to such Seller's portion of the Escrow Deposit. Upon the execution
of this Escrow Agreement, Buyer is delivering to the Escrow Agent $50,000,000,
constituting, in the aggregate, the Escrow Deposit. The receipt of the Escrow
Deposit will be acknowledged by the Escrow Agent in the form of a receipt. An
additional amount may be deposited in the Escrow Fund by each of the Sellers in
the proportions set forth on Annex A hereto to replenish any payment made from
the Escrow Fund pursuant to the purchase price adjustment set forth in the
Agreement. The Escrow Agent will acknowledge any such deposit in the form of a
receipt, but shall have no duty to determine the sufficiency thereof.
2. Investments.
The Escrow Agent will hold the Escrow Fund. Each of the
Sellers shall be responsible for all tax reporting with respect to the Escrow
Fund and shall pay any and all tax liabilities arising with respect to the
Escrow Deposit, if any, and income generated by the Escrow Fund pro rata in
proportion to such Seller's percentage interest in the Total Purchase Price as
set forth on Annex A. By execution and delivery hereof the Sellers hereby direct
the Escrow Agent to invest the Escrow Deposit only in, or in money market or
mutual funds invested exclusively in, securities or direct obligations of, or
obligations the timely payment of the principal and interest on which is fully
guaranteed by, the United States of America or its Agencies, and which have an
ending maturity of 397 days or less. On April 30, 1998 and on each six-month
anniversary of the date of this Escrow Agreement thereafter (each, an "Income
Calculation Date"), the Escrow Agent will calculate the amount of distributable
income (the "Distributable Income") included in the Escrow Fund as of such
Income Calculation Date. On any applicable Income Calculation Date the
Distributable Income shall be any positive sum calculated in accordance with the
following formula:
2
<PAGE> 3
Distributable Income = Aggregate Balance -- ($50,000,000 -
Payout Amounts)
where:
"Aggregate Balance" means the aggregate value of the Escrow
Fund as of the Income Calculation Date, with the value of any
securities in the Escrow Fund being determined on a
marked-to-market basis as of such Income Calculation Date.
"Payout Amounts" means the aggregate amount of any funds paid
out of the Escrow Fund to, as applicable, (i) Buyer, pursuant
to a Final Determination, and (ii) Seller pursuant to Section
3(a) hereof. The foregoing notwithstanding, no amount paid out
of the Escrow Fund pursuant to the provisions of Section
2.5(b) of the Agreement shall be considered a "Payout Amount"
for purposes of this definition or this Escrow Agreement.
If an Income Calculation Date is not a Business Day, the next following Business
Day shall be deemed to be the Income Calculation Date. On the third Business Day
following each Income Calculation Date, the Escrow Agent shall pay to each
Seller pro rata in proportion to such Seller's percentage interest in the Total
Purchase Price as set forth on Annex A, any Distributable Income.
3. Release of the Escrow Fund. The Escrow Agent will hold the
Escrow Fund in its possession until authorized hereunder to distribute any
specified portion thereof, as follows:
(a) On the second anniversary of the Closing Date, the Escrow
Agent shall distribute to the Sellers in accordance with each such Seller's pro
rata share of the
3
<PAGE> 4
Total Purchase Price one-half (1/2) of the amount of the funds in the Escrow
Fund, and on the third anniversary of the Closing Date, the Escrow Agent shall
distribute to the Sellers in accordance with each such Seller's pro rata share
of the Total Purchase Price the total amount remaining in the Escrow Fund, in
each case less any amounts then reserved pursuant to clause (b) below with
respect to any unresolved or disputed claims for Damages made by Buyer
hereunder.
(b) Notwithstanding the provisions of Section 3(a) hereof,
upon written notice from Buyer to the Escrow Agent and the Sellers that,
pursuant to Section 10.2 of the Agreement, Buyer is asserting against Sellers a
right of indemnity with respect to Damages (which notice shall state whether or
not such Damages arise from the assertion of liability by a third party (a
"Third Party Claim")) (each a "Claim for Damages"), the Escrow Agent shall
reserve an amount of the Escrow Fund as shall be reasonably necessary (taking
into account the potential amount of the likely exposure) to pay the Damages as
so specified in the Claim for Damages (or, if such amount exceeds the remaining
balance in the Escrow Fund, the entire balance of the Escrow Fund) and continue
to hold such amount in escrow in accordance with paragraphs (c) and (d) below;
provided, however, that, should the Buyer and the Sellers agree, as evidenced by
written instructions to the Escrow Agent signed by each of them, that a
specified amount be reserved in settlement of any contingent claim, the Escrow
Agent shall reserve that specified amount in accordance with such instructions
and such specified amount shall be deemed to be the "reasonably necessary"
amount to be reserved. The Escrow Agent shall have no liability to either Buyer
or Sellers for any shortfall resulting from an incorrect reservation of moneys
in the Escrow Fund unless such shortfall is caused by the gross negligence or
willful misconduct of the Escrow Agent with respect to such estimation. Buyer
shall deliver any notice hereunder to the Sellers in accordance with Section 9
hereof and with the notice provisions in Section 11.9 of the Agreement.
(c) Upon delivery by Buyer of a Claim for Damages to the
Escrow Agent and the Sellers in accordance with
4
<PAGE> 5
paragraph (b) above, the Sellers shall have thirty calendar days from the date
such notice is deemed to be received hereunder to notify the Escrow Agent and
Buyer that the Sellers dispute (i) whether the Agreement provides Buyer with a
contractual right to indemnity for the claims asserted in such Claim for Damages
and (ii) in the case of a claim other than a Third Party Claim, the amount of
Damages set forth in such Claim for Damages. Notwithstanding the foregoing, any
notice by the Sellers under clause (i) shall be deemed withdrawn if the Sellers
deliver notice to Buyer of their intent to undertake, conduct or control the
proceedings related to the Third Party Claim which is the subject of such Claim
for Damages. The Escrow Agent shall keep reserved, and not distribute, that part
of the Escrow Fund equal to the amount reserved pursuant to paragraph (b) above
with respect to any Claims for Damages until such dispute has been resolved in
accordance with Section 5 hereof or there has been a Final Determination, as
applicable, and notice of such resolution or Final Determination, as the case
may be, including the amount, if any, to be distributed or remain reserved in
respect of such disputed Claim for Damages, has been delivered to the Escrow
Agent.
(d) Upon notice to the Escrow Agent of a Final Determination
setting forth the amount of the Damages, the Escrow Agent shall promptly
distribute to Buyer from the Escrow Fund an amount, if any, equal to such Final
Determination of Damages.
4. Final Determination. For the purpose of this Escrow
Agreement, a "Final Determination" shall mean (a) in the case of Damages
resulting from a Third Party Claim, a written compromise or settlement signed by
the parties thereto, an arbitration award, or an order, decree, or judgment of a
court of competent jurisdiction, or (b) in the case of Damages not resulting
from a Third Party Claim, (i) if the Sellers have not delivered a notice of
dispute of a Claim for Damages in accordance with Section 3(c) or does not
dispute a portion of the Damages set forth therein, such Claim for Damages with
respect to the Damages or portion thereof; provided that such Claim for Damages
sets forth the
5
<PAGE> 6
Damages with specificity, and if not, such later notice which sets forth the
Damages with specificity, or (ii) if the Sellers have delivered a notice of
dispute of a Claim for Damages in accordance with Section 3(c), a written
compromise or settlement signed by the parties thereto, an arbitration award, or
an order, decree, or judgment of a court of competent jurisdiction.
5. Settlement of Disputes. All disputes that may arise under
this Escrow Agreement with respect to the delivery or ownership or right of
possession of the Escrow Fund or any portion thereof, or the duties of the
Escrow Agent hereunder, shall be settled either by mutual agreement of the
parties concerned (evidenced by appropriate instruc tions in writing to the
Escrow Agent, signed by all such parties) or by a binding arbitration, or by a
final order, decree, or judgment of a court of competent jurisdiction in the
United States of America (the time for appeal having expired and no appeal
having been taken, as evidenced by notice of the same delivered in good faith by
either the Sellers or Buyer to the Escrow Agent). Such arbitration proceeding,
if mutually agreed to by Buyer and the Sellers, shall be conducted before a
panel of three arbitrators under the rules of the American Arbitration
Association, all costs and expenses of which shall be paid one-half by Buyer and
one-half by the Sellers. The Escrow Agent shall be under no duty whatsoever to
institute or defend any such proceedings, nor shall the Escrow Agent be required
to determine any dispute arising between the Sellers and Buyer under this Escrow
Agreement or take any other action regarding such dispute. Except as otherwise
specifically provided for in this Escrow Agreement, the Escrow Agent may hold
all docu ments and funds which are subject to such dispute and may wait for
settlement of any such dispute by appropriate legal proceedings or other means
as, in the Escrow Agent's discre tion, it deems necessary or appropriate
(without liability to anyone), notwithstanding any provision to the contrary in
this Escrow Agreement.
6
<PAGE> 7
6. Concerning the Escrow Agent.
(a) The Escrow Agent shall be entitled to receive such fees as
are reasonable and customary as compensation for its services hereunder, and
shall be reimbursed for all reasonable expenses, disbursements, and advances
incurred or made by the Escrow Agent in performance of its duties hereunder.
Such fee and reimbursements shall be paid one-half by Buyer and one-half by the
Sellers, as per the Fee Schedule (the "Fee Schedule") attached hereto as Annex B
other than (i) those fees set forth in Section 3 of such Fee Schedule, which
will be borne solely by Sellers, except in the case of fees for wire transfers
made pursuant to Section 3 of this Escrow Agreement, which will be borne
one-half by Buyer and one-half by Sellers, and (ii) the Acceptance Fee specified
in the Fee Schedule, which shall be paid immediately by the Sellers following
the deposit of funds pursuant to Section 1 of this Escrow Agreement.
(b) The Escrow Agent may resign and be discharged from its
duties hereunder at any time by giving notice of such resignation to Buyer and
the Sellers specifying a date when such resignation shall take effect. Upon such
notice, a successor Escrow Agent shall be appointed with the consent of Buyer
and the Sellers, such successor Escrow Agent to become Escrow Agent hereunder
upon the resignation date specified in such notice. If Buyer and the Sellers are
unable to agree upon a successor Escrow Agent within 30 days after such notice,
the Escrow Agent shall be entitled to apply to a court of competent jurisdiction
for the appointment of a successor escrow agent, with any expenses to be shared
equally by the Buyer on the one hand and the Sellers on the other hand. The
Escrow Agent shall continue to serve until its successor accepts the terms of
the escrow and receives the Escrow Fund. Buyer and the Sellers hereto shall have
the right at any time upon their mutual consent to substitute a new Escrow Agent
by giving notice thereof to the Escrow Agent then acting.
(c) With the exception of Section 2.3 and Article X of the
Agreement and the related definitions, the Escrow Agent shall not be charged
with knowledge of the Agreement.
7
<PAGE> 8
A copy of the Agreement has been delivered to the Escrow Agent prior to the date
hereof. The Escrow Agent undertakes to perform such duties as are specifically
set forth herein and no implied duties shall be read into this Escrow Agreement
against the Escrow Agent; and may conclusively rely, and shall be protected in
acting or refraining from acting, on any written notice, instrument, or
signature believed by it to be genuine and to have been signed or presented by
the proper party or parties duly authorized to do so; provided, however, in
accordance with Section 2.3 of the Agreement, any action taken or decision made
by Sellers hereunder shall be evidenced in a writing signed by all of the
Sellers. Buyer and the Sellers are the only authorized persons upon which the
Escrow Agent may conclusively rely for all purposes under this Agreement;
provided, however, each of the Buyer and the Sellers (in the case of the
Sellers, by a writing signed by all of them) may notify the Escrow Agent and the
other party in writing that other persons are authorized to act on behalf of
Buyer or the Sellers, as the case may be. The Escrow Agent shall have no
responsibility for the contents of any writing contemplated herein and may rely
without any liability upon the contents thereof.
(d) The Escrow Agent shall not be liable for any action taken
or omitted by it in good faith and believed by it to be authorized hereby or
within the rights or power conferred upon it hereunder, nor for action taken or
omitted by it in good faith, and in accordance with advice of counsel (which
counsel may be of the Escrow Agent's own choosing), and shall not be liable for
any mistake or fact or error of judgment or for any acts or omissions of any
kind unless attributable solely to its willful misconduct or gross negligence.
(e) Each party hereto agrees to indemnify the Escrow Agent and
hold it harmless against any and all liabilities incurred by it hereunder as a
consequence of such party's action, and the parties agree jointly and severally
to indemnify the Escrow Agent and hold it harmless against any and all
liabilities incurred by it hereunder that are not a consequence of any party's
action, except in
8
<PAGE> 9
either case for liabilities incurred by the Escrow Agent resulting solely from
its own willful misconduct or gross negligence.
7. Payments.
Any payment required to be made by the Escrow Agent to any
Seller under this Escrow Agreement shall be made to such Seller's account in
accordance with instructions each Seller will provide to the Escrow Agent within
14 days of the date of this Escrow Agreement.
8. Appointment of Agents.
(a) The Escrow Agent may appoint one or more agents (each, an
"Agent") which shall be authorized to act on behalf of the Escrow Agent. An
Agent shall have the powers and authority granted to and conferred upon it
hereby and such further powers and authority to act on behalf of the Escrow
Agent as may be mutually agreed upon by the Escrow Agent and Agent. Each Agent
shall be acceptable to the Sellers and Buyer and shall at all times be a
corporation organized and doing business under the laws of the United States of
America, any State thereof or the District of Columbia. If at any time an Agent
shall cease to be eligible in accordance with the provisions of this Section,
such Agent shall resign immediately in the manner and with the effect specified
in this Section.
(b) An Agent may resign at any time by giving written notice
thereof to the Escrow Agent. The Escrow Agent may at any time terminate the
agency of an Agent by giving written notice thereof to such Agent and to the
Sellers and Buyer.
9. Miscellaneous.
(a) This Escrow Agreement shall be deemed to be made in and in
all respects shall be interpreted, construed and governed by and in accordance
with the laws of the State of New York, without giving effect to principles of
conflicts of laws thereof. The parties hereto consent to
9
<PAGE> 10
the jurisdiction of and venue in the Federal courts located in the Borough of
Manhattan, in New York City.
(b) This Escrow Agreement and all of the provisions hereof
shall be binding upon and shall inure to the benefit of the parties hereto and
their respective successors and permitted assigns.
(c) This Escrow Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
(d) "Business Day" shall mean any day other than a Saturday, a
Sunday or a day on which banks in New York, New York or Chicago, Illinois are
authorized or obligated by law or executive order to be closed.
10. Termination. This Escrow Agreement may be terminated upon
the distribution of the entire balance of the Escrow Fund pursuant to the terms
hereof, or at any other time, upon the mutual written consent of Buyer, the
Sellers and the Escrow Agent. Upon such termination, Buyer, the Sellers and the
Escrow Agent shall be discharged from all obligations under this Escrow
Agreement.
11. Notices. Any notice, request, instruction or other
document to be given hereunder by any party (or other Person referred to herein)
shall be deemed given if in writing and delivered personally or sent by
facsimile (if a facsimile number for the intended recipient is provided in this
Section or in a notice given as provided in this Section), by telegram, by
registered or certified mail (return receipt requested) or by national courier
service:
(a) if to the Sellers, to their respective addresses specified
on Annex C hereto, with a copy to:
10
<PAGE> 11
Sullivan & Cromwell
125 Broad Street
New York, New York 10004
Telephone: (212) 558-4000
Telecopy: (212) 558-3588
Attention: Francis J. Aquila
(b) if to Buyer, to:
Beckman Instruments, Inc.
2500 Harbor Boulevard
Fullerton, California 92834
Attention: President
with a copy to:
Beckman Instruments, Inc.
2500 Harbor Boulevard
Fullerton, California 92834
Attention: General Counsel
Fax: (714) 773-7936
(c) if to the Escrow Agent, to:
The First National Bank of Chicago
One First National Plaza
Suite 0126
Chicago, IL 60670-0126
Attention: Corporate Trust Services Division;
Tammie Marshall
Fax: (312) 407-1708
or to such other Persons or addresses as may be designated in writing by the
party to receive such notice as provided above. Any notice given by mail,
national courier service or telegram shall be effective when received. Any
notice given by facsimile shall be effective when the appropriate facsimile
answerback is received.
11
<PAGE> 12
IN WITNESS WHEREOF, this Agreement has been duly executed and
delivered by Buyer, Sellers and the Escrow Agent as of the date first above
written.
BECKMAN INSTRUMENTS, INC.
By: /s/ William H. May
-------------------------------
Name: William H. May
Title: Vice President, General
Counsel & Secretary
THE WALLACE H. COULTER CHARITABLE
REMAINDER UNITRUST UAD 5/23/97
By: /s/ Sue Van
-------------------------------
Name: Sue Van
Title: Trustee
THE JOSEPH R. COULTER, JR. TRUST
UAD 8/2/93
By: /s/ Laura Coulter-Jones
-------------------------------
Name: Laura Coulter-Jones
Title: Co-Trustee
By: /s/ Joseph R. Coulter III
-------------------------------
Name: Joseph R. Coulter III
Title: Co-Trustee
<PAGE> 13
THE COULTER FAMILY LIMITED
PARTNERSHIP
By: THE WALLACE H. COULTER TRUST
UAD 8/2/93, as General Partner
By: /s/ Sue Van
-------------------------------
Name: Sue Van
Title: Successor Trustee
THE JOSEPH R. COULTER, JR. TRUST
UAD 8/2/93, as General Partner
By: /s/ Laura Coulter-Jones
-------------------------------
Name: Laura Coulter-Jones
Title: Co-Trustee
By: /s/ Joseph R. Coulter III
-------------------------------
Name: Joseph R. Coulter III
Title: Co-Trustee
THE FIRST NATIONAL BANK OF CHICAGO,
as Escrow Agent
By: /s/ John R. Prendiville
-------------------------------
Name: John R. Prendiville
Title: Vice President
<PAGE> 14
Annex A
<TABLE>
<CAPTION>
% of
Total Purchase Amount
Number Purchase Price in
Sellers of Shares Price Payable Escrow
- ----------------------- --------- -------- -------------- -------------
<S> <C> <C> <C> <C>
THE WALLACE H.
COULTER CHARITABLE
REMAINDER UNITRUST:
- Class A Common Stock 2,250 23.35 $169,474,117 $10,271,159
- Class B Common Stock 308 $ 23,199,124 $ 1,406,007
THE JOSEPH R.
COULTER, JR. TRUST:
- Class A Common Stock 2,143 19.57 $161,414,680 $ 9,782,708
- Class B Common Stock 0 $ 0 $ 0
THE COULTER FAMILY
LIMITED PARTNERSHIP:
- Class A Common Stock 5,500 57.08 $414,270,063 $25,107,277
- Class B Common Stock 752 $ 56,642,016 $ 3,432,849
----- ----- ------------ -----------
Subtotal Class A - 9,893
Class B - 1,060
-----
Total 10,953 100.00 $825,000,000 $50,000,000
====== ====== ============ ===========
</TABLE>
A-1
<PAGE> 15
ANNEX B
FIRST CHICAGO NBD
FEE SCHEDULE
ESCROW AGENCY SERVICES
BECKMAN INSTRUMENTS, INC./THE COULTER FAMILY LIMITED PARTNERSHIP
- -------------------------------------------------------------------------------
I. Account Acceptance
A fee for services in connection with the initial set-up of this escrow
account will be charged as follows:
Account Acceptance $2,500
Legal Fee Included
The fee covers examination and execution of an escrow agreement and all
required documentation.
II. Annual Administration
A fee for ordinary administration of this escrow account will be charged at
$2,500. The fee will be payable annually in advance for the annual period
or any portion thereof.
III. Operating Services
A. Wire transfers $20.00 each
B. Purchase or sale of securities $75.00 each
There will be no transaction charge for investments made in the
Pegasus Funds.
IV. Miscellaneous
Fees for services not specifically covered in this schedule will be
assessed in amounts commensurate with the services rendered. The fees in
this schedule are subject to reasonable adjustments as changes in laws,
procedures, or costs of doing business demand. The costs of supplies and
other out-of-pocket expenses that can be directly allocated will be added
to our regular charges.
For investments in the Pegasus Funds, First Chicago NBD and/or our
affiliates may earn service fees/expenses associated with these funds as
disclosed in the mutual fund prospectus.
<PAGE> 16
ANNEX C
ADDRESSES OF SELLERS
1. If to the Wallace H. Coulter Charitable Remainder
Unitrust, to:
Sue Van
c/o H. Randolph Williams, Esq.
Williams & Lee LLC
333 North Michigan Avenue
Suite 728
Chicago, Illinois 60601
Fax: (312) 629-9020
2. If to the Joseph R. Coulter, Jr. Trust, to:
Laura G. Coulter-Jones
1121 Starling Avenue
Miami Springs, FL 33166
and to:
Joseph R. Coulter III
260 Huntinglodge Drive
Miami Springs, FL 33166
3. If to the Coulter Family Limited Partnership, to:
a) Wallace H. Coulter Trust
c/o Sue Van
c/o H. Randolph Williams, Esq.
Williams & Lee LLC
333 North Michigan Avenue
Suite 728
Chicago, Illinois 60601
Fax: (312) 629-9020
b) Joseph R. Coulter, Jr. Trust
c/o Laura G. Coulter-Jones
1121 Starling Avenue
Miami Springs, FL 33166
and to:
c/o Joseph R. Coulter III
260 Huntinglodge Drive
Miami Springs, FL 33166
C-1
<PAGE> 1
Exhibit 10.2
NONCOMPETITION AGREEMENT
This Noncompetition Agreement (this "Agreement") is made as of
October 31, 1997, by and among Beckman Instruments, Inc., a Delaware corporation
("Buyer"), Coulter Corporation (the "Company") and Wallace H. Coulter, Joseph R.
Coulter III and Laura G. Coulter-Jones (each, a "Key Employee").
R E C I T A L S
Concurrently with the execution and delivery of this
Agreement, Buyer is purchasing from the stockholders of Coulter Corporation (the
"Company") all of the outstanding shares (the "Shares") of common stock of the
Company pursuant to the terms and conditions of the Stock Purchase Agreement
dated August 29, 1997, as amended on October 31, 1997, among the Company, the
stockholders of the Company listed on Annex A thereto and Buyer (the "Stock
Purchase Agreement"). The Stock Purchase Agreement requires that noncompetition
agreements be executed and delivered by each of the Key Employees as a condition
to the purchase of the Shares by Buyer.
AGREEMENT
The parties, intending to be legally bound and in
consideration of the mutual promises contained herein, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, agree as follows:
ARTICLE 1 DEFINITIONS
Capitalized terms not expressly defined in this Agreement
shall have the meanings ascribed to them in the Stock Purchase Agreement.
ARTICLE 2 ACKNOWLEDGMENTS BY SELLERS
Each Key Employee acknowledges that (a) Key Employee has
occupied a position of trust and confidence with the Company prior to the date
hereof and has become familiar with certain of the following, any and all of
which constitute confidential information of the Company, (collectively, the
"Confidential Information"): (i) any and all trade secrets concerning the
business and affairs of the Company, product specifications, data, know-how,
1
<PAGE> 2
formulae, compositions, processes, designs, sketches, photographs, graphs,
drawings, samples, inventions and ideas, past, current and planned research and
development, current and planned manufacturing and distribution methods and
processes, customer lists, current and anticipated customer requirements, price
lists, market studies, business plans, computer software and programs (including
object code and source code), computer software and data base technologies,
systems, structures and architectures (and related processes, formulae
compositions, improvements, devices, know-how, inventions, discoveries,
concepts, ideas, designs, methods and information, of the Company; (ii) any and
all information concerning the business and affairs of the Company (which
includes historical financial statements, financial projections and budgets,
historical and projected sales, capital spending budgets and plans, the names
and backgrounds of key personnel, personnel training and techniques and
materials, however documented); and (iii) any and all notes, analyses,
compilations, studies, summaries, and other material prepared by or for the
Company containing or based, in whole or in part, on any information included in
the foregoing, (b) the Company conducts its business and markets its products
and services throughout the world, (c) the Company competes with other
businesses that are located throughout the world, and (d) the provisions of
Articles 3 and 4 of this Agreement are reasonable and necessary to protect and
preserve the Company's business and legitimate business interests as that term
is used in the Florida Statute Section 542.335.
ARTICLE 3 CONFIDENTIAL INFORMATION
Subject to the Key Employees' rights as representatives or
affiliates of Sellers to retain documents pursuant to Sections 6.9, 7.5 and 10.3
of the Stock Purchase Agreement, Key Employee acknowledges and agrees that all
Confidential Information known or obtained by Key Employee, whether before or
after the date hereof, is the property of the Company. Therefore, Key Employee
agrees that Key Employee will not, at any time, disclose to any unauthorized
Persons or use for his own account or for the benefit of any third party any
Confidential Information, whether Key Employee has such information in Key
Employee's memory or embodied in writing or other physical form, without Buyer's
written consent, unless and to the extent that the Confidential Information is
or becomes generally known to and available for use by the public other than as
a result of Key Employee's fault or the fault of any other Person known by Key
Employee to be bound by a duty of confidentiality to Buyer or the Company or
when disclosure of such information is required by a court of law, any
governmental agency or any administrative or legislative body (including a
committee thereof) with apparent jurisdiction to order him or her to divulge,
disclose or make accessible such information. Subject to the Key Employees'
rights as representatives or affiliates of Sellers to retain documents pursuant
to
2
<PAGE> 3
Sections 6.9, 7.5 and 10.3 of the Stock Purchase Agreement, Key Employee agrees,
upon prior written request by Buyer, to deliver to Buyer within a reasonable
period of time following receipt of such request, all documents, memoranda,
notes, plans, records, reports, and other documentation, models, components,
devices, or computer software, whether embodied in a disk or in other form (and
all copies of all of the foregoing), relating to the businesses, operations, or
affairs of the Company and any other Confidential Information that Key Employee
may then possess or have under Key Employee's control.
ARTICLE 4 NONCOMPETITION
As an inducement for Buyer to enter into the Stock Purchase
Agreement, Key Employee agrees that:
(a) For a period of three years after the Closing:
(i) Key Employee will not, directly or indirectly, including
through entities which Key Employee controls, or has a
beneficial interest in, anywhere in the world, without
the prior written consent of Buyer, engage or invest in,
own, manage, operate, finance, control, or participate
in the ownership, management, operation, financing, or
control of, be employed by, associated with, or in any
manner connected with, lend Key Employee's name or any
similar name to, lend Key Employee's credit to, or
render services or advice to, any business whose
products or activities compete with the products or
activities of the Company; provided, however, that (i)
Key Employee may purchase or otherwise acquire up to
(but not more than) five percent of any class of
securities of any enterprise (but without otherwise
participating in the activities of such enterprise) if
such securities are listed on any national or regional
securities exchange or have been registered under
Section 12(g) of the Securities Exchange Act of 1934, so
long as the cumulative purchase price of any such class
of securities does not exceed $100 million at the time
of purchase; (ii) each Key Employee, and such Key
Employee's affiliates, as the case may be, shall be
entitled to continue to hold the shares of Coulter
Cellular Therapies Inc. ("CCTI") that will be
distributed to such Key Employee or such affiliates,
directly or indirectly, by dividend declared on October
20, 1997 and having a record date of October 30, 1997
(the "Distribution"), and to invest in CCTI and to sit
on the board of directors of CCTI, so long as no Key
Employees
3
<PAGE> 4
shall during the term of this Agreement (A) make any
additional investment in CCTI after the date hereof that
increases the percentage shareholding of such Key
Employee above the percentage that such Key Employee
holds as a result of the Distribution or (B) participate
in the day to day management of CCTI; (iii) each Key
Employee, and such Key Employee's affiliates, as the
case may be, shall be entitled to continue to hold such
Key Employee's and such affiliates', as the case may be,
current investment in Micromeretics Inc.
("Micromeretics") and to sit on the board of directors
of Micromeretics, so long as no Key Employee shall
during the term of this Agreement (A) increase such Key
Employee's percentage shareholding in Micromeretics
above the level of such Key Employee's current
percentage shareholding or (B) participate in the day to
day management of Micromeretics; (iv) each Key Employee
and such Key Employee's affiliates, as the case may be,
shall be entitled to invest in any investment fund, so
long as (A) the Key Employee making such investment does
not control the investment decisions of any such fund
and (B) no Key Employee shall make an investment in
excess of $100 million in any fund the investment
criteria of which is primarily targeted at investments
in the in vitro diagnostics industry; and (v) with
respect to Wallace H. Coulter, the parties hereto
acknowledge that in connection with his estate planning
Wallace H. Coulter may establish one or more foundations
for charitable purposes and the trustee or trustees of
such foundation or persons performing analogous
functions to a trustee or trustees shall be entitled to
invest the foundation's principal and to make grants of
its income or principal in accordance with the
applicable governing documents thereof, it being
understood that, in addition to the investments
permitted by the foregoing clauses, the foundation shall
be entitled to invest in private companies so long as
such investments do not exceed $50 million. Each of the
Key Employees agrees that this covenant is reasonable
with respect to its duration, geographical area, and
scope and is reasonably necessary to protect the
legitimate business interests of the Company.
(ii) Key Employee will not, directly or indirectly, either
for himself or any other Person, (A) induce or attempt
to induce any employee of Company to leave the employ of
Company, (B) in any way interfere with the relationship
between the Company and any employee of the Company, (C)
employ, or otherwise engage as an employee, independent
contractor, or otherwise, any employee of the Company or
(D) induce or attempt to induce any customer, supplier,
licensee, or
4
<PAGE> 5
business relation of the Company to cease doing business
with Company, or in any way interfere with the
relationship between any customer, supplier, licensee,
or business relation of the Company.
(iii) Key Employee will not, directly or indirectly, either
for himself or any other Person, solicit the business of
any Person known to Key Employee to be a customer of
Company, whether or not Key Employee had personal
contact with such Person with respect to products or
activities which compete in whole or in part with the
products or activities of the Company;
(b) In the event of a breach by Key Employee of any covenant set
forth in Subarticle 4(a) of this Agreement, the term of such
covenant will be extended with respect to such Key Employee by
the period of the duration of such specific breach;
(c) Key Employee will not, at any time during or after the three
year period, disparage Buyer or the Company, or any of their
stockholders, directors, officers, employees, or agents; and
(d) Key Employee will, for a period of three years after the
Closing, within ten days after accepting any employment, advise
Buyer of the identity of any employer of Key Employee. Buyer or
Company may serve notice upon each such employer that Key
Employee is bound by this Agreement and furnish each such
employer with a copy of this Agreement or relevant portions
thereof.
ARTICLE 5 REMEDIES
If Key Employee breaches the covenants set forth in Articles 3
or 4 of this Agreement, Buyer and the Company will be entitled to the following
remedies:
(a) Buyer's sole remedy at law shall be recovery of damages from Key
Employee in an amount equal to the amount received by such Key
Employee, if any, under the Company's Special Incentive Plan;
(b) In the event that a Key Employee breaches or threatens to breach
any of the covenants contained herein, the Company or Buyer
shall be entitled to seek a temporary or permanent injunction
against such Key Employee prohibiting any further violation of
5
<PAGE> 6
any such covenants, it being acknowledged and agreed that any
such breach of the covenants will cause irreparable harm to the
Company and Buyer, and that the remedy specified in paragraph
(a) above for any breach or threatened breach of such covenants
would be inadequate to protect the interests of Buyer or the
Company. The injunctive or equitable relief provided herein
shall be in addition to any award pursuant to paragraph (a)
above.
(c) The rights and remedies of the parties to this Agreement are
cumulative and not alternative.
ARTICLE 6 SUCCESSORS AND ASSIGNS
This Agreement will be binding upon Buyer, the Company and
each of the Key Employees and, with respect to the provisions of Article 3, Key
Employee's assigns and legal representatives, and will inure to the benefit of
Buyer and the Company and their affiliates, successors and assigns.
ARTICLE 7 WAIVER
Neither the failure nor any delay by any party in exercising
any right, power, or privilege under this Agreement will operate as a waiver of
such right, power, or privilege, and no single or partial exercise of any such
right, power, or privilege will preclude any other or further exercise of such
right, power, or privilege or the exercise of any other right, power, or
privilege. To the maximum extent permitted by applicable law, (a) no claim or
right arising out of this Agreement can be discharged by one party, in whole or
in part, by a waiver or renunciation of the claim or right unless in writing
signed by the other party; (b) no waiver that may be given by a party will be
applicable except in the specific instance for which it is given; and (c) no
notice to or demand on one party will be deemed to be a waiver of any obligation
of such party or of the right of the party giving such notice or demand to take
further action without notice or demand as provided in this Agreement.
ARTICLE 8 GOVERNING LAW
This Agreement will be governed by the laws of the State of
Florida without regard to conflicts of laws principles.
6
<PAGE> 7
ARTICLE 9 JURISDICTION; SERVICE OF PROCESS
Any action or proceeding seeking to enforce any provision of,
or based on any right arising out of, this Agreement may be brought against any
of the parties in the federal courts seated in the County of Dade, State of
Florida or in any state court seated in the County of Dade, State of Florida,
and each of the parties consents to the jurisdiction of such courts (and of the
appropriate appellate courts) in any such action or proceeding and waives any
objection to venue laid therein. Process in any action or proceeding referred to
in the preceding sentence may be served on any party anywhere in the world.
ARTICLE 10 SEVERABILITY
Whenever possible each provision and term of this Agreement
will be interpreted in a manner to be effective and valid but if any provision
or term of this Agreement is held to be prohibited or invalid, then such
provision or term will be ineffective only to the extent of such prohibition or
invalidity, without invalidating or affecting in any manner whatsoever the
remainder of such provision or term or the remaining provisions or terms of this
Agreement. If any of the covenants set forth in Article 4 of this Agreement are
held to be unreasonable, arbitrary, or against public policy, such covenants
will be considered divisible with respect to scope, time, and geographic area,
and in such lesser scope, time and geographic area, will be effective, binding
and enforceable against Key Employee.
ARTICLE 11 COUNTERPARTS
This Agreement may be executed in one or more counterparts,
each of which will be deemed to be an original copy of this Agreement and all of
which, when taken together, will be deemed to constitute one and the same
agreement.
ARTICLE 12 ARTICLE HEADINGS, CONSTRUCTION
The headings of Articles in this Agreement are provided for
convenience only and will not affect its construction or interpretation. All
references to "Article" or "Articles" refer to the corresponding Article or
Articles of this Agreement unless otherwise specified. All words used in this
Agreement will be construed to be of such gender or number as the
7
<PAGE> 8
circumstances require. Unless otherwise expressly provided, the word "including"
does not limit the preceding words or terms.
ARTICLE 13 NOTICES
All notices, consents, waivers, and other communications under
this Agreement must be in writing and will be deemed to have been duly given
when (a) delivered by hand (with written confirmation of receipt), (b) sent by
facsimile (with written confirmation of receipt), provided that a copy is mailed
by registered mail, return receipt requested, or (c) when received by the
addressee, if sent by a nationally recognized overnight delivery service
(receipt requested), in each case to the appropriate addresses and facsimile
numbers set forth below (or to such other addresses and facsimile numbers as a
party may designate by notice to the other parties):
If to a Key Employee: The address specified in Annex A hereto.
With a copy to: Sullivan & Cromwell
125 Broad Street
New York, New York 10004
Attention: Francis J. Aquila
Facsimile: (212) 558-3588
Buyer: Beckman Instruments, Inc.
2500 Harbor Boulevard
Fullerton, California 92834
Attention: President
with a copy to: Beckman Instruments, Inc.
2500 Harbor Boulevard
Fullerton, California 92834
Attention: General Counsel
Facsimile: (714) 773-7936
Company: Coulter Corporation
Coulter Technology Center
11800 Southwest 147th Avenue
Miami, Florida 33196-2500
Attention: General Counsel
Facsimile: (305) 380-8312
8
<PAGE> 9
with a copy to: Beckman Instruments, Inc.
2500 Harbor Boulevard
Fullerton, California 92834
Attention: General Counsel
Facsimile: (714) 773-7936
ARTICLE 14 ENTIRE AGREEMENT
This Agreement, together with the Intellectual Property
Agreement dated of even date herewith, constitutes the entire agreement between
the parties with respect to the specific subject matter of this Agreement and
supersedes all prior written and oral agreements and understandings between
Buyer the Company, and each Key Employee with respect to the specific subject
matter of this Agreement. To the extent this Agreement is inconsistent with the
terms of the Stock Purchase Agreement, the terms of this Agreement shall govern.
This Agreement may not be amended except by a written agreement executed by the
party to be charged with the amendment.
(signature page follows)
9
<PAGE> 10
IN WITNESS WHEREOF, the parties have executed and delivered this
Agreement as of the date first above written.
BUYER: KEY EMPLOYEE:
By: /s/ William H. May /s/ Sue Van
---------------------------- --------------------------
William H. May Wallace H. Coulter
Vice President, General By: Sue Van
Counsel and Secretary Title: Attorney-in-fact
/s/ Joseph R. Coulter III
---------------------------
Joseph R. Coulter III
/s/ Laura G. Coulter-Jones
---------------------------
Laura G. Coulter-Jones
COMPANY:
By: /s/ Laura G. Coulter-Jones
----------------------------
Laura G. Coulter-Jones
Executive Vice President
Attachment: Annex A
10
<PAGE> 11
ANNEX A
ADDRESSES OF RELATED PARTIES FOR NOTICE PURPOSES
Wallace H. Coulter
c/o Sue Van
c/o H. Randolph Williams, Esq.
Williams & Lee LLC
333 North Michigan Avenue
Suite 728
Chicago, IL 60601
Facsimile: (312) 629-9020
Joseph R. Coulter III
260 Huntinglodge Drive
Miami Springs, FL 33166
Laura G. Coulter-Jones
1121 Starling Avenue
Miami Springs, FL 33166
11
<PAGE> 1
EXHIBIT 10.3
Intellectual Property Agreement
This Intellectual Property Agreement (this "Agreement") is made as of
October 31, 1997, by and among Beckman Instruments, Inc., a Delaware corporation
("Buyer"), Coulter Corporation (the "Company") and Wallace H. Coulter, Joseph R.
Coulter, III and Laura G. Coulter-Jones (each, a "Related Employee").
Recitals
A. Company is the owner, either directly or indirectly, of trademark and
trade name rights with respect to the name COULTER (the "Name").
B. Company has entered into a Stock Purchase Agreement dated August 29,
1997, as amended on October 31, 1997, among the Company, the
stockholders of the Company listed on Annex A thereto and Buyer (the
"Stock Purchase Agreement").
C. Each Related Employee is a member of the Coulter family, and further, is
entering into or has entered into a noncompetition agreement (the
"Noncompetition Agreement") as a condition of the sale of the Company
shares to Buyer.
D. Company and each Related Employee are aware of the significant value of
the Name, both to the Company and to Buyer, and the Company and each
Related Employee are entering into this Agreement to restrict the use of
the Name by any Related Employee.
The parties, intending to be legally bound and in consideration of the mutual
promises contained herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, agree as follows:
Article 1 Definitions, Etc.
Capitalized terms not expressly defined in this Agreement shall have the
meanings ascribed to them in the Stock Purchase Agreement.
Article 2 Restrictions, Covenants
Each Related Employee represents, warrants and covenants that he/she
shall not use the Name, whether alone or in any combination or with any other
word or character or in or with any design or device or logo or other
representation, as any trade name, company name or trademark (including without
limitation any service mark or affiliation mark or otherwise) in association
with any business, operation, activity, product or service that is: competitive
to,
1
<PAGE> 2
related to, associated with, or in the same field of activity as the
business, operation, activity, product or service of Buyer, the Company or
Subsidiaries of Buyer or of the Company; or that is, when used in association
with the business, operation, activity, product or service, confusingly similar
to or likely to cause confusion or mistake or to deceive with respect to any
trade name, company name or trademark (including without limitation any service
mark or affiliation mark or otherwise) of Buyer, the Company or Subsidiaries of
Buyer or of the Company. By way of example only, but without limitation, a
business, operation, activity, product or service that involves or relates to
the health care industry, including but not limited to human and veterinary
medical research, clinical diagnostics, drug discovery or pharmaceuticals, the
biotechnology industry, or scientific or industrial instruments, shall be
considered as falling within the restrictions set forth herein. In addition, (i)
nothing herein shall be construed to limit the restrictions set forth in the
Noncompetition Agreement and (ii) nothing herein shall restrict Wallace H.
Coulter or, in the event of his death, his estate from using the name The
Wallace H. Coulter Foundation or some such similar name as the name of a
foundation to be established for charitable purposes.
Article 3 Successors and Assigns
This Agreement will be binding upon Buyer, the Company and each of the
Related Employees and Related Employee's assigns and legal representatives, and
will inure to the benefit of Buyer and the Company and their affiliates,
successors and assigns.
Article 4 Remedies
If Related Employee breaches any covenant set forth in Article 2 of this
Agreement, Buyer and the Company will be entitled to the following remedies:
(a) In addition to the right to damages and any other rights they
may have, to obtain injunctive or other equitable relief to
restrain any breach or threatened breach or otherwise to
specifically enforce the provisions of Article 2 of this
Agreement, it being agreed that any violation of Article 2 will
result in irreparable injury to the Company, the exact amount of
which will be difficult to ascertain, and that money damages
alone would be inadequate to compensate the Company and would be
an inadequate remedy for such breach.
(b) The rights and remedies of the parties to this Agreement are
cumulative and not alternative.
2
<PAGE> 3
Article 5 Waiver
Neither the failure nor any delay by any party in exercising any right, power,
or privilege under this Agreement will operate as a waiver of such right, power,
or privilege, and no single or partial exercise of any such right, power, or
privilege will preclude any other or further exercise of such right, power, or
privilege or the exercise of any other right, power, or privilege. To the
maximum extent permitted by applicable law, (a) no claim or right arising out of
this Agreement can be discharged by one party, in whole or in part, by a waiver
or renunciation of the claim or right unless in writing signed by the other
party; (b) no waiver that may be given by a party will be applicable except in
the specific instance for which it is given; and (c) no notice to or demand on
one party will be deemed to be either a waiver of any obligation of such party
by the party giving such notice or demand, or a waiver of the right of the party
giving such notice or demand to take further action without notice or demand as
provided in this Agreement.
Article 6 Governing Law
This Agreement will be governed by the laws of the State of California without
regard to conflicts of laws principles.
Article 7 Jurisdiction; Service Of Process
Any action or proceeding seeking to enforce any provision of, or based on any
right arising out of, this Agreement may be brought against any of the parties
in the United States District Court seated in Dade County, Florida or in any
state court seated in Dade County, Florida, and each of the parties consents to
the jurisdiction of such courts (and of the appropriate appellate courts) in any
such action or proceeding and waives any objection to venue laid therein.
Process in any action or proceeding referred to in the preceding sentence may be
served on any party anywhere in the world.
Article 8 Severability
Whenever possible each provision and term of this Agreement will be interpreted
in a manner to be effective and valid but if any provision or term of this
Agreement is held to be prohibited or invalid, then such provision or term will
be ineffective only to the extent of such prohibition or invalidity, without
invalidating or affecting in any manner whatsoever the remainder of such
provision or term or the remaining provisions or terms of this Agreement.
3
<PAGE> 4
Article 9 Counterparts
This Agreement may be executed in one or more counterparts, each of which will
be deemed to be an original copy of this Agreement and all of which, when taken
together, will be deemed to constitute one and the same agreement.
Article 10 Section Headings, Construction
The headings in this Agreement are provided for convenience only and will not
affect its construction or interpretation. All references to "Article" or
"Articles" refer to the corresponding Article or Articles of this Agreement
unless otherwise specified. All words used in this Agreement will be construed
to be of such gender or number as the circumstances require. Unless otherwise
expressly provided, the word "including" does not limit the preceding words or
terms.
Article 11 Notices
All notices, consents, waivers, and other communications under this Agreement
must be in writing and will be deemed to have been duly given when (a) delivered
by hand (with written confirmation of receipt), (b) sent by facsimile (with
written confirmation of receipt), provided that a copy is mailed by registered
mail, return receipt requested, or (c) when received by the addressee, if sent
by a nationally recognized overnight delivery service (receipt requested), in
each case to the appropriate addresses and facsimile numbers set forth below (or
to such other addresses and facsimile numbers as a party may designate by notice
to the other parties):
If to a Related Employee: The address specified in Annex A hereto.
With a copy to: Sullivan & Cromwell
125 Broad Street
New York, New York 10004
Attention: Francis J. Aquila
Facsimile: (212) 558-3588
Buyer: Beckman Instruments, Inc.
2500 Harbor Boulevard
Fullerton, California 92834
Attention: President
with a copy to: Beckman Instruments, Inc.
2500 Harbor Boulevard
Fullerton, California 92834
Attention: General Counsel
Facsimile: (714) 773-7936
4
<PAGE> 5
Company: Coulter Corporation
Coulter Technology Center
11800 Southwest 147th Avenue
Miami, Florida 33196-2500
Attention: General Counsel
Facsimile: (305) 380-8312
with a copy to: Beckman Instruments, Inc.
2500 Harbor Boulevard
P.O. Box 3100
Fullerton, California 92834-3100
Attention: General Counsel
Facsimile: (714) 773-7936
Article 12 Entire Agreement
This Agreement, together with the Noncompetition Agreement dated of even date
herewith, constitutes the entire agreement between the parties with respect to
the subject matter of this Agreement and supersedes all prior written and oral
agreements and understandings between the parties hereto with respect to the
subject matter of this Agreement. To the extent this Agreement is inconsistent
with the terms of the Stock Purchase Agreement, the terms of this Agreement
shall govern. This Agreement may not be amended except by a written agreement
executed by the party to be charged with the amendment.
5
<PAGE> 6
IN WITNESS WHEREOF, the parties have executed and delivered this
Agreement as of the date first above written.
BUYER: RELATED EMPLOYEE:
By: /s/ William H. May /s/ Sue Van
------------------------------- -------------------------------
William H. May Wallace H. Coulter
Vice President, General Counsel By: Sue Van
and Secretary Title: Attorney-in-fact
/s/ Joseph R. Coulter III
-------------------------------
Joseph R. Coulter III
/s/ Laura G. Coulter-Jones
-------------------------------
Laura G. Coulter-Jones
COMPANY:
By: /s/ Laura G. Coulter-Jones
-----------------------------
Laura G. Coulter-Jones
Executive Vice President
Attachment: Annex A
6
<PAGE> 7
ANNEX A
ADDRESSES OF RELATED PARTIES FOR NOTICE PURPOSES
Wallace H. Coulter
c/o Sue Van
c/o H. Randolph Williams, Esq.
Williams & Lee LLC
333 North Michigan Avenue
Suite 728
Chicago, IL 60601
Facsimile: (312) 629-9020
Joseph R. Coulter III
260 Huntinglodge Drive
Miami Springs, FL 33166
Laura G. Coulter-Jones
1121 Starling Avenue
Miami Springs, FL 33166
<PAGE> 1
Exhibit 23.1
ARTHUR ANDERSEN LLP
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
---------------------------------------------------
As independent certified public accountants, we hereby consent to the use of our
report and to all references to our Firm included in this Form 8-K of Beckman
Instruments, Inc.
/s/ Arthur Andersen LLP
Miami, Florida,
November 10, 1997
<PAGE> 1
EXHIBIT 99.1
BECKMAN
2500 Harbor Blvd., Fullerton, California 92834
- -------------------------------------------------------------------------------
Contact: Michael J. Whelan (714) 773-7620
Director, Investor Relations
COULTER ACQUISITION COMPLETES KEY BECKMAN INITIATIVE
----------------------------------------------------
FULLERTON, California - November 3, 1997 -- Beckman Instruments, Inc.
(NYSE:BEC) announced today that it completed its acquisition of Coulter
Corporation of Miami, Florida, on Friday, October 31. The new company will be
known as Beckman Coulter. This joins two of the most-recognized global
franchises in clinical diagnostics and life sciences, and completes a key
Beckman initiative to become a broad-based world leader in in vitro diagnostic
testing. Total 1996 sales of the combined companies were $1.7 billion, half of
which came from outside the United States. Since nearly 70 percent of these
revenues are from the recurring sale of reagents, supplies and service, going
forward Beckman Coulter is expected to generate strong and recurring cash flow.
- more -
<PAGE> 2
COULTER ACQUISITION COMPLETES
KEY BECKMAN INITIATIVE Page 2 of 4
- --------------------------------------------------------------------------------
Coulter is the world's leading manufacturer of hematology systems for the
clinical analysis of blood cells, where it has a market share twice as large as
the next competitor. In addition, Coulter is considered a technology leader in
cell counting and characterization and has a number two market position in flow
cytometry, which is used for both research and clinical applications. An
important advantage for this purchase is the fact that there is no product
overlap between the two companies but both sell to substantially the same
customer base.
With Coulter and the two earlier acquisitions in immunochemistry-based
diagnostics, Hybritech Incorporated and the Access(R) immunoassy product
business, Beckman completed a major initiative intended to build on its
leadership position in automated clinical chemistry and create a broad-based
capability in routine clinical diagnostics. Now, Beckman Coulter will be able
to offer hospital laboratories a range of automated systems that together can
perform more than 75 percent of their test volume and essentially all of the
tests that are considered routine. Going forward, this will allow Beckman
Coulter to provide significant value added benefits for customers, which will
be further leveraged by the company's expertise in simplifying and automating
laboratory processes.
- more -
<PAGE> 3
COULTER ACQUISITION COMPLETES
KEY BECKMAN INITIATIVE PAGE 3 OF 4
- --------------------------------------------------------------------------------
Total consideration for the acquisition was $875 million for all
outstanding shares plus approximately $275 million for the retirement of Coulter
debt and the payment of pre-existing extraordinary obligations. Funding was
provided under a senior unsecured credit facility.
Over the next several months, the company expects to refinance a portion of
the acquisition debt with the sale of certain financial assets and real-estate
and may, if market conditions permit, issue long-term debt and complete its
recently announced plans for existing debt. The company plans to improve its
financial flexibility and achieve an investment grade profile by the end of
1999.
Louis T. Rosso, chairman and chief executive officer, said "The formation
of this new company, Beckman Coulter, from two of the industry's most recognized
and respected names not only creates a powerful presence in diagnostics, but
also strengthens our life sciences business.
Our strategy is to improve customer productivity by simplifying and
automating their laboratory processes. Implementing this strategy across one of
the broadest product lines in the industry will be a differentiating
characteristic of the new company."
- more -
<PAGE> 4
COULTER ACQUISITION COMPLETES
KEY BECKMAN INITIATIVE PAGE 4 OF 4
- --------------------------------------------------------------------------------
Beckman Coulter automates and simplifies biological analysis with products
used in clinical diagnostics and life science laboratories. The company's
instrument systems, chemistries, software and supplies are used in all
laboratory phases of the battle against disease, from pioneering medical
research and drug discovery to patient blood testing. Operating on a global
basis, Beckman Coulter's combined annual sales totaled $1.7 billion in 1996,
with half of these generated outside the United States.
This press release contains forward-looking statements regarding, among
other things, the company's business strategy, anticipated synergies and cash
flow, possible future debt financings, the use of proceeds from such debt
financings, and the achievement of an investment grade profile. The
forward-looking statements are based largely on the Company's current
expectations and are subject to a number of risks and uncertainties, many of
which are beyond the Company's control. Actual results could differ materially
from those anticipated by these forward-looking statements as a result of
factors described in the company's reports filed with the Securities and
Exchange Commission, including its Report on Form 8-K dated October 15, 1997,
and as a result of other factors.
###
