<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
PSC INC.
- --------------------------------------------------------------------------------
(Name of Issuer)
Common Stock, par value $.01 per share
- --------------------------------------------------------------------------------
(Title of Class of Securities)
69361E 10 7
- --------------------------------------------------------------------------------
(CUSIP Number)
Spectra-Physics, Inc. Copy to: Carmen J. Romano
108 Webster Building Dechert Price & Rhoads
3411 Silverside Road 4000 Bell Atlantic Tower
Wilmington, DE 19810 1717 Arch Street
(302) 478-4600 Philadelphia, PA 19103-2793
Attn: Ms. Barbara Schoenberg (215) 994-2971
- --------------------------------------------------------------------------------
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)
July 12, 1996
- --------------------------------------------------------------------------------
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1 (b)(3) or (4), check the following box [ ].
Check the following box if a fee is being paid with the statement [X]. (A fee
is not required only if the reporting person: (1) has a previous statement on
file reporting beneficial ownership of more than five percent of the class of
securities described in Item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of five percent or less of such class.)
(See Rule 13d-7.)
Note. Six copies of this statement, including all exhibits, should be filed
with the Commission. See Rule 13d-1 (a) for other parties to whom copies are
to be sent.
* The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class of
securities, and for any subsequent amendment containing information which would
alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
<PAGE> 2
- -----------------------------
CUSIP NO. 69361E 10 7
- -----------------------------
- -----------------------------------------------------------------
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
Spectra-Physics, Inc.
- -----------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A (a) [ ]
MEMBER OF A GROUP (b) [X]
- -----------------------------------------------------------------
3. SEC USE ONLY
- -----------------------------------------------------------------
4. SOURCE OF FUNDS OO
- -----------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS
IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e) [ ]
- -----------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION Delaware
- -----------------------------------------------------------------
7. SOLE VOTING POWER 977,135 shares of
Common Stock
NUMBER OF -------------------------------------------------
SHARES 8. SHARED VOTING POWER 0 shares of Common Stock
BENEFICIALLY --------------------------------------------------
OWNED BY 9. SOLE DISPOSITIVE 977,135 shares of
EACH POWER Common Stock
REPORTING --------------------------------------------------
PERSON WITH 10. SHARED DISPOSITIVE 0 shares of Common Stock
POWER
- -----------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY 977,135 shares of
OWNED BY EACH REPORTING PERSON Common Stock
- -----------------------------------------------------------------
12. CHECK BOX IF THE AGGREGATE AMOUNT
IN ROW (11) EXCLUDES CERTAIN SHARES [ ]
- -----------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY 8.9% of Common Stock
AMOUNT IN ROW (11)
- -----------------------------------------------------------------
14. TYPE OF REPORTING PERSON CO; HC
- -----------------------------------------------------------------
<PAGE> 3
- -----------------------------
CUSIP NO. 69361E 10 7
- -----------------------------
- -----------------------------------------------------------------
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
Spectra-Physics Holdings USA, Inc.
- -----------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A (a) [ ]
MEMBER OF A GROUP (b) [X]
- -----------------------------------------------------------------
3. SEC USE ONLY
- -----------------------------------------------------------------
4. SOURCE OF FUNDS OO
- -----------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS
IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e) [ ]
- -----------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION Delaware
- -----------------------------------------------------------------
7. SOLE VOTING POWER 977,135 shares of
Common Stock
NUMBER OF --------------------------------------------------
SHARES 8. SHARED VOTING POWER 0 shares of Common Stock
BENEFICIALLY --------------------------------------------------
OWNED BY 9. SOLE DISPOSITIVE 977,135 shares of
EACH POWER Common Stock
REPORTING --------------------------------------------------
PERSON WITH 10. SHARED DISPOSITIVE 0 shares of Common Stock
POWER
- -----------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY 977,135 shares of
OWNED BY EACH REPORTING PERSON Common Stock
- -----------------------------------------------------------------
12. CHECK BOX IF THE AGGREGATE AMOUNT
IN ROW (11) EXCLUDES CERTAIN SHARES [ ]
- -----------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY 8.9% of Common Stock
AMOUNT IN ROW (11)
- -----------------------------------------------------------------
14. TYPE OF REPORTING PERSON CO; HC
- -----------------------------------------------------------------
<PAGE> 4
- -----------------------------
CUSIP NO. 69361E 10 7
- -----------------------------
- -----------------------------------------------------------------
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
Spectra-Physics AB
- -----------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A (a) [ ]
MEMBER OF A GROUP (b) [X]
- -----------------------------------------------------------------
3. SEC USE ONLY
- -----------------------------------------------------------------
4. SOURCE OF FUNDS OO
- -----------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS
IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e) [ ]
- -----------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION Sweden
- -----------------------------------------------------------------
7. SOLE VOTING POWER 977,135 shares of
Common Stock
NUMBER OF --------------------------------------------------
SHARES 8. SHARED VOTING POWER 0 shares of Common Stock
BENEFICIALLY --------------------------------------------------
OWNED BY 9. SOLE DISPOSITIVE 977,135 shares of
EACH POWER Common Stock
REPORTING --------------------------------------------------
PERSON WITH 10. SHARED DISPOSITIVE 0 shares of
POWER Common Stock
- -----------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY 977,135 shares of
OWNED BY EACH REPORTING PERSON Common Stock
- -----------------------------------------------------------------
12. CHECK BOX IF THE AGGREGATE AMOUNT
IN ROW (11) EXCLUDES CERTAIN SHARES [ ]
- -----------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY 8.9% of Common Stock
AMOUNT IN ROW (11)
- -----------------------------------------------------------------
14. TYPE OF REPORTING PERSON CO; HC
- -----------------------------------------------------------------
<PAGE> 5
- -----------------------------
CUSIP NO. 69361E 10 7
- -----------------------------
- -----------------------------------------------------------------
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
Securum Forvaltning AB
- -----------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A (a) [ ]
MEMBER OF A GROUP (b) [X]
- -----------------------------------------------------------------
3. SEC USE ONLY
- -----------------------------------------------------------------
4. SOURCE OF FUNDS OO
- -----------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS
IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e) [ ]
- -----------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION Sweden
- -----------------------------------------------------------------
7. SOLE VOTING POWER 977,135 shares of
Common Stock
NUMBER OF --------------------------------------------------
SHARES 8. SHARED VOTING POWER 0 shares of Common Stock
BENEFICIALLY --------------------------------------------------
OWNED BY 9. SOLE DISPOSITIVE 977,135 shares of
EACH POWER Common Stock
REPORTING --------------------------------------------------
PERSON WITH 10. SHARED DISPOSITIVE 0 shares of Common Stock
POWER
- -----------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY 977,135 shares of
OWNED BY EACH REPORTING PERSON Common Stock
- -----------------------------------------------------------------
12. CHECK BOX IF THE AGGREGATE AMOUNT
IN ROW (11) EXCLUDES CERTAIN SHARES [ ]
- -----------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY 8.9% of Common Stock
AMOUNT IN ROW (11)
- -----------------------------------------------------------------
14. TYPE OF REPORTING PERSON CO; HC
- -----------------------------------------------------------------
<PAGE> 6
- -----------------------------
CUSIP NO. 69361E 10 7
- -----------------------------
- -----------------------------------------------------------------
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
Securum AB
- -----------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A (a) [ ]
MEMBER OF A GROUP (b) [X]
- -----------------------------------------------------------------
3. SEC USE ONLY
- -----------------------------------------------------------------
4. SOURCE OF FUNDS 00
- -----------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS
IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e) [ ]
- -----------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION Sweden
- -----------------------------------------------------------------
7. SOLE VOTING POWER 977,135 shares of
Common Stock
NUMBER OF --------------------------------------------------
SHARES 8. SHARED VOTING POWER 0 shares of Common Stock
BENEFICIALLY --------------------------------------------------
OWNED BY 9. SOLE DISPOSITIVE 977,135 shares of
EACH POWER Common Stock
REPORTING --------------------------------------------------
PERSON WITH 10. SHARED DISPOSITIVE 0 shares of Common Stock
POWER
- -----------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY 977,135 shares of
OWNED BY EACH REPORTING PERSON Common Stock
- -----------------------------------------------------------------
12. CHECK BOX IF THE AGGREGATE AMOUNT
IN ROW (11) EXCLUDES CERTAIN SHARES [ ]
- -----------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY 8.9% of Common Stock
AMOUNT IN ROW (11)
- -----------------------------------------------------------------
14. TYPE OF REPORTING PERSON CO; HC
- -----------------------------------------------------------------
<PAGE> 7
ITEM 1. SECURITY AND ISSUER.
-------------------
The class of equity securities to which this statement relates
is the Common Stock, par value $.01 per share, of PSC Inc., a New York
corporation ("PSC"), which has its principal executive offices at 675 Basket
Road, Webster, New York 14580 ("Common Stock").
ITEM 2. IDENTITY AND BACKGROUND.
-----------------------
This statement on Schedule 13D is being filed by
Spectra-Physics, Inc., a Delaware corporation ("SPI"), Spectra-Physics Holdings
USA, Inc., a Delaware corporation ("SPHUI"), Spectra-Physics AB a Swedish
corporation ("SPAB"), Securum Forvaltning AB, a Swedish corporation ("SFAB")
and Securum AB, a Swedish corporation ("SAB").
SPI, which has its principal executive office and principal
business address at 108 Webster Building, 3411 Silverside Road, Wilmington,
Delaware 19810, holds investments in companies engaged in, among other things,
the manufacture and sale of construction site positioning devices, construction
and agricultural machine control equipment, and lasers and laser systems. The
name, business address, present principal occupation and citizenship of each
executive officer and director of SPI are set forth on Appendix A hereto.
SPHUI, which has its principal executive office and principal
business address at 108 Webster Building, 3411 Silverside Road, Wilmington,
Delaware 19810, holds 100% interest in SPI. The name, business address,
present principal occupation and citizenship of each executive officer and
director of SPHUI are set forth on Appendix B hereto.
SPAB, which has its principal executive office and principal
business address at P.O. Box 5226, Sturegatan 32, s-102 45, Stockholm, Sweden,
holds 100% interest in SPHUI as well as investments in companies engaged in,
among other things, the manufacture and sale of construction site positioning
devices, construction and agricultural machine control equipment, lasers and
laser systems, and infrared measurement systems and microwave equipment. The
name, business address, present principal occupation and citizenship of each
executive officer and director of SPHUI are set forth on Appendix C hereto.
<PAGE> 8
SFAB, which has its principal executive office and principal
business address at Box 70277, S-107 22, Stockholm, Sweden, holds 61.7%
interest in SPAB as well as investments in companies engaged in, among other
things, real estate and various industrial operations. The name, business
address, present principal occupation and citizenship of each executive officer
and director of SFAB are set forth on Appendix D hereto.
SAB, which has its principal executive office and principal
business address at Box 70277, S-107 22, Stockholm, Sweden, holds 100% interest
in SFAB as well as investments in companies engaged in, among other things,
real estate and various industrial operations. The name, business address,
present principal occupation and citizenship of each executive officer and
director of SAB are set forth on Appendix E hereto.
During the last five years, SPI, SPHUI, SPAB, SFAB and SAB
have not, and to the respective best knowledge of SPI, SPHUI, SPAB, SFAB and
SAB, none of the executive officers or directors of SPI, SPHUI, SPAB, SFAB or
SAB have not, been convicted in any criminal proceeding (excluding traffic
violations or similar misdemeanors) or been a party to a civil proceeding of a
judicial or administrative body of competent jurisdiction as a result of which
it, he or she is or was subject to a judgment, decree or final order enjoining
future violations of, or prohibiting or mandating activities subject to,
federal or state securities laws or finding any violations with respect to such
laws.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
-------------------------------------------------
Pursuant to an Asset and Stock Purchase Agreement dated May
20, 1996 and amended July 12, 1996, by and among PSC, SPI, and Spectra-Physics
Holding, S.A. ("SPHSA") (the "Purchase Agreement", a copy of which is attached
hereto as Exhibit A and is incorporated herein by reference), SPI received
977,135 shares of Common Stock as part of the consideration for the sale to PSC
and certain of its subsidiaries of certain stock and assets owned by SPI and
certain of its affiliated entities.
<PAGE> 9
Such 977,135 shares of Common Stock represent 9.7% of the
outstanding shares of Common Stock (10,040,776 shares as of July 12, 1996)
before giving effect to the issuance of such 977,135 shares, and 8.9% after
giving effect to the issuance of such shares.
Pursuant to an Escrow Agreement dated as of July 12, 1996, by
and among PSC, SPI and Chase Manhattan Bank, N.A., as escrow agent (the "Escrow
Agreement", a copy of which is attached hereto as Exhibit B and is incorporated
herein by reference), SPI has delivered to an escrow agent, pursuant to the
Purchase Agreement, 315,789 shares of Common Stock acquired by SPI pursuant to
the Purchase Agreement (together with any securities into which such shares may
be converted by virtue of any merger or other reorganization during the term of
the escrow, the "Escrowed Shares"), together with stock powers for such
Escrowed Shares duly executed in blank.
In accordance with the Escrow Agreement, the Escrowed Shares
may be used to satisfy certain indemnification obligations of SPI and SPHSA
under Article VIII of the Purchase Agreement (an "Indemnification Claim").
Pursuant to the Escrow Agreement and as more fully described therein, on the
earlier of January 12, 1997, or the first date on which PSC consummates a
public offering of its equity securities, certain of the Escrowed Shares may be
released from escrow and delivered to SPI, and on July 12, 1997, additional
Escrowed Shares may be released from escrow and delivered to SPI. Any
remaining Escrowed Shares will be released from escrow and delivered to SPI,
pursuant to the Escrow Agreement, when no Indemnification Claim made in
accordance with the Escrow Agreement remains outstanding (or earlier, as
described therein).
Pursuant to the Escrow Agreement, SPI has the right to replace
any number of the Escrowed Shares with cash, to vote or otherwise exercise all
other shareholder rights with respect to the Escrowed Shares, to receive and to
exercise any right to acquire further PSC stock or other securities distributed
with respect to the Escrowed Shares, and to receive any dividends or other
distributions declared and paid on the Escrowed Shares.
Pursuant to a Registration Rights and Holdback Agreement dated
as of July 12, 1996, by and between SPI and PSC (the "Registration Agreement",
a copy of which is attached hereto as Exhibit C and is incorporated herein by
reference), PSC granted to SPI registration rights for the shares of Common
Stock
<PAGE> 10
that SPI acquired pursuant to the Purchase Agreement, SPI agreed to certain
restrictions on the sale of such Common Stock, and PSC agreed to certain
restrictions on the sale of Common Stock in connection with a registered
offering by SPI of its Common Stock.
Until the earlier of July 12, 1997 or 180 days from the date
of the consummation of the first public offering of equity securities by PSC
after July 12, 1996, pursuant to the Registration Agreement, without PSC's
prior written consent, SPI may not effect any public sale or distribution of
the Common Stock received by SPI pursuant to the Purchase Agreement except
pursuant to an available Piggyback Registration (as defined therein).
If PSC enters into an underwriting agreement in connection
with a firm underwritten offering of shares of its Common Stock, SPI will not,
pursuant to the Registration Agreement, if requested by the managing
underwriter for such offering and PSC, effect any public sale or distribution
of Common Stock during the 10 days prior to, and during the 90-day period
beginning on, the effective date of such registration statement.
Pursuant to the Registration Agreement, if SPI enters into an
underwriting agreement in connection with a firm underwritten offering of
shares of Registerable Securities (other than in connection with a Piggyback
Registration), PSC will not, if requested by the managing underwriter for such
offering and SPI, effect any public sale or distribution of any Common Stock or
securities convertible into or exchangeable or exercisable for such Common
Stock (other than pursuant to a registration statement on Form S-8 or any
successor form), during the 10 days before, and during the 90-day period
beginning on, the effective date of such registration statement.
ITEM 4. PURPOSE OF TRANSACTION.
----------------------
SPI acquired the PSC Stock pursuant to the Purchase Agreement
as an investment. SPI's investment in PSC is subject to the provisions of the
Escrow Agreement and the Registration Agreement which are attached in their
entirety as exhibits to this Schedule 13D and incorporated herein by reference
and certain provisions of which are summarized in Item 3 above.
SPI may, subject to applicable securities laws, market
conditions and its assessment of the business prospects of PSC,
<PAGE> 11
acquire additional shares of Common Stock from time to time through open market
purchases or otherwise, as it determines in its sole discretion. SPI has not
determined whether it will acquire additional shares or fixed any number of
shares of Common Stock it might seek to acquire or any amount of money it may
be willing to invest in PSC.
SPI is continuously evaluating the business and business
prospects of PSC, and its present and future interests in, and intentions with
respect to, PSC and, subject to the Escrow Agreement and the Registration
Agreement, may, at any time decide to dispose of any or all of the shares of
Common Stock currently owned by it.
Other than as discussed above, SPI currently has no plans to
effect:
(a) any extraordinary corporate transaction, such as a
merger, reorganization or liquidation, involving PSC
or any of its subsidiaries;
(b) a sale or transfer of a material amount of the assets
of PSC or any of its subsidiaries;
(c) any change in the present Board of Directors or
management of PSC, including any change in the number
or term of directors or the filling of any vacancies
of the Board of Directors;
(d) any material change in the present capitalization or
dividend policy of PSC;
(e) any other material change in PSC's business or
corporate structure;
(f) any change in PSC's charter, by-laws or instruments
corresponding thereto or any other actions which may
impede the acquisition of control of PSC by any
person;
(g) the delisting of any class of securities of PSC from
a national securities exchange or the ceasing to be
authorized to be quoted in an interdealer quotation
system of a registered national securities
association;
<PAGE> 12
(h) any class of equity securities of PSC becoming
eligible for termination of registration pursuant to
Section 12(g)(4) of the Securities Exchange Act of
1934; or
(i) any action similar to any of those enumerated above.
SPI intends to re-evaluate continuously its investment in PSC
and may, based on such re-evaluation, determine at a future date to change its
current position with respect to any action enumerated above.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
------------------------------------
(a) - (b) SPI acquired 977,135 shares of Common Stock (9.7%
of the outstanding shares of Common Stock (10,040,776 shares as of July 12,
1996) before giving effect to the issuance of such 977,135 shares, and 8.9%
after giving effect to the issuance of such shares) as part of the
consideration for the sale to PSC of certain stock and assets owned by SPI and
certain of its affiliated entities as described in Item 3 above. SPHUI, SPAB,
SFAB and SAB may be deemed to share the voting and dispositive power of the
977,135 shares of Common Stock acquired by SPI by virtue of, and this form is
being filed by SPHUI, SPAB, SFAB and SAB solely because of, SPHUI's 100%
ownership interest in SPI, SPAB's 100% ownership interest in SPHUI, SFAB's
61.7% ownership interest in SPAB and SAB's 100% interest in SFAB.
(c) Other than SPI's acquisition of the Common Stock
pursuant to the Purchase Agreement as described in Item 3 above, SPI, SPHUI,
SPAB, SFAB and SAB have not, and to the best knowledge of SPI, SPHUI, SPAB,
SFAB and SAB, no director or executive officer of SPI, SPHUI, SPAB, SFAB or SAB
has, effected any transaction in shares of Common Stock during the period
extending from the date 60 days prior to the date hereof except as set forth on
Appendix F.
(d) To the best knowledge of SPI, SPHUI, SPAB, SFAB and SAB,
no other person has the right to receive or the power to direct the receipt of
dividends from, or the proceeds from the sale of, the Common Stock acquired by
SPI pursuant to the Purchase Agreement.
(e) Not applicable.
<PAGE> 13
ITEM 6. CONTRACTS, AGREEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO
----------------------------------------------------------------------
SECURITIES OF THE ISSUER.
------------------------
As more fully described in Item 3 above, PSC and SPI have
entered into the Purchase Agreement, the Escrow Agreement and the Registration
Agreement. A copy of the Purchase Agreement, the Escrow Agreement and the
Registration Agreement is attached hereto as Exhibits A, B and C, respectively.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
--------------------------------
Exhibit Description
------- -----------
A Asset and Stock Purchase Agreement dated May 20, 1996
and amended July 12, 1996, by and among PSC, SPI, and
SPHSA
B Escrow Agreement dated as of July 12, 1996, by and
among PSC, SPI and Chase Manhattan Bank, N.A., as
escrow agent
C Registration Rights and Holdback Agreement dated as
of July 12, 1996, by and between SPI and PSC
<PAGE> 14
SIGNATURE
After reasonable inquiry and to the best of my knowledge and
belief, I certify that the information set forth in this statement is true,
complete and correct.
Dated: July 22, 1996
SPECTRA-PHYSICS, INC.
By: /s/ JOHN J. CARNEY
--------------------------------
Name: John J. Carney
----------------------------
Title: President
---------------------------
SPECTRA-PHYSICS HOLDINGS USA, INC.
By: /s/ JOHN J. CARNEY
--------------------------------
Name: John J. Carney
----------------------------
Title: President
---------------------------
SPECTRA-PHYSICS AB
By: /s/ NILS-ERIK JOHANSSON
/s/ ERIK ASPLUND
--------------------------------
Name: Nils-Erik Johansson
Erik Asplund
----------------------------
Title: Group Controller
Group Treasurer
---------------------------
Securum Forvaltning AB
By: /s/ JAN KVARNSTROM
--------------------------------
Name: Jan Kvarnstrom
----------------------------
Title: Director
---------------------------
SECURUM AB
By: /s/ JAN KVARNSTROM
--------------------------------
Name: Jan Kvarnstrom
----------------------------
Title: Director
---------------------------
<PAGE> 15
JOINT FILING AGREEMENT
Pursuant to Rule 13d-1(f) promulgated under the Securities
Exchange Act of 1934, the undersigned hereby agree to the joint filing of this
Statement on Schedule 13D including any amendments thereto.
This Agreement may be executed in any number of counterparts,
each of which shall be deemed an original, but all of which shall constitute
one and the same instrument.
Dated: July 22, 1996
SPECTRA-PHYSICS, INC.
By: /s/ JOHN J. CARNEY
--------------------------------
Name: John J. Carney
----------------------------
Title: President
---------------------------
SPECTRA-PHYSICS HOLDINGS USA, INC.
By: /s/ JOHN J. CARNEY
--------------------------------
Name: John J. Carney
----------------------------
Title: President
---------------------------
SPECTRA-PHYSICS AB
By: /s/ NILS-ERIK JOHANSSON
/s/ ERIK ASPLUND
--------------------------------
Name: Nils-Erik Johansson
Erik Asplund
----------------------------
Title: Group Controller
Group Treasurer
---------------------------
Securum Forvaltning AB
By: /s/ JAN KVARNSTROM
--------------------------------
Name: Jan Kvarnstrom
----------------------------
Title: Director
---------------------------
SECURUM AB
By: /s/ JAN KVARNSTROM
--------------------------------
Name: Jan Kvarnstrom
----------------------------
Title: Director
---------------------------
<PAGE> 16
APPENDIX INDEX
<TABLE>
<CAPTION>
Appendix Sequential Description
- -------- ----------------------
<S> <C>
A List of Executive Officers and
Directors of SPI
B List of Executive Officers and
Directors of SPHUI
C List of Executive Officers and
Directors of SPAB
D List of Executive Officers and
Directors of SFAB
E List of Executive Officers and
Directors of SAB
F List of transactions in PSC Common
Stock during the period extending
from the date 60 days prior to the
date hereof
</TABLE>
<PAGE> 17
APPENDIX A
----------
Executive Officers and Directors of SPI
---------------------------------------
1. Name: John J. Carney
2. Director: Yes [X] No [ ]
3. Office(s) Held: President and Secretary
4. Business Address: c/o Spectra-Physics, Inc.
108 Webster Building
3411 Silverside Road
Wilmington, DE 19810
5. Citizenship: U.S.A.
6. Present Principal
Occupation or Employment: President and Secretary
7. Organization in Which Such
Employment is Conducted
a. Name: SPI
b. Principal Business: Measurement Technology
c. Address: 108 Webster Building
3411 Silverside Road
Wilmington, DE 19810
- -----------------------------------------------------------------
1. Name: Barbara H. Schoenberg
2. Director: Yes [ ] No [X]
3. Office(s) Held: Assistant Secretary
4. Business Address: c/o Spectra-Physics, Inc.
108 Webster Building
3411 Silverside Road
Wilmington, DE 19810
5. Citizenship: U.S.A.
6. Present Principal
Occupation or Employment: Certified Public Accountant
7. Organization in Which Such
Employment is Conducted
a. Name: Barbara H. Schoenberg, C.P.A.
b. Principal Business: Accounting Services
c. Address: 108 Webster Building
3411 Silverside Road
Wilmington, DE 19810
- -----------------------------------------------------------------
<PAGE> 18
APPENDIX B
----------
Executive Officers and Directors of SPHUI
-----------------------------------------
1. Name: Ulf J. Johansson
2. Director: Yes [X] No [ ]
3. Office(s) Held: Chairman
4. Business Address: c/o Spectra-Physics, Inc.
108 Webster Building
3411 Silverside Road
Wilmington, Delaware 19810
5. Citizenship: Sweden
6. Present Principal
Occupation or Employment: President and CEO
7. Organization in Which Such
Employment is Conducted
a. Name: SPAB
b. Principal Business: Measurement Technology
c. Address: P.O. Box 5226, Sturegatan 32
S-102 45
Stockholm, Sweden
- -----------------------------------------------------------------
1. Name: Lennart F. Rappe
2. Director: Yes [X] No [ ]
3. Office(s) Held: Vice Chairman
4. Business Address: c/o Spectra-Physics, Inc.
108 Webster Building
3411 Silverside Road
Wilmington, Delaware 19810
5. Citizenship: Sweden
6. Present Principal
Occupation or Employment: Vice President and CEO
7. Organization in Which Such
Employment is Conducted
a. Name: SPAB
b. Principal Business: Measurement Technology
c. Address: P.O. Box 5226, Sturegatan 32
S-102 45
Stockholm, Sweden
- -----------------------------------------------------------------
<PAGE> 19
1. Name: John J. Carney
2. Director: Yes [X] No [ ]
3. Office(s) Held: President
4. Business Address: c/o Spectra-Physics, Inc.
108 Webster Building
3411 Silverside Road
Wilmington, DE 19810
5. Citizenship: U.S.A.
6. Present Principal
Occupation or Employment: President and Secretary
7. Organization in Which Such
Employment is Conducted
a. Name: SPI
b. Principal Business: Measurement Technology
c. Address: c/o Spectra-Physics, Inc.
108 Webster Building
3411 Silverside Road
Wilmington, DE 19810
- -----------------------------------------------------------------
<PAGE> 20
APPENDIX C
----------
Executive Officers and Directors of SPAB
----------------------------------------
1. Name: Ulf J. Johansson
2. Director: Yes [X] No [ ]
3. Office(s) Held: President and CEO
4. Business Address: P.O. Box 5226
Sturegatan 32
S-102 45
Stockholm, Sweden
5. Citizenship: Sweden
6. Present Principal
Occupation or Employment: President and CEO
7. Organization in Which Such
Employment is Conducted
a. Name: SPAB
b. Principal Business: Measurement Technology
c. Address P.O. Box 5226
Sturegatan 32
S-102 45
Stockholm, Sweden
- -----------------------------------------------------------------
1. Name: Lennart F. Rappe
2. Director: Yes [ ] No [X]
3. Office(s) Held: Vice President and CFO
4. Business Address: P.O. Box 5226
Sturegatan 32
S-102 45
Stockholm, Sweden
5. Citizenship: Sweden
6. Present Principal
Occupation or Employment: Vice President and CFO
7. Organization in Which Such
Employment is Conducted
a. Name: SPAB
b. Principal Business: Measurement Technology
c. Address: P.O. Box 5226
Sturegatan 32
S-102 45
Stockholm, Sweden
- -----------------------------------------------------------------
<PAGE> 21
1. Name: Jan Kvarnstrom
2. Director: Yes [X] No [ ]
3. Office(s) Held: Chairman
4. Business Address: P.O. Box 5226
Sturegatan 32
S-102 45
Stockholm, Sweden
5. Citizenship: Sweden
6. Present Principal
Occupation or Employment: President and CEO
7. Organization in Which Such
Employment is Conducted
a. Name: SAB
b. Principal Business: Investment Company
c. Address Box 70227 (Klarabergsviadukten 70)
S-107 22
Stockholm, Sweden
- -----------------------------------------------------------------
1. Name: Gunnar Bark
2. Director: Yes [X] No [ ]
3. Office(s) Held: Vice-Chairman
4. Business Address: P.O. Box 5226
Sturegatan 32
S-102 45
Stockholm, Sweden
5. Citizenship: Sweden
6. Present Principal
Occupation or Employment: President and CEO
7. Organization in Which Such
Employment is Conducted
a. Name: Autoliv AB
b. Principal Business: Automobile Safety Equipment
c. Address: P.O. Box 70381 (Klarabengsviadukten 70)
S-107 24
Stockholm, Sweden
- -----------------------------------------------------------------
<PAGE> 22
1. Name: Andrejs Cakste
2. Director: Yes [X] No [ ]
3. Office(s) Held: Ordinary Board Member
4. Business Address: P.O. Box 5226
Sturegatan 32
S-102 45
Stockholm, Sweden
5. Citizenship: Sweden
6. Present Principal
Occupation or Employment: President and CEO
7. Organization in Which Such
Employment is Conducted
a. Name: Addum Industri AB
b. Principal Business: Holding Company
c. Address: Vasagatan 36, 2nd Floor
S-111 20
Stockholm, Sweden
- -----------------------------------------------------------------
1. Name: Bengt Kredell
2. Director: Yes [X] No [ ]
3. Office(s) Held: Ordinary Board Member
4. Business Address: P.O. Box 5226
Sturegatan 32
S-102 45
Stockholm, Sweden
5. Citizenship: Sweden
6. Present Principal
Occupation or Employment: Retired
7. Organization in Which Such
Employment is Conducted
- -----------------------------------------------------------------
<PAGE> 23
1. Name: Egon Linderoth
2. Director: Yes [X] No [ ]
3. Office(s) Held: Ordinary Board Member
4. Business Address: P.O. Box 5226
Sturegatan 32
S-102 45
Stockholm, Sweden
5. Citizenship: Sweden
6. Present Principal
Occupation or Employment: President and CEO
7. Organization in Which Such
Employment is Conducted
a. Name: Celsius Industrier AB
b. Principal Business: Defense Equipment
c. Address: P.O. Box 1777 Birger Jarlsgaten 32
S-102 45
Stockholm, Sweden
- -----------------------------------------------------------------
1. Name: Jonas Wahlstrom
2. Director: Yes [X] No [ ]
3. Office(s) Held: Ordinary Board Member
4. Business Address: P.O. Box 5226
Sturegatan 32
S-102 45
Stockholm, Sweden
5. Citizenship: Sweden
6. Present Principal
Occupation or Employment: Executive Position
7. Organization in Which Such
Employment is Conducted
a. Name: Hagstromer and Qviberg AB
b. Principal Business: Broker Firm
c. Address: S-103 71
Stockholm, Sweden
<PAGE> 24
- -----------------------------------------------------------------
1. Name: Nils-Erik Johansson
2. Director: Yes [ ] No [X]
3. Office(s) Held: Vice President and Group Controller
4. Business Address: P.O. Box 5226
Sturegatan 32
S-102 45
Stockholm, Sweden
5. Citizenship: Sweden
6. Present Principal
Occupation or Employment: Vice President and Group Controller
7. Organization in Which Such
Employment is Conducted
a. Name: SPAB
b. Principal Business: Measurement Technology
c. Address: P.O. Box 5226
Sturegatan 32
S-102 45
Stockholm, Sweden
- -----------------------------------------------------------------
1. Name: Erik Asplund
2. Director: Yes [ ] No [X]
3. Office(s) Held: Vice President and Group Treasurer
4. Business Address: P.O. Box 5226
Sturegatan 32
S-102 45
Stockholm, Sweden
5. Citizenship: Sweden
6. Present Principal
Occupation or Employment: Vice President and Group Treasurer
7. Organization in Which Such
Employment is Conducted
a. Name: SPAB
b. Principal Business: Measurement Technology
c. Address: P.O. Box 5226
Sturegatan 32
S-102 45
Stockholm, Sweden
- -----------------------------------------------------------------
<PAGE> 25
APPENDIX D
----------
Executive Officers and Directors of SFAB
----------------------------------------
1. Name: Jan Kvanstrom
2. Director: Yes [X] No [ ]
3. Office(s) Held: CEO
4. Business Address: Box 70277
S-107 22
Stockholm, Sweden
5. Citizenship: Sweden
6. Present Principal
Occupation or Employment: CEO
7. Organization in Which Such
Employment is Conducted
a. Name: SFAB
b. Principal Business: Investment company
c. Address: Box 70277
S-107 22
Stockholm, Sweden
- -----------------------------------------------------------------
1. Name: Mats Lonnqvist
2. Director: Yes [X] No [ ]
3. Office(s) Held: CFO
4. Business Address: Box 70277
S-107 22
Stockholm, Sweden
5. Citizenship: Sweden
6. Present Principal
Occupation or Employment: CFO
7. Organization in Which Such
Employment is Conducted
a. Name: SFAB
b. Principal Business: Investment Company
c. Address: Box 70277
S-107 22
Stockholm, Sweden
- -----------------------------------------------------------------
<PAGE> 26
1. Name: Hans Brissman
2. Director: Yes [X] No [ ]
3. Office(s) Held: Tax Officer
4. Business Address: Box 70277
S-107 22
Stockholm, Sweden
5. Citizenship: Sweden
6. Present Principal
Occupation or Employment: Tax Officer
7. Organization in Which Such
Employment is Conducted
a. Name: SFAB
b. Principal Business: Investment Company
c. Address: Box 70277
S-107 22
Stockholm, Sweden
- -----------------------------------------------------------------
<PAGE> 27
APPENDIX E
----------
Executive Officers and Directors of SAB
---------------------------------------
1. Name: Lars V Kylberg
2. Director: Yes [X] No [ ]
3. Office(s) Held: Chairman of Board
4. Business Address: Box 70277
S-107 22
Stockholm, Sweden
5. Citizenship: Sweden
6. Present Principal
Occupation or Employment: Member of Various Boards
7. Organization in Which Such
Employment is Conducted
a. Name: SAB
b. Principal Business: Investment Company
c. Address: Box 70277
S-107 22
Stockholm, Sweden
- -----------------------------------------------------------------
1. Name: Bengt Ake Berg
2. Director: Yes [X] No [ ]
3. Office(s) Held: Board Member
4. Business Address: Box 70277
S-107 22
Stockholm, Sweden
5. Citizenship: Sweden
6. Present Principal
Occupation or Employment: President
7. Organization in Which Such
Employment is Conducted
a. Name: AB Tumba Bruk
b. Principal Business: Printing of Swedish Bank Notes
c. Address: S-147 82 Tumba
Sweden
- -----------------------------------------------------------------
<PAGE> 28
1. Name: Mats Israelsson
2. Director: Yes [X] No [ ]
3. Office(s) Held: Board Member
4. Business Address: Box 70277
S-107 22
Stockholm, Sweden
5. Citizenship: Sweden
6. Present Principal
Occupation or Employment: Consultant
7. Organization in Which Such
Employment is Conducted
a. Name: Mats Israelsson Konsult AB
b. Principal Business: Real Estate
c. Address: Lotsvagen 2, S-183 57 Taby
Sweden
- -----------------------------------------------------------------
1. Name: Urban Jansson
2. Director: Yes [X] No [ ]
3. Office(s) Held: Board Member
4. Business Address: Box 70277
S-107 22
Stockholm, Sweden
5. Citizenship: Sweden
6. Present Principal
Occupation or Employment: President
7. Organization in Which Such
Employment is Conducted
a. Name: Forvaltning AB Ratos
b. Principal Business: Investment Company
c. Address: Box 1661
S-111 96
Stockholm, Sweden
- -----------------------------------------------------------------
1. Name: Wilhelm Lauren
2. Director: Yes [X] No [ ]
3. Office(s) Held: Consultant
4. Business Address: Box 70277
S-107 22
<PAGE> 29
Stockholm, Sweden
5. Citizenship: Sweden
6. Present Principal
Occupation or Employment: Consultant
7. Organization in Which Such
Employment is Conducted
a. Name: SAB
b. Principal Business: Investment Company
c. Address: Box 70277
S-107 22
Stockholm, Sweden
- -----------------------------------------------------------------
1. Name: Kajsa Lindstahl
2. Director: Yes [X] No [ ]
3. Office(s) Held: Board Member
4. Business Address: Box 70277
S-107 22
Stockholm, Sweden
5. Citizenship: Sweden
6. Present Principal
Occupation or Employment: President
7. Organization in Which Such
Employment is Conducted
a. Name: Banco Fonder
b. Principal Business: Fund Company
c. Address: Box 3568
S-103 69
Stockholm, Sweden
- -----------------------------------------------------------------
1. Name: Kerstin Sirvell
2. Director: Yes [X] No [ ]
3. Office(s) Held: Board Member
4. Business Address: Box 70277
S-107 22
Stockholm, Sweden
5. Citizenship: Sweden
6. Present Principal
Occupation or Employment: Consultant
7. Organization in Which Such
Employment is Conducted
a. Name: various companies
b. Principal Business: Biochemical research
<PAGE> 30
c. Address: Tjadervagen 28
S-181 40
Lidingo, Sweden
- -----------------------------------------------------------------
1. Name: Jan Kvarnstrom
2. Director: Yes [X] No [ ]
3. Office(s) Held: CEO
4. Business Address: Box 70277
S-107 22
Stockholm, Sweden
5. Citizenship: Sweden
6. Present Principal
Occupation or Employment: CEO
7. Organization in Which Such
Employment is Conducted
a. Name: SAB
b. Principal Business: Investment company
c. Address: Box 70277
S-107 22
Stockholm, Sweden
<PAGE> 31
APPENDIX F
----------
List of transactions in PSC Common Stock
----------------------------------------
1. Lennart F. Rappe purchased 4,000 shares of PSC Common Stock on
June 7, 1996 for the price of eleven dollars ($11.00) per
share through SE-Banken in Sweden.
2. Ulf J. Johansson purchased 5,200 shares of PSC Common Stock on
June 7, 1996 for the price of eleven dollars ($11.00) per
share through Royal Scandia, Insurance Company.
<PAGE> 32
EXHIBIT INDEX
-------------
<TABLE>
<CAPTION>
Exhibit Sequential Description
- ------- ----------------------
<S> <C>
A Asset and Stock Purchase Agreement
dated May 20, 1996 and amended
July 12, 1996, by and among PSC,
SPI, and SPHSA
B Escrow Agreement dated as of
July 12, 1996, by and among PSC,
SPI and Chase Manhattan Bank,
N.A., as escrow agent
C Registration Rights and Holdback
Agreement dated as of July 12,
1996, by and between SPI and PSC
</TABLE>
<PAGE> 1
EXHIBIT A
ASSET AND STOCK PURCHASE AGREEMENT
<PAGE> 2
CONFIDENTIAL
____________________________________________________________
ASSET AND STOCK PURCHASE AGREEMENT
by and among
PSC Inc.
a New York corporation
and
SPECTRA-PHYSICS, INC.
a Delaware corporation
and
SPECTRA-PHYSICS HOLDING, S.A.
a French corporation
Dated May 20, 1996
_______________________________________________________
<PAGE> 3
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C> <C>
ARTICLE I THE TRANSACTION . . . . . . . . . . . . . . . . . . . . . . . . 2
1.1 Sale and Purchase of Shares, Purchased Assets, TxCom Shares and
TxCom Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.2 Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
(a) Certain Definitions . . . . . . . . . . . . . . . . . . . . . . 3
(b) Other Definitions . . . . . . . . . . . . . . . . . . . . . . . 6
1.3 Pre-Closing Transfer of Certain Assets of Scanning; Industrial
Revenue Bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
1.4 Purchase Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
1.5 Payment of Cash Portion; Delivery of Buyer Stock and Note;
Assumption of Liabilities . . . . . . . . . . . . . . . . . . . . . . . 9
1.6 Purchase Price Adjustment . . . . . . . . . . . . . . . . . . . . . . . 10
1.7 Allocation of Purchase Price . . . . . . . . . . . . . . . . . . . . . . 12
1.8 Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
1.9 Deliveries and Proceedings at Closing . . . . . . . . . . . . . . . . . 13
(a) Deliveries by Seller . . . . . . . . . . . . . . . . . . . . . 13
(b) Deliveries by Buyer . . . . . . . . . . . . . . . . . . . . . . 13
(c) Other Deliveries . . . . . . . . . . . . . . . . . . . . . . . 14
ARTICLE II REPRESENTATIONS AND WARRANTIES OF SELLER . . . . . . . . . . . . . . . . 14
2.1 Representations and Warranties Pertaining to the Business . . . . . . . 14
(a) Organization and Qualification . . . . . . . . . . . . . . . . 14
(b) Capitalization . . . . . . . . . . . . . . . . . . . . . . . . 14
(c) Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . 15
(d) Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
(e) Non-Contravention . . . . . . . . . . . . . . . . . . . . . . . 16
(f) Governmental Consents and Approvals . . . . . . . . . . . . . . 16
(g) Combined Financial Statements . . . . . . . . . . . . . . . . . 17
(h) Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
(i) Properties . . . . . . . . . . . . . . . . . . . . . . . . . . 18
(j) Environmental Matters . . . . . . . . . . . . . . . . . . . . . 19
(k) Patents; Trademarks etc . . . . . . . . . . . . . . . . . . . . 19
(l) Domestic Employee Benefit Plans . . . . . . . . . . . . . . . . 20
(m) Foreign Employee Benefit Plans . . . . . . . . . . . . . . . . 21
(n) Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
(o) No Changes . . . . . . . . . . . . . . . . . . . . . . . . . . 23
(p) Litigation or Proceedings . . . . . . . . . . . . . . . . . . . 24
(q) Compliance with Laws . . . . . . . . . . . . . . . . . . . . . 24
(r) Labor Matters . . . . . . . . . . . . . . . . . . . . . . . . . 25
(s) Insurance Coverage . . . . . . . . . . . . . . . . . . . . . . 25
(t) Certain Transactions with Affiliates . . . . . . . . . . . . . 25
(u) Securities Act . . . . . . . . . . . . . . . . . . . . . . . . 25
(v) Banks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
(w) Powers of Attorney . . . . . . . . . . . . . . . . . . . . . . 25
2.2 Excluded International Assets, Etc . . . . . . . . . . . . . . . . . . . 26
ARTICLE III REPRESENTATIONS AND WARRANTIES OF BUYER . . . . . . . . . . . . . . . . 26
3.1 Representations and Warranties of Buyer . . . . . . . . . . . . . . . . 26
</TABLE>
- i -
<PAGE> 4
TABLE OF CONTENTS (cont'd)
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
(a) Organization and Qualification . . . . . . . . . . . . . . . . 26
(b) Capitalization . . . . . . . . . . . . . . . . . . . . . . . . 27
(c) Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . 27
(d) Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
(e) Non-Contravention . . . . . . . . . . . . . . . . . . . . . . . 28
(f) Governmental Consents and Approvals . . . . . . . . . . . . . . 28
(g) Financial Statements . . . . . . . . . . . . . . . . . . . . . 29
(h) Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
(i) Patents; Trademarks . . . . . . . . . . . . . . . . . . . . . . 29
(j) No Changes . . . . . . . . . . . . . . . . . . . . . . . . . . 29
(k) Litigation or Proceedings . . . . . . . . . . . . . . . . . . . 30
(l) Compliance with Laws . . . . . . . . . . . . . . . . . . . . . 31
(m) Buyer's Stock . . . . . . . . . . . . . . . . . . . . . . . . . 31
(n) Securities Act . . . . . . . . . . . . . . . . . . . . . . . . 31
(o) SEC Filings . . . . . . . . . . . . . . . . . . . . . . . . . . 31
(r) Note . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
3.2 Certain Limitations on Representations and Warranties . . . . . . . . . 32
ARTICLE IV CERTAIN OBLIGATIONS OF SELLER . . . . . . . . . . . . . . . . . 33
4.1 Conduct of Business Pending Closing . . . . . . . . . . . . . . . . . . 33
4.2 Access . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
4.3 Exclusive Dealing . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
ARTICLE V CERTAIN OBLIGATIONS OF BUYER . . . . . . . . . . . . . . . . . 35
5.1 Conduct of Business Pending Closing . . . . . . . . . . . . . . . . . . 35
5.2 Access . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
ARTICLE VI CONDITIONS TO CLOSING; TERMINATION . . . . . . . . . . . . . . 36
6.1 Conditions Precedent to Obligations of the Buyer Group . . . . . . . . . 36
(a) Bringdown of Representations and Warranties . . . . . . . . . . 36
(b) Performance and Compliance . . . . . . . . . . . . . . . . . . 37
(c) Opinion of Counsel . . . . . . . . . . . . . . . . . . . . . . 37
(d) Waiting Periods . . . . . . . . . . . . . . . . . . . . . . . . 37
(e) Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . 37
(f) Non-Compete Agreement . . . . . . . . . . . . . . . . . . . . . 37
(g) Transition Services Agreement . . . . . . . . . . . . . . . . . 37
(h) Minute Books and Resignations . . . . . . . . . . . . . . . . . 37
(i) Permits, Approvals and Authorizations . . . . . . . . . . . . . 38
(j) Certificate of Incorporation, Bylaws . . . . . . . . . . . . . 38
(k) Certificates of Good Standing . . . . . . . . . . . . . . . . . 38
(l) Secretary's Certificate . . . . . . . . . . . . . . . . . . . . 38
6.2 Conditions Precedent to the Obligations of the Seller Group . . . . . . 38
(a) Bringdown of Representations and Warranties . . . . . . . . . . 38
(b) Performance and Compliance . . . . . . . . . . . . . . . . . . 38
(c) Opinion of Counsel for the Buyer Group . . . . . . . . . . . . 39
(d) Waiting Periods . . . . . . . . . . . . . . . . . . . . . . . . 39
(e) Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . 39
</TABLE>
- ii -
<PAGE> 5
TABLE OF CONTENTS (cont'd)
<TABLE>
<CAPTION>
Page
----
<S> <C>
(f) TxCom Guarantee . . . . . . . . . . . . . . . . . . . . . . . . 39
(g) Permits, Approvals and Authorizations . . . . . . . . . . . . . 39
(h) Certificate of Incorporation, Bylaws . . . . . . . . . . . . . 39
(i) Certificates of Good Standing . . . . . . . . . . . . . . . . . 39
(j) Secretary's Certificate . . . . . . . . . . . . . . . . . . . . 39
6.3 Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
ARTICLE VII CERTAIN ADDITIONAL COVENANTS . . . . . . . . . . . . . . . . . 40
7.1 Costs, Expenses and Taxes . . . . . . . . . . . . . . . . . . . . . . . 40
7.2 Brokers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
7.3 Employment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
7.4 Best Efforts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
7.5 Transition Services Agreement . . . . . . . . . . . . . . . . . . . . . 41
7.6 Regulatory Filings . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
7.7 Use of Name . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
7.8 Registration Rights . . . . . . . . . . . . . . . . . . . . . . . . . . 44
7.9 TxCom Guarantee . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
7.10 Buyer's Further Assurances . . . . . . . . . . . . . . . . . . . . . . . 44
7.11 Restriction on Sale of Buyer Stock . . . . . . . . . . . . . . . . . . . 44
ARTICLE VIII INDEMNIFICATION . . . . . . . . . . . . . . . . . . . . . . . . 45
8.1 Indemnification by the Seller . . . . . . . . . . . . . . . . . . . . . 45
8.2 Indemnification By Buyer . . . . . . . . . . . . . . . . . . . . . . . . 46
8.3 Limitations on Indemnification Obligations . . . . . . . . . . . . . . . 46
8.4 Procedures Relating to Indemnification . . . . . . . . . . . . . . . . . 48
8.5 Exclusive Remedy . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
ARTICLE IX TAX MATTERS . . . . . . . . . . . . . . . . . . . . . . . . . . 49
9.1 Tax Responsibility . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
9.2 Section 338(h)(10) Election . . . . . . . . . . . . . . . . . . . . . . 51
9.3 Refunds and Credits . . . . . . . . . . . . . . . . . . . . . . . . . . 53
9.4 Tax Sharing Agreements . . . . . . . . . . . . . . . . . . . . . . . . . 54
9.5 Dispute Resolution . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
ARTICLE X MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . 54
10.1 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
10.2 Successors and Assigns; Benefit . . . . . . . . . . . . . . . . . . . . 56
10.3 Public Announcements . . . . . . . . . . . . . . . . . . . . . . . . . . 56
10.4 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
10.5 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
10.6 Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
10.7 Limitation on Knowledge . . . . . . . . . . . . . . . . . . . . . . . . 56
10.8 Foreign Sales Agreements and TxCom Agreement . . . . . . . . . . . . . . 57
10.9 Consent to Jurisdiction . . . . . . . . . . . . . . . . . . . . . . . . 57
10.10 Post-Closing Access . . . . . . . . . . . . . . . . . . . . . . . . . . 58
10.11 Regarding Certain Consents . . . . . . . . . . . . . . . . . . . . . . . 58
10.12 Further Assurances . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
10.13 Preservation of Records Information . . . . . . . . . . . . . . . . . . 59
10.14 Further Audit Assistance . . . . . . . . . . . . . . . . . . . . . . . . 59
10.15 Specific Performance . . . . . . . . . . . . . . . . . . . . . . . . . . 59
</TABLE>
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<PAGE> 6
TABLE OF CONTENTS (cont'd)
<TABLE>
<CAPTION>
Page
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<S> <C>
10.16 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
</TABLE>
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<PAGE> 7
EXHIBITS
<TABLE>
<S> <C> <C>
Exhibit A - Foreign Sales Agreements
B - TxCom Share Transfer Order
C - TxCom Assignment and Assumption
Agreement
D - Terms of Note
E - Form of Escrow Agreement
F - Allocation of Purchase Price
G - Opinion of Seller's Counsel
H - Form of Non-Compete Agreement
I - Form of Transition Services
Agreement
J - Opinion of Buyer's Counsel
K - Form of Registration Rights
Agreement
</TABLE>
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<PAGE> 8
ASSET AND STOCK PURCHASE AGREEMENT
This is an ASSET AND STOCK PURCHASE AGREEMENT (the "Agreement") dated
May 20, 1996, by and among PSC Inc., a New York corporation ("Buyer"),
Spectra-Physics, Inc., a Delaware corporation ("Seller") and Spectra-Physics
Holding, S.A., a French corporation ("SP Holding").
BACKGROUND
A. Seller is engaged, through Spectra-Physics Scanning Systems,
Inc., a Delaware corporation ("Scanning"), T.X.C.O.M., S.A., a French
corporation ("TxCom"), and the Seller Subsidiaries (as defined below), in the
business of designing, manufacturing and marketing bar code scanners, wireless
radio frequency systems and retail automation systems for the automatic
identification and data collection industry (the "Business"). The Seller
Subsidiaries consist of Spectra-Physics S.A., a French corporation,
Spectra-Physics S.r.l., an Italian corporation, Spectra-Physics K.K., a
Japanese company, Spectra-Physics GmbH, a German corporation, Spectra-Physics
Pty Ltd., an Australian corporation and Spectra-Physics Ltd, a United Kingdom
corporation.
B. The Business is conducted through and consists of (a)
Scanning, (b) TxCOM, (c) certain of the assets and liabilities of the Seller
Subsidiaries, which assets (the "International Assets") and which liabilities
(the "Assumed International Liabilities") are more particularly described in
SECTION 1.2(A) below and (d) the patents, subject to the license listed in
SCHEDULE 2.1(T) hereto (the "US Assets"), owned by Seller and used in the
Business which are set forth in SCHEDULE 2.1(K) hereto (the International
Assets and the US Assets are herein referred to as the "Purchased Assets").
C. Seller is the sole owner of all of the issued and outstanding
shares of capital stock of Scanning (the "Shares").
D. SP Holding owns 7235 shares of common stock (or 72% of the
issued and outstanding capital stock) of TxCom (the "TxCom Shares") and has the
right to purchase all of the remaining issued and outstanding capital stock of
TxCom.
E. Seller desires to sell to Buyer, and Buyer desires to
purchase, the Shares and the US Assets. Seller desires to cause each Seller
Subsidiary to sell to one or more wholly-owned subsidiaries of Buyer (each a
"Buyer Subsidiary" and collectively the "Buyer Subsidiaries"), and Buyer
desires to cause the Buyer Subsidiaries to purchase, the International Assets,
subject to the Assumed International Liabilities, all upon the terms and
subject to the conditions hereinafter set forth. SP Holding desires to sell
the TxCom Shares and to assign certain contracts (including certain contract
rights (the "TxCom Rights"), subject to certain contract obligations (the
"TxCom Obligations") (each as more particularly described in SECTION 1.2(A))
(the "TxCom
<PAGE> 9
Contracts") to Buyer (or a Buyer Subsidiary) and Buyer desires to purchase (or
cause such Buyer Subsidiary to purchase) the TxCom Shares and assume the TxCom
Contracts (including the TxCom Rights, subject to the TxCom Obligations).
Seller, SP Holding and the Seller Subsidiaries are sometimes referred to herein
as the "Seller Group" and Buyer and the Buyer Subsidiaries are sometimes
referred to herein as the "Buyer Group."
TERMS
In consideration of the mutual covenants contained herein and
intending to be legally bound hereby, the parties hereto agree as follows:
ARTICLE I
THE TRANSACTION
1.1 Sale and Purchase of Shares, Purchased Assets, TxCom Shares
and TxCom Rights. Subject to the terms and conditions contained herein, at the
Closing referred to in SECTION 1.8 below:
(a) Seller shall sell, convey, assign, transfer and
deliver to Buyer, and Buyer shall purchase and acquire from Seller, the Shares;
(b) Seller shall sell, convey, assign, transfer and
deliver to Buyer, and Buyer shall purchase and acquire from Seller, the US
Assets;
(c) Seller shall cause each Seller Subsidiary to sell,
convey, assign, transfer and deliver to the Buyer Subsidiaries, and Buyer shall
cause one or more Buyer Subsidiaries to purchase or acquire from each Seller
Subsidiary, the International Assets of such Seller Subsidiary, subject to the
Assumed International Liabilities of such Seller Subsidiary. The sale of
assets and transfer of liabilities by each Seller Subsidiary shall be made to
the Buyer Subsidiaries by means of a separate purchase and sale agreement (each
a "Foreign Sales Agreement" and collectively, the "Foreign Sales Agreements"),
which agreements shall each be substantially in the form of EXHIBIT A hereto,
with such changes therein as are necessary or appropriate under local law or as
the parties may otherwise agree; and
(d) SP Holding shall sell, convey, assign, transfer and
deliver the TxCom Shares and assign the TxCom Contracts (including the TxCom
Rights and the TxCom Obligations), to Buyer (or a Buyer Subsidiary), and Buyer
shall purchase and acquire (or shall cause such Buyer Subsidiary to purchase
and acquire) from
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<PAGE> 10
SP Holding the TxCom Shares and assume the TxCom Contracts (including the TxCom
Rights, subject to the TxCom Obligations). Such transfer shall be made by SP
Holding to Buyer (or a Buyer Subsidiary) by means of (i) a share transfer
order, in customary form, and (ii) the TxCom Assignment and Assumption
Agreement (collectively, the "TxCom Agreement"), which order and which
agreement shall be substantially in the form of EXHIBIT B and EXHIBIT C,
respectively, hereto.
1.2 Definitions.
(a) Certain Definitions.
(i) The term "International Assets" shall mean
all assets, properties and rights (contractual or otherwise) of every kind,
nature and description (including, without limitation, (i) furniture,
machinery, parts, tools and equipment, if any, (ii) inventory, (iii) accounts
receivable, (iv) license, distribution, dealer, sales representative, supplier,
service, and other commercial agreements, if any, (v) sales orders, purchase
orders, quotations, and bids, (vi) prepaid items, if any, (vii) licenses,
permits, authorizations and approvals, if any, (viii) customer lists, (ix)
books and records, (x) technical manuals and product and sales literature, (xi)
all rights under express or implied warranties, (xii) goodwill and (xiii) all
claims or defenses relating to any of the foregoing or to the Assumed
International Liabilities (as defined below)) of the Seller Subsidiaries
existing on the Closing Date that are used primarily in the Business, except
for the Excluded International Assets (as defined below).
(ii) The term "Excluded International Assets"
shall mean cash and cash equivalents, accounts receivable represented by
discounted notes, any assets or rights not used primarily in, or primarily
benefitting, the Business and any rights under insurance policies except for
claims related to the Business that are covered under such insurance policies
but that have not yet been submitted. Excluded International Assets shall
specifically include leasehold rights and improvements (other than with respect
to the Purchased International Offices as hereinafter defined), central
management information systems of the Seller Subsidiaries and related office
equipment (but not including any readily-movable local area network and wide
area communication network used primarily in the Business), telephone systems,
other office equipment (such as photocopiers or audiovisual equipment) not used
exclusively in the Business, security deposits, any claims for refunds of Taxes
(as hereinafter defined) paid by the Seller Subsidiaries, and except as set
forth in SECTION 7.7 of this Agreement, any rights in or to the name
"Spectra-Physics" or the Spectra-Physics stylized "S" logo.
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<PAGE> 11
(iii) The term "Assumed International Liabilities"
shall mean all liabilities and obligations (contractual or otherwise) of every
kind, nature and description, known or unknown, of the Seller Subsidiaries that
primarily relate to the Business, the conduct of the Business or the
International Assets, excepting the Excluded International Liabilities (as
hereinafter defined). For avoidance of doubt, Assumed International
Liabilities shall include all obligations related to the Business's offices
located in Belgium and Spain (the "Purchased International Offices") (such
locations being further specified in SCHEDULE 2.1(I) hereto).
(iv) The term "Excluded International Liabilities"
shall mean the following liabilities of the Seller Subsidiaries: (i)
liabilities for Taxes, (ii) liabilities or obligations for facility costs, such
as obligations under real estate leases (except with respect to the Purchased
International Offices), (iii) trade payables for goods and services relating to
the overall operations of the Seller Subsidiaries, such as for office supplies,
facility maintenance services and telephone service (except with respect to the
Purchased International Offices), and (iv) recourse liabilities in respect of
accounts receivable represented by discounted notes.
(v) The term "Foreign Business Employees" shall
mean (i) those employees of the Seller Subsidiaries set forth on SCHEDULE
1.2(A)(V) hereto (provided such employees are employees of the Seller
Subsidiaries on the Closing Date), and (ii) any other employees of the Seller
Subsidiaries hired after the date hereof and employed by the Seller
Subsidiaries on the Closing Date whose work relates primarily to the business
and operations of the Business, such as employees who sell and service the
products sold by the Business, employees who process orders and collect
receivables with respect to products sold by the Business, support staff whose
primary function is to support such salesmen, servicemen, order processors and
accounts receivable clerks, and managerial employees whose function is to
manage such salesmen, servicemen, order processors, accounts receivable clerks
and staff.
(vi) The "TxCom Contracts" shall mean the (i)
Share Purchase Agreement by and between Compagnie Auxiliaire de
Telecommunication, Ali Ben Ameur, GH Conseil, Christian Hart de Keating,
Philippe Malaise, Joseph Boissy, Vincent Baumier, Daniel Mawas, Bernard
Malaise, Alain Bonodot, SP Holding and Scanning, (ii) Shareholders and
Management Agreement by and between Spectra-Physics AB, Scanning, SP Holding,
Vincent Baumier, Bernard Malaise, Daniel Mawas and Alain Bonodot, and (iii)
Representation and Warranty Agreement by and between TxCom, SP Holding, Vincent
Baumier, Bernard Malaise, Daniel Mawas and Alain Bonodot, all dated as of
August 28, 1995.
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<PAGE> 12
(vii) The "TxCom Rights" shall mean all of
Spectra-Physics AB's, SP Holding's and Scanning's right, title or interest in
and to the TxCom Contracts.
(viii) The "TxCom Obligations" shall mean all of
Spectra-Physics AB's, SP Holding's and Scanning's liabilities and obligations
under the TxCom Contracts.
(ix) The term "Subsidiary", when used in this
Agreement, means, with respect to any corporation or entity ("Person"), any
other corporation or other business entity in which such Person owns directly
or indirectly fifty percent (50%) or more of the effective voting power or
equity interest or has the power or authority to control such corporation or
other business entity.
(x) The term "Industrial Revenue Bonds" shall
mean the State of Oregon Economic Development Commission $4,400,000 Industrial
Revenue Bonds, dated as of July 1, 1979.
(xi) The term "Material Adverse Effect" means any
material adverse effect on the financial condition or results of operation of
the Business taken as a whole, other than with respect to any adverse effects
which, directly or indirectly, relate to or result from (i) public or industry
knowledge relating to the transactions contemplated by this Agreement or (ii)
past, existing or prospective economic, regulatory or other conditions
affecting the Business or the industries in which the Business competes;
provided that no act, omission, occurrence, expense or liability shall be
deemed to be or result in such a material adverse effect unless the loss to or
cost borne by the Business by reason of such act, omission, occurrence, expense
or liability is greater than US $300,000; and provided further that for
purposes of SECTION 6.1(A) of this Agreement no act, omission, occurrence,
expense or liability shall be deemed to be or result in such a material adverse
effect unless the loss to or cost borne by the Business by reason of such act,
omission, occurrence, expense or liability is greater than US $2,000,000.
(xii) The term "Material Adverse Effect on Buyer"
means any material adverse effect on the financial condition or results of
operation of Buyer or its Subsidiaries taken as a whole, other than with
respect to any adverse effects which, directly or indirectly, relate to or
result from (i) public or industry knowledge relating to the transactions
contemplated by this Agreement or (ii) past, existing or prospective economic,
regulatory or other conditions affecting Buyer or its Subsidiaries or the
industries in which they compete; provided that no act, omission, occurrence,
expense or liability shall be deemed to be or result in such a material adverse
effect on Buyer unless the loss to or cost borne by Buyer or its Subsidiaries
by reason of such act, omission, occurrence,
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<PAGE> 13
expense or liability is greater than US $300,000; and provided further that for
purposes of SECTION 6.2(A) of this Agreement no act, omission, occurrence,
expense or liability shall be deemed to be or result in such a material adverse
effect on Buyer unless the loss to or cost borne by Buyer or its Subsidiaries
by reason of such act, omission, occurrence, expense or liability is greater
than US $2,000,000.
(b) Other Definitions. The following defined terms shall
have the meaning set forth in the referenced section.
<TABLE>
<CAPTION>
Defined Term Term Defined In Section
- ------------ -----------------------
<S> <C>
Accounting Principles 2.1(g)
Accumulated Funding Deficiency 2.1(l)(iii)
Adjusted Cash Portion 1.6(e)
Adjusted Purchase Price 1.6(e)
Agreement Introductory Paragraph
Anti-Monopoly Law 2.1(f)
Audited Balance Sheet 2.1(g)
Breakup Fee 4.4
Business Background Paragraph A
Buyer Group Background Paragraph F
Buyer's Subsidiaries Background Paragraph E
Buyer's Subsidiary Background Paragraph E
Buyer Proxy Statement 3.1(p)
Buyer Stock 1.4(a)
Buyer's Filings 3.1(s)
Buyer's Knowledge 10.7
Buyer's 10-K 3.1(c)
Cash Portion 1.4(a)
CECS 2.1(m)
CERCLA 2.1(j)
Closing 1.8
Closing Cash Payment 1.5(a)
Closing Date Balance Sheet 1.6(c), 1.6(d)
Code 2.1(h)
Combined Financial Statements 2.1(g)
Common Stock 1.4(a)
Confidentiality Agreement 8.5
Consent 2.1(e)
Customer 2.1(x)
Damages 8.1
Election Forms 9.2
Elections 9.2
Employee Pension Benefit Plan 2.1(l)(iii)
Environmental Permits 2.1(j)
Environmental Laws 2.1(j)
ERISA 2.1(l)(i)
Escrow Agent 1.5(d)
Escrow Agreement 1.5(d)
Escrowed Shares 1.5(d)
</TABLE>
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<PAGE> 14
<TABLE>
<CAPTION>
Defined Term Term Defined In Section
- ------------ -----------------------
<S> <C>
Estimated Cash Portion Adjustment 1.4(b)
Estimated Cash Portion of the Purchase Price 1.4(b)
Exchange Act 3.1(s)
Foreign Sales Agreement 1.1(c)
GAAP 2.1(g)
Government Authority 2.1(h)
Hazardous Substances 2.1(j)
HSR Act 2.1(f)
Indemnification Notice 8.4(a)
Indemnified Party 8.4(a)
Indemnifying Party 8.4(a)
Intellectual Property 2.1(k)
IRS 2.1(l)(i)
Licensed Products 7.7(b)
Licensed Names 7.7(b)
Multiemployer Plan 2.1(l)(ii)
Neutral Auditors 1.6(d)
Non-Assignable Contracts 10.11
Non-compete Agreement 6.1(f)
Note 1.4(a)
Payroll Taxes 2.1(h)
Person 1.2(f)
Phase I Investigation 2.1(j)
Potential Acquiror 4.4
Preliminary Closing Date Balance Sheet 1.6(a)
Pro-Forma Adjustments 1.6(e)
Prohibited Transaction 2.1(l)(ii)
Purchase Price 10.8
Purchase Price 1.4(a)
Purchased Assets Background Paragraph B
Purchased International Offices 1.2(a)(ii)
Registration Rights Agreement 7.8
Reportable Event 2.1(l)(iii)
Representations and Warranties Agreement 8.3(c)
Retained Names and Logos 7.7(a)
Return/Returns 2.1(h)
Scanning Background Paragraph A
Securities Act 2.1(u)
Seller Subsidiary Background Paragraph A
Seller Group Background Paragraph E
Seller's Knowledge 10.7
Scanning's Benefit Plans 2.1(l)(i)
Seller Brokers 7.2
Scanning's Qualified Plans 2.1(l)(iii)
Scanning's ERISA Affiliate 2.1(l)(i)
Shares Background Paragraph C
Spectra-Physics AB 1.5(a)
Subordinated Debt Commitment Letters 3.1(q)
</TABLE>
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<PAGE> 15
<TABLE>
<CAPTION>
Defined Term Term Defined In Section
- ------------ -----------------------
<S> <C>
Tax/Taxes 2.1(h)
Third Party Claim 8.4(a)
Third Party Transaction 4.4
Transition Services Agreement 6.1(g)
TxCom Background Paragraph A
TxCom Agreement 1.1(d)
TxCom Guarantee 8.2(c)
TxCom Shares Background Paragraph D
Undisputed Amount 1.6(e)
US Assets Background Paragraph B
</TABLE>
1.3 Pre-Closing Transfer of Certain Assets of Scanning; Industrial
Revenue Bonds.
(a) Prior to Closing, Seller shall cause Scanning to
dividend or otherwise transfer to Seller or its designees all or substantially
all cash and cash equivalents of Scanning. As of the Closing, all intercompany
payables or receivables between the Business, on the one hand, and any
affiliate of Seller (other than Scanning or TxCom), on the other hand, shall be
cancelled, except for receivables from Spectra-Physics Lasers, Inc. to Scanning
in respect of sales of VLD/ASIC drivers by Scanning to Spectra- Physics Lasers,
Inc. in the ordinary course of business.
(b) Prior to Closing, Seller will pay or call for payment
on the next available prepayment date all of the outstanding Industrial Revenue
Bonds.
1.4 Purchase Price.
(a) The aggregate purchase price for (i) the non-compete
covenant described in SECTION 6.1(F), (ii) the Shares, (iii) the TxCom Shares
and TxCom Rights and (iv) the Purchased Assets shall consist of One-Hundred
Twenty Million Dollars (US $120,000,000) (the "Cash Portion"), 977,135 fully
paid and non-assessable shares (the "Buyer Stock") of Buyer's Common Stock, par
value $.01 per share ("Common Stock"), and a promissory note of Buyer (the
"Note") in the principal amount of Five Million United States Dollars (US
$5,000,000), plus the assumption by Buyer (and/or the Buyer Subsidiaries) of
the Assumed International Liabilities and the TxCom Obligations (such
consideration, as adjusted as provided herein, is collectively referred to
herein as the "Purchase Price"). The Cash Portion of the Purchase Price shall
be subject to adjustment as provided in SECTION 1.6 below, and an increase or a
decrease in the Cash Portion of the Purchase Price will result in a
corresponding increase or decrease in the Purchase Price. The Note shall be
dated the date of Closing and shall be on the terms set forth on EXHIBIT D
hereto.
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<PAGE> 16
(b) At least five days prior to the Closing Date, Seller
will deliver to Buyer in writing its good faith estimate of the Cash Portion of
the Purchase Price based on the then most currently available financial
information concerning the Business' working capital, together with
documentation setting forth the basis for such estimate (such estimate of the
Cash Portion of the Purchase Price being the "Estimated Cash Portion of the
Purchase Price" and 50% of the amount by which the Estimated Cash Portion of
the Purchase Price exceeds US $120,000,000 being the "Estimated Cash Portion
Adjustment").
1.5 Payment of Cash Portion; Delivery of Buyer Stock and Note;
Assumption of Liabilities. At the Closing, the Purchase Price (prior to being
finally adjusted pursuant to SECTION 1.6) shall be payable as follows:
(a) Buyer shall and/or shall cause the Buyer Subsidiaries
to (i) pay an amount (the "Closing Cash Payment") in United States Dollars
equal to $120,000,000 plus the Estimated Cash Portion Adjustment in cash or by
wire transfer of immediately available funds to a bank account or accounts
designated by Seller on behalf of itself, the Seller Subsidiaries, SP Holding
and Spectra-Physics AB ("Spectra-Physics AB"), (ii), subject to the provisions
of SECTION 1.5(D) hereto, deliver the Buyer Stock to Seller, free and clear of
all liens, claims, equities, options, calls, voting trusts, agreements,
commitments and encumbrances whatsoever other than restrictions arising under
federal and state securities laws and (iii) execute and deliver the Note to
Seller. The Purchase Price shall be allocated as provided in SECTION 1.7.
(b) The Buyer Subsidiaries will pursuant to the Foreign
Sales Agreements assume and agree to pay, perform, satisfy or otherwise
discharge when due the Assumed International Liabilities.
(c) Buyer will (or will cause the appropriate Buyer
Subsidiary to), pursuant to the TxCom Assignment and Assumption Agreement,
assume the TxCom Contracts (including the TxCom Obligations) and agree to pay,
perform, satisfy or otherwise discharge when due the TxCom Obligations.
(d) Buyer shall deposit with Chase Manhattan Bank, N.A.
(the "Escrow Agent") the number of shares of the Buyer Stock which equals US
$3,000,000 divided by the closing price of the Common Stock on the NASDAQ
National Market System on the next to the last trading day prior to the Closing
Date as reported in the Wall Street Journal (the "Escrowed Shares"). The
Escrowed Shares will be held in escrow as security for the indemnification
obligation set forth in ARTICLE VIII in accordance with the terms of an escrow
agreement (the "Escrow Agreement"), substantially in the form of EXHIBIT E
hereto.
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<PAGE> 17
1.6 Purchase Price Adjustment.
(a) Within 60 days after the Closing, Scanning (acting
through Roger Tedford, its Vice President-Finance, or his successor as
designated by John O'Brien, the President of Scanning) shall cause to be
prepared and concurrently delivered to Seller and to Buyer a combined balance
sheet of the Business as of the Closing Date (the "Preliminary Closing Date
Balance Sheet"). The Preliminary Closing Date Balance Sheet shall be prepared
using the same accounting principles, practices and procedures as were used in
the preparation of the Audited Balance Sheet (as defined in SECTION 2.1(G)),
applied on a consistent basis (such accounting principles, practices and
procedures so applied being the "Accounting Principles").
(b) During the preparation of the Preliminary Closing
Date Balance Sheet by Scanning and the period of any dispute referred to below,
Buyer shall provide Seller and Seller's independent accountants full access to
the books, records, facilities and employees of the Business; provided,
however, that any such access shall be allowed only in such manner as not to
interfere unreasonably with the operation of the Business. Neither Seller nor
Buyer will engage in any substantive discussions with Scanning or its employees
regarding preparation of the Preliminary Closing Balance Sheet unless the other
party is also represented in such discussions.
(c) Either Buyer or Seller may dispute the amounts set
forth on the Preliminary Closing Date Balance Sheet, but only on the basis that
such amounts were not determined in accordance with the Accounting Principles
or with regard to computational errors; provided, however, that no dispute
shall be considered properly raised unless Buyer or Seller, as the case may be,
shall have notified Scanning and the other party in writing of each disputed
item, specifying the amount thereof in dispute and setting forth, in reasonable
detail, the basis for such dispute, within 30 days of such party's receipt of
the Preliminary Closing Date Balance Sheet. Any items not properly disputed by
either party within such 30-day period shall be final, binding and conclusive
on the parties hereto. If neither Buyer nor Seller fails properly to notify
Scanning and the other party of any such dispute within such 30-day period the
Preliminary Closing Date Balance Sheet shall be deemed to be the "Closing Date
Balance Sheet."
(d) In the event of a dispute with respect to the
Preliminary Closing Date Balance Sheet, Buyer and Seller shall attempt to
resolve their differences and any such resolution shall be final, binding and
conclusive on the parties hereto. If Buyer and Seller fail to reach a
resolution with respect to any disputed item within 10 business days of a
party's written notice of dispute to Scanning and the other party, Buyer and
Seller
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<PAGE> 18
shall submit the items remaining in dispute for resolution to the Portland,
Oregon office of KPMG Peat Marwick LLP or, if such firm is unable to so act, by
another internationally recognized accounting firm selected by the Portland,
Oregon office of KPMG Peat Marwick LLP (the "Neutral Auditors"). The Neutral
Auditors shall be instructed to determine and report to the parties hereto upon
such remaining disputed items within 30 days after submission, and such report
and determination shall be final, binding and conclusive on the parties hereto.
The Neutral Auditors' determination shall be based solely on whether the item
in dispute has been accounted for on the Preliminary Closing Date Balance Sheet
in accordance with the Accounting Principles. The fees and disbursements of
the Neutral Auditors shall be allocated between Buyer and Seller in the same
proportion that the aggregate amount of such remaining disputed items so
submitted to the Neutral Auditors that is unsuccessfully disputed by each (as
finally determined by the Neutral Auditors) bears to the total amount of such
remaining disputed items so submitted. The Preliminary Closing Date Balance
Sheet, as modified by resolution by Seller and Buyer or by the Neutral
Auditors, shall be the "Closing Date Balance Sheet." If disagreements arise
with respect to individual items of inclusion and/or exclusion on the
Preliminary Closing Balance Sheet, the parties agree that the governing
principle will be that the Purchase Price adjustment contemplated by this
section is intended to analyze the economic effects of a change in
Shareholders' equity from December 31, 1995 to the Closing Date and that such
change can only be appropriately measured when the Closing Balance Sheet and
Audited Balance Sheet are prepared on a consistent basis.
(e) Upon determination of the Closing Date Balance Sheet,
the Cash Portion of the Purchase Price shall be increased or decreased, as the
case may be, by the amount equal to the amount by which the Shareholder's
equity on the Closing Date Balance Sheet, as adjusted to exclude accounts
receivable represented by discounted notes, deferred tax assets, deferred tax
liabilities and indebtedness relating to the Industrial Revenues Bonds (such
adjustments being the "Pro Forma Adjustments") is greater or less than the
Shareholder's equity on the Audited Balance Sheet, as adjusted for the
Pro-Forma Adjustments and the removal of cash and cash equivalents and the note
receivable, provided that such amount is greater than US $500,000. In the
event such amount is not greater than US $500,000, no adjustment shall be made
to the Cash Portion of the Purchase Price pursuant to this SECTION 1.6. For
the avoidance of doubt, the parties agree that the Closing Date Balance Sheet
shall not include any Excluded International Liabilities, Excluded
International Assets or any federal, state, foreign or local income Taxes
against which Seller has agreed to indemnify Buyer pursuant to SECTION 8.1
hereof. If the Cash Portion of the Purchase Price, as adjusted in accordance
with this Section (the "Adjusted Cash Portion"), is in excess of the
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<PAGE> 19
Closing Cash Payment, Buyer shall pay Seller such excess, or if the Closing
Cash Payment is in excess of the Adjusted Cash Portion, Seller shall pay Buyer
such excess. In either case, such amount shall be payable to Buyer or Seller,
as the case may be, in cash within five business days after the final
determination of such amount, and shall bear interest at a rate equal to the
rate of interest from time to time announced publicly by CoreStates Bank, N.A.
as its prime or base rate (calculated on the basis of a 365-day year for the
actual number of days elapsed from the Closing Date until the date of payment).
The Buyer Group and the Seller Group shall treat any such interest as interest
in their respective Tax Returns. Such payment shall be made by certified or
official bank check payable to the order of the Seller or the Buyer, as the
case may be, or by wire transfer to a bank account or accounts designated by
the Seller or Buyer, as the case may be. If (a) there is a dispute with
respect to the Preliminary Closing Date Balance Sheet and (b) even if all
disputed items were resolved in favor of a party, that party would still be
required to make a payment (the "Undisputed Amount") to the other party under
this SECTION 1.6(E), then pending resolution of the disputed items, such party
will pay the Undisputed Amount to the other party.
1.7 Allocation of Purchase Price. The Purchase Price shall be
allocated among the non-compete covenant described in SECTION 6.1(F), the
Shares, the TxCom Shares and the TxCom Rights, the US Assets and the
International Assets (by country) as set forth in EXHIBIT F. For purposes of
all Taxes (as defined below), Buyer and Seller agree to report the transactions
contemplated in this Agreement in a manner consistent with the final allocation
under this SECTION 1.7, and agree that neither of them will take any position
inconsistent therewith for any Tax (as defined below) purposes, unless required
to do so pursuant to a "determination" within the meaning of section 1313 of
the Code (as defined below) or an analogous provision under state or local law.
1.8 Closing. The closing under this Agreement (the "Closing")
will take place at 10:00 a.m., local time, on the later of (i) July 1, 1996 or
(ii) three business days after all conditions contained in this Agreement have
been satisfied or waived, at the offices of Boylan, Brown, Code, Fowler, Vigdor
& Wilson, LLP, 2400 Chase Square, Rochester, New York 14604, or at such other
time, location or date as the parties shall mutually agree. The date on which
the Closing occurs is sometimes referred to herein as the "Closing Date." All
transactions at the Closing shall be deemed to take place simultaneously at the
close of business on the Closing Date, and no transaction shall be deemed to
have been completed and no document or certificate shall be deemed to have been
delivered until all transactions are completed and all documents are delivered.
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1.9 Deliveries and Proceedings at Closing. At the Closing:
(a) Deliveries by Seller. Seller will deliver or cause
to be delivered to Buyer:
(i) a certificate or certificates representing
the Shares, which certificate shall be properly endorsed for transfer by duly
executed stock powers, executed in blank or in favor of Buyer and otherwise in
a form acceptable for transfer on the books of Scanning;
(ii) a certificate or certificates representing
the TxCom Shares, which certificate shall be properly endorsed for transfer by
a duly executed share transfer order, executed in blank or in favor of Buyer
(or a Buyer Subsidiary) and otherwise in a form acceptable for transfer on the
books of TxCom;
(iii) a patent assignment of the US Assets in form
and substance reasonably satisfactory to the parties hereto and their
respective counsel duly executed by Seller;
(iv) Foreign Sales Agreements, duly executed by
the appropriate Seller Subsidiaries;
(v) the TxCom Agreement, duly executed by SP
Holding;
(vi) the Registration Rights Agreement as provided
for in SECTION 7.8 hereto, duly executed by Seller; and
(vii) the Escrow Agreement, duly executed by
Seller.
(b) Deliveries by Buyer. Buyer will deliver or cause to
be delivered to Seller:
(i) the Closing Cash Payment;
(ii) a certificate or certificates representing
the Buyer Stock, duly registered in the name of Seller or its designee;
(iii) Foreign Sales Agreements, duly executed by
the appropriate Buyer Subsidiaries;
(iv) the TxCom Agreement, duly executed by Buyer
(or a Buyer Subsidiary);
(v) the Registration Rights Agreement as provided
for in SECTION 7.8 hereto, duly executed by Buyer;
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<PAGE> 21
(vi) the Escrow Agreement, duly executed by Buyer;
and
(vii) the Note.
(c) Other Deliveries. The closing certificates, opinions
of counsel and other documents required to be delivered pursuant to this
Agreement will be exchanged.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF SELLER
2.1 Representations and Warranties Pertaining to the Business.
Seller and SP Holding represent and warrant to the Buyer Group that:
(a) Organization and Qualification. Each of Seller,
Scanning, TxCom, the Scanning Subsidiaries and the Seller Subsidiaries is a
corporation duly organized, validly existing and in good standing under the
laws of the jurisdiction of its organization and each has all requisite
corporate power and corporate authority to own, operate and lease its
properties and to carry on its business as it is now being conducted. Complete
and correct copies of the Certificate of Incorporation and Bylaws of Scanning,
TxCom, and the Scanning Subsidiaries, as amended to date, have been made
available to Buyer. Scanning is duly qualified or registered as a foreign
corporation to do business, and is in good standing, in each jurisdiction in
which the character of the properties owned, operated or leased by it or the
nature of its activities is such that such qualification is required by
applicable law, except where the failure to so qualify and be in good standing
would not, individually or in the aggregate, have a Material Adverse Effect.
All jurisdictions where Scanning is qualified as a foreign corporation are
listed on SCHEDULE 2.1(A) hereto.
(b) Capitalization. The authorized capital stock of
Scanning consists of 100 shares of common stock, $.01 par value per share, and
there is no other capital stock of Scanning authorized for issuance. There are
100 shares of Scanning common stock issued and outstanding, all of which are
owned by Seller, and the Shares constitute the total issued and outstanding
share capital of Scanning. The authorized capital stock of TxCom consists of
10,043 shares of common stock, with a par value of 100 French Francs per share,
and there is no other capital stock of TxCom authorized for issuance. There
are 10,043 shares of TxCom common stock issued and outstanding, 7235 of which
are owned by SP Holding. All of the Shares and the TxCom Shares have been duly
authorized and validly issued, are fully paid, non-assessable, and have not
been issued and are not owned or held in
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<PAGE> 22
violation of any preemptive right of shareholders. Seller and SP Holding,
respectively, owns the Shares and the TxCom Shares and will transfer the Shares
and the TxCom Shares to Buyer pursuant to this Agreement free and clear of all
liens, claims, equities, options, calls, voting trusts, agreements, commitments
and encumbrances whatsoever. No shares of capital stock of Scanning or TxCom
are reserved for issuance, and there are no options, warrants, convertible
instruments or other rights, agreements or commitments, contingent or
otherwise, obligating Scanning or TxCom to issue or sell shares of capital
stock. Scanning owns 870,923 shares of Series B Convertible Preferred Stock of
Catalina Electronic Clearing Systems, Inc., a Delaware corporation ("CECS").
Complete and correct copies of the Certificate of Incorporation and Bylaws of
CECS, as amended to date, have been made available to Buyer.
(c) Subsidiaries. Scanning has no Subsidiaries other
than SpectraScan (AUST) Pty Ltd., an Australian corporation, and SpectraScan
Europe Ltd., a United Kingdom corporation. Each of SpectraScan (AUST) Pty Ltd.
and SpectraScan Europe Ltd. is an inactive corporation incorporated in February
1996 which has never held any assets, conducted any operations or incurred any
liabilities which have not been fully discharged (other than liabilities
related to incorporation or the registration of branch offices).
(d) Authority. Seller and SP Holding have the corporate
power and corporate authority to execute, deliver and perform this Agreement,
and to consummate the transactions contemplated hereby. This Agreement has
been duly and validly authorized by all necessary corporate, and, if necessary,
shareholder, action on the part of Seller and SP Holding. This Agreement has
been duly and validly executed and delivered by Seller and SP Holding and,
assuming due execution and delivery by Buyer and SP Holding, constitutes, the
valid and binding obligations of Seller and SP Holding, enforceable against
Seller and SP Holding in accordance with its terms, subject to applicable
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or
other similar laws relating to creditors' rights generally and subject to
general principles of equity (regardless of whether enforcement is sought in a
proceeding at law or in equity). Each Seller Subsidiary and SP Holding has the
corporate power and corporate authority to execute, deliver and perform the
Foreign Sales Agreement and the TxCom Agreement, respectively, to which it will
be a party and to consummate the transactions contemplated thereby. Each
Foreign Sales Agreement and the TxCom Agreement have been duly and validly
authorized by all necessary corporate and, if necessary, shareholder action on
the part of the appropriate Seller Subsidiary and SP Holding, respectively.
Each Foreign Sales Agreement and the TxCom Agreement, when duly and validly
executed by the appropriate Seller Subsidiary and SP Holding, respectively,
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<PAGE> 23
assuming due execution and delivery by Buyer (or the counterpart Buyer
Subsidiary), will constitute the valid and binding obligations of each such
Seller Subsidiary and SP Holding, respectively, enforceable against the
appropriate Seller Subsidiary and SP Holding, respectively, in accordance with
its terms, subject to applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium or other similar laws relating to creditors' rights
generally and subject to general principles of equity (regardless of whether
enforcement is sought in a proceeding at law or in equity).
(e) Non-Contravention. Except as set forth on SCHEDULE
2.1(E) hereto and subject to the Seller Group's obtaining any consent,
approval, authorization, waiver or exemption (collectively, a "Consent")
required pursuant to or in connection with this Agreement, the execution,
delivery and performance by Seller and SP Holding of this Agreement and the
consummation by the Seller Group of the transactions contemplated hereby will
not (i) violate any provision of law, rule or regulation to which Scanning,
TxCom or, with regard to the Business, any of the Seller Subsidiaries is
subject, which violation would, individually or in the aggregate, have a
Material Adverse Effect, (ii) conflict or violate any order, judgment,
injunction, award or decree applicable to Scanning, TxCom or, with regard to
the Business, any of the Seller Subsidiaries, (iii) violate or conflict with
the Certificate of Incorporation, Bylaws or other similar governing documents
of any member of the Seller Group, (iv) constitute a default under or give rise
to a right of termination, cancellation or acceleration of any right or
obligation of Scanning, TxCom or, with regard to the Business, any of the
Seller Subsidiaries under any provision of any agreement, contract or other
instrument binding upon Scanning, TxCom or, with regard to the Business, any of
the Seller Subsidiaries or any license, franchise, permit or other similar
authorization held by Scanning, TxCom or, with regard to the Business, any of
the Seller Subsidiaries which would, individually or in the aggregate, have a
Material Adverse Effect, or (v) result in the creation or imposition of any
lien, encumbrance, charge or claim upon any of the assets of Scanning, TxCom or
any of the Purchased Assets.
(f) Governmental Consents and Approvals. Except as set
forth on SCHEDULE 2.1(F) hereto, the execution, delivery and performance by
Seller and SP Holding of this Agreement and the consummation by the Seller
Group of the transaction contemplated hereby does not require any consent from
or filing with any governmental body, agency or official except for (i) the
filing of a report under the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended (the "HSR Act") and the expiration of the applicable waiting
period; (ii) any consent or filing, including filings under the Anti-Monopoly
Law (the "Anti-Monopoly Law") to the Fair Trade Commission of Japan, that the
Buyer Group is
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<PAGE> 24
required to obtain or make; and (iii) consents and filings which, if not
obtained or made, will not individually or in the aggregate have a Material
Adverse Effect or have a material adverse effect on the ability of the parties
hereto to consummate the transactions contemplated hereby.
(g) Combined Financial Statements. Attached as SCHEDULE
2.1(G) hereto are: (i) combined balance sheets of the Business as of December
31, 1995 and 1994 and (ii) a combined statement of operations and cash flows of
the Business for each of the three years in the period ended December 31, 1995
(such statements, including the notes thereto, are collectively referred to
herein as the "Combined Financial Statements" and such December 31, 1995
balance sheet, including the notes thereto, is referred to herein as the
"Audited Balance Sheet"). The Combined Financial Statements have been audited
by Coopers & Lybrand L.L.P., independent public accountants. The Combined
Financial Statements present fairly in all material respects the combined
financial position of the Business at December 31, 1995 and 1994, and results
of its operations and its cash flows for each of the three years in the
three-year period ended December 31, 1995, in conformity with generally
accepted accounting principles in the United States, consistently applied.
(h) Taxes. Each of Scanning and its Subsidiaries and
TxCom has (i) timely filed, or had timely filed on its behalf, all material
returns, reports and other information statements ("Return" or "Returns")
required to be filed in respect of Taxes (as defined below) and (ii) paid, or
has had paid on its behalf, all Taxes shown to have become due pursuant to such
Returns or for which an assessment has been received, except for any assessment
being contested in good faith which contested assessments, if any, are set
forth on SCHEDULE 2.1(H) hereto. Except as set forth on SCHEDULE 2.1(H)
hereto, (i) Scanning and its Subsidiaries and TxCom are not parties to any tax
sharing agreements, (ii) no Tax Return is under audit as of the date hereof by
any Governmental Authority (as hereinafter defined) and (iii) Scanning and its
Subsidiaries and TxCom have not executed any waivers or consents extending the
statute of limitations with respect to any possible or actual audit or
assessment by any Governmental Authority with regard to any income Tax Return
or any other material Tax Return, which waiver or consent remains outstanding
as of the date hereof. There are no security interests in favor of any
Governmental Authority on any of the assets of any of Scanning and its
Subsidiaries, Seller Subsidiaries (with respect to the Business), and TxCom
that arose in connection with any failure (or alleged failure) to pay any Tax.
Except as disclosed on SCHEDULE 2.1(H), as of the date hereof, there is no
pending or unresolved dispute or claim concerning any tax liability of any of
Scanning and its Subsidiaries and TxCom either claimed or raised by any
Governmental Authority in writing. None of Scanning and its Subsidiaries and
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<PAGE> 25
TxCom has made any payments, is obligated to make any payments, or is a party
to any agreement that, under certain circumstances, could obligate it to make
any payments that will not be deductible under Section 280G of the Internal
Revenue Code of 1986, as amended (the "Code"). None of Scanning and its
Subsidiaries has been a member of an affiliated group filing a consolidated
federal income tax return, other than a group, the common parent of which is
Spectra-Physics Holdings USA, Inc. For purposes of this Agreement, "Tax" or
"Taxes" shall mean all taxes, assessments or other governmental charges of any
kind whatsoever imposed by the United States or any state, local or foreign
government or political subdivision or taxing authority thereof or therein (a
"Governmental Authority"), including, without limitation, any income, profits,
capital gains, franchise, sales, use, value added, gross receipts, transfer,
excise, property, property transfer, occupation, lease, capital stock, premium,
estimated customs, payroll, withholding or social security taxes, including all
interest, penalties and additions to tax imposed with respect to such amounts.
For purposes of this Agreement, "Payroll Taxes" shall mean all Taxes required
to be paid by an employer with respect to an employee or required to be
withheld by an employer.
(i) Properties. Scanning, SP Holding and, with respect
to the Business, the Seller Subsidiaries, have good and valid title to all
their properties and assets, real and personal, tangible and intangible
(including those reflected on the Audited Balance Sheet or acquired by Scanning
or the Seller Subsidiaries since the date of the Audited Balance Sheet, except
property sold or otherwise disposed of in the ordinary course of business since
the date of the Audited Balance Sheet), free and clear of all mortgages, liens,
attachments, pledges, encumbrances or security interests of any nature
whatsoever, except (a) those disclosed in the Audited Balance Sheet, (b) any
liens for current Taxes not yet due and payable or which may thereafter be paid
without penalty, (c) encumbrances described in SCHEDULE 2.1(I) hereto, (d)
zoning, building and other similar governmental restrictions and liens imposed
by operation of law (including without limitation mechanics', carriers',
workmen's, repairmen's, landlord's or other similar liens arising from or
incurred in the ordinary course of business and for which the underlying
payments are not yet delinquent), and (e) easements, covenants, rights-of-way
or other similar restrictions and imperfections of title, none of which items
referred to in clauses (d) and (e) materially impair the use, value or
marketability of title of the property to which they relate in the Business as
presently conducted taken as a whole. The properties and assets of Seller, SP
Holding and the Seller Subsidiaries to be acquired by the Buyer Group at the
Closing constitute all properties and assets, except for the Excluded
International Assets, required to operate the Business in the same manner as it
was operated prior to the Closing. Set forth on SCHEDULE 2.1(I) hereto is a
list of all real estate
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<PAGE> 26
owned or leased by Scanning, TxCom or, exclusively with respect to the
Business, the Seller Subsidiaries.
(j) Environmental Matters. Except as set forth on
SCHEDULE 2.1(J) hereto or identified in connection with the Phase I
environmental assessment performed by Buyer (the "Phase I Investigation"),
Scanning, TxCom, and, with respect to the Business, the Seller Subsidiaries
have obtained all environmental permits, certificates, licenses, approvals,
registrations and authorizations ("Environmental Permits") which are required
in connection with the Business except for Environmental Permits which if not
obtained would not, individually or in the aggregate, have a Material Adverse
Effect. Set forth on SCHEDULE 2.1(J) hereto is a schedule of all such
Environmental Permits. Except as set forth on SCHEDULE 2.1(J) hereto and
except as identified in connection with the Phase I Investigation, (i)
Scanning, TxCom and, with respect to the Business, the Seller Subsidiaries have
complied with such Environmental Permits except for such possible violations
which would not, individually or in the aggregate have a Material Adverse
Effect, (ii) Scanning, TxCom and, with respect to the Business, the Seller
Subsidiaries, have complied with the applicable environmental statutes, rules,
regulations, ordinances and orders of any governmental entity with jurisdiction
over such matters, as well as valid and enforceable judicial and administrative
rulings and regulations relating thereto, including but not limited to those
relating to Hazardous Substances (as hereinafter defined) ("Environmental
Laws") except for such possible violations which would not, individually or in
the aggregate, have a Material Adverse Effect, and (iii) Scanning, TxCom and,
with respect to the Business, the Seller Subsidiaries have not received any
written request for information, notice of claim, demand or notification that
it is or may be potentially responsible with respect to any investigation or
clean-up of any threatened or actual release of any hazardous substance as
defined in the Comprehensive Environmental Response, Compensation, and
Liability Act of 1980, as amended ("CERCLA") or hazardous waste as defined in
the Resource Conservation and Recovery Act (collectively "Hazardous
Substances"), except for such matters which have since been resolved.
(k) Patents; Trademarks etc. Set forth on SCHEDULE
2.1(K) is a true and correct list as of the date hereof of (i) all patents,
patent applications and registered trademarks, tradenames, service marks,
copyrights and all applications pending on said date for trademark, trade name,
service mark or copyright registrations by (A) Seller or the Seller
Subsidiaries and used primarily in the conduct of the Business or (B) Scanning
or TxCom and (ii) all material licenses granted by or to (A) Seller or the
Seller Subsidiaries and used primarily in the conduct of the Business or (B)
Scanning or TxCom which relate, in whole or in part, to any items in the
categories mentioned in (i)
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<PAGE> 27
above (all items in (i) and (ii) hereinafter collectively referred to as
"Intellectual Property"). As of the date hereof, all relevant maintenance fees
with respect to the patents included in the Intellectual Property payable by
Scanning, TxCom or, with respect to the Business, Seller or the Seller
Subsidiaries have been paid and, to Seller's knowledge, none of the
Intellectual Property is subject to any interference, opposition or
cancellation proceedings. Except as set forth on SCHEDULE 2.1(K) hereto, to
Seller's knowledge, neither Scanning, TxCom, nor the Seller Subsidiaries has,
since January 1, 1990, received a written claim or, since April 1, 1995,
received an oral claim, from any person (that has not been subsequently
resolved) which asserts, with specificity, that the operations of the Business
infringe such person's intellectual property rights, which claim relates to
products of the Business that exist or are in development and have expected
annual sales of over US $5,000,000.
(l) Domestic Employee Benefit Plans.
(i) Set forth on the SCHEDULE 2.1(L) hereto is a
true and complete list of each material "employee benefit plan" (as defined in
Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA")), deferred compensation, incentive compensation, excess benefit,
supplemental retirement, stock purchase, stock option, severance, and other
material employee benefit plan, program or arrangement maintained, contributed
to or required to be contributed to by Scanning or any other employer that is,
or was at any time, together with Scanning, treated as a "single employer"
under Section 414 of the Code, (a "Scanning's ERISA Affiliate"), for the
benefit of any employees of Scanning (collectively, the "Scanning's Benefit
Plans"). A true and complete copy of each of Scanning's Benefit Plans
(including any related trust agreements), have been made available to Buyer.
With respect to each of Scanning's Benefit Plans (to the extent applicable) the
Seller has made available to Buyer (i) the most recent summary plan
description, (ii) the most recent annual report (Form 5500) filed with the
Internal Revenue Service ("IRS") and (iii) the most recent determination letter
issued by the IRS.
(ii) Each of Scanning's Benefit Plans has at all
times been maintained, operated and administered in compliance with its terms
and with all applicable laws, except where noncompliance would not have a
Material Adverse Effect on the Business. No "prohibited transaction" (within
the meaning of Section 406 of ERISA or Section 4975 of the Code) has occurred
with respect to any of Scanning's Benefit Plans. At no time for which any
relevant statute of limitations remain open have Scanning or any of Scanning's
ERISA Affiliates incurred any liability under Title I or Title IV of ERISA
(other than for payment of premiums to the Pension Benefit Guaranty Corporation
("PBGC")) with respect to
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<PAGE> 28
Scanning's Benefit Plans. Neither Scanning nor any of Scanning's ERISA
Affiliates has ever participated in nor had an obligation to contribute to any
"multiemployer plan" (as defined in Sections 3(37) and 4001(a)(3) of ERISA).
(iii) Each of Scanning's Benefit Plans which is an
"employee pension benefit plan" (as defined in Section 3(2) of ERISA) is
qualified under Section 401(a) of the Code ("Scanning's Qualified Plans") and
each trust maintained in connection with such a plan is exempt from federal
income taxes under Section 501 of the Code. There is no "accumulated funding
deficiency" (within the meaning of Section 302(a) of ERISA or Section 412(a) of
the Code) with respect to any of Scanning's Qualified Plans whether or not
waived. There is no reasonable basis, including without limitation, any
"reportable event" (as defined in Section 4043 of ERISA) that would constitute
grounds for the termination of any of Scanning's Qualified Plans by the PBGC or
the appointment of a trustee or administrator under Title IV of ERISA.
(iv) There are no pending investigations by any
governmental agency involving Scanning's Benefit Plans, no termination
proceedings involving Scanning's Benefit Plans, and to Seller's knowledge, no
threatened or pending claims (except for claims for benefits payable in the
normal operation of Scanning's Benefit Plans) or suits against any of
Scanning's Benefit Plans.
(v) Except as set forth on the SCHEDULE 2.1(L)
hereto, neither Seller nor any of its ERISA Affiliates contributes to, or ever
has been required to contribute to any employee benefit plan providing medical,
health or life insurance or other welfare type benefits for current or future
retired or terminated employees, their spouses, or their dependents (other than
in accordance with Part 6 of Subtitle B of Title I of ERISA and Code Section
4980(B)).
(m) Foreign Employee Benefit Plans. Each material
pension, retirement, savings, profit sharing, deferred compensation, incentive
compensation, excess benefit, supplemental retirement, stock purchase, stock
option, severance, and other material employee benefit plan, program or
arrangement maintained, contributed to or required to be contributed to by
TxCom or the Seller Subsidiaries for or on behalf of any Foreign Business
Employee (each, a "Foreign Plan") has been maintained, operated and
administered in compliance in all material respects with its terms and with all
applicable laws.
(n) Contracts. Set forth on SCHEDULE 2.1(N) hereto is a
list of the following contracts, agreements, arrangements, leases, permits,
licenses and commitments (except for purchase contracts and orders for
inventory or supplies made in the
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ordinary course of business) in existence on the date hereof to which Scanning,
TxCom and, with respect to the Business, any of the Seller Subsidiaries is a
party, or by which any of them is bound:
(i) any contract not made in the ordinary course
of business which by its terms has an aggregate future liability in excess of
US $300,000 or which is not terminable on 180 days notice or less without
penalty or premium;
(ii) all real property lease agreements;
(iii) joint venture agreements;
(iv) all employment or consulting agreements with
employees of, or consultants to, the Business, which may not be terminated
without penalty within thirty days after the Closing (other than oral
employment agreements with employees terminable at will without penalty,
subject to the Business's normal severance policies and applicable law);
(v) union or other collective bargaining
agreements;
(vi) each agreement of Scanning and TxCom, and
each agreement of the Seller Subsidiaries that will be assumed by the Buyer
Group pursuant to this Agreement, containing any covenant restricting the
freedom of Scanning, TxCom or the Seller Subsidiaries, as the case may be, to
compete in the current or a related business of the Business; and
(vii) each agreement relating to the incurrence or
guaranty of indebtedness for borrowed money.
A correct and complete copy of each such contract listed on
such Schedule has been delivered to Buyer.
All contracts to which Scanning, TxCom and, with respect to
the Business, any of the Seller Subsidiaries is a party, or by which any of
them is bound, are legal, valid, binding and enforceable and in full force and
effect and there is not under any such contract any existing breach, default,
event of default or event which, with the giving of notice or the passage of
time, or both, would constitute a breach, default or event of default
thereunder by Scanning, TxCom or, with respect to the Business, any of the
Seller Subsidiaries, or to Seller's knowledge, the other party or parties
thereto, except for any such failure to be in full force or any such breach,
default or event of default which would not, individually or in the aggregate,
have a Material Adverse Effect.
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<PAGE> 30
(o) No Changes. Except as set forth on SCHEDULE 2.1(O)
hereto and except as contemplated by this Agreement, since the date of the
Audited Balance Sheet, Scanning, TxCom and the Seller Subsidiaries have
conducted the Business in the ordinary course. Except as set forth on SCHEDULE
2.1(O) hereto and except as contemplated by this Agreement, since the date of
the Audited Balance Sheet there has not been:
(i) any change in the Business which has had a
Material Adverse Effect;
(ii) any declaration, setting aside or payment of
any dividend, or other distribution, in respect of Scanning's or TxCom's
capital stock or any direct or indirect redemption, purchase or other
acquisition of such stock;
(iii) any split, combination or reclassification of
outstanding capital stock of Scanning or TxCom, or any issuance or the
authorization of any issuance of any other securities in respect of, in lieu of
or in substitution for shares of Scanning's or TxCom's capital stock;
(iv) any issuance by Scanning or TxCom, or
commitment of them to issue, any shares of their capital stock or securities
convertible into or exchangeable for shares of their capital stock;
(v) any issuance or sale by Scanning or TxCom of
any bonds or other corporate debt securities, or any partial or complete
formation, acquisition, disposition or liquidation of Scanning or TxCom;
(vi) any sale, assignment, lease, transfer or
other disposition of any asset or shares of capital stock of Scanning or TxCom,
or any asset of the Seller Subsidiaries used primarily in the Business, except
in the ordinary course of business;
(vii) any amendment, termination or waiver of any
material right belonging to Scanning or TxCom, or, with respect to the
Business, the Seller Subsidiaries, except in the ordinary course of business;
(viii) any increase in the compensation or benefits
payable or to become payable by either of Scanning or TxCom, to any of its
officers or employees or by the Seller Subsidiaries to the Foreign Business
Employees except for increases in the ordinary course of business; or
(ix) any agreement by Scanning or TxCom or any
Seller Subsidiary (other than the transactions contemplated by this Agreement)
to do any of the foregoing.
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(p) Litigation or Proceedings. Except as set forth in
SCHEDULE 2.1(P) hereto and except for worker's compensation or Bureau of Labor
and Industry claims or cases arising in the ordinary course of business, to
Seller's knowledge, there are (i) no actions, suits, investigations, or
proceedings pending against Scanning or TxCom, or, with respect to the
Business, the Seller Subsidiaries, at law or in equity, by or before any court
or governmental department, agency or instrumentality and (ii) no actions,
suits, investigations, or proceedings threatened against Scanning or TxCom, or,
with respect to the Business, the Seller Subsidiaries, at law or in equity, by
or before any court or governmental department, agency or instrumentality, as
to which such threatened actions, suits, investigations or proceedings there is
a reasonable likelihood of an adverse determination and which, if adversely
determined, would individually or in the aggregate have a Material Adverse
Effect. There are no orders, rulings, decrees, writs, injunctions, judgments
or stipulations to which Scanning or TxCom, or, with respect to the Business,
any Seller Subsidiary, is a party by or with any court, arbitrator or
administrative agency, other than orders or stipulations entered into in the
ordinary course of business in connection with litigation proceedings and
settlement thereof which do not require payment by Scanning, TxCom or any
Seller Subsidiary, individually or in the aggregate after payment, of any
amount greater than US $300,000.
(q) Compliance with Laws. Except with respect to
Environmental Permits which are the subject of SECTION 2.1(J) hereto, each of
Scanning and TxCom, and with respect to the Business, the Seller Subsidiaries,
possesses all governmental licenses, permits and authorizations necessary for
the lawful conduct of its respective businesses, except for any failure to
possess any such license, permit and authorization which would not,
individually or in the aggregate, have a Material Adverse Effect. Except with
respect to Environmental Laws which are the subject of SECTION 2.1(J), Scanning
and TxCom, and, with respect to the Business, the Seller Subsidiaries are in
compliance with all applicable laws, ordinances and regulations of federal,
state, local and foreign authorities, except where noncompliance would not,
individually or in the aggregate, have a Material Adverse Effect. To Seller's
knowledge, except as set forth on SCHEDULE 2.1(J), neither Scanning, TxCom,
nor, with respect to the Business, the Seller Subsidiaries has received written
notice or has actual knowledge of any action, suit, proceeding, investigation,
charge, complaint, claim or demand that has been filed or commenced against
Scanning, TxCom or, with respect to the Business, the Seller Subsidiaries with
respect to (i) any alleged violation of any law, ordinance or regulation of any
federal, state, local or foreign authority or (ii) any alleged failure to have
a license, permit or authorization required in connection with the Business,
except for any alleged violation or
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alleged failure which would not, individually or in the aggregate, have a
Material Adverse Effect.
(r) Labor Matters. There has been no employee strike or
other organized employee work stoppage by the employees of the Business during
the past three (3) years and, to Seller's knowledge, no such strike or stoppage
is currently threatened.
(s) Insurance Coverage. Set forth on SCHEDULE 2.1(S)
hereto is a list of all policies of insurance currently held by, or maintained
on behalf of Scanning in effect for policy periods beginning on or after
January 1, 1995, indicating for each policy the carrier, the insured, the type
of insurance, the amounts of coverage and the expiration date. Except as set
forth on SCHEDULE 2.1(S), all such policies are in full force and effect and
Scanning, TxCom or, with respect to the Business, any Seller Subsidiary has not
received any written notice of cancellation, material amendment or material
dispute as to coverage with respect to any such policies, which dispute relates
to the Business.
(t) Certain Transactions with Affiliates. Except for
arrangements contemplated by or disclosed in this Agreement or as set forth on
SCHEDULE 2.1(T) hereto, there are no transactions of a continuing nature
between Scanning, TxCom or, with respect to the Business, the Selling
Subsidiaries, on the one hand, and any of their respective affiliates, on the
other hand, which are not subject to cancellation without liability or penalty
and which will continue beyond the Closing Date.
(u) Securities Act. The Buyer Stock and the Note being
acquired by Seller pursuant to this Agreement are being acquired for investment
only and not with a view to any public distribution thereof in violation of the
Securities Act of 1933, as amended (the "Securities Act").
(v) Banks. The name of each bank in which Scanning has
an account or safe deposit box, the name and number of such account or box and
the names of all persons authorized to draw thereon or who have access thereto,
with the amounts they are authorized to draw are disclosed on SCHEDULE 2.1(V).
(w) Powers of Attorney. The names of all persons, if
any, holding powers of attorney from Scanning, other than powers of attorney
granted in the ordinary course of business by Scanning to its attorneys,
accountants or other agents, are disclosed on SCHEDULE 2.1(W).
(x) Significant Customers. To Seller's knowledge, as of
the date hereof, no Person who was one of the Business's top ten customers in
1995 (as measured by 1995 sales figures) (a "Customer") has informed Scanning
orally or in writing that such
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Customer will cease to do business with or materially reduce the amount of
business it is currently doing with the Business as a direct result, in either
case, of the acquisition of the Business by Buyer pursuant hereto; provided,
however, that nothing herein shall constitute a representation that any
Customer will continue its relationship with the Business.
(y) Severance Benefits. Except as set forth in SCHEDULE
2.1(V) hereto, none of Scanning, TxCom or, with respect to the Business, the
Seller Subsidiaries, shall be obligated to make any severance or other payment
or provide any employee benefits to any director, officer or employee as a
result of the consummation of the transactions contemplated hereby, except,
with respect to Foreign Business Employees, as required by law.
(z) Net Worth. As of December 31, 1995, the
shareholder's equity of Seller was in excess of US $200,000,000.
2.2 Excluded International Assets, Etc. Notwithstanding anything
contained herein to the contrary, the Seller Group makes no representation,
warranty or covenant of any kind with respect to any Excluded International
Asset, the assets referred to in SECTION 1.3 of this Agreement or any matter
constituting an Excluded International Liability or against which Buyer is
indemnified by Seller pursuant to SECTION 8.1 hereto.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF BUYER
3.1 Representations and Warranties of Buyer. Buyer hereby
represents and warrants to the Seller Group that:
(a) Organization and Qualification. Buyer and each of
its Subsidiaries is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction of its organization and each has
all requisite corporate power and corporate authority to own, operate and lease
its properties and to carry on its business as it is now being conducted.
Complete and correct copies of the Certificate of Incorporation and Bylaws of
Buyer, as amended to date, have been made available to Seller. Buyer is duly
qualified or registered as a foreign corporation to do business, and is in good
standing, in each jurisdiction in which the character of the properties owned,
operated or leased by it or the nature of its activities is such that such
qualification is required by applicable law, except where the failure to so
qualify and be in good standing would not, individually or in the aggregate,
have a Material Adverse Effect on Buyer.
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<PAGE> 34
(b) Capitalization. The authorized capital stock of
Buyer consists of 40,000,000 shares of common stock, $.01 par value per share,
of which 9,969,185 shares of common stock are issued and outstanding, 38,500
shares of common stock are held in treasury and 4,016,149 shares of common
stock are reserved for issuance, and 10,000,000 shares of preferred stock, $.01
par value per share, of which none are issued and outstanding. All such
outstanding shares of common stock have been duly authorized and validly issued
and are fully paid and non-assessable. Options to purchase 2,440,203 shares of
common stock are issued and outstanding. No other shares of capital stock of
Buyer are reserved for issuance, and there are no other options, warrants,
convertible instruments or other rights, agreements or commitments, contingent
or otherwise, obligating Buyer to issue or sell shares of capital stock, except
that at the Closing Buyer expects to issue a warrant to purchase 975,000 shares
of Common Stock of Buyer in connection with the subordinated debt financing
referred to in the Subordinated Debt Commitment Letters referred to in SECTION
3.1(Q).
(c) Subsidiaries. Except as disclosed on the Form 10-K
for the fiscal year ended December 31, 1995 (including any exhibits thereto)
filed by Buyer with the Securities and Exchange Commission (the "Buyer's
10-K"), Buyer has no Subsidiaries other than (a) any Subsidiaries which Buyer
creates to effect the transactions contemplated hereby and (b) PSC Asia Pacific
Pty Ltd., an Australian corporation incorporated on April 4, 1996.
(d) Authority. Buyer has the corporate power and
corporate authority to execute, deliver and perform this Agreement, and to
consummate the transactions contemplated hereby. The execution, delivery and
performance of this Agreement has been duly and validly authorized by all
necessary corporate, and, if necessary, shareholder action on the part of
Buyer. This Agreement has been duly and validly executed and delivered by
Buyer and, assuming due execution and delivery by Seller constitutes, the valid
and binding obligations of Buyer, enforceable against Buyer in accordance with
its respective terms, subject to applicable bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium or other similar laws relating to
creditors' rights generally and subject to general principles of equity
(regardless of whether enforcement is sought in a proceeding at law or in
equity). Buyer and each Buyer Subsidiary has the corporate power and corporate
authority to execute, deliver and perform the Foreign Sales Agreement and/or
the TxCom Agreement to which it will be a party and to consummate the
transactions contemplated thereby. Each Foreign Sales Agreement and the TxCom
Agreement has been duly and validly authorized by all necessary corporate and,
if necessary, shareholder action on the part of Buyer and the respective Buyer
Subsidiary. Each Foreign Sales Agreement and/or the TxCom Agreement when duly
and validly executed by Buyer and/or the
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<PAGE> 35
respective Buyer Subsidiary, and assuming due execution and delivery by the
counterpart Seller Subsidiary or SP Holding, respectively, will constitute the
valid and binding obligations of Buyer and/or each such Buyer Subsidiary,
enforceable against Buyer and/or the respective Buyer Subsidiary in accordance
with its terms, subject to applicable bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium or other similar laws relating to
creditors' rights generally and subject to general principles of equity
(regardless of whether enforcement is sought in a proceeding at law or in
equity).
(e) Non-Contravention. Except as described on SCHEDULE
3.1(E), the execution, delivery and performance by Buyer of this Agreement, and
the consummation by the Buyer Group of the transactions contemplated hereby
will not (i) violate any provision of law, rule or regulation to which the
Buyer Group is subject, which violation would, individually or in the
aggregate, have a Material Adverse Effect on Buyer, (ii) conflict or violate
any order, judgment, injunction, award or decree applicable to any member of
the Buyer Group, which violation or conflict would, individually or in the
aggregate, have a Material Adverse Effect on Buyer, (iii) violate or conflict
with the Certificate of Incorporation, Bylaws or other similar governing
documents of any member of the Buyer Group, (iv) constitute a default under or
give rise to a right of termination, cancellation or acceleration of any
material right or obligation of any member of the Buyer Group under any
provision of any agreement, contract or other instrument binding upon the Buyer
Group or any license, franchise, permit or other similar authorization held by
any member of the Buyer Group, which would, individually or in the aggregate,
have a Material Adverse Effect on Buyer or (v) result in the creation or
imposition of any lien, encumbrance, charge or claim upon any of the assets of
Buyer.
(f) Governmental Consents and Approvals. Except as set
forth on SCHEDULE 3.1(F) hereto, the execution, delivery and performance by the
Buyer Group of this Agreement and the consummation by Buyer of the transaction
contemplated hereby does not require consent from or filing with any
governmental body, agency or official except for (i) the filing of a report
under the HSR Act and the expiration of the applicable waiting period, (ii) any
consent, or filing, if any, that the Seller Group is required to obtain or
make, (iii) filing of a report under the Anti-Monopoly Law with the Fair Trade
Commission of Japan and the expiration of the applicable waiting period and
(iv) consents, and filings which, if not obtained or made, will not
individually or in the aggregate have a Material Adverse Effect on Buyer or the
ability of the parties hereto to consummate the transactions contemplated
hereby.
(g) Financial Statements. Filed together with Buyer's
10-K are (i) the consolidated balance sheets of Buyer and
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<PAGE> 36
its Subsidiaries as of December 31, 1995 and 1994 and (ii) the related
consolidated statement of operations and cash flows for each of the three years
in the period ended December 31, 1995 (such statements, including the notes
thereto, are collectively referred to herein as the "Buyer Financial
Statements.") The Buyer Financial Statements have been audited by Arthur
Andersen, LLP, independent public accountants. The Buyer Financial Statements
present fairly in all material respects the consolidated financial position of
Buyer and its Subsidiaries at December 31, 1995 and 1994, and their
consolidated results of operations and cash flows for each of the three years
in the three-year period ended December 31, 1995, in conformity with generally
accepted accounting principles in the United States, consistently applied.
(h) Taxes. Buyer and each of its Subsidiaries has (i)
timely filed all material Returns in respect of Taxes required to be filed and
(ii) paid, or has had paid on its behalf, all Taxes shown to have become due
pursuant to such Returns or for which an assessment has been received, except
for any assessment being contested in good faith.
(i) Patents; Trademarks. To Buyer's knowledge, neither
Buyer nor any of its Subsidiaries has, since January 1, 1994, received a
written claim or, since April 1, 1995, received an oral claim, from any person
(that has not been subsequently resolved) which asserts, with specificity, that
the operations of Buyer or its Subsidiaries infringe such person's intellectual
property rights, which claim relates to products of Buyer or its Subsidiaries
that exist or are in development and have expected annual sales of over US
$5,000,000.
(j) No Changes. Except as set forth on SCHEDULE 3.1(J)
hereto and except as contemplated by this Agreement, since December 31, 1995,
Buyer and its Subsidiaries have conducted their respective businesses in the
ordinary course. Except as contemplated by this Agreement, since December 31,
1995, there has not been:
(i) any change which has had a Material Adverse
Effect on Buyer;
(ii) any declaration, setting aside or payment of
any dividend, or other distribution, in respect of Buyer's or any of its
Subsidiaries' capital stock (except for dividends or distributions declared,
set aside or paid to Buyer or a wholly-owned Subsidiary of Buyer) or any
direct or indirect redemption, purchase or other acquisition of such stock;
(iii) any split, combination or reclassification of
outstanding capital stock of Buyer or any issuance or the authorization of any
issuance of any other
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<PAGE> 37
securities in respect of, in lieu of or in substitution for shares of Buyer's
or any of its Subsidiaries' capital stock (except for the issuance or
authorization of issuance of such securities to Buyer or a wholly-owned
Subsidiary of Buyer);
(iv) any issuance by Buyer or its Subsidiaries of,
or commitment of Buyer or any Subsidiary to issue, any shares of their capital
stock or securities convertible into or exchangeable for shares of their
capital stock (except for any such issuance to Buyer or to a wholly-owned
Subsidiary of Buyer);
(v) any issuance or sale by Buyer or any of its
Subsidiaries of any bonds or other corporate debt securities, or any partial or
complete formation, acquisition, disposition or liquidation of Buyer or any
Subsidiary of Buyer;
(vi) any sale, assignment, lease, transfer or
other disposition of any asset of Buyer or any Subsidiary of Buyer, except in
the ordinary course of business;
(vii) any amendment, termination or waiver of any
material right belonging to Buyer or its Subsidiaries, except in the ordinary
course of business; or
(viii) any agreement by Buyer or any of its
Subsidiaries (other than the transactions contemplated by this Agreement) to do
any of the foregoing.
(k) Litigation or Proceedings. Except as set forth in
SCHEDULE 3.1(K) hereto and except for worker's compensation or Bureau of Labor
and Industry claims or cases arising in the ordinary course of business, to
Buyer's knowledge, there are (i) no actions, suits, investigations, or
proceedings pending against Buyer or its Subsidiaries, at law or in equity, by
or before any court or governmental department, agency or instrumentality and
(ii) no actions, suits, investigations, or proceedings threatened against Buyer
or its Subsidiaries, at law or in equity, by or before any court or
governmental department, agency or instrumentality, as to which such threatened
actions, suits, investigations or proceedings there is a reasonable likelihood
of an adverse determination and which, if adversely determined, would
individually or in the aggregate have a Material Adverse Effect on Buyer.
There are no orders, rulings, decrees, writs, injunctions, judgments or
stipulations to which Buyer or its Subsidiaries is a party by or with any
court, arbitrator or administrative agency, other than orders or stipulations
entered into in the ordinary course of business in connection with litigation
proceedings and settlement thereof which do not require payment by Buyer or its
Subsidiaries, individually or in the aggregate, of any amount greater than US
$300,000.
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<PAGE> 38
(l) Compliance with Laws. Buyer and its Subsidiaries
possesses all licenses, permits and authorizations necessary for the lawful
conduct of their respective businesses, except for any failure to possess any
such license, permit and authorization which would not, individually or in the
aggregate, have a Material Adverse Effect on Buyer. Buyer and its Subsidiaries
are in compliance with all applicable laws, ordinances and regulations of
federal, state, local and foreign authorities, except where non-compliance
would not, individually or in the aggregate, have a Material Adverse Effect on
Buyer.
(m) Buyer's Stock. Buyer has authorized, and reserved, a
sufficient number of shares of Buyer's Common Stock to provide for the issuance
of Buyer Stock contemplated by this Agreement. When the Buyer Stock is issued
in accordance with SECTION 1.5 of this Agreement, all shares of the Buyer Stock
shall have been duly authorized and validly issued, shall be fully paid and
non-assessable, shall not have been issued in violation of any preemptive
rights, shall not be subject to any liens, claims, equities, options, calls,
voting trusts, agreements, commitments or encumbrances whatsoever and shall
have been authorized for inclusion on the NASDAQ National Market upon official
notice of issuance.
(n) Securities Act. The Shares and the TxCom Shares
being purchased by Buyer pursuant to this Agreement are being acquired for
investment only and not with a view to any public distribution thereof in
violation of the Securities Act.
(o) SEC Filings. Since January 1, 1994, Buyer has timely
filed all required reports, statements, schedules and registration statements
with the Securities and Exchange Commission required to be filed by Buyer
pursuant to the Exchange Act of 1934, as amended (the "Exchange Act"), all of
which complied in all material respects with all applicable requirements of the
Exchange Act. Buyer has delivered to Seller (i) Buyer's 10-K, (ii) its proxy
statement dated March 25, 1996 relating to the April 30, 1996 meeting of its
stockholders (the "Buyer Proxy Statement") and (iii) and any other reports,
statements, schedules and registration statements filed by Buyer with the
Securities and Exchange Commission since January 1, 1996 (the items described
in clauses (i), (ii) and (iii) are collectively referred to as "Buyer's
Filings"). None of Buyer's Filings, including without limitation, any
financial statements or schedules included therein, at the time filed,
contained any untrue statements of a material fact or omitted to state a
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading.
(p) Certain Transactions; Contracts. There are (i) no
transactions to which Buyer is a party or otherwise related to
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<PAGE> 39
Buyer that would be required to be disclosed pursuant to Item 404 of the
Regulation S-K (other than as disclosed in Buyer's Proxy Statement) and (ii) no
agreements or other documents entered into by Buyer or otherwise related to
Buyer required to be disclosed or filed as an exhibit pursuant to Item 601 of
the Regulation S-K (other than as disclosed in or filed as an exhibit to
Buyer's 10-K or Buyer's Form 10-Q for the fiscal quarter ended March 31, 1996
filed by Buyer with the Securities and Exchange Commission).
(q) Financing. Buyer has received and provided Seller
with a copy of a fully-executed commitment letter dated May 17, 1996, from
Fleet National Bank, and fully-executed subordinated financing letters dated
May 17, 1996 from each of John Hancock Mutual Life Insurance Company, The
Equitable Life Assurance Society of America and Lincoln Investment Management,
Inc. (the "Subordinated Debt Commitment Letters"). All such letters have been
accepted by Buyer and are legal, valid, binding, enforceable and in full force
and effect.
(r) Note. Buyer has the corporate power and corporate
authority to execute, deliver and perform the Note. The execution, delivery
and performance of the Note by Buyer has been duly authorized by all necessary
corporate and, if necessary, shareholder action on the part of Buyer. When
executed and delivered by Buyer in accordance with this Agreement, the Note
will constitute the valid and binding obligation of Buyer enforceable against
it in accordance with its terms, subject to applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium or other similar laws
relating to creditors' rights generally and subject to general principles of
equity (regardless of whether enforcement is sought in a proceeding at law or
in equity).
3.2 Certain Limitations on Representations and Warranties. Each
of the parties is a sophisticated legal entity that was advised by experienced
counsel and, to the extent it deemed necessary, other advisors in connection
with this Agreement. Accordingly, each of the parties hereby acknowledges that
(i) no party has relied or will rely in respect of this Agreement or the
transactions contemplated hereby upon any document or written or oral
information previously furnished to or discovered by it or its representatives,
other than this Agreement (including the Schedules hereto) or such of the
foregoing as are delivered at the Closing, (ii) there are no representations or
warranties by or on behalf of any party hereto or any of its respective
affiliates or representatives other than those expressly set forth in this
Agreement, and (iii) the parties' respective rights and obligations with
respect to this Agreement and the events giving rise thereto will be solely as
set forth in this Agreement.
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ARTICLE IV
CERTAIN OBLIGATIONS OF SELLER
4.1 Conduct of Business Pending Closing. From and after the date
hereto and prior to Closing, and unless Buyer shall otherwise consent or agree
in writing and except as contemplated by this Agreement or as disclosed on
SCHEDULE 4.1 hereto, Seller covenants and agrees that:
(a) Scanning, TxCom and the Seller Subsidiaries will
conduct the Business in the ordinary course;
(b) Scanning, TxCom and the Seller Subsidiaries will use
their reasonable best efforts to preserve the business organization of the
Business intact, to maintain the services of their present key employees and to
preserve the goodwill of the suppliers, customers and others having business
dealings with them. If and as requested by Buyer, Scanning, TxCom and, with
respect to the Business, Seller Subsidiaries shall make reasonable arrangements
for representatives of Buyer to meet with their customers, suppliers and key
employees;
(c) Scanning, TxCom and, with respect to the Business,
the Seller Subsidiaries shall not, and Seller will not permit Scanning, SP
Holding, TxCom or, with respect to the Business, the Seller Subsidiaries, to:
(i) amend the Certificate of Incorporation,
Bylaws or other similar governing documents of Scanning or TxCom;
(ii) issue any capital stock of Scanning or TxCom
or rights, warrants or options to acquire shares of such capital stock or issue
any securities convertible into such shares or convertible into securities in
turn so convertible, or grant any options, warrants or rights to acquire any
such convertible securities;
(iii) split, combine or reclassify outstanding
capital stock of Scanning or TxCom;
(iv) enter into, assume or terminate any material
contract or commitment or amend, terminate or waive any material right of the
Business, except in the ordinary course of business and consistent with past
practice;
(v) sell, transfer, lease or otherwise dispose of
any assets of the Business other than transfers, leases and dispositions in the
ordinary course of business;
(vi) incur, create or assume any mortgage, pledge,
lien, restriction, encumbrance or security interest on
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any assets of the Business, except in the ordinary course of business;
(vii) except for cash dividends, declare or pay any
dividend or other distribution in respect of any class of capital stock of
Scanning or TxCom, or make any payment to redeem, purchase or otherwise
acquire, or call for redemption, any of such stock;
(viii) incur any indebtedness for borrowed money
with respect to the Business except to the extent discharged on or before the
Closing Date;
(ix) merge or consolidate with any other
corporation or acquire any stock, or, except in the ordinary course of
business, any business, property or assets of any other person, firm,
association, corporation or other business organization; or
(x) make or commit to make any capital
expenditure, capital addition or capital improvement with respect to the
Business in excess of US $1,000,000 in the aggregate.
4.2 Access. Prior to the Closing, Scanning, TxCom and, with
respect to the Business, the Seller Subsidiaries, shall give to Buyer and to
Buyer's counsel, accountants and other representatives reasonable access during
normal business hours to properties, books and records of the Business, and
shall provide to Buyer such financial and operating data and other information
concerning the Business as Buyer shall reasonably request.
4.3 Exclusive Dealing. From and after the date hereof and until
the earlier of Closing under or termination of this Agreement, Seller and
Scanning will not, and will not authorize or permit any of their officers,
directors or employees or any of their affiliates or authorize any of their
investment bankers, attorneys, accountants or other representatives retained by
them or any of their affiliates to, directly or indirectly, without the written
consent of Buyer, solicit or knowingly encourage the submission of, or furnish
non-public information (with the intent of inducing any person to make an
offer) with respect to the Business to, any person (a "Potential Acquiror") in
connection with, any proposal by a Potential Acquiror for a merger or other
business combination with the Business or the acquisition of a substantial
equity interest in the Business or a substantial portion of the Business's
assets (a "Third Party Transaction")(other than sales in the ordinary course of
business), other than as contemplated by this Agreement. Notwithstanding the
foregoing or any other provision contained herein to the contrary, if Seller
breaches the covenant contained in the previous sentence and, as a result
thereof, Seller terminates its obligations pursuant to this Agreement (other
than as permitted by SECTION 6.3 hereof) and consummates a Third Party
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<PAGE> 42
Transaction with a Potential Acquiror, then Seller shall promptly pay to Buyer
as liquidated damages for such breach and as compensation for such termination
US $3,000,000 plus an amount not to exceed US $1,500,000 to reimburse Buyer for
(i) any non-refundable bank commitment fee(s) and out-of-pocket expenses paid
by Buyer pursuant to the commitment letters referred to in SECTION 3.1(Q)
hereto and (ii) any non-refundable fees and out-of-pocket expenses of
Hambrecht & Quist Incorporated which Buyer is obligated to pay or otherwise
reimburse (collectively, the "Breakup Fee"), and such Breakup Fee shall be the
sole and exclusive remedy of the Buyer Group in connection with a breach of the
foregoing covenant and such termination. In addition to Seller's termination
rights under SECTION 6.3, and notwithstanding any provision contained herein to
the contrary, Seller may also terminate its obligations under this Agreement
pursuant to this Section upon payment to Buyer of the Breakup Fee. In any
event, upon payment of the Breakup Fee to Buyer, this Agreement shall terminate
and be of no further force or effect, and the Seller and its affiliates shall
have no further liability to Buyer or its affiliates under or for any breach of
this Agreement. For avoidance of doubt, a Third Party Transaction shall not
include any transaction the consummation of which does not impede the
consummation of the transactions contemplated hereby.
ARTICLE V
CERTAIN OBLIGATIONS OF BUYER
5.1 Conduct of Business Pending Closing. From and after the date
hereto and prior to Closing, and unless Seller shall otherwise consent or agree
in writing and except as contemplated by this Agreement, Buyer covenants and
agrees that:
(a) Buyer and its Subsidiaries will conduct their
respective businesses in the ordinary course;
(b) Buyer and its Subsidiaries will use their reasonable
best efforts to preserve the business organization of their respective
businesses intact, to maintain the services of their present key employees and
to preserve the goodwill of the suppliers, customers and others having business
dealings with them; and
(c) Buyer and its Subsidiaries shall not:
(i) amend their respective Articles of
Incorporation, Bylaws or other similar governing documents so as to affect
adversely Seller or holders of Buyer's Common Stock;
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(ii) issue any capital stock of Buyer or any of
its Subsidiaries, or rights, warrants or options to acquire shares of such
capital stock or issue any securities convertible into such shares or
convertible into securities in turn so convertible, or grant any options,
warrants or rights to acquire any such convertible securities (except (a) for
issuances of such securities to Buyer or a wholly-owned Subsidiary of Buyer,
(b) for the grant of employee stock options, (c) in connection with the
exercise of employee stock options outstanding as of the date hereof or (d)
pursuant to employee stock purchase plans existing as of the date hereof);
(iii) split, combine or reclassify the outstanding
capital stock of Buyer;
(iv) declare or pay any dividend or other
distribution in respect of any class of Buyer's or any of its Subsidiaries'
capital stock (except for dividends or distributions declared or paid to Buyer
or a wholly-owned Subsidiary of Buyer), or make any payment to redeem, purchase
or otherwise acquire, or call for redemption, any of such stock; and
(v) enter into a transaction or take any other
action that would be required to be reported under Item 1, 2 or 3 of a Form 8-K
Current Report pursuant to Section 13 or 15(d) of the Exchange Act.
5.2 Access. Prior to the Closing, Buyer and its Subsidiaries,
shall give to Seller and to Seller's counsel, accountants and other
representatives reasonable access during normal business hours to properties,
books and records of Buyer and its Subsidiaries, and shall provide to Seller
such financial and operating data and other information concerning the business
of Buyer and its Subsidiaries as Seller shall reasonably request.
ARTICLE VI
CONDITIONS TO CLOSING; TERMINATION
6.1 Conditions Precedent to Obligations of the Buyer Group. The
obligations of the Buyer Group to proceed with the Closing under this Agreement
are subject to the fulfillment prior to or at Closing of the following
conditions (any one or more of which may be waived in whole or in part by Buyer
at Buyer's option):
(a) Bringdown of Representations and Warranties. The
representations and warranties of Seller contained in this Agreement shall be
true and correct on and as of the Closing Date, with the same force and effect
as though such representations and warranties had been made on, as of and with
reference to such date (other than such representations and warranties as
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are made as of another date, which shall be true and correct as of such date),
except where the failure to be true and correct would not, individually or in
the aggregate, have a Material Adverse Effect, and Seller shall have delivered
to Buyer a certificate of Seller to such effect signed by a duly authorized
corporate officer of Seller.
(b) Performance and Compliance. The Seller Group shall
have performed and complied in all material respects with all of the covenants
required by this Agreement to be performed or complied with by them on or
before the Closing Date, and Seller shall have delivered to Buyer a certificate
of Seller to such effect signed by a duly authorized corporate officer of
Seller.
(c) Opinion of Counsel. Buyer shall have received from
Dechert Price & Rhoads, counsel for the Seller Group, an opinion dated as of
the Closing Date, in a form reasonably satisfactory to counsel to Buyer with
respect to the matters set forth on EXHIBIT G.
(d) Waiting Periods. Any applicable waiting period under
the HSR Act and the regulations promulgated thereunder or the Anti-Monopoly Law
and the regulations promulgated thereunder shall have expired or been
terminated.
(e) Litigation. No order of any court or administrative
agency shall be in effect that restrains or prohibits the transactions
contemplated hereby.
(f) Non-Compete Agreement. Spectra-Physics AB shall have
executed and delivered to Buyer a non-compete agreement (the "Non-Compete
Agreement"), which Non-Compete Agreement shall be substantially in the form of
EXHIBIT H attached hereto.
(g) Transition Services Agreement. The Seller
Subsidiaries shall have entered into a transition services agreement (the
"Transition Services Agreement") with the Buyer Group with respect to the
provision by the Seller Subsidiaries of certain administrative services and the
lease of certain office space related to the non-U.S. operations of the
Business, such Transition Services Agreement to be substantially in the form of
EXHIBIT I attached hereto.
(h) Minute Books and Resignations. Buyer shall have
received the minute books and stock record books of each of Scanning, the
Scanning Subsidiaries (if then available) and TxCom. Seller will cause to be
removed or deliver to Buyer the written resignations, effective as of the
Closing Date, of all members of the boards of directors of Scanning and the
Scanning Subsidiaries and such of the officers of Scanning and the Scanning
Subsidiaries as Buyer has requested.
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(i) Permits, Approvals and Authorizations. All consents,
waivers, permits and approvals from any governmental or regulatory body, which
are required by applicable law to be obtained prior to consummation of the
transactions contemplated hereby shall have been obtained and shall be in full
force and effect on the Closing Date.
(j) Certificate of Incorporation, Bylaws. Buyer shall
have received a complete and correct copy of the Certificate of Incorporation
and Bylaws of Scanning, TxCom, Seller and SP Holding, each certified by the
Secretary of the respective corporation.
(k) Certificates of Good Standing. Buyer shall have
received a Certificate of Good Standing, dated within a recent date of Closing,
for Scanning, TxCom, Seller and SP Holding.
(l) Secretary's Certificate. Buyer shall have received a
Certificate of the Secretary of Seller, SP Holding, and each of the Seller
Subsidiaries certifying (a) the resolutions adopted by the Board of Directors
(and stockholders, if necessary) authorizing, as appropriate, this Agreement,
the TxCom Agreement, the Foreign Sales Agreements and all other agreements and
related transactions contemplated hereunder and (b) the signatures of the
officers authorized to execute such agreements.
6.2 Conditions Precedent to the Obligations of the Seller Group.
The obligations of the Seller Group to proceed with the Closing hereunder are
subject to the fulfillment prior to or at Closing of the following conditions
(any one or more of which may be waived in whole or in part by Seller at
Seller's option):
(a) Bringdown of Representations and Warranties. The
representations and warranties of Buyer contained in this Agreement shall be
true and correct on and as of the date of Closing, with the same force and
effect as though such representations and warranties had been made on, as of
and with reference to such date (other than such representations and warranties
as are made as of another date, which shall be true and correct as of such
date), except where the failure to be true and correct would not, individually
or in the aggregate, have a Material Adverse Effect on Buyer, and Buyer shall
have delivered to Seller a certificate of Buyer to such effect signed by a duly
authorized corporate officer of Buyer.
(b) Performance and Compliance. The Buyer Group shall
have performed and complied in all material respects with all the covenants
required by this Agreement to be performed or complied with by them on or
before the Closing Date and Buyer shall have delivered to Seller a certificate
of Buyer to such effect, signed by a duly authorized corporate officer of
Buyer.
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(c) Opinion of Counsel for the Buyer Group. Seller shall
have received from Boylan, Brown, Code, Fowler, Vigdor & Wilson, LLP, counsel
for the Buyer Group, an opinion dated as of the Closing Date, in a form
reasonably satisfactory to counsel to the Seller Group with respect to the
matters set forth on EXHIBIT I.
(d) Waiting Periods. Any applicable waiting period under
the HSR Act and the regulations promulgated thereunder or the Anti-Monopoly Law
and the regulations promulgated thereunder shall have expired or been
terminated.
(e) Litigation. No order of any court or administrative
agency shall be in effect that restrains or prohibits the transactions
contemplated hereby.
(f) TxCom Guarantee. Spectra-Physics AB shall have been
released from its guarantee obligations under the Guaranty dated August 28,
1995 in favor of Vincent Baumier, Daniel Mawas, Bernard Malaise and Antoine
Bonodot, dated August 28, 1995 (the "TxCom Guarantee").
(g) Permits, Approvals and Authorizations. All consents,
waivers, permits and approvals from any governmental or regulatory body, which
are required by applicable law to be obtained prior to consummation of the
transactions contemplated hereby and shall be in full force and effect on the
Closing Date.
(h) Certificate of Incorporation, Bylaws. Seller shall
have received a complete and correct copy of the Certificate of Incorporation
and Bylaws of Buyer and any subsidiaries Buyer creates to effect the
transactions contemplated hereby.
(i) Certificates of Good Standing. Seller shall have
received a Certificate of Good Standing, dated within a recent date of Closing,
for Buyer and any subsidiaries Buyer creates to effect the transactions
contemplated hereby.
(j) Secretary's Certificate. Seller shall have received
a Certificate of Secretary of Buyer and any subsidiaries Buyer creates to
effect the transactions contemplated hereby certifying (a) the resolutions
adopted by the Board of Directors (and stockholders, if necessary) authorizing,
as appropriate, this Agreement, the TxCom Agreement, the Foreign Sales
Agreements and all other agreements and related transactions contemplated
hereunder and (b) the signatures of the officers authorized to execute such
agreements.
6.3 Termination.
(a) This Agreement may be terminated:
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(i) by the mutual written agreement of Buyer and
Seller;
(ii) by written notice of Buyer to Seller if the
Closing has not occurred within 60 days after the date hereof;
provided, however, that Buyer may not terminate the Agreement pursuant
to this paragraph if Closing shall not have occurred by such date
primarily as a result of Buyer's breach of its obligations hereunder;
or
(iii) by written notice of Seller to Buyer if the
Closing has not occurred within 60 days after the date hereof;
provided, however, that Seller may not terminate the Agreement
pursuant to this paragraph if Closing shall not have occurred by such
date primarily as a result of Seller's breach of its obligations
hereunder.
. (b) In the event of termination by Seller or Buyer
pursuant to paragraph (a) of this SECTION 6.3, written notice thereof shall
promptly be given to the other and the transactions contemplated by this
Agreement shall be terminated, without further action by either. If the
transactions contemplated by this Agreement are terminated as provided herein:
(i) the provisions of SECTION 7.1 (relating to
expenses) and SECTION 7.2 (relating to brokers' fees) hereto shall remain in
full force and effect; and
(ii) in no event shall any termination of this
Agreement limit or restrict the rights and remedies of either party hereto
against the other party which has willfully breached any of the agreements or
other provisions of this Agreement prior to termination hereto.
ARTICLE VII
CERTAIN ADDITIONAL COVENANTS
7.1 Costs, Expenses and Taxes. Buyer and Seller will pay all of
the expenses of the Buyer Group and the Seller Group, respectively, incurred in
connection with this Agreement and the transactions contemplated hereby. Buyer
will pay all sales, value added, transfer, documentary and similar taxes in
connection with the delivery of the Shares and the TxCom Shares and in respect
of the conveyances, assignments or transfers to Buyer or the Buyer Subsidiaries
of the Purchased Assets and the TxCom Rights.
7.2 Brokers. Each of the Seller Group and the Buyer Group
represents and warrants to the other that there are no claims (or any basis for
any claim) for brokerage commissions, finder's fees
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or like payments in connection with this Agreement or the transactions
contemplated hereby resulting from any action taken by them or on their behalf,
except that Salomon Brothers Inc and the Robinson-Humphrey Company, Inc. (the
"Seller Brokers") have been retained by Seller and Seller shall be responsible
for any fees and expenses that may be due to the Seller Brokers. Hambrecht &
Quist Incorporated has been retained by Buyer and Buyer shall be responsible
for any fees and expenses that may be due to Hambrecht & Quist Incorporated.
The Seller Group shall indemnify and hold the Buyer Group harmless and Buyer
shall indemnify and hold the Seller Group harmless with respect to their
respective representations and warranties set forth in this SECTION 7.2.
7.3 Employment. Effective as of the Closing Date, all Foreign
Business Employees shall become employees of the appropriate Buyer
Subsidiaries, subject to the satisfaction of any legal requirements regarding
the transfer of employment of such employees. The Buyer Subsidiaries shall in
all circumstances be responsible for any severance, termination or similar
payment that may be due to any Foreign Business Employee. Buyer agrees that to
the extent length of service is relevant for any purpose under any pension or
other benefit plan or arrangement made available to Foreign Business Employees,
such Foreign Business Employees shall receive credit for their years of service
with the applicable Seller Subsidiary. Buyer further agrees that any medical
or life insurance benefit plans made available to all employees of the Business
shall not contain a pre- existing condition exclusion.
7.4 Best Efforts. Subject to the terms and conditions of this
Agreement, each party will use its reasonable best efforts to cause the Closing
to occur including, without limitation, its reasonable best efforts to obtain
all necessary waivers, consents and approvals and effect all necessary
registrations and filings.
7.5 Transition Services Agreement. On the Closing Date, the
Seller Subsidiaries and the Buyer Subsidiaries shall enter into the Transition
Services Agreement.
7.6 Regulatory Filings. Seller and Buyer agree to file or cause
to be filed all necessary documentation with the appropriate government bodies
as soon as practicable to obtain as soon as possible all consents required by
any governmental bodies in order to consummate the transactions contemplated by
this Agreement. Without limiting the generality of the foregoing, Seller and
Buyer agree to file or cause to be filed, respectively, as soon as practicable
after the date hereof, but in no event more than five business days after the
date hereof, an acquired person's and acquiring person's HSR Act notification
and report form with respect to the transactions contemplated by this Agreement
required by the HSR Act. Buyer further agrees to file or cause to be filed, as
soon as practicable after the date
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hereof, but in no event more than five business days after the date hereof, a
Notification of Acquisition of Business, or any other appropriate form, with
the Fair Trade Commission of Japan with respect to the transactions
contemplated by this Agreement in Japan, and Seller further agrees to use its
reasonable best efforts to cooperate with Buyer to supply Buyer with such
information or data as Buyer may require to prepare and file such form. Seller
and Buyer further agree to use their reasonable best efforts to comply promptly
with and, where appropriate, to respond in cooperation with each other to, all
requests or requirements which applicable federal, state, local, foreign or
other applicable law or governmental officials may impose on them with respect
to the transactions which are the subject of this Agreement. In addition,
anything in this Agreement to the contrary notwithstanding, Buyer covenants and
agrees to use its best efforts to (a) take any action requested or accept any
condition imposed by any government body in connection with any consent
required by any governmental body to consummate the transactions contemplated
in this Agreement and (b) resolve any objection asserted with respect to the
transactions contemplated hereby under any federal or state statute, rule or
regulation designed or intended to prohibit or regulate actions in restraint of
trade, including, if required by any applicable government authority, agreeing
to divest or hold separate pending required divestitures, businesses owned
directly or indirectly by Buyer and entering into such other agreements, order
or decrees with such government body as may be required by such government
body.
7.7 Use of Name.
(a) Anything herein to the contrary notwithstanding, no
interest in or right to use the name or mark "Spectra-Physics", any derivation
thereof, any name or mark confusingly similar therewith, or any logo used in
connection therewith (including without limitation the stylized logo "S")
(collectively, the "Retained Names and Logos"), is being transferred to Buyer
or the Buyer Subsidiaries pursuant to the transactions contemplated hereby, and
except as set forth in this SECTION 7.7, after the Closing, Scanning, TxCom and
the Scanning Subsidiaries will cease to have any interest in or right to use
the Retained Names and Logos. The Seller agrees that it will not at any time
object to the use of the word "SpectraScan" in the corporate name of Scanning
and for all other purposes related to the Business or any other business
conducted by Scanning, the Buyer Group or their successors or assigns in the
future. Buyer agrees to cause Scanning to file an amendment to its Certificate
of Incorporation to change its name promptly after the Closing to eliminate any
reference to the Retained Names and Logos.
(b) Seller grants Buyer a limited non-exclusive
royalty-free license (A) commencing on the Closing Date and ending two years
after the Closing Date, to use the mark
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"Spectra-Physics," the name "Spectra-Physics Scanning Systems, Inc." and the
stylized logo "S" (the "Licensed Names") solely on (i) any products or
inventory in the possession of Scanning or, with regard to the Business, the
Seller Subsidiaries at the time of the Closing or (ii) any products
manufactured by Scanning during the two-year period after the Closing Date
(except for products using new molds) (collectively, the "Licensed Products"),
(B) commencing on the Closing Date and ending six months after the Closing
Date, to use solely in connection with the Business any signs, purchase orders,
invoices, sales orders, labels, letterhead, shipping documents, brochures,
displays, advertising, promotional materials, and other written materials
existing on the Closing Date that bear the Licensed Names, (C) with regard to
any labels affixed to products that bear the Licensed Names for which
government consent would be necessary to replace the Licensed Name appearing on
the label, to use such labels until the earlier of (i) receipt of government
approval to replace the Licensed Name appearing on the labels or (ii) two years
after the date of the Closing and (D) commencing on the Closing Date and ending
two years after the Closing Date, to use the phrase "formerly known as
Spectra-Physics Scanning Systems, Inc." on any written materials used solely in
connection with the Business. Notwithstanding the foregoing, Buyer agrees to
use its best efforts to discontinue its use of the Licensed Names as soon after
the Closing as commercially practicable, consistent with Buyer's good faith
judgment.
(c) Buyer agrees that all of its use of the Licensed
Names shall inure to the exclusive benefit of Seller for trademark purposes,
and Buyer agrees not to challenge Seller's ownership of the Licensed Names or
the validity of the Licensed Names or this license. The license granted by
this Agreement is subject to the concurrent right of Seller and its licensees
to use the Licensed Names in connection with any product, service or business.
Buyer shall only use the Licensed Names in providing Licensed Products that are
of a quality equal or superior to those provided by Scanning under the Licensed
Names as of the date hereto. Seller shall have the right to monitor and
inspect the quality of such Licensed Products from time to time on reasonable
notice; provided that Seller shall have no right to inspect or monitor any
Licensed Products until they are commercially available for sale. At Seller's
request, Buyer shall submit for Seller's inspection representative samples of
all advertising, promotional and marketing materials bearing the Licensed Names
used in connection with the Business. Buyer acknowledges that the purpose of
the inspections conducted and quality control standards prescribed by Seller in
this Agreement is to maintain the reputation, image and goodwill of the
Licensed Names. Seller shall not bear or assume any responsibility or
liability to third parties as a result of setting or enforcing such standards
or for any failure of any Licensed Product or of Buyer's conduct of the
Business to conform to such standards.
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Buyer shall indemnify, defend and hold Seller harmless against any and all
claims, losses, liabilities, damages, and expenses (including attorneys' fees
and expenses) arising from or relating to Buyer's use of the Licensed Names in
conducting the Business or in marketing, distributing, offering, or selling the
Licensed Products or otherwise arising from or relating to Buyer and Seller's
use of similar names. Buyer shall take no action that would prejudice or
interfere with the validity of or Seller's ownership of the Licensed Names, and
Buyer shall not enter into any agreement with any third party which in any way
alters, diminishes or restricts the rights of Seller in the Licensed Names or
places any restrictions or conditions upon the use or appearance of any
Licensed Name. Buyer shall not prosecute any application for the registration
of any trademark, service mark or trade name containing any form or variation
of any Licensed Name (other than the name "SpectraScan"). Seller grants this
license "as is," and makes no representations or warranties concerning the
Licensed Names. Buyer may not assign, sublicense, pledge, grant or otherwise
encumber or transfer this license or any of its rights and obligations
hereunder (whether by operation of law or otherwise) without the prior written
consent of Seller.
7.8 Registration Rights. At Closing, Buyer and Seller will enter
into a registration rights agreement (the "Registration Rights Agreement")
which agreement shall be substantially in the form of EXHIBIT K hereto.
7.9 TxCom Guarantee. If requested by Seller, Buyer agrees to
enter into a guarantee agreement with Vincent Baumier, Daniel Mawas, Bernard
Malaise and Antoine Bonodot in substantially the same form as, and in
replacement of, the TxCom Guarantee.
7.10 Buyer's Further Assurances. Buyer agrees to, and to cause its
Subsidiaries to, promptly transfer, convey, assign and deliver to Seller or its
designee all notices, correspondence, documentation, rights and payments
received by the Buyer Group after the Closing relating to the Excluded
International Assets, or any asset, claim or right dividended or otherwise
transferred to Seller or its designees pursuant to SECTION 1.3 of this
Agreement.
7.11 Restriction on Sale of Buyer Stock. Seller agrees not to
sell, in a privately negotiated transaction, any shares of Buyer Stock to
Symbol Technologies Inc. or its subsidiaries or affiliates. The parties agree
that this restriction shall not prohibit Seller from selling shares of Buyer
Stock on or through the facilities of any national securities exchange or the
NASDAQ National Market System.
7.13 Patent License Agreement. From and after the Closing, the
Buyer shall be bound by, and shall be considered the "Licensor" for all
purposes under, the Patent License Agreement
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between Seller and Spectra-Physics Holdings USA, Inc. referred to on SCHEDULE
2.1(T).
ARTICLE VIII
INDEMNIFICATION
8.1 Indemnification by the Seller. Subject to the limitations
contained herein, after the Closing, Seller and SP Holding shall indemnify and
hold harmless the Buyer Group from and against any loss, liability, claim,
obligation, damage or expense (including reasonable legal, consulting and
accounting fees and expenses and costs of litigation) (collectively "Damages")
that any member of the Buyer Group may incur or suffer arising out of or
resulting from:
(a) the inaccuracy of any representation or warranty made
by Seller and SP Holding in this Agreement or in any closing certificate
delivered pursuant hereto;
(b) any failure by Seller or SP Holding to perform any
obligation or comply with any covenant or agreement specified herein;
(c) any liability for federal or foreign income Taxes of
Scanning and its Subsidiaries, Seller Subsidiaries or TxCom with respect to any
taxable period that ends on or prior to the Closing Date;
(d) any liability owed to a Governmental Authority for
state or local income or franchise Taxes, Payroll Taxes or state or local sales
and use Taxes of Scanning and its Subsidiaries, Seller Subsidiaries, or TxCom
with respect to any taxable period that ends on or prior to the Closing Date,
provided that a Tax Return for the same type of tax for which such liability is
owed was filed with such Governmental Authority by or on behalf of Scanning and
its Subsidiaries, Seller Subsidiaries or TxCom on or before the Closing Date or
was caused to be filed by Seller with such Governmental Authority after the
Closing Date pursuant to SECTION 9.1(A), except to the extent any of the
foregoing Taxes are reflected on the Closing Date Balance Sheet;
(e) any liability for Taxes of Seller or of any other
entity which is a member of any consolidated, combined or unitary federal or
state tax group of which Scanning is or was a member on or before the Closing
Date, pursuant to Treasury Regulation Section 1.1502-6 or any analogous state
or local tax provisions; and
(f) any liability for Taxes of Scanning and its
Subsidiaries, Seller Subsidiaries, or TxCom, other than the Taxes described in
SECTION 8.1(C), (D) OR (E), with respect to any
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taxable period that ends on or prior to the Closing Date, except to the extent
any such Taxes are reflected on the Closing Date Balance Sheet.
8.2 Indemnification By Buyer. Subject to the limitations
contained herein, after the Closing, Buyer shall indemnify and hold harmless
the Seller Group from and against any Damages that any member of the Seller
Group may incur or suffer arising out of or resulting from:
(a) the inaccuracy of any representation or warranty made
by Buyer in this Agreement or in any certificate delivered pursuant hereto;
(b) any failure by Buyer to perform any obligation or
comply with any covenant or agreement specified herein; and
(c) the Assumed International Liabilities, the TxCom
Obligations and Spectra-Physics AB's obligations under the TxCom Guarantee.
8.3 Limitations on Indemnification Obligations.
(a) Seller and SP Holding shall not have any liability
under SECTIONS 8.1(A) or SECTION 8.1(F) of this Agreement for Damages unless
the aggregate of all Damages for which Seller and SP Holding would, but for
this sentence, be liable exceeds US $1,350,000 on a cumulative basis, and then
only to the extent of any such excess. Seller and SP Holding shall not have
any liability under SECTION 8.1(D) of this Agreement for Damages unless the
aggregate of all Damages for which Seller and SP Holding would, but for this
sentence, be liable exceeds US $50,000 on a cumulative basis and then only to
the extent of any such excess. Under no circumstances shall Buyer and its
affiliates be entitled to indemnification for Damages under SECTION 8.1(A) and
SECTION 8.1(F) of this Agreement for an amount in excess of US $10,000,000.
(b) No action, claim or set off for Damages under
SECTIONS 8.1(A) AND 8.1(F) of this Agreement shall be brought or made by the
Buyer Group after the date that is twelve (12) months after the Closing Date,
except that such time limitation shall not apply to claims for
misrepresentations or breaches of warranty relating to SECTIONS 2.1(B) and
2.1(D). The time limitation specified in this SECTION 8.3(B) shall not apply
to any item as to which Buyer shall have, before the expiration of the
applicable period, previously made a claim by delivering a notice (stating in
reasonable detail the basis of such claim) to Seller.
(c) The amount of any Damages for which indemnification
is provided under SECTIONS 8.1 and 8.2 of this Agreement
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shall be (i), in the case of calculating Buyer's Damages, net of any accruals
or reserves reflected on the Closing Date Balance Sheet with respect to the
matters to which those Damages relate, (ii) net of any amounts recovered by the
indemnified party for such Damages pursuant to any indemnification by or
indemnification agreement with any third party and/or any insurance policies
with respect to such Damages and (iii) offset to the extent of the present
value (calculated using a discount rate equal to the appropriate applicable
federal rate under Code Section 1274(d)) of any tax benefit (including without
limitation, any benefit attributable to a decrease in income, increase in
deductions or credits, or increase in basis) realized by the indemnified party
arising from, or in connection with, the incurrence or payment of any such
Damages. Buyer shall not be entitled to indemnification hereunder with respect
to Taxes of TxCom if the existence of such Taxes constitutes a breach of the
Seller's Representations and Warranties Agreement by and between Vincent
Baumier, Bernard Malaise, Daniel Mawas, Alain Bonodot and TxCom and SP Holding,
dated August 28, 1995 (the "Representations and Warranties Agreement") and
Buyer (as successor to SP Holding) receives indemnification for such breach
pursuant to the Representations and Warranties Agreement.
(d) Seller, SP Holding and Buyer shall have no obligation
under this Agreement to indemnify the other with respect to any matter that was
or could have been raised by the other in connection with the Closing Date
Balance Sheet pursuant to the terms of SECTION 1.6.
(e) From and after the Closing, no claim for indemnity
shall be made by the Buyer Group or the Seller Group, if such claim is based on
an event or facts disclosed to such party in writing prior to Closing.
(f) Buyer shall not have any liability under SECTION
8.2(A) of this Agreement for Damages unless the aggregate of all Damages for
which Buyer would, but for this sentence, be liable exceeds US $1,350,000 on a
cumulative basis, and then only to the extent of any such excess. Under no
circumstances shall Seller, SP Holding and their affiliates be entitled to
indemnification for Damages under SECTION 8.2(A) of this Agreement for an
amount in excess of US $10,000,000.
(g) No action, claim or set off for Damages under
SECTIONS 8.2(A) of this Agreement shall be brought or made by any member of the
Seller Group after the date that is twelve (12) months after the Closing Date,
except that such time limitation shall not apply to claims for
misrepresentations or breaches of warranty relating to SECTIONS 3.1(B), 3.1(D),
3.1(M) AND 3.1(R). The time limitation specified in this SECTION 8.3(G) shall
not apply to any item as to which Seller or SP Holding shall have, before the
expiration of the applicable period, previously made a
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claim by delivering a notice (stating in reasonable detail the basis of such
claim) to Buyer.
8.4 Procedures Relating to Indemnification.
(a) In order for a party (the "Indemnified Party") to be
entitled to any payment under the indemnification provided for under this
Agreement in respect of, arising out of or involving a claim, legal proceeding
or demand made by any person, firm, governmental authority, corporation or
other entity (other than any of the parties to this Agreement or their
affiliates) against the Indemnified Party (a "Third Party Claim"), such
Indemnified Party must notify the other party (the "Indemnifying Party") in
writing of the Third Party Claim, setting forth in reasonable detail the basis
for such claim, as promptly as practicable, but in any case within 30 days,
after receipt by such Indemnified Party of written notice of the Third Party
Claim (the "Indemnification Notice"); provided, however, that failure to give
such Indemnification Notice shall not affect the indemnification provided
hereunder except to the extent that the Indemnifying Party shall have been
prejudiced as a result of such failure. Thereafter, the Indemnified Party
shall deliver to the Indemnifying Party, within five business days after the
Indemnified Party's receipt thereof, copies of all notices and documents
(including court papers) received by the Indemnified Party relating to the
Third Party Claim.
(b) In connection with any Third Party Claim, the
Indemnifying Party, at the sole cost and expense of the Indemnifying Party,
may, upon written notice to the Indemnified Party, assume the defense of any
such Third Party Claim. Should the Indemnifying Party so elect to assume the
defense of a Third Party Claim, the Indemnifying Party will not be liable to
the Indemnified Party for legal expenses subsequently incurred by the
Indemnified Party in connection with the defense thereof. If the Indemnifying
Party assumes such defense, the Indemnified Party shall be entitled to
participate in, but not control, the defense thereof at its own expense. If
the Indemnifying Party shall fail to defend such Third Party Claim, or if after
commencing or undertaking any such defense to such Third Party Claim, fails to
prosecute, or withdraws from such defense, the Indemnified Party shall have the
right to undertake such defense at the Indemnifying Party's expense. Whether
or not the Indemnifying Party chooses to defend or prosecute any Third Party
Claim, the Indemnified and Indemnifying Parties shall cooperate in the defense
or prosecution thereof. Such cooperation shall include access during normal
business hours afforded to the Indemnifying Party to, and reasonable retention
by the Indemnified Party of, records and information which are reasonably
relevant to such Third Party Claim, and making employees available on a
mutually convenient basis to provide additional information and explanation of
any material provided hereunder, and the Indemnifying Party shall
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reimburse the Indemnified Party for all its reasonable out-of-pocket expenses
in connection therewith. Regardless of whether the Indemnifying Party elects
to assume the defense of any such Third Party Claim, the Indemnified Party
shall not admit any liability with respect to, or settle, compromise or
discharge, such Third Party Claim without the Indemnifying Party's prior
written consent.
8.5 Exclusive Remedy. The indemnification provided in this
ARTICLE XIII shall be the sole and exclusive remedy after the Closing Date for
monetary damages available to the Buyer Group and the Seller Group for breach
of any of the terms, conditions, representations or warranties contained
herein. As between the Seller Group, on the one hand, and the Buyer Group and
its affiliates, including without limitation after the Closing, Scanning and
TxCom, on the other hand, the rights and obligations set forth in this
Agreement will be the exclusive rights and obligations with respect to this
Agreement, the events giving rise to this Agreement and the transactions
provided for herein or contemplated hereby (other than, prior to the Closing,
the Confidentiality Agreement dated February 1, 1996 between Buyer and
Spectra-Physics AB (the "Confidentiality Agreement")). Without limiting the
generality or effect of the foregoing, as a material inducement to the other
parties hereto entering into this Agreement, and in light of, among other
factors, the acknowledgements contained in SECTION 3.2, each of the parties to
this Agreement hereby waives any claim or cause of action, known and unknown,
foreseen and unforeseen, which exists or may arise in the future, or which it
otherwise might assert, including without limitation under the common law or
federal or state securities laws, trade regulation laws, Environmental Laws
(including CERCLA or any other statutes now or hereafter in effect) or other
Laws, by reason of this Agreement, the events giving rise to this Agreement and
the transactions provided for herein or contemplated hereby or thereby (other
than in respect of the Confidentiality Agreement), except for (i) claims or
causes of action brought under and subject to the terms and conditions of this
Agreement, or (ii) injunctive or other equitable relief (other than for
rescission or rescissory or similar damages).
ARTICLE IX
TAX MATTERS
9.1 Tax Responsibility.
(a) Seller shall be responsible for the preparation and
filing of (i) all federal and foreign income tax Returns and all consolidated,
combined or unitary state or local income or franchise tax Returns which
include the results of Scanning for
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any taxable period ending on or before the Closing Date and all other state or
local income or franchise tax Returns of Scanning for a taxable year that ends
on the Closing Date; and (ii) all other Tax Returns of Scanning which are
required to be filed on or before the Closing Date (taking into account any
applicable extensions). Seller shall be responsible for remitting or causing
to be remitted to the proper Governmental Authority all payments of Taxes
required to be paid on or before filing any such return as shown thereon except
for any such Taxes that are reflected on the Closing Date Balance Sheet.
Seller shall submit to Buyer any Return prepared by Seller
which has not been filed on or before the Closing Date and which is required to
be executed by an officer of Scanning. Within fifteen business days of the
receipt of such return, Buyer shall cause the appropriate officer of Scanning
to duly execute such return and shall deliver such duly executed return to
Seller. Buyer shall also, within such fifteen-day time period, remit to Seller
an amount equal to the amount of any Taxes due with respect to such return, but
only to the extent such Taxes are reflected on the Closing Date Balance Sheet.
Seller shall be responsible for filing such return and remitting all payments
of Taxes required to be paid with respect to such return.
Seller will also be responsible for deferred income, if any,
triggered into income by Treasury Regulation Section 1.1502-13 and Treasury
Regulation Section 1.1502-14 and excess loss accounts, if any, taken into
income under Treasury Regulation Section 1.1502-19 for all periods through the
Closing Date and pay any federal income Taxes attributable to such income.
Seller will prepare and file all Returns for which it is responsible for under
this SECTION 9.1(A) in a manner that is consistent with its past tax accounting
methods or practice and will take no position on such returns that relate to
Scanning and its Subsidiaries that materially and adversely affects Scanning
and its Subsidiaries after the Closing Date, unless such position would be
reasonable in the case of a person that owned Scanning and its Subsidiaries
both before and after the Closing Date or is consistent with past tax
accounting methods or practice.
(b) Buyer shall cause Scanning to prepare and file all
Tax Returns of Scanning not described in SECTION 9.1(A). Buyer shall remit or
cause Scanning to remit to the proper taxing authorities all payments of Taxes
required to be paid on or before filing any such return as shown thereon.
Buyer will take no position (nor will cause Scanning to take a position) on any
Return that would materially and adversely affect either Seller or Scanning and
its Subsidiaries with respect to any Returns (and any liability for Taxes
related thereto) described in SECTION 9.1(A), unless such position would be
reasonable in the case of a person that owned Scanning and its Subsidiaries
both before and
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after the Closing Date or is consistent with past tax accounting methods or
practice.
(c) All Tax Returns of Scanning, or which include the
results of Scanning, (other than any one-day Returns required by reason of any
election described in SECTION 9.2 hereto) shall be prepared on the basis of a
taxable period of Scanning ending at the close of business on the Closing Date,
unless clearly required otherwise by applicable Tax law.
(d) Within 180 days after the Closing Date, Buyer shall
provide to Seller completed Tax Return packages and such other information
reasonably requested by Seller with respect to Scanning for the preparation of
any Tax Return required to be filed by Seller under SECTION 9.1(A)(I). In
addition, Seller and Buyer shall provide reasonable cooperation to each other
in connection with (i) the preparation or filing of any Tax Return, Tax
election, Tax consent or certification, or any claim for a Tax refund, (ii) any
determination of liability for Taxes, and (iii) any audit, examination or other
proceeding in respect of Taxes of Scanning. Such cooperation shall include
making available, on a reasonable basis, employees of the Seller, Buyer, or
Scanning, as the case may be, whose out-of-pocket costs, if any, such as travel
and lodging, shall be reimbursed by the party to which such employees are made
available. After the Closing Date, Seller and Buyer shall make available to
each other, as reasonably requested all information, records or documents of
Scanning for all periods prior to and including the Closing Date and shall
preserve all such information, records and documents until the expiration of
any applicable statute of limitations, including extensions thereof, provided
that notice of such extension is given to the party which did not grant the
extension.
(e) Notwithstanding anything to the contrary in SECTION
8.4 of this Agreement, Seller shall have the sole right, at its own expense, to
control any audit or examination by any Governmental Authority, to initiate any
claim for refund, to amend any Return, or to contest, resolve and defend
against any assessment, notice or deficiency, or other adjustment or proposed
adjustment relating to any Taxes for which Buyer seeks to be indemnified by
Seller pursuant to SECTION 8.1 hereto. Seller will not settle any such audit
in a manner which would materially and adversely affect Scanning and its
Subsidiaries after the Closing Date unless such settlement would be reasonable
in the case of a person that owned Scanning and its Subsidiaries both before
and after the Closing Date or such settlement is consistent with past tax
accounting methods or practice of Seller or Scanning and its Subsidiaries in
handling such audits.
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9.2 Section 338(h)(10) Election.
Seller and Buyer agree that they shall jointly make or cause
to be made the election under Section 338(h)(10) of the Code and Treasury
Regulation Section 1.338(h)(10)-1(d) (and any corresponding election under
state and local Tax law) with respect to the purchase and sale of the Shares,
except that Seller and Buyer shall jointly elect not to have an election under
Section 338(h)(10) or Section 338(g) of the Code apply for California purposes
(collectively, the "Elections"). Because Seller is not the common parent of a
"selling consolidated group" of which Scanning is a member, as that term is
defined under Treasury Regulation Section 1.338(h)(10)-1, Seller shall cause
the person that is the common parent with respect to the selling consolidated
group to join with Buyer in making the Elections with respect to Scanning.
(Any person authorized to make the Elections with respect to the selling
consolidated group and Scanning (on behalf of Seller) is referred to as an
"Authorized Person" herein). Buyer shall prepare IRS Form 8023-A (and any
required attachments) and any similar state and local tax forms (and any
required attachments) required to make the Elections (collectively, the
"Election Forms" and each singularly, the "Election Form") and shall submit the
Election Forms to Seller no later than 75 days prior to the date the Election
Forms are required to be filed. The amount of consideration allocated to the
purchase and sale of the Shares shall be consistent with the Purchase Price
allocation set forth in SECTION 1.7 hereto. In the event of any dispute with
regard to the content of any Election Form, the Parties shall attempt to
resolve such dispute using good faith efforts. If they have not done so by the
thirtieth day prior to the date the Election Form in question is required to be
filed, the dispute shall be resolved by the Neutral Auditors (in accordance
with SECTION 9.5 hereto) at least five business days prior to the time the
Election Form is required to be filed. Seller shall promptly deliver to Buyer
the Election Forms, which shall have been executed by the Authorized Person.
Buyer shall then duly execute the Election Forms or promptly cause the Election
Forms to be duly executed by the person authorized to execute such forms on
behalf of Buyer and shall file the Election Forms in accordance with applicable
Tax laws and the terms of this Agreement. Seller and Buyer shall take or cause
to be taken any other actions that are necessary for making or perfecting the
Elections. Buyer shall provide Seller with a copy of the Election Forms as
filed. Seller and Buyer shall report all transactions pursuant to this
Agreement for Tax purposes in a manner that is consistent with the Elections in
all jurisdictions which recognize the effectiveness of the Elections for Tax
purposes and shall take no position contrary thereto in such jurisdictions
unless required to do so pursuant to a "determination" within the meaning of
Section 1313 of the Code or an analogous provision under state or local law.
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Seller will pay any tax attributable to the making of the
Section 338(h)(10) election and will indemnify Buyer and Scanning against any
liability or expense arising out of any failure to pay such tax. Seller will
also pay any state, local or foreign tax (and indemnify Buyer and Scanning
against any liability or expense arising out of any failure to pay such tax)
attributable to an election under state, local or foreign law similar to the
election available under Section 338(g) of the Code (or which results from the
making of an election under Section 338(g) of the Code) with respect to the
purchase and sale of the stock of Scanning hereunder where the state, local, or
foreign tax jurisdiction (i) does not provide or recognize a Section 338(h)(10)
election or (ii) does not apply its provisions corresponding to Section
338(h)(10) of the Code to the purchase and sale of the stock of Scanning (for
example, because Scanning files a separate company tax return in such
jurisdiction).
9.3 Refunds and Credits.
(a) Except as otherwise provided in SECTION 9.3(B),
Seller shall be entitled to any refund or credit (including any refund or
credit resulting from a carry back of a net operating loss, net capital loss or
tax credit) of federal and foreign income Taxes, any state or local income or
franchise Taxes, Payroll Taxes or state or local sales and use Taxes of
Scanning and its Subsidiaries and TxCom with respect to any taxable period that
ends on or prior to the Closing Date, except to the extent such refund or
credit is reflected on the Closing Date Balance Sheet.
Seller, at its expense, shall be responsible for filing and
preparing any Returns (including any amended Returns) necessary to obtain such
refund or credit. Buyer shall cooperate with Seller in connection with the
preparation and filing of such returns. Seller will indemnify Buyer for any
penalty, interest or costs incurred by Buyer that is attributable to such
refund or credit.
(b) Where permitted by applicable Tax law, Buyer and
Scanning shall elect not to carry back any net operating loss, net capital loss
or tax credit that arises in any taxable year ending after the Closing Date
("Carryback Item"), to a taxable year of any consolidated, combined or unitary
Returns filed by, or with respect to, Scanning that ends on or before the
Closing Date. If a Carryback Item of Buyer or Scanning (or a successor to
them) is required to be carried back under applicable Tax law to a taxable year
of any consolidated, combined or unitary Returns filed by, or with respect to,
Scanning, and is absorbed or used in whole or in part in such year, Seller
shall pay Buyer an amount equal to any refund or credit attributable to such
Carryback Item, provided that Seller receives such refund or realizes the
benefit of any such credit. The amount of any such
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refund or credit attributable to the Carryback Item shall be equal to the
difference between the amount of such refund or credit (net of any income taxes
payable thereon) with and without the Carryback Item. Amounts due pursuant to
this paragraph shall be paid in full within 30 days after Seller receives a
refund or credit. If a refund or credit attributable to a Carryback Item is
later reduced (for example, as a result of a reduction in the amount of a
Carryback Item caused by an audit adjustment), Buyer shall pay to Seller the
amount of such reduction including statutory interest by the due date of any
required tax payment by Seller or, if no payment is due, within 30 days after
the final determination of the amount of the reduction in such benefit.
Seller shall be responsible for preparing and filing (or
arranging for the preparation and filing of) any Returns required to carry back
a Carryback Item to a taxable year ending on or before the Closing Date. Buyer
shall reimburse Seller for the reasonable cost of preparation of any such
Returns. Buyer shall indemnify Seller for any penalty, interest or costs
incurred by Seller that is attributable to Carryback Items.
(c) Except as otherwise provided in SECTION 9.3(A),
Scanning shall be entitled to any other refunds or credits of its Taxes for all
taxable periods.
9.4 Tax Sharing Agreements. Effective as of the Closing Date, all
tax sharing agreements between Scanning and any member of any consolidated,
combined, or unitary group of which Scanning is a member on or before the
Closing Date shall be terminated. Neither Scanning nor such member shall have
any current or continuing obligations to or benefits from any other party under
such terminated agreements as of and after the Closing Date.
9.5 Dispute Resolution. In the event of a dispute concerning this
ARTICLE IX, the parties shall submit such dispute to the Neutral Auditors (to
be selected in the same manner as set forth under SECTION 1.6(D) hereto) whose
decision shall be binding on the parties. The Neutral Auditors' fee shall be
borne equally by Buyer and Seller.
ARTICLE X
MISCELLANEOUS
10.1 Notices. All notices, requests, demands and other
communications hereunder shall be in writing and shall be deemed to have been
duly given if personally delivered or, if mailed, three business days after
being mailed by United States first-class, certified or registered mail,
postage prepaid, or, if sent by overnight delivery by a nationally recognized
courier such as Federal Express, one business day after deposit with such
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courier, or, if sent by telecopy, upon confirmation of receipt, to the other
party at the following addresses (or at such other address as shall be given in
writing by any party to the other):
If to Seller Group to:
Spectra-Physics, Inc.
108 Webster Building
3411 Silverside Road
Wilmington, DE 19810
Telephone: (302) 478-4600
Fax: (302) 478-8962
Attn: Ms. Barbara Schoenberg
With required copies to:
Spectra-Physics AB
Box 5226
Sturegatan 32
Fourth Floor
S-102 45 Stockholm, Sweden
Telephone: 011-468-783-0725
Fax: 011-468-660-9226
Attn: Mr. Ulf Johansson
and
Dechert Price & Rhoads
4000 Bell Atlantic Tower
1717 Arch Street
Philadelphia, PA 19103
Telephone: (215) 994-2971
Fax: (215) 994-2222
Attention: Carmen J. Romano, Esquire
If to Buyer Group, to:
PSC Inc.
675 Basket Road
Webster, NY 14580
Telephone: (716) 265-1600
Fax: (716) 265-6402
Attention: William J. Woodard, Vice-President -
Finance
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With required copies to:
Boylan, Brown, Code, Fowler, Vigdor
& Wilson, LLP
2400 Chase Square
Rochester, NY 14604
Telephone: (716) 232-5300
Fax: (716) 232-3528
Attention: Martin S. Weingarten, Esq.
10.2 Successors and Assigns; Benefit. This Agreement, and all
rights and powers granted hereby, will bind and inure to the benefit of the
parties hereto and their respective successors and assigns. No party hereto
may assign its rights or delegate its duties and obligations under this
Agreement without the prior written consent of the other party hereto;
provided, however, that Buyer may assign its rights hereunder to a wholly-
owned Subsidiary of Buyer, provided further that no such assignment shall
limit or release any of Buyer's obligations hereunder. Except as provided in
SECTION 7.3 of this Agreement, nothing in this Agreement, express or implied,
is intended to confer on any other person other than the parties hereto, the
Seller Subsidiaries and the Buyer Subsidiaries or their respective successors
and permitted assigns, any rights, remedies, obligations or liabilities under
or by reason of this Agreement.
10.3 Public Announcements. Prior to the Closing, neither the
Seller Group nor the Buyer Group shall issue any press release or public
announcement regarding this Agreement or the transactions contemplated hereby
except as and to the extent that Buyer and Seller jointly agree, and except as
any party shall in the opinion of its counsel be obligated by law, rule or
regulation of any governmental or regulatory body or stock exchange, and in
such event the party issuing any release or public announcement or disclosure
shall to the extent practical, give the other party reasonable prior notice of
such announcement or disclosure and a reasonable opportunity to comment
thereon.
10.4 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York.
10.5 Headings. The headings preceding the text of the sections and
subsections hereto are inserted solely for convenience of reference, and shall
not constitute a part of this Agreement, nor shall they affect its meaning,
construction or effect.
10.6 Amendments. No amendment to this Agreement shall be effective
unless it shall be in writing and signed by each of the parties against which
it is to be enforced.
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10.7 Limitation on Knowledge. To the extent any representation or
warranty of Seller in this Agreement is limited to "Seller's knowledge" or
similar language, knowledge shall be limited to any facts or circumstances
actually known after reasonable investigation by the individuals set forth on
SCHEDULE 10.7 hereto. To the extent any representation or warranty of Buyer in
this Agreement is limited to "Buyer's knowledge" or similar language, knowledge
shall be limited to any facts or circumstances actually known after reasonable
investigation by any of the individuals set forth on SCHEDULE 10.7 hereto.
10.8 Foreign Sales Agreements and TxCom Agreement. Notwithstanding
anything to the contrary contained in any of the Foreign Sales Agreements or
the TxCom Agreement to be executed and delivered in accordance with SECTION
1.1(C) and SECTION 1.1(D), respectively, of this Agreement, any "purchase
price" referred to in any such Foreign Sales Agreement or TxCom Agreement
represents the portion of the Purchase Price allocated to the assets and
liabilities being transferred by the Seller Subsidiary party to such Foreign
Sales Agreement or by SP Holding pursuant to the TxCom Agreement, respectively,
and no amounts in excess of, or less than, the Purchase Price shall be owed by
Buyer as a result of the purchase price specified in any Foreign Sales
Agreement or TxCom Agreement. The purchase price adjustment contemplated by
the Foreign Sales Agreements and the TxCom Agreement refer only to the
adjustments to the purchase price referred to in the appropriate Foreign Sales
Agreement or TxCom Agreement, respectively, if any, necessary as a result of
the finalization of the allocation of the Purchase Price in accordance with
SECTION 1.7 of this Agreement, and no amounts shall be owed by the Buyer Group
or the Seller Group as a result of any such adjustments. Notwithstanding
anything contained in this Agreement, the Foreign Sales Agreements or the TxCom
Agreement to the contrary, nothing in the Foreign Sales Agreements or the TxCom
Agreement will be deemed to enlarge or diminish in any way any of the parties'
rights or obligations under this Agreement. To the extent that any of the
provisions of the Foreign Sales Agreements or the TxCom Agreement are
inconsistent with the provisions of this Agreement, the provisions of this
Agreement shall control. No party to any of the Foreign Sales Agreements or
the TxCom Agreement shall have any right to bring any claim thereunder for
breach of the representations or warranties contained therein. That portion of
the Purchase Price allocated to the International Assets transferred to a Buyer
Subsidiary from Spectra-Physics K.K. shall be deemed to be paid in Japanese Yen
at the spot price for Japanese Yen listed in the Wall Street Journal on the
Closing Date.
10.9 Consent to Jurisdiction. Buyer and Seller each irrevocably
submits to the exclusive jurisdiction of (a) the courts of the State of New
York, situated in the county of New York and (b)
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the United States District Court for the Southern District of New York, for the
purposes of any suit, action or other proceeding arising out of or related to
this Agreement or any transaction contemplated hereby. Buyer and Seller each
hereby irrevocably consents to the service of summons, complaint and any and
all other process in any such action or proceeding brought in such
jurisdictions within the State of New York by delivery of copies of such
process to it, at its address specified in SECTION 10.1 of this Agreement or by
certified mail direct to such address. Buyer and Seller each hereby waives any
objection that it may have based upon lack of personal jurisdiction, including,
without limitation, any objection to the laying of venue or based on grounds of
forum non conveniens, which it may now or hereafter have to the bringing of any
such action or proceeding in such jurisdiction.
10.10 Post-Closing Access. Buyer and Seller shall reasonably
cooperate with each other after the Closing so that (subject to any limitations
that are reasonably required to preserve any applicable attorney-client
privilege) each party has access to the business records, contracts and other
information existing at the Closing Date and relating to the Business (whether
in the possession of Seller Group, Buyer Group, Scanning or TxCom) as is
reasonably necessary for (a) the preparation for or the prosecution or defense
of any suit, action, litigation or administrative, arbitration or other
proceeding or investigation (other than one by or on behalf of a party to this
Agreement against another party to this Agreement) by or against Scanning,
TxCom or any member of the Seller Group or Buyer Group, (b) the preparation and
filing of any Tax Return or election relating to the Business or any audit by
any taxing authority of any Returns of Scanning, TxCom or the Scanning
Subsidiaries and (c) the preparation and filing of any other documents required
by any government authority. The party requesting such information and
assistance shall reimburse the other party for all out-of-pocket costs and
expenses incurred by such party in providing such information and in rendering
such assistance. The access to files, books and records contemplated by this
SECTION 10.10 shall be during normal business hours and upon not less than two
business days' prior written request, shall be subject to such reasonable
limitations as the party having custody or control thereof may impose to
preserve the confidentiality of information contained therein, and shall not
extend to material subject to a claim of privilege unless expressly waived by
the party entitled to claim the same.
10.11 Regarding Certain Consents. Nothing in this Agreement shall
be construed as an attempt by any Seller Subsidiary to assign to the Buyer
Subsidiaries pursuant to this Agreement and/or the Foreign Sales Agreements any
contract, agreement, permit, franchise, claim or asset included in the
International Assets which is by its terms or by law nonassign
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able without the consent of any other party or parties, unless such consent or
approval shall have been given, or as to which all the remedies for the
enforcement thereof available to any Seller Subsidiary would not by law pass to
the Buyer Subsidiaries as an incident of the assignments provided for by this
Agreement (a "Non-Assignable Contract"). To the extent that any such consent
or approval in respect of, or a novation of, a Non-Assignable Contract shall
not have been obtained on or before the Closing Date, Seller shall cause the
Seller Subsidiaries to use reasonable efforts and to cooperate in any
reasonable arrangement to assure the Buyer Subsidiaries the benefits of such
Non-Assignable Contract to the extent permitted by law. To the extent lawful,
practicable and reasonable in the circumstances, including the obtaining of any
such necessary consent or approval after the Closing (provided that neither
Seller nor any Seller Subsidiary shall be required to pay any money or other
consideration or grant forbearances to any third party to effect such consent
or approval), Seller at the request and under the direction of Buyer shall
cause the appropriate Seller Subsidiary to take all reasonable actions to
assure that the rights of any Seller Subsidiary under the Non-Assignable
Contracts shall be preserved for the benefit of the Buyer Subsidiaries to the
extent not involving any undue hardships upon any Seller Subsidiary or
unreasonable time constraints in the request or compliance with such
instructions. Buyer shall indemnify and hold harmless Seller Group for
performing such obligations and reimburse Seller Group for its expenses related
thereto.
10.12 Further Assurances. Following the Closing, each party shall
cooperate with the other and execute and deliver, or cause to be executed and
delivered, all such other instruments, including, without limitation,
instruments of conveyance, assignment and transfer, and take all such other
actions as may reasonably be requested by the other party hereto from time to
time, consistent with the terms of this Agreement, in order to effectuate the
provisions and purposes of this Agreement.
10.13 Preservation of Records Information. Buyer will hold all of
the material books and records of Scanning, TxCom, and, with respect to the
Business, the Seller Subsidiaries, existing on the Closing Date and not destroy
or dispose of any thereto for a period of seven years from the Closing Date.
Seller and Seller Subsidiaries shall preserve and keep any such books and
records it may retain with respect to the Business for a period of seven years
from the Closing Date.
10.14 Further Audit Assistance. Immediately following the Closing
and thereafter, Seller will use its reasonable best efforts to cause Coopers &
Lybrand L.L.P., its auditors, at Buyer's expense, to continue to provide Arthur
Andersen LLP with all such information and assistance with respect to the
Business' audited historical financial statements and quarterly financial
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data as may reasonably be required by Arthur Andersen LLP, including but not
limited to the furnishing of any opinion or consents required for the inclusion
of such audited financial statements in any filings under the Securities Act or
the Exchange Act by Buyer.
10.15 Specific Performance. Buyer and Seller each acknowledges and
agrees that the other party would be damaged irreparably in the event any of
the provisions of this Agreement are not performed in accordance with their
specific terms or otherwise are breached. Accordingly, each of the parties
agree that the other party shall be entitled to an injunction or injunctions to
prevent breaches of the provisions of this Agreement and to enforce
specifically this Agreement and the terms and provisions hereof in addition to
any other remedy to which they may be entitled, at law or in equity.
10.16 Entire Agreement. This Agreement and the Exhibits and
Schedules hereto, each of which is hereby incorporated herein, set forth all of
the promises, covenants, agreements, conditions and undertakings between the
parties hereto with respect to the subject matter hereof, and supersede all
prior and contemporaneous agreements and undertakings, inducements or
conditions, express or implied, oral or written, except the Confidentiality
Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the day and year first above written.
SPECTRA-PHYSICS, INC.
By: /s/ ULF J. JOHANSSON
Title: as authorized agent
PSC Inc.
By: /s/ L. MICHAEL HONE
Title: President, CCO, CHM
SPECTRA-PHYSICS HOLDING, S.A.
By: /s/ ULF J. JOHANSSON
Title: as authorized agent
- 60 -
<PAGE> 68
Schedules to Asset and Stock Purchase Agreement
The following constitutes the schedules called for and
referred to in the Asset and Stock Purchase Agreement (the "Agreement") dated
May 20, 1996, by and among PSC Inc. ("Buyer"), Spectra-Physics, Inc. ("Seller")
and Spectra-Physics Holding, S.A. To avoid repetition, in some instances the
information called for in the Agreement is provided by cross-reference from one
section of the schedules to anther section. Any matter that is disclosed in
one section of the schedules to the Agreement in such a way as to make apparent
its relevance to the information called for by another section of the schedules
to the Agreement shall be deemed to have been included in such other section.
Capitalized terms used in the schedules shall have the same
meaning as in the Agreement.
Inclusion of any item on the schedules shall not be deemed to
be an admission that disclosure of such item is in fact required pursuant to
the Agreement or that such item is material to the Business or otherwise lends
meaning to the term material.
<PAGE> 69
Schedule 1.2(a)(v)
FOREIGN BUSINESS EMPLOYEES
Spectra-Physics GmbH:
Thomas Fleckenstein
Rose Fuchs
Manfred Klinge - starts July 1, 1996
Robert-Lee Joll
Wolfgang Keppke
Emil Sachs
Horst Wagener
Olaf Restle
Paolos Ghebreweldi - start date not yet set
Spectra-Physics S.A.:
Jean-Francois Codron
Agnes Bachelier
Jean-Francois Gervaiseaux
Olivier du Couedic
Francois Gremillot
Nicolas Segons
Pascal Barat
Bertrand Chambellan
Jean-Philippe Masson
Alexandre Meyer - Temporary Employee
Noella Humbert
Serge Mathieu
Jesus de Dios
Maria de Pedro
Luis Hidalgo
Dominique Gaillard
Spectra-Physics Ltd.:
Kerry Lee
Mark Baldwin
Vernon Witney
Kelvin Leaver
Debbie O'Neill
Eileen McKillon
Michelle White
Nigel Davis
Nick Pitt
Donna Simpson - Temporary Employee
<PAGE> 70
Spectra-Physics Pty Ltd.:
James Rodrigo
Tracy Paterson
Mark Howell
Spectra-Physics K.K.:
Ken Sugita
Sawako Togashi
Hideaki Yoshikawa
Yukihiro Higashikawa
Toshiaki Takeda
Ja Koo
Spectra-Physics S.r.l.:
Claudio Bassoli
Monique Mazzari
Maria Teresa Lacquaniti
Luigi Dell'orto
Elia Lupi
Daniela Saini - Temporary Employee
Giovanna Amati
Marco Zorz - Contract Employee Through December 31, 1996
Other Foreign Representatives:
Lars Andersson
<PAGE> 71
Schedule 2.1(a)
JURISDICTIONS WHERE QUALIFIED AS A FOREIGN CORPORATION
Oregon
Texas
<PAGE> 72
Schedule 2.1(e)
EXCEPTIONS TO NON-CONTRAVENTION
The Lease dated December 14, 1992, between Fidra Realties Inc. ("Fidra") and
Scanning (as amended by Renewal of Lease dated August 3, 1995, between Fidra
and Scanning) may not be assigned without the prior consent of Fidra, which
consent, subject to certain conditions, shall not be unreasonably withheld. If
Buyer is not a public corporation, or is not controlled by a public
corporation, whose shares are traded and listed on a recognized stock exchange,
a sale of Scanning's stock to Buyer is deemed an assignment under such Lease.
The License Agreement dated August 1, 1990, between Opticon, Inc. ("Opticon")
and Seller (as assigned to Scanning by Master Assignment and Instrument of
Assumption dated as of December 31, 1990, between Seller and Scanning) (the
"Opticon License") may not be assigned without the prior written consent of the
non-assigning party, which consent shall not be unreasonably withheld.
Opticon's consent was not obtained in 1990. If Buyer is, or might reasonably
become, a competitor of Opticon, a sale of Scanning's stock to Buyer is deemed
an assignment under the Agreement.
If Buyer (or any parent or controlling company of Buyer) is not principally
based in North America, Europe, Israel or Australia, Symbol Technologies, Inc.
("Symbol") has the right to terminate the Agreement dated as of October 1,
1985, between Symbol and Seller and the Agreement dated January 1, 1995,
between Symbol, Seller and Scanning. The term of the Opticon License expires
upon termination of the Agreement dated as of October 1, 1995, between Symbol
and Seller.
Pursuant to Article 9 of the Shareholders and Management Agreement dated as of
August 28, 1995, between Vincent Baumier, Bernard Malaise, Daniel Mawas and
Alain Bonodot (together, the "Founders") and Spectra-Physics A.B., Scanning,
and Spectra-Physics Holding, S.A., absent waiver of their rights, the Founders
have certain rights to fix the purchase price of their remaining shares of
TxCom upon a sale of Spectra-Physics Holdings S.A.'s shares of TxCom to a third
party.
Pursuant to the Articles of Association of TxCom, the TxCom Board of Directors
must consent to a change in ownership of TxCom. Such consent has not been
obtained.
<PAGE> 73
A sale of Scanning's stock to Buyer may constitute a default under the
Installment Sale Agreement dated January 1, 1981, between the State of Oregon,
Economic Development Commission and Seller and/or the Guaranty Agreement dated
as of July 1, 1979, between the State of Oregon, Economic Development
Commission and Seller.
Generally, the contracts of Seller Subsidiaries, such as purchase orders of
customers, purchase orders by Seller Subsidiaries and automobile leases of
Seller Subsidiaries, may not be assigned without the consent of the
non-assigning parties. Such consents have not been obtained.
The Development and License Agreement dated April 20, 1993, between Percon
Acquisition, Inc. ("Percon") and Scanning may not be assigned without the
prior written consent of the non-assigning party, which consent shall not be
unreasonably withheld. If Buyer is, or might reasonably become, a competitor
of Percon, a sale of Scanning's stock to Buyer is deemed an assignment under
the Agreement.
Upon a change in control of Scanning, Federal Express Corporation ("Federal
Express") has the right to terminate the Consulting Agreement dated as of
November 14, 1995, between Federal Express and Scanning.
<PAGE> 74
Schedule 2.1(f)
GOVERNMENT CONSENTS AND APPROVALS
Certain post-transaction administrative filings may be required with respect to
the Foreign Sales Agreements, including: registration of assignments of book
debts with the Australian Victorian Registrar General, and registration of the
Italian Foreign Sales Agreement with the Italian Court and the Italian
Registration Tax Authority. No filings have been made as of this date.
<PAGE> 75
Schedule 2.1(g)
COMBINED FINANCIAL STATEMENTS
Attached
<PAGE> 76
THE DATA CAPTURE GROUP OF SPECTRA-PHYSICS AB
_________
COMBINED FINANCIAL STATEMENTS
as of December 31, 1994 and 1995 and
for the three years in the period ended December 31, 1995
<PAGE> 77
THE DATA CAPTURE GROUP OF SPECTRA-PHYSICS AB
________
<PAGE> 78
INDEX TO COMBINED FINANCIAL STATEMENTS
__________
<TABLE>
<CAPTION>
Page
----
<S> <C>
The Data Capture Group of Spectra-Physics AB:
Report of Independent Accountants 1
Combined Balance Sheets at December 31, 1994 and 1995 2
For the years ended December 31, 1993, 1994 and 1995:
Combined Statements of Operations 3
Combined Statements of Changes in Spectra-Physics AB's
Investment 4
Combined Statements of Cash Flows 5-6
Notes to Combined Financial Statements 7-20
</TABLE>
THE DATA CAPTURE GROUP OF SPECTRA-PHYSICS AB
<PAGE> 79
Coopers &
Lybrand a professional services firm
Report of Independent Accountants
The Board of Directors and Shareholders
The Data Capture Group of Spectra-Physics AB:
We have audited the accompanying combined balance sheets of The Data Capture
Group of Spectra-Physics AB (the Company), as described in Note 1, as of
December 31, 1995 and 1994, and the related combined statements of operations,
cash flows and changes in Spectra-Physics AB's investment for each of the three
years in the period ended December 31, 1995. These financial statements are
the responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the combined financial position of The Data Capture
Group of Spectra-Physics AB at December 31, 1995 and 1994, and results of its
operations and its cash flows for each of the three years in the period ended
December 31, 1995 in conformity with generally accepted accounting principles.
(Coopers & Lybrand, L.L.P.)
Eugene, Oregon
January 26, 1996, except for Notes 3,
as to which the date is February 9,
1996
Coopers & Lybrand is a member of Coopers & Lybrand International, a limited
liability association incorporated in Switzerland.
<PAGE> 80
THE DATA CAPTURE GROUP OF SPECTRA-PHYSICS AB
COMBINED BALANCE SHEETS
Amounts in thousands, except stock par value, shares issued and outstanding
<TABLE>
<CAPTION>
ASSETS December 31
--------------------
1994 1995
<S> <C> <C>
Current Assets:
Cash and cash equivalents $ 1,749 $ 2,280
Accounts receivable, net of allowance of $359 and $271 in 1995 11,755 12,466
and 1994, respectively
Notes receivable 1,642
Inventories 7,224 8,691
Deferred tax assets 1,906 1,564
Other current assets 2,375 2,233
------- -------
Total current assets 25,009 28,876
Property, plant and equipment, net 15,734 15,482
Intangible assets, net 18,568 2,267
------- -------
Total assets $59,311 $46,625
======= =======
LIABILITIES AND SHAREHOLDER'S EQUITY
Current liabilities:
Current portion of long-term debt $ 300 $ 300
Accounts payable and accrued liabilities 10,153 12,662
Deferred revenue 647 846
------- -------
Total current liabilities 11,100 13,808
Long-term debt 4,100 3,800
Deferred income taxes 2,462 1,279
Other liabilities 240 221
Minority interests 0 1,647
------- -------
Total liabilities 17,902 20,755
Commitments and contingencies (Note 11)
Shareholder's equity:
Spectra-Physics AB's investment 41,409 25,870
------- -------
Total liabilities and shareholder's equity $59,311 $46,625
======= =======
</TABLE>
The accompanying notes are an integral part of these combined financial
statements.
2
<PAGE> 81
THE DATA CAPTURE GROUP OF SPECTRA-PHYSICS AB
COMBINED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Year ended December 31,
-----------------------------------------------
<S> <C> <C> <C>
Net sales $ 79,455 $ 88,334 $101,627
Cost of goods sold 48,637 55,784 60,188
-------- -------- --------
Gross profit 30,818 32,550 41,439
-------- -------- --------
Operating expenses:
Research and development 8,402 7,462 7,856
Selling, general and administrative 21,423 18,579 20,415
Corporate overhead allocation 281 285 327
Write-off of in-process technology 863
Amortization of acquisition related intangibles 24,064 24,064 18,249
-------- -------- --------
Total operating expenses 54,170 50,390 47,710
-------- -------- --------
Loss from operations (23,352) (17,840) (6,271)
Other expense, net 502 2,052 1,072
Minority interests (TxCom) 0 0 411
-------- -------- --------
Loss before income tax benefit (expense) (23,854) (19,892) (7,754)
Income tax benefit (expense) 3,931 2,366 (2,025)
-------- -------- --------
Net loss $(19,923) $(17,526) $ (9,779)
======== ======== ========
</TABLE>
The accompanying notes are an integral part of these combined financial
statements.
3
<PAGE> 82
THE DATA CAPTURE GROUP OF SPECTRA-PHYSICS AB
COMBINED STATEMENTS OF CHANGES IN SPECTRA-PHYSICS AB'S INVESTMENT
for the years ended December 31, 1993, 1994 and 1995
<TABLE>
<CAPTION>
Year ended December 31,
--------------------------------------
1993 1994 1995
(in thousands)
<S> <C> <C> <C>
Balance, beginning of year $ 82,690 $ 59,797 $41,409
Net loss (19,923) (17,526) (9,779)
Foreign currency translation 226 (5) 280
Net capital withdrawal (3,196) (857) (6,040)
-------- -------- -------
Balance, end of year $ 59,797 $ 41,409 $25,870
======== ======== =======
</TABLE>
The accompanying notes are an integral part of these combined financial
statements.
4
<PAGE> 83
THE DATA CAPTURE GROUP OF SPECTRA-PHYSICS AB
COMBINED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Year ended December 31,
--------------------------------
1993 1994 1995
(in thousands)
<S> <C> <C> <C>
Increase (Decrease) in Cash and Cash Equivalents:
Cash flows from operating activities:
Net loss $(19,923) $(17,526) $ (9,779)
Adjustments to reconcile net loss to net cash
provided by operating activities:
Depreciation 3,181 3,305 4,101
Amortization of intangibles 24,412 24,461 18,639
Write-off of in-process technology 863
Write-off of investment in CECS 61 379 330
Deferred income tax benefit (3,304) (2,864) (1,350)
Minority interests (TxCom) 411
Changes in assets and liabilities, net of the
effect of acquisition of TxCom in 1995:
Accounts receivable 3,229 (3,945) 644
Note receivable (1,642)
Inventories 810 (497) (911)
Other current assets (339) (913) 224
Accounts payable and accrued liabilities (2,800) 3,484 1,400
Deferred revenue 329 232 165
------- ------- -------
Net cash provided by operating activities 5,656 6,116 13,095
------- ------- -------
Cash flows from investing activities:
Purchase of property, plant and equipment (3,414) (3,721) (3,824)
Proceeds from sale of property, plant and
equipment 115 12 17
Investment in minority-owned equipment (110) (330) (330)
Purchase of TxCom, net of cash acquired 0 0 (2,367)
------- ------- -------
Net cash used in investing activities (3,409) (4,039) (6,504)
------- ------- -------
Cash flows used in financing activities:
Net capital withdrawal by Spectra-Physics AB (3,196) (857) (6,040)
------- ------- -------
Effect of exchange rate changes on cash 226 (5) 280
------- ------- -------
Net increase (decrease) in cash and cash equivalents (723) 1,215 831
Cash and cash equivalents at beginning of year 1,257 534 1,749
------- ------- -------
Cash and cash equivalents at end of year $ 534 $ 1,749 $ 2,580
======= ======= =======
</TABLE>
Continued
5
<PAGE> 84
THE DATA CAPTURE GROUP OF SPECTRA-PHYSICS AB
COMBINED STATEMENTS OF CASH FLOWS, Continued
<TABLE>
<CAPTION>
Year ended December 31,
-----------------------------
1993 1994 1995
(in thousands)
<S> <C> <C> <C>
Supplemental Disclosure of Cash Flow Information:
Cash paid during the year for:
Interest $ 313 $313 $ 304
Income taxes 1,040 498 3,247
Acquisition of TxCom:
Purchased technology $ 1,273
In-process technology 863
Goodwill 760
-------
2,896
Tangible assets acquired, net of liabilities assumed 1,923
Deferred income tax liability (509)
-------
4,310
Less cash acquired (1,943)
-------
Net cash paid at acquisition $ 2,367
=======
</TABLE>
The accompanying note are an integral part of these combined financial
statements.
6
<PAGE> 85
THE DATA CAPTURE GROUP OF SPECTRA-PHYSICS AB
NOTES TO COMBINED FINANCIAL STATEMENTS
(Amounts in thousands)
1. ORGANIZATION AND BASIS OF PRESENTATION:
ORGANIZATION: The accompanying combined financial statements of The
Data Capture Group of Spectra-Physics AB (the Company) include the
assets and liabilities at historical cost and operating results and
cash flows of the Data Capture Group of Spectra-Physics AB, a Swedish
manufacturing company. The Company consists of the operations, assets
and liabilities of the Company's sales and manufacturing facilities
located in Eugene, Oregon; its various foreign sales and technical
support offices located in the United Kingdom, France, Germany, Italy,
Australia and Japan; and a 60% investment in T.X.C.O.M. SA (TxCom).
The Company designs, manufactures and markets bar code scanners,
wireless radio frequency systems and retail automation systems for the
use in the worldwide automatic identification and data collection
industry.
In July 1990, Spectra-Physics, Inc. and its subsidiaries (SP) were
acquired by Pharos USA, Inc., which is indirectly owned by Pharos AB
(now known as Spectra-Physics AB). In 1990, SP managed four distinct
operating divisions, one of which was the scanning system division.
The transaction was recorded using the purchase method of accounting.
Accordingly, a new basis of accounting was established for the Company
in 1990 based on an allocation of the purchase price among SP
divisions, based upon the present value of estimated future cash flows
expected to result from the use of certain assets, resulting in a
purchase price in excess of tangible assets acquired less liabilities
assumed of $145,900 (see Note 6).
BASIS OF PRESENTATION: The combined financial statements have been
prepared as if the Company had operated as an independent stand-alone
entity for all periods presented. The Company has not had significant
borrowings, and there was no allocation of Spectra-Physics AB
consolidated borrowings and related interest expense. The Company had
engaged in various transactions with Spectra-Physics AB and its
affiliates that are characteristic of a group of companies under
common control. Throughout the period covered by these combined
financial statements, the Company participated in Spectra-Physics AB's
centralized cash management system. The Company's operational
transactions resulted in amounts receivable from and payable to
Spectra-Physics AB which fluctuated over time and such net withdrawals
have been presented net in the balance sheet as Spectra-Physics AB's
investment in the Company. Significant intercompany balances and
transactions within the Company have been eliminated.
The Company was charged by Spectra-Physics AB for direct costs and
expenses associated with its operations which were included in cost of
goods sold or selling and administrative expenses, as appropriate.
Spectra-Physics AB's administrative costs which are indirectly
attributable to the Company, have not been historically charged to the
Company. However, these costs have been allocated to the Company in
the accompanying financial statements based on the estimated level of
effort expended on behalf of the Company. Management believes that
such method of allocation is reasonable and reflects a reasonable
estimate of the level of expenses that would have been incurred had
the Company operated on a stand-alone basis. As shown on the combined
statements of operations, "Corporate overhead allocation" consisted of
$281, $285 and $327 of such indirect costs for 1993, 1994 and 1995,
respectively.
Continued
7
<PAGE> 86
THE DATA CAPTURE GROUP OF SPECTRA-PHYSICS AB
NOTES TO COMBINED FINANCIAL STATEMENTS, Continued
(Amounts in thousands)
1. ORGANIZATION AND BASIS OF PRESENTATION, Continued:
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the
date of the financial statements and the reported amounts of revenues
and expenses during the reporting period. Actual results could differ
from those estimates.
ESTIMATES AND INDUSTRY FACTORS:
Estimates- The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets
and liabilities and disclosure of contingent assets and liabilities at
the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period. Actual results
could differ from those estimates.
Technology - The market for the Company's products is characterized by
rapidly changing technology, evolving industry standards and changing
customer needs. The Company believes that its future success will
depend, in part, upon its ability to enhance its current products, to
develop new products and systems on a timely and cost-effective basis,
and to respond to changing customer needs and technological
developments. To date, the Company's revenues have been concentrated
in the sale of fixed and handheld scanners. The Company expects that
increasing portions of its operations will be devoted to, and revenues
will result from, the manufacture and sale of automated data
collection systems and product-related services.
Patents- The Company's success is dependent in part on its ability to
continue to have patent protection for its products, maintain trade
secret protection and operate without infringing the proprietary
rights of others.
Major Customers - The Company sells to various customers. A major
customer represented 10% or more of net sales. One customer
represents 24%, 12% and 14% of net sales in 1993, 1994 and 1995,
respectively.
8
<PAGE> 87
THE DATA CAPTURE GROUP OF SPECTRA-PHYSICS AB
NOTES TO COMBINED FINANCIAL STATEMENTS, Continued
(Amounts in thousands)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
REVENUE RECOGNITION: Revenue for sales of the Company's products is
recognized upon shipment. In conjunction with these sales, field
service maintenance agreements are entered into for certain products.
Maintenance revenues are recognized ratably over the term of the
maintenance period, which is typically one to three years.
CASH AND CASH EQUIVALENTS: The Company participates in Spectra-Physics
AB's centralized cash management system that invests excess cash in
marketable securities, with maturities of three months or less. The
carrying value of cash and cash equivalents approximates fair value
because of the short maturity of these investments.
ACCOUNTS RECEIVABLE: Accounts receivable are stated at face value,
less an allowance for uncollectible accounts.
INVENTORIES: Inventories are stated at the lower of cost (first-in,
first-out basis) or market.
PROPERTY,PLANT AND EQUIPMENT: Property, plant and equipment is
recorded at cost. Depreciation and amortization is provided on a
straight-line basis over the following estimated useful lives:
<TABLE>
<S> <C>
Buildings and improvements 10 to 45 years
Machinery and equipment 3 to 8 years
Leasehold improvements (limited to
terms of the leases) 5 to 10 years
</TABLE>
INTANGIBLE ASSETS: In 1995, the Company elected adoption of the
accounting provisions of Statement of Financial Accounting Standards
(SFAS) No. 121, "Accounting for the Impairment of Long-Lived Assets
and for Long-Lived Assets to be Disposed Of". This Standard requires
that long-lived assets and certain identifiable intangibles to be held
and used by an entity be reviewed for impairment whenever events or
changes in circumstances indicate that the carrying amount of an asset
may not be recoverable. No adjustments were necessary to implement
this Standard.
Intangibles resulting from business acquisitions represent goodwill,
covenants not to compete and purchased technologies, and are being
amortized on the straight-line method over their estimated useful
lives of 5 years. When factors indicate that these intangibles should
be evaluated for possible impairment, the Company uses an estimate of
the acquired business' undiscounted future cash flows expected to
result from the use of the intangibles and its eventual disposition in
measuring whether the intangibles are recoverable. Other intangibles,
which consist of patents, licenses and trademarks, including costs
incurred in connection with the protection of patents, are generally
amortized over their estimated useful lives of 5 to 10 years, using
the straight-line method.
Continued
9
<PAGE> 88
THE DATA CAPTURE GROUP OF SPECTRA-PHYSICS AB
NOTES TO COMBINED FINANCIAL STATEMENTS, Continued
(Amounts in thousands)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued.
INVESTMENT IN MINORITY-OWNED COMPANY: The Company owns 11% of the
equity of Catalina Electronic Clearing Systems, Inc. (CECS) and
accounts for it on the cost method. CECS has been a development stage
company incurring recurring losses. When factors indicate that the
Company's investment in CECS should be evaluated for possible
impairment, the Company uses an estimate of CECS's expected
undiscounted future cash flows and its eventual disposition in
measuring whether the investment in CECS is recoverable. In each year
through 1995, the Company has written down its investment to zero as
the Company believes its value has been impaired.
SOFTWARE DEVELOPMENT COSTS: The Company capitalizes costs incurred for
internally developed product software where economic and technological
feasibility has been established and for qualifying purchased product
software. Generally, software development costs incurred subsequent
to achieving economic and technological feasibility using a working
model have not been material. Accordingly, no software development
costs were capitalized.
RESEARCH AND DEVELOPMENT EXPENSES: The Company expenses all research
and development costs as incurred.
INCOME TAXES: The Company uses the liability method to record
deferred tax assets and liabilities based on the difference between
the tax bases of assets and liabilities and their carrying amounts for
financial reporting purposes.
The Company has historically been included in the consolidated federal
and state income tax returns of Spectra-Physics, Inc. The income tax
benefit reflected in the accompanying combined financial statements
represents the Company's share of Spectra-Physics, Inc.'s income tax
provision which is intended to approximate the benefit which would
have been recognized had the Company filed separate income tax
returns.
Domestic income taxes have been treated as if settled immediately
through an adjustment to Spectra-Physics AB's investment in the
Company. The current deferred income tax asset and the deferred
income tax liability have been determined on a stand-alone basis.
Provision is made for U.S. income taxes on undistributed earnings of
foreign entities, unless such earnings are considered indefinitely
reinvested.
FORWARD FOREIGN EXCHANGE CONTRACTS: The Company may occasionally enter
into forward foreign exchange contracts as a hedge against currency
fluctuations relating to net foreign transactions and commitments
denominated in foreign currencies. Gains and losses on forward
contracts are deferred and offset against foreign exchange gains or
losses on the underlying hedged items.
Continued
10
<PAGE> 89
THE DATA CAPTURE GROUP OF SPECTRA-PHYSICS AB
NOTES TO COMBINED FINANCIAL STATEMENTS, Continued
(Amounts in thousands)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued:
FOREIGN CURRENCY TRANSLATION: The Company's foreign subsidiaries'
accounts are measured using local currency as the functional currency.
Assets and liabilities are translated at the exchange rate in effect
at year end. Revenues and expenses are translated at the average rate
of exchange prevailing during the year. Translation adjustments
arising from differences in exchange rates from period to period are
included in the cumulative adjustment account in Spectra-Physics AB's
investment, net of related deferred income taxes.
PRODUCT WARRANTY: The Company's products typically have a warranty
period of 12 months. Estimated warranty costs are accrued at the time
of sale of the warranted products. The Company maintains an accrual
for warranty claims and adjusts this accrual periodically based on
historical experience and known warranty claims.
SPECTRA-PHYSICS AB'S INVESTMENT: Spectra-Physics AB's investment
reflects the historical activity between the Company and Spectra-
Physics AB and the Company's cumulative results of operations.
Transactions with Spectra-Physics AB are reflected as though they were
settled immediately as an addition to or reduction of Spectra-Physics
AB's investment, and there are no significant amounts due to or from
Spectra-Physics AB at the end of any period, except as described in
Notes 3 and 8.
ACCOUNTING STANDARDS PRONOUNCEMENTS: In October 1995, the Financial
Accounting Standards Board adopted Statement of Financial Accounting
Standards (SFAS) No. 123, "Accounting for Stock-Based Compensation",
which is effective for fiscal years beginning after December 15, 1995.
The Standard requires the Company either to adopt a fair value based
method of accounting for compensation cost related to stock options in
the income statement or to continue using the intrinsic value based
method of accounting prescribed by Accounting Principles Board Opinion
25, "Accounting for Stock Issued to Employees". If the Company opts
not to use the fair value based method of accounting, pro forma
disclosures will need to be reported in the notes to the financial
statements. The Company currently does not plan to adopt the fair
value based method provisions of SFAS No. 123.
11
<PAGE> 90
THE DATA CAPTURE GROUP OF SPECTRA-PHYSICS AB
NOTES TO COMBINED FINANCIAL STATEMENTS, Continued
(Amounts in thousands)
3. ACQUISITION OF TXCOM:
Effective July 1, 1995, the Company entered into an agreement to
purchase all of the outstanding shares of TxCom over a four-year
period and purchased 60% of the outstanding shares as of that date.
TxCom manufactures and sells wireless radio frequency systems for
material movement and inventory control applications. The acquisition
was accounted for using the purchase method. Accordingly, the
purchase price, net of cash acquired of $2,367, was allocated to
assets and liabilities acquired based upon their fair values. The
results of operations of TxCom are included in the 1995 combined
statement of operations since the date of acquisition. The total cost
in excess of net assets acquired was allocated based upon the present
value of estimated future cash flows expected to result from the use
of certain assets to purchased technology of $1,273, in-process
technology of $963 and goodwill of $760. Purchased technology and
goodwill are being amortized over the estimated useful life of five
years. In the third quarter of 1995, the Company incurred a one-time
noncash charge to operations of $863 for the write-off of in-process
technology, because the technological feasibility of the in-process
technology acquired had not been established and there was no
alternative future use. An additional 12% of the shares of TxCom were
acquired on February 9, 1996 for approximately $1.8 million. The
remaining 28% of the shares will be acquired in increments of 10%, 10%
and 8% in January 1997, 1999 and 1999, respectively, at purchase
prices based, in general, on TxCom's operating earnings during certain
measuring periods.
The following unaudited pro forma summary presents information as if
the acquisition had occurred at the beginning of each fiscal year.
The pro forma information is provided for information purposes only.
It is based on historical information and does not necessarily reflect
the actual results that would have occurred nor is it necessarily
indicative of future results of operations of the combined companies.
<TABLE>
<S> <C>
Year ended December 31, 1995:
Net sales $103,749
Net loss (9,806)
Year ended December 31, 1994:
Net sales 91,925
Net loss (18,385)
</TABLE>
On December 22, 1995, TxCom loaned Spectra-Physics approximately
$1,642 at an interest rate of 5.75% to be paid on March 28, 1996.
12
<PAGE> 91
THE DATA CAPTURE GROUP OF SPECTRA-PHYSICS AB
NOTES TO COMBINED FINANCIAL STATEMENTS, Continued
(Amounts in thousands)
4. INVENTORIES:
Inventories consist of the following:
<TABLE>
<CAPTION>
1994 1995
<S> <C> <C>
Raw materials $3,905 $4,057
Work-in-process 1,817 1,545
Finished goods 1,502 3,089
------ ------
$7,224 $8,691
====== ======
</TABLE>
5. Property, Plant and Equipment:
<TABLE>
<CAPTION>
1994 1995
<S> <C> <C>
Land $ 848 $ 928
Building and improvements 10,304 10,707
Machinery and equipment 25,042 28,231
------ ------
36,194 39,866
Less accumulated depreciation (20,460) (24,384)
-------- --------
$15,734 $15,482
======= =======
</TABLE>
6. INTANGIBLE ASSETS:
<TABLE>
<CAPTION>
1994 1995
<S> <C> <C>
Intangibles as a result of business
acquisitions:
Goodwill $ 71,656 $ 72,416
Purchased technology 28,662 29,935
Covenant not-to-compete 20,000 20,000
------ ------
120,318 122,351
Other intangibles:
Patents, trademarks and
licenses 2,297 2,268
----- -----
122,615 124,619
Less accumulated amortization (104,047) (122,352)
--------- ---------
$ 18,568 $ 2,267
========= =========
</TABLE>
Continued
13
<PAGE> 92
THE DATA CAPTURE GROUP OF SPECTRA-PHYSICS AB
NOTES TO COMBINED FINANCIAL STATEMENTS, Continued
(Amounts in thousands)
6. INTANGIBLE ASSETS, Continued:
EXCESS OF PURCHASE PRICE: Intangibles resulting from business
acquisitions relate to the allocation of the purchase price resulting
from the 1990 acquisition of the Company by Spectra-Physics AB (see
Note 1) and the 1995 acquisition of TxCom by the Company (see Note 3).
A summary of the purchase price allocation of the 1990 acquisition of
the Company by Spectra-Physics AB as of July 1990 is as follows:
<TABLE>
<S> <C>
Purchased technology $28,662
In-process technology 15,147
Covenant-not-to-compete 20,000
Goodwill 71,656
-------
135,465
Tangible assets acquired,
net of liabilities assumed 21,900
Deferred income tax liability (11,465)
--------
Total purchase price $145,900
========
</TABLE>
The purchase price in excess of net tangible assets acquired was
amortized using the straight-line method over the estimated useful
lives of five years, except for in-process technology acquired which
was written off in July 1990 as its technological feasibility had not
yet been established and there was no alternative future use.
Accumulated amortization related to the 1990 acquisition was
approximately $102,270 and $120,318 at December 31, 1994 and 1995,
respectively. As of September 1995, the total purchase price in
excess of net tangible assets acquired was fully amortized.
The deferred tax liability of $11,465 arose as a result of the
difference between the bases of the purchased technology for financial
reporting and tax purposes at the date of acquisition.
7. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES:
<TABLE>
<CAPTION>
1994 1995
<S> <C> <C>
Accounts payable $ 6,822 $ 6,697
Accrued payroll and related employee
benefits 2,514 4,667
Warranty accrual 540 984
Other accrued expenses 277 314
------ -------
$10,153 $12,662
======= =======
</TABLE>
14
<PAGE> 93
THE DATA CAPTURE GROUP OF SPECTRA-PHYSICS AB
NOTES TO COMBINED FINANCIAL STATEMENTS, Continued
(Amounts in thousands)
8. LONG-TERM DEBT:
Long-term debt consists of the following:
<TABLE>
<CAPTION>
1994 1995
<S> <C> <C>
Industrial Development Bonds, interest payable January 1 and July
1, at varying interest rates from 6.8% to 7.2% (notes are
collateralized by certain property and equipment of the Company),
which have been assumed by the Company from Spectra-Physics, Inc. $ 4,400 $ 4,100
Less current portion (300) (300)
------- -------
$ 4,100 $ 3,800
======= =======)
</TABLE>
The minimum annual maturities of long-term debt at December 31, 1995
are as follows:
<TABLE>
<S> <C>
1996 $ 300
1997 300
1998 300
1999 300
Thereafter 2,900
------
$4,100
======
</TABLE>
15
<PAGE> 94
THE DATA CAPTURE GROUP OF SPECTRA-PHYSICS AB
NOTES TO COMBINED FINANCIAL STATEMENTS, Continued
(Amounts in thousands)
9. INCOME TAXES:
Income tax benefit (expense) consisted of the following:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
-----------------------------------------
1993 1994 1995
<S> <C> <C> <C>
Current:
Federal $1,667 $(2,663)
State (606)
Foreign (1,040) $(498) (1,022)
------- ------ -------
Total current 627 (498) (4,291)
------- ------ -------
Deferred:
Federal 2,568 2,641 1,289
State 736 223 61
----- ----- -----
Total deferred 3,304 2,864 1,350
----- ----- -----
Benefit of loss carryforwards 916
-----
Income tax benefit (expense) $3,931 $2,366 $(2,025)
====== ====== ========
</TABLE>
The temporary differences and net operating losses that generate deferred
tax assets and liabilities included in the combined balance sheets are as
follows:
<TABLE>
<CAPTION>
DECEMBER 31
-------------------------
1994 1995
<S> <C> <C>
Assets:
Inventories $ 506 $ 489
Allowance for doubtful accounts receivable 55 55
Accrued vacation 284 334
Warranty provision 211 381
Other provisions 334 305
Deferred revenue 319 381
Equity losses from minority-owned company 167 293
Net operating loss carryforwards 916 0
----- -----
Total deferred tax assets 2,792 2,238
----- -----
Liabilities:
Accumulated depreciation (1,628) (1,495)
Purchased technology (1,720) (428)
------- -------
Total deferred tax liabilities (3,348) (1,953)
------- -------
Net deferred tax asset (liability) $ (556) $ 285
========= =======
</TABLE>
Continued
16
<PAGE> 95
THE DATA CAPTURE GROUP OF SPECTRA-PHYSICS AB
NOTES TO COMBINED FINANCIAL STATEMENTS, Continued
(Amounts in thousands)
9. INCOME TAXES, Continued:
The effective tax rate of the income tax benefit (expense) varies from
the federal statutory rate. The reasons for the variances are as
follows:
<TABLE>
<CAPTION>
1993 1994 1995
<S> <C> <C> <C>
Tax benefit at statutory rate 34.0% 34.0% 34.0%
State income taxes, net of federal benefit 3.1 1.7 (4.1)
Amortization and write-off of cost in excess
of net assets acquired (nondeductible items) (20.4) (25.0) (56.0)
Tax exempt Foreign Sales Corporation income .8 2.5
Foreign tax in excess of domestic rate (.1) (3.9)
Other (.2) .5 1.4
---- ---- -----
16.5% 11.9% (26.1%)
===== ===== =======
</TABLE>
10. OTHER EXPENSE, NET:
Other expense, net consists of the following:
<TABLE>
<CAPTION>
1993 1994 1995
<S> <C> <C> <C>
Interest expense $313 $313 $304
Foreign exchange loss 128 796 573
Minimum royalties paid under settlement of
litigation 500
Write-off of investment in CECS 61 379 330
Other 0 64 (135)
---- ---- -----
Total $502 $2,052 $1,072
==== ====== ======
</TABLE>
17
<PAGE> 96
THE DATA CAPTURE GROUP OF SPECTRA-PHYSICS AB
NOTES TO COMBINED FINANCIAL STATEMENTS, Continued
(Amounts in thousands)
11. COMMITMENTS AND CONTINGENCIES:
ROYALTY AGREEMENTS: The Company has entered into several royalty
agreements to obtain licenses of certain patents. Royalty expense
under these agreements was $701, $1,107, and $855 in 1993, 1994 and
1995, respectively. In 1994, the Company entered into an agreement
settling patent litigation brought by another manufacturer, which
gives the Company future rights to use certain manufacturing
technology. The minimum royalty liability was $500, which was paid
and included in other expense in 1994. Under the agreement, the
Company will pay royalties not to exceed an additional $1 million.
Royalties due are first credited against the $500 payment. In 1995,
the Company applied approximately $80 in royalty costs against the
prepayment.
PATENT LITIGATION: The Company is currently a defendant in a patent
infringement lawsuit filed against it by PSC, Inc. (PSC) alleging that
the Company is infringing a PSC patent for an optical scanning device
for detecting bar codes. The Company maintains that PSC's patent is
invalid, that the Company has not infringed the patent, or both. In
addition, the Company is currently involved in other matters of
litigation arising from the normal course of business. Management is
of the opinion that such litigation will not have a material adverse
effect on the Company's combined financial position or results of
operations.
12. BENEFIT PLANS:
SAVINGS PLUS PLAN: The Company sponsors a Savings Plus Plan (the
401(k) plan) for all U.S. employees meeting certain service
requirements. The Company may make contributions to the 401(k) plan
each year that match in whole or in part the pre-tax contributions
that employees make to the 401(k) plan. The Company's contributions
for 1993, 1994 and 1995 were $336, $300 and $328, respectively.
INCENTIVE COMPENSATION: The Company has two incentive plans. The
first plan allows for payment of cash awards to management and key
employees based upon achievement of annual financial performance goals
or other by the Company. The Company recognized expenses relating to
this plan of $49, $112 and $611 in 1993, 1994 and 1995, respectively.
The second plan allows for payments of cash awards to substantially
all employees based upon improvement in the Company's earnings over a
three-year period. The Company recognized expenses related to this
plan of approximately $-0-, $178 and $489 in 1993, 1994 and 1995,
respectively.
18
<PAGE> 97
THE DATA CAPTURE GROUP OF SPECTRA-PHYSICS AB
NOTES TO COMBINED FINANCIAL STATEMENTS, Continued
(Amounts in thousands)
13. OPERATIONS BY GEOGRAPHIC AREA:
The Company is engaged in one industry segment, specifically, the
design, manufacture and marketing of bar code scanners, wireless radio
frequency systems and retail automation systems. Operations are
summarized below by geographic area. The Company's operations in
Western Europe generally consist of selling and performing field
service maintenance on products designed and manufactured primarily in
the United States, and the activities of TxCom.
<TABLE>
<CAPTION>
NORTH
AMERICA EUROPE OTHER ELIMINATION TOTAL
<S> <C> <C> <C> <C> <C>
1995
- ----
INCOME STATEMENT
Net sales $43,580 $40,713 $17,334 $101,627
Loss from operations (3,126) (1,991) (1,154) (6,271)
BALANCE SHEET
Identifiable assets $33,937 $13,874 $2,441 $(3,627) $46,625
1994
- ----
INCOME STATEMENT
Net sales $38,924 $32,942 $16,468 $88,334
Loss from operations (7,222) (7,806) (2,812) (17,840)
BALANCE SHEET
Identifiable assets $52,589 $6,856 $2,812 $(2,946) $59,311
1993
- ----
INCOME STATEMENT
Net sales $42,195 $26,710 $10,550 $79,455
Loss from operations (10,330) (7,870) (5,152) (23,352)
BALANCE SHEET
Identifiable assets $71,982 $2,225 $4,606 $(2,358) $76,455
</TABLE>
19
<PAGE> 98
THE DATA CAPTURE GROUP OF SPECTRA-PHYSICS AB
NOTES TO COMBINED FINANCIAL STATEMENTS, Continued
(Amounts in thousands)
14. FINANCIAL INSTRUMENTS:
FORWARD EXCHANGE CONTRACTS: The Company has only limited involvement
with derivative financial instruments and does not use them for
trading purposes. Periodically, the Company enters into foreign
currency forward exchange contracts to hedge a portion of its
anticipated foreign currency sales transactions. The effect of this
practice is to minimize the impact of foreign exchange rate movements
on the Company's operating results.
As of December 31, 1995, the Company had no forward exchange contracts
outstanding. The forward exchange contracts generally have maturities
that do not exceed 12 months and require the Company to exchange
foreign currencies for U.S. dollars at maturity, at rates agreed to at
inception of the contracts.
The Company controls the credit risks associated with Foreign currency
transactions through approvals and centralized monitoring procedures
but does not normally require collateral or other security from the
parties to the financial instruments.
FAIR VALUE OF FINANCIAL INSTRUMENTS: In December 1991, the Financial
Accounting Standards Board issued Statement of Financial Accounting
Standards No. 107 ("SFAS 107") "Disclosures about Fair Value of
Financial Instruments". SFAS 107 requires disclosures of the
estimated fair value of all financial instruments other than specified
items such as lease contracts, subsidiary and affiliate investments
and employers' pension and benefit obligations.
The following methods and assumptions were used by management to
estimate the fair value of each class of financial instrument for
which it is practicable to estimate that value. The resulting
estimates of fair value require subjective judgments and are
approximate. Changes in the following methodologies and assumptions
could significantly affect the estimates.
o CASH AND CASH EQUIVALENTS: The carrying amounts reflected in
the combined financial statements are reasonable estimates of
fair value.
o NOTE RECEIVABLE: The fair value of note receivable is
estimated by discounting the future cash flows using the
current rates at which a similar note receivable would be made
to borrowers with similar credit ratings and for the same
maturities.
o LONG-TERM DEBT AND CURRENT PORTION OF LONG-TERM DEBT: The
estimated fair values of these financial instruments set forth
below were determined by estimating future cash flows on a
borrowing-by-borrowing basis and discounting these future cash
flows using the Company's incremental borrowing rates for
similar types of borrowing arrangements.
<TABLE>
<CAPTION>
1995
--------------------
CARRYING ESTIMATED
AMOUNT FAIR VALUE
<S> <C> <C>
Cash and cash equivalents $3,922 $3,922
Note receivable 1,642 1,642
Long-term debt 4,100 3,650
</TABLE>
20
<PAGE> 99
Schedule 2.1(h)
TAXES
Tax Allocation Agreement effective the tax year ended December 31, 1991,
between Pharos USA, Inc. and Seller, Spectra-Physics Analytical, Inc.,
Spectra-Physics Laserplane, Inc., Spectra-Physics Lasers, Inc., Spectra-Physics
Optics, Inc., Spectra-Physics Laser Diode Systems, Inc., Scanning, Geotronics
of North America, Inc., BLH Electronics, Inc., Automatic Power, Inc.,
Interspiro USA, Inc., Spirotech, Inc., and the AGEMA and Spectrogeon Divisions
of Pharos USA, Inc.
Tax Allocation Agreement effective the tax year ended December 31, 1995,
between Spectra-Physics Holdings USA, Inc., and AGEMA Infrared Systems, Inc.,
Automatic Power, Inc., BLH Electronics, Inc., Geotronics of North America,
Inc., Opto Power Corporation, Pharos Holdings, Inc., Pharos Protection USA,
Inc., Pharos Tech USA, Inc., Spectra-Physics Credit Corp., Seller, Inc.,
Spectra-Physics USA, Inc., Spectra-Physics Laserplane, Inc., Spectra-Physics
Lasers, Inc., Spectra-Physics Optics Corporation, Scanning, SPHM, Inc., and
SPSE Inc.
The State of Texas has given Scanning oral notice that it intends to conduct a
sales tax audit.
<PAGE> 100
Schedule 2.1(i)
REAL PROPERTY OWNED (TOGETHER WITH ENCUMBRANCES THEREON)
OR REAL PROPERTY LEASED
Scanning
Real Property Owned
1. 959 Terry Street, Eugene, Oregon, as more fully described in
Statutory Warranty Deed dated December 27, 1990, from Seller
to Scanning and recorded in Lane County Oregon Records as
Instrument No. 9101896.
Encumbrances:
a. Right of access for care and maintenance of Amazon
drainage ditch.
b. Sewer easement granted Goodwill Industries of Lane
Co., as set forth by instrument recorded July 17,
1978, Reception No. 7848928, Lane County Oregon
Records.
c. Easement for Amazon Ditch Channel, including the
terms and provision thereof, granted to City of
Eugene, by instrument recorded July 26, 1979,
Reception No. 7943657, Lane County Oregon Records.
d. Sewer easement over the East 7 1/2 feet granted to
City of Eugene, by instrument recorded July 24, 1979,
Reception No. 7943656, Lane County Oregon Records.
e. Easement for bicycle path, including the terms and
provisions thereof, granted to the City of Eugene by
instrument recorded July 26, 1979, Reception No.
7943658, Lane County Oregon Records.
f. Declaration of Protective Covenants, recorded July
26, 1979, Reception No. 7944172, and Declaration of
Protective Covenants, Conditions and Restrictions,
recorded July 26, 1979, Reception No. 7944173, Lane
County Oregon Records.
2. 959 Terry Street, Eugene, Oregon, as more fully described in
Statutory Warranty Deed dated December 27, 1990, from Seller
to Scanning and recorded in Lane County Oregon Records as
Instrument No. 9101895.
<PAGE> 101
Encumbrances:
a. Right of access for care and maintenance of Amazon
drainage ditch.
b. Public utility easement, storm and sanitary sewer
easement and roadway easement over the North 30 feet
granted to the City of Eugene by instrument recorded
October 24, 1969, Reception No. 85400, Lane County
Oregon Records.
c. A 14.0 foot sewer easement granted to the City of
Eugene which runs from the Northeast corner of
Sweetland Industrial Park, North to the North line of
Section 33, as granted to the City of Eugene by
instrument recorded October 24, 1969, Reception No.
85401, Lane County Oregon Records. Said sewer
easement has been vacated by the City of Eugene by
Ordinance No. 18526, recorded October 31, 1979,
Reception No. 7965467, Lane County Oregon Records,
except for the North 30 feet.
d. Power line easement granted to the City of Eugene, as
set forth by instrument recorded May 31, 1978,
Reception No. 7837414, Lane County Oregon Records.
e. A fifteen foot sanitary sewer easement, including the
terms and provisions thereof, granted to the City of
Eugene, by instrument recorded July 24, 1979,
Reception No. 7943656, Lane County Oregon Records.
f. Easement, including the terms and provision thereof,
granted to City of Eugene, by instrument recorded
July 24, 1979, Reception No. 7943657, Lane County
Oregon Records.
g. Easement for bicycle trail and pedestrian way, as
deeded to the City of Eugene by instrument recorded
July 24, 1979, Reception No. 7943658, Lane County
Oregon Records.
h. Declaration of Protective Covenants, Conditions and
Restrictions, including the terms and provision
thereof, as disclosed by instrument recorded July 26,
1979, Reception No. 7944172, Lane County Oregon
Records.
<PAGE> 102
i. Declaration of Protective Covenants, Conditions and
Restrictions, including the terms and provision
thereof, as disclosed by instrument recorded July 26,
1979, Reception No. 7944173, Lane County Oregon
Records.
3. Sweetland Industrial Park parcel, Corner of Terry Street and
Arrowsmith Street Eugene, Oregon, as more fully described in
Statutory Warranty Deed dated December 27, 1990, from Seller
to Scanning and recorded in Lane County Oregon Records as
Instrument No. 9101898.
Encumbrances:
a. Public utility easement over the North 7.0 feet as
set forth on plat.
b. Access restriction as set forth on the plat, to-wit:
"Lot 1, Block 1 and Lot 1, Block 2, to take their
access from Arrowsmith Street, not Terry Street."
c. Elevation building restriction as set forth on the
Plat to-wit: "No building structure to be constructed
within this subdivision that has a finish floor
elevation of less than 379.00 feet."
d. Easement restriction as set forth on the Plat,
to-wit: "No building, structure, tree, shrubs, or
other obstructions shall be placed or located on or
in any public utility easement."
e. Conditions and restrictions as set forth in
instrument recorded May 1, 1973, Reception No.
7319096, and as amended by instrument recorded
November 15, 1977, Reception No. 7773306, Lane County
Oregon Records.
Real Property Beneficially Owned
1. 959 Terry Street, Eugene, Oregon, as more fully defined in
Assignment of Rights Under Installment Sale Agreement dated
December 21, 1990, from Seller to Scanning and recorded in
Lane County Oregon Records as Instrument No. 9106739, and
re-recorded in Lane County Oregon Records as Instrument No.
9114882.
<PAGE> 103
Encumbrances:
a. Pursuant to Bargain and Sale, Correction Deed from
Net Investment Co. to the State of Oregon, reserving
to Grantor the right to require Grantee, or its
successors in interest, to dedicate one-half of the
right-of-way required along the East boundary of the
Property, for access road improvements, not to exceed
a dedication from Grantee or its successors in
interest of 30 feet, to the extent that Grantor, or
its successor, elects to dedicate for such purpose
portions of its property lying adjacent to the
Property.
b. Pursuant to Bargain and Sale, Correction Deed from
Net Investment Co. to the State of Oregon, reserving
to Grantor and its successors in interest an easement
running in a generally North-South direction over,
across and under a 30 foot strip (the "Easement
Strip") within that portion of the Property lying
West of the Amazon Channel and East of Terry Street;
upon the certain terms and conditions.
c. Right of access for care and maintenance of Amazon
drainage ditch.
d. A 14.0 foot sewer easement granted to the City of
Eugene which runs from the Northeast corner of
Sweetland Industrial Park, North to the North line of
Section 33, as granted to the City of Eugene by
instrument recorded October 24, 1969, Reception No.
85401, Lane County, Oregon Records.
e. Sewer Easement granted Goodwill Industries of Lane
County, as set forth by instrument recorded July 17,
1978, Reception No. 7848928, Lane County, Oregon
Records.
f. An easement for the construction, maintenance,
operation, inspection and improvement of a channel
for flood, drainage and irrigation canal purposes, in
which NET Investment Co., a partnership, is Grantor,
and the City of Eugene, a municipal corporation of
the State of Oregon, is Grantee, dated July 23, 1979,
and recorded on July 24, 1979, on Reel 1010,
Reception No. 43657, of the official records of Lane
County, Oregon.
<PAGE> 104
g. An easement for a bicycle trail and pedestrian way,
in which NET Investment Co., a partnership, is
Grantor, and the City of Eugene, a municipal
corporation of Lane County, State of Oregon, is
Grantee, dated July 23, 1979, and recorded on July
24, 1979, on Reel 1010, Reception No. 43658, of the
official records of Lane County, Oregon.
h. An easement for Sanitary/Storm Sewer, in which NET
Investment Co. is Grantor, and the city of Eugene, a
municipal corporation of Lane County, State of
Oregon, is Grantee, dated July 23, 1979, and recorded
on July 24, 1979, on Reel 1010, Reception No. 43656
of the official records of Lane County, Oregon.
i. Declaration of protective covenants, conditions and
restrictions, in which NET Investment Co. is
declarant, dated July 25, 1979, and recorded on July
26, 1979, on Reel 1010, Reception No. 7944173 of the
official records of Lane County, Oregon.
j. Pursuant to Bargain Sale, Correction Deed from Net
Investment Co. to the State of Oregon, or reserving
to Grantor the right to require Grantee, or its
successors in interest, to dedicate one-half of the
right-of-way required along the East boundary of the
above-described real property for access road
improvements, not to exceed a dedication from Grantee
or its successors in interest of 30 feet, to the
extent that Grantor, or its successor, elects to
dedicate for such purpose portions of its property
laying adjacent to the above-described property.
Real Property Leased
1. Building V
3472 W. 11th Street
Eugene, Oregon
2. 1135 Kildaire Farm Road, Suite 200
Cary, North Carolina
3. 5450 Far Hills Avenue, Suite #218
Kettering, Ohio
4. 250 South Stemmons, Suite 334
Lewisville, Texas
<PAGE> 105
5. W. 316 Boone Avenue
Suite 250, Office 7
Spokane, Washington
6. 2550 N.W. 72nd Avenue
Suite 203
Miami, Florida
7. Unit #8, Building B
1500-20 Trinity Drive
Mississauga, Ontario
8. Suite 705
Bank of America Tower
12 Harcourt Road
Central Hong Kong
9. Ground Floor, Block 1
Villa Martini
8 Stanley Beach Road
Stanley, Hong Kong
10. 1015 Arrowsmith Street
Suite A
Eugene, Oregon
11. Rua Manoel da Nobrega
572 apto: 111 Sao Paulo
Sao Paulo, Brazil 04001-002
Personal Property Encumbrances
1. UCC Financing Statement filed against Spectra Physics
on June 11, 1991, with the Oregon Secretary of State
as file no. P56110, by Digital Equipment Corporation
and assigned to Leasetec Corporation securing a
VAXstation 3100 computer system with all peripherals,
accessories, other equipment and supplies, if any, as
more fully described in a DEClease #91-5504 between
"Spectra Physics" and Digital Equipment Corporation.
2. UCC Financing Statement filed against Spectra Physics
on April 30, 1992, with the Oregon Secretary of State
as file no. R04711, by Hewlett Packard Company
Finance & Remarketing Division securing certain
Hewlett-Packard equipment and the proceeds thereof.
<PAGE> 106
3. UCC Financing Statement filed against Spectra Physics
Retail Systems on September 17, 1993, with the Oregon
Secretary of State as file no. R73056, by AT&T
securing new DEFINITY G3vs and associated products
value $39,037.00.
4. UCC Financing Statement filed against Scanning on
November 10, 1994, with the Oregon Secretary of State
as file no. S29081, by Canon Financial Services, Inc.
securing a Canon CLC350 Copier Serial #NRW00806.
5. UCC Financing Statement filed against Scanning on
March 28, 1991, with the Oregon Secretary of State as
file no. P44837, by Hewlett Packard Company securing
certain Hewlett Packard equipment and the proceeds
thereof.
6. UCC Financing Statement filed January 27, 1995, with
the Oregon Secretary of State as file no. S37585, by
GE Capital securing copiers, sorters, duplex modules,
etc.
Seller Subsidiaries
Real Property Leased by Spectra-Physics S.A.
1. The Business Centre EEBIC
Office 213
Avenue Joseph Wybranlaan 40
1070 Bruxelles, Belgium
2. Present Spanish Address:
Calle Francisco Giralte, No. 2
28002 Madrid, Spain
Expected Future Spanish Address (lease currently under
negotiation):
Parque Empresarial San Fernando
Avenida de Castilla No. 2
Edificio F
28831 Madrid, Spain
TxCom
Real Property Leased
La Boursidiere
92357 LE PLESSIS ROBINSON, France
<PAGE> 107
Schedule 2.1(j)
ENVIRONMENTAL
Scanning
1. Fill Permit No. 00-08310 from the Department of the Army,
Portland District Corps of Engineers, expiring April 30, 1997.
2. Removal/Fill Permit No. 5158 from Oregon Division of State
Lands, expiring April 12, 1997.
3. Hazardous Materials Permit No. 13144-01-001 from the Hazardous
Materials Regulation and Fire Code Enforcement Division of
Eugene, Oregon, expiring June 30, 1996.
4. In 1990, Seller entered into a Consent Order with the United
States Environmental Protection Agency ("EPA") which required
Seller to develop and implement a wetlands mitigation plan
("Mitigation Plan") to replace wetlands which Seller filled at
its Oregon facility in 1979 and 1985. All of the terms of the
Consent Order, including implementing the Mitigation Plan,
were satisfied and the EPA issued a letter dated February 8,
1995 approving the termination of the Consent Order and
confirming that all requirements have been satisfied.
Seller and/or Scanning was granted authorizations by the
Department of the Army, Corps of Engineers ("COE") and the
State of Oregon, Division of State Lands, respectively, to
fill additional wetlands at the Oregon facility to accommodate
possible future construction at that facility (the "COE Fill
Permit," and the "State Fill Permit"). If Scanning desires to
fill such additional wetlands, further governmental approvals
are required.
The COE Fill Permit expires on April 30, 1997 and the State
Fill Permit expires on April 12, 1997.
5. There is a pile of debris which primarily includes concrete
rubble and waste tires located on a small area in the southern
portion of the Oregon facility. The debris has been there for
a substantial period of time (possibly over 15 years) and was
evidently placed there by parties unaffiliated with Seller.
This area is
<PAGE> 108
currently not being used.
6. The Report of the Environmental Assessment prepared by Dames &
Moore for Buyer.
7. Conditionally Exempt Generator of Hazardous Waste, DEQ/EPA ID
ORD098299035
TxCom
None.
Seller Subsidiaries
None.
<PAGE> 109
Schedule 2.1(k)
PATENTS AND TRADEMARK
Patents and Patent Applications Owned
Seller
<TABLE>
<CAPTION>
Patent Numbers Title Issue Date
---------------- ----- ----------
<S> <C> <C>
4000397 Signal Processor Method and Apparatus 12/28/76
4064390 Method and Apparatus for Reading Coded Labels 12/20/77
4601452 Laser Diode Mounting System 7/22/86
4678288 Trifocal Lens for Laser 7/7/87
4694182 Hand Held Bar Code Reader with Modulated Laser Diode 9/15/87
4699447/B14699447 Optical Beam Scanner with Rotating Mirror (Reexamined) 10/13/87
(7/3/90)
4709369 Power Control System for Controlling the Power Output of a 11/24/87
Modulated Laser Diode
4712853 Rapidly Starting Low Power Scan Mechanism 12/15/87
4749879 Signal Transition Detection Method and System 7/7/88
4786798 Beam Forming and Collection Lens Assembly for Laser Scanner 11/22/88
System
4792666 Bar Code Reader with Compensation for Signal Variation on 12/20/88
Different Scan Lines
4798943 Method for Control of Bar Code Scanner Threshold 1/17/89
4799164 Shallow Bar Code Scanner 1/17/89
4845349 Bar Code Scanner Laser Emission Reduction 7/4/89
4861973 Optical Scan Pattern Generating Arrangement for a Laser 8/29/89
Scanner
4868836 Laser Diode Power Control and Modulator Circuit 9/19/89
4879456 Method of Decoding a Binary Scan Signal 11/7/89
4939356 Bar Code Scanner with Asterisk Scan Patter 6/3/90
4943127 Multi-Faceted Optical Device for Laser Scanner 7/24/90
</TABLE>
<PAGE> 110
<TABLE>
<CAPTION>
Patent Numbers Title Issue Date
---------------- ----- ----------
<S> <C> <C>
4962305 Mounting Arrangement for Vertically Mounting a Scanner 10/9/90
4963719 Bar Code Scanner and Method of Scanning 10/16/90
4971176 Data Gathering System Including Cradle Suspension 11/20/90
4971177 Data Gathering System Housing/Mounting 11/20/90
4991692 Spill Control Mounting for Data Gathering System 2/12/91
5001406 Brushless DC Motor Speed Control via Power Supply Voltage 3/19/91
Level Control
5042821 Seal for Optical Scanner Window 8/27/91
5086879 Scale Calibration/Zeroing in Data Gathering System 2/11/92
5144118 Bar Code Scanning System with Multiple Decoding 9/1/92
Microprocessors
5179270 Scanner System Interface 1/12/93
5198649 Bar Code Scanner and Method of Scanning Bar Codes Labels With 3/30/93
or Without an Add-On Code
5214270 Modular Handheld or Fixed Scanner 5/25/93
5232185 Method and Apparatus for Mounting a Compact Optical Scanner 8/3/93
5247161 Bar Code Scanning System with Coverter Means and 9/21/93
Microprocessor Contained in a Single Integrated Circuit
5256864 Scanning System for Preferentially Aligning a Package in an 10/26/93
Optimal Scanning Plane for Decoding a Bar Code Label
5327451 Laser Diode Assembly for Laser Scanner System 6/5/94
5329103 Laser Beam Scanner with Low Cost Ditherer Mechanism 6/12/94
D 320,011 Window for an Optical Scanner 9/17/91
D 320,012 Window for an Optical Scanner 9/17/91
D 323,492 Window for an Optical Scanner 1/28/92
D 312,631 Mounting Bracket for a Compact Optical Scanner 12/4/90
D 313,590 Mounting Bracket for a Compact Optical Scanner 1/8/91
</TABLE>
All foreign equivalents or counterparts of each such patent or patent
application.
<PAGE> 111
Seller Subsidiaries
None.
Scanning
Patents:
<TABLE>
<CAPTION>
Patent Numbers Title Issue Date
---------------- ----- ----------
<S> <C> <C>
4861972 Bar Code Scanner and Method of Programming (being Reexamined) 8/29/89
4866257 Bar Code Scanner and Method (being Reexamined) 9/12/89
4894522 Interface Apparatus 1/16/90
4939355 Automatic Package Label Scanner 7/3/90
5146463 Pointer Beam for Hand-Held Laser Scanner 9/892
5202784 Optical System for Data Reading Applications 3/13/93
5235168 Bar Code Scanner Housing Assembly 8/10/93
5237162 Handheld Laser Scanner with Contoured Hand Rest 8/17/93
5239165 Bar Code Lottery Ticket Handling System 8/24/93
5274219 Handheld Laser Scanner with Built-In Stand 12/28/93
5296689 Aiming Beam System for Optical Data Reading Device 3/22/94
5298728 Signal Processing Apparatus and Method 3/29/94
5299590 Dome-Shaped Handheld Laser Scanner 7/20/93
5311000 Bar Code Scanner and Method of Scanning 5/10/94
5330370 Multiple Interface Selection System for Computer Peripherals 6/19/94
5347113 Multiple-Interface Selection System for Computer Peripherals 9/13/94
5347121 Variable Focus Optical System for Data Reading 9/13/94
5371361 Optical Processing System 12/6/94
5400110 Bar Code Scanner and Method of Scanning 8/8/95
5410108 Combined Scanner and Scale 4/25/95
</TABLE>
<PAGE> 112
<TABLE>
<CAPTION>
Patent Numbers Title Issue Date
---------------- ----- ----------
<S> <C> <C>
5438187 Multiple Focus Optical System for Data Reading Applications 8/1/95
5446271 Omnidirectional Scanning Method and Apparatus 8/29/95
5463211 Method and Apparatus for Detecting Transitions in a Time 10/31/95
Sampled Input Signal
5475206 Scanner Assembly 12/12/95
5475207 Multiple Plane Scanning System for Data Reading Applications 12/12/95
5479011 Variable Focus Optical System for Data Reading 12/26/95
5481098 Method and Apparatus for Reading Multiple Bar Codes Formats 1/2/96
5491328 Checkout Counter Scanner Having Multiple Scanning Surfaces 2/13/96
5493108 Method and Apparatus for Recognizing and Assembling Optical 2/20/96
Code Information from Partially Scanned Segments
5504350 Lens Configuration 4/2/96
D 350,127 Stand for a Handheld Laser 8/30/94
D 351,149 Laser Scanner Housing 10/4/94
D 351,150 Laser Scanner Head 10/4/94
Re. 35,117/5128520 Scanner With Coupon Validation (Reissued) 7/7/92
(Reissue
12/12/95)
</TABLE>
All foreign equivalents or counterparts of each such patent.
Patent Applications:
<TABLE>
<CAPTION>
Attorney Title Inventor Filing Date
Docket #
---------- ----- -------- -----------
<S> <C> <C> <C>
218/141 Multiple Window Data Reader Tamburrini, Duncan 1/31/96 (provisional)
218/128 Integral Illumination Svetal, Ring, Alavi 2/6/96 (provisional)
Source/Collection Lens Assembly for a
Barcode Reader
</TABLE>
<PAGE> 113
<TABLE>
<CAPTION>
Attorney Title Inventor Filing Date
Docket #
---------- ----- -------- -----------
<S> <C> <C> <C>
217/231 Scanner with Coupon Validation Rando 12/11/95
217/181 Method and Apparatus for Reading Olmstead 12/20/95
Images in Varying Ambient Light
Levels Over Large Depth of Field
216/074 Multiple Plane Weigh Platter for Svetal, Bobba, Schler, 10/5/95
Multiple Plane Scanning Systems Oldham
215/274 Omnidirectional Scanning Method and Cherry, Actis 8/25/95
Apparatus
215/157 Single Chip Bar Code Scanner Using Olmstead, Colley 8/25/95 (provisional)
CMOS Active Pixel Sensor Technology
215/111 Method and Apparatus for Detecting Arends, Elliott 10/26/95
Transitions in an Input Signal
214/254 Scanner Assembly Reddersen, et al. 8/3/95
214/253 Object Recognition System Using Rando, Cherry 6/8/95 (provisional)
Multispectral Data
214/249 Optical Data Capture System for Coded McQueen, McMahon, 6/8/95 (provisional)
and Non-Coded Objects Turkal, Cherry
214/248 Method of Recognizing Items Based McQueen, Schler 6/8/95 (provisional)
Upon Differential Thermal Analysis
214/247 Spiderless Scale for Use in a Bar Oldham, Sautter 6/8/95 (provisional)
Code Scanner/Scale System
214/246 Method of Creating Machine Readable McQueen 6/8/95 (provisional)
Optical Codes on Electrical Displays
214/236 Consumer Data Device System for McMahon, McQueen, 6/8/95 (provisional)
Consumer Transactions Schler
214/235 Automated Verification System for Walker 6/8/95 (provisional)
Filling Prescriptions
214/234 Produce or Grocery Item Recognition O'Donnell, Schler, 6/8/95 (provisional)
System Using Secondary Emission Cherry
Detection
214/233 Fixed Commercial and Industrial Williams, Kortt, 6/8/95 (provisional)
Scanning System Peavey, Tamburrini
</TABLE>
<PAGE> 114
<TABLE>
<CAPTION>
Attorney Title Inventor Filing Date
Docket #
---------- ----- -------- -----------
<S> <C> <C> <C>
214/232 Adaptive Optical Code Reader Using Actis, Cherry, McMahon, 6/8/95 (provisional)
Object Location and Movement Dieball, Olmstead,
Information McQueen, Arends
214/231 Readability Monitoring System for Cherry, Actis, Bradley, 6/8/95 (provisional)
Optical Code Dieball
214/166 Multiple Focus Optical System for Reddersen, Arends 6/7/95
Data Reading Applications
214/007 Variable Focus Optical System for Rudeen 6/7/95
Data Reading
213/219 Checkout Counter Scanner Having Rando 6/5/95
Multiple Scanning Surfaces
211/119 Bar Code Scanner and Method Elliott, Actis 9/22/95 (reexam)
211/118 Bar Code Scanner and Method of Elliott, Tabet 9/22/95 (reexam)
Processing
211/81 Multiple Plane Scanner for Data Bobba, Acosta, 11/6/95
Reading Eusterman, Ring
210/055 Method and Apparatus for Reading Olmstead 12/23/94
Images Without Need for Self-
Generated Illumination Source
209/257 Ultra-Compact Bar Code Scanner Ring, et al. 10/10/94
209/104 Multiple-Interface Selection System Reddersen, Shepard, 9/13/94
for Computer Peripherals Moch, Williams
207/240 Improved Scanner Window Pellicori, Sullivan, 10/17/94
Ahten
</TABLE>
All foreign equivalents or counterparts of each such patent
application.
TxCom
"Procede et dispositif de transmission a distance
d'informations au moyen d'ondes hertziennes" no2 693 862/92
08916 from 07/20/92
<PAGE> 115
Material Licenses
1. Agreement dated as of October 1, 1985, between Symbol
Technologies, Inc. and Seller.
2. Agreement dated January 1, 1995, between Symbol Technologies,
Inc., Seller and Scanning.
3. License Agreement dated August 1, 1990, between Opticon, Inc.
and Seller.
4. Agreement dated as of May 1, 1992, between International
Business Machines Corporation and Scanning.
5. Settlement Agreement dated December 16, 1994, between AT&T
Global Information Solutions Company and Scanning.
6. Contract dated March 31, 1993, between Symbol Technologies,
Inc. and TxCom.
7. Agreement dated January 1, 1993, between Scanning and Point of
Sale Data Products, Inc.
8. See License Agreements listed in Schedule 2.1(t).
Trademarks, Trade Names, Service Marks and Copyrights (and Applications
Therefor) Owned or Licensed
Scanning
Registered Trademarks and Trade Names
Magellan, Registration No. 1861693, Registered
November 8, 1994.
Licenses
Agreement dated December 8, 1995, between Scanning
and Optimal Robotics Corporation pursuant to which
Optimal licenses to Scanning the right to use the
following trademarks: "U-Scan Express", "U-Scan",
"8870 System", and "8880 System".
<PAGE> 116
TxCom
TXCOM from 07/19/91 under no299 287
RADIO LINK from 07/19/91 under no299286
Claims of Potential Infringement
See Schedule 2.1(p)
<PAGE> 117
Schedule 2.1(l)
BENEFIT PLANS
Scanning Profit/Equity Share Program 1993, 1994 and 1995.
Scanning 401(k) Plan
1996 Management Incentive Compensation Plan
1996 Executive Compensation, Supplemental Benefits and Incentive Plan
1996 Compensation, Supplemental Benefits and Incentive Plan for John O'Brien
Paid Time Off
Sick Leave
Employee Assistance Program
Scanning Educational Assistance Plan
Scanning Medical Coverage
Scanning Dental Coverage
Scanning Disability Coverage
Scanning Survivor Benefits
Employee Handbook
Perfect Attendance Bonus
John O'Brien Excess Liability Insurance Policy
Scanning Severance Practices - In the past, Scanning has provided certain
involuntarily terminated employees with severance pay. For example, Scanning
provided severance pay to certain employees involved with the reduction in
force that occurred in 1993.
<PAGE> 118
Schedule 2.1(n)
CONTRACTS
Master Assignment and Instrument of Assumption dated as of December 31, 1990,
between Seller and Scanning.
Shareholder and Management Agreement dated August 29, 1995, among
Spectra-Physics AB, Spectra-Physics Holding, Scanning and certain shareholders
of TxCom.
Seller's Representations and Warranties dated August 28, 1995, among the
Founders (as defined therein), TxCom and Spectra-Physics Holdings.
Share Purchase Agreement dated as of August 28, 1995, among certain investors,
the Founders (as defined therein), Spectra-Physics Holdings and Scanning.
Oregon Leases:
Real Property Commercial Lease of Building V, 3472 W. 11th, Eugene,
Oregon, dated April 27, 1990, between Leo J. Nielson, landlord, and
"Spectra-Physics, 959 Terry Street, Eugene, Oregon", tenant (as
amended by addendum to Real Property Commercial Lease dated June 29,
1994, between Leo J. Nielson, landlord, and Scanning, tenant).
Indenture of Lease dated March 15, 1996, between RDS Inc., landlord,
and Scanning, tenant.
North Carolina Lease:
Lease Agreement - Executive Suites - The Lawrence Building dated
August 3, 1994, between Lawrence Building Associates Limited
Partnership, landlord, and Scanning, tenant.
Ohio Lease:
Rahn Fountain Plaza Sublease dated April 1, 1995, between ASAP Office
Services, Inc., landlord, and Scanning, tenant.
<PAGE> 119
Texas Lease:
Office Center - Lewisville Lease Agreement dated November 1, 1994,
between NL Group, Inc., landlord, and Scanning, tenant (as amended by
letter dated November 14, 1995, from Norm Lebanoniski, NL Group, Inc.,
landlord, to Charles E. Missar, Scanning, tenant.
Washington Lease:
Rock Pointe Executive Suites Lease and Service Agreement dated March,
1993, between Walter B. Worthy d/b/a Rock Pointe Executive Suites,
landlord, and Scanning, tenant.
Florida Lease:
Standard Lease dated March 18, 1996, between W. James Orovitz,
landlord, and Scanning, tenant.
Canada Lease:
Lease dated December 14, 1992, between Fidra Realties Inc., landlord,
and Scanning, tenant (as amended by Renewal of Lease dated August 3,
1995, between Fidra Realties Inc., landlord, and Scanning, tenant).
Hong Kong Lease:
The Executive Center License Agreement dated July 1, 1995, between the
Executive Centre Limited, landlord, and Scanning, tenant (as amended
as noted in letter dated March 6, 1996, from John Cates, Scanning, to
Chuck Missar, Scanning).
Hong Kong (residential) Lease:
Agreement dated December 15, 1995, between Gale Well Limited, landlord
and Scanning, tenant.
France Lease:
Bail dated Juin 30, 1994, between M. Viatz, Le Bailleur, and TxCom,
LePreneur.
<PAGE> 120
Belgium Lease:
Convention dated Janvier 2, 1995, between L'ERASMUS EUROPEAN BUSINESS
AND INNOVATION CENTER, landlord, and SPECTRA PHYSICS ayant son siege
avenue de Scandinavie - 2A de Courtaboef - BP 28 a 91941 Les Ulis
Cedex., tenant.
Spain Lease:
Contrat de Services dated Avril 1, 1995, between Fellsa Regalado Diaz
en nom et representation d'OFICENTER, S.A., landlord, and
SPECTRA-PHYSICS FRANCE, tenant.
A new Spanish lease for Parque Empresarial San Fernando, Avenida de
castilla No 2, Edificio F, 28831 Madrid, is currently under
negotiation.
Brazil Lease:
Contrato de Locacao dated Janoiro 1, 1996, between Robert Edward
Grant, landlord, and Gary Ellis Glaser and Carla Castelar Glaser,
tenants.
Stockholder Agreement dated September 3, 1993, between Catalina Marketing
Corporation ("CMC"), Seller, CECS and Scanning, as amended by that certain
Subscription Agreement dated December 28, 1995, among CMC, CECS and Seller.
Subscription Agreement dated September 3, 1993, among CMC, CECS and Seller.
Subscription Agreement dated as of December 28, 1995, among CMC, CECS, CECS and
Seller.
Technology License Agreement dated September 3, 1993, between CECS and
Scanning.
Ancillary Agreement dated September 3, 1993, among CMC, Seller, CECS and
Scanning.
Tax Sharing Agreement dated September 3, 1993, between CMC and CECS.
Contract of Employment dated January 9, 1996, between Nick Pitt and Scanning.
Management Severance Agreements dated March 31, 1996, between Scanning and each
of Dennis Hopwood, Michael Kalashian, John O'Brien, William Parnell, Brad
Reddersen, and Roger Tedford.
<PAGE> 121
Contrat de Travail dated Aout 1995, between TxCom and Alain Bonodot.
Contrat de Travail dated Aout 1995, between TxCom and Daniel Mawas.
Contrat de Travail dated Aout 1995, between TxCom and Bernard Malaise.
Employment Contract dated September, 1992, between Ja Koo and Scanning.
Installment Sale Agreement dated as of January 1, 1981, between State of
Oregon, Economic Development Commission and Seller.
Indenture of Trust dated as of July 1, 1979, between State of Oregon, Economic
Development Commission and the Oregon Bank.
Various letters and statements of employment, including severance benefits,
with employees of Seller Subsidiaries or TxCom of the type customarily entered
into with such Seller Subsidiaries or TxCom.
Rights of employees of Seller Subsidiaries which are prescribed by law or under
various industry wide collective bargaining arrangements.
Consulting Agreement dated November 14, 1995, between Federal Express
Corporation and Scanning.
Agreement dated December 8, 1995, between Optimal Robotics
Corporation and Scanning.
Agreement dated November 16, 1995, between SAP America, Inc. and Scanning
<PAGE> 122
Schedule 2.1(o)
CHANGES SINCE DATE OF AUDITED FINANCIAL STATEMENTS
Purchase of an additional 12% of the shares of TxCom in February 1996.
Formation of SpectraScan (AUST) Pty Ltd.
Formation of SpectraScan Europe Ltd.
Investment of $252,307.50 in CECS made pursuant to that certain Subscription
Agreement dated as of December 28, 1995, among CECS, CMC and Seller.
See also Management Severance Agreements listed in Schedule 2.1(n).
See also License Agreements listed in Schedule 2.1(t).
Since December 31, 1995, Scanning has paid certain cash dividends to its
shareholder.
<PAGE> 123
Schedule 2.1(p)
PENDING OR THREATENED LITIGATION OR PROCEEDINGS
Scanning
PSC Inc. v. Spectra-Physics Scanning Systems, Inc., Civil Action No.
92-CV-6278T, pending in the United States District Court for the
Western District of New York.
Alice Rouse v. Stores Automated Systems, Inc., et al., Case No. 4112,
pending in the Court of Common Pleas, Philadelphia County.
Kamla Generett v. NCR Corporation, et al., Case No. CV 95 - 0420 DT
(JRx), pending in the United States District Court for the Central
District of California.
Bridget Fanning v. Quinnsworth Limited, 1992 No. 8244P pending in the
High Court of Ireland.
Attorneys for International Automated Systems, Inc. sent a letter to
Scanning dated April 22, 1996, stating that the U-Scan system
infringes on its client's patent, U.S. Patent No. 4,787,476.
Scotti Natale v. Bizeta Elettronica S.r.l. and Eurelettronica S.p.a.
and Spectra-Physics, S.R.L., filed in Milan, Italy in March 1993.
By letter dated December 30, 1992, General Motors requested
indemnification from Scanning under an unspecified purchase agreement
with respect to a suit between Jerome Lemelson and General Motors.
By letter dated August 12, 1993, Motorola stated that it intends to
seek reimbursement for costs and liabilities from Scanning with
respect to a suit between Jerome Lemelson and Motorola and Ford.
TxCom
None.
Seller Subsidiaries
None.
<PAGE> 124
Schedule 2.1(s)
INSURANCE
Property damage/boiler and machinery insurance in various amounts insuring all
Spectra-Physics entities through Skandia Group, policy no. NS2000001060-1,
expiring December 1, 1996.
Foreign comprehensive general liability insurance in the amount of $1,000,000
insuring all Spectra-Physics entities through Republic/Blue Ridge/Winter Thur
Group, policy nos. GL003-05-23-95 and HFL004-27-20-95, expiring December 1,
1996.
Umbrella liability insurance in the amount of $50,000,000 insuring all
Spectra-Physics entities through American National Fire Insurance Federal
Insurance Company, policy nos. TUU9823733 (umbrella) and 7966-83-02 (excess),
expiring December 1, 1996.
Crime insurance in the amount of $5,000,000 insuring all Spectra-Physics
entities through National Union Fire Insurance Company, policy no. 482-15-81,
expiring December 1, 1996.
Global marine program insurance in the amount of $3,000,000 insuring
Spectra-Physics USA, Inc. and all of its subsidiaries through American
International Marine Agency, policy no. 86066C, expiring December 1, 1996.
Workers' compensation and employers' liability insurance in the amount of
$1,000,000 insuring several Spectra-Physics entities including Scanning through
American National Fire, policy no. WC2080360-04, expiring June 29, 1996.
Business automobile liability insurance in the amount of $1,000,000 insuring
several Spectra-Physics entities including Scanning through American National
Fire, policy no. CAP2080361-04, expiring June 29, 1996.
Fiduciary liability insurance in the amount of $5,000,000 insuring several
employee benefit plans including Scanning Savings Plus Plan and Spectra-Physics
USA & Subsidiaries 401(k) Profit Sharing Plan through National Fire Insurance
Company of Pittsburgh, PA, policy no. PTL4453161, expiring June 29, 1996.
Directors & Officers Insurance in the amount of $10,000,000 insuring
Spectra-Physics AB and its subsidiaries through AIG, policy no. 109-1804,
expiring November 30, 1996.
<PAGE> 125
Workers' Compensation insurance for the employees of Spectra-Physics USA and
its subsidiaries through Great American, policy no. 715-34-36, expiring June
29, 1996.
Vision insurance for the employees of Scanning through VSP, policy no.
12-031613 0001, expiring December 31, 1996.
HMO medical insurance for the employees of Scanning through HMO Oregon, policy
no. 800876000, expiring December 21, 1996.
Medical insurance for the employees of Spectra-Physics USA and its subsidiaries
through Aetna, policy no. 393561, expiring December 31, 1996.
Dental insurance for the employees of Scanning through Oregon Dental Service,
policy no. 2358, expiring December 31, 1996.
Dental insurance for the employees of Spectra-Physics USA and its subsidiaries
through Aetna, policy no. 393561, expiring December 31, 1996.
Short term disability insurance for the employees of Scanning through Standard,
policy no. 613514.01, expiring December 31, 1996.
Accidental death and dismemberment insurance for the employees of
Spectra-Physics USA and its subsidiaries through Aetna, policy no.
393561-31-00003, expiring December 31, 1996.
Long term disability insurance for the employees of Spectra-Physics USA and its
subsidiaries through UNUM, policy no. 510856-04, expiring December 31, 1996.
Business travel insurance for the employees of Spectra-Physics USA and its
subsidiaries through Commercial Life, policy no. GTA 15910, expiring June 29,
1996.
Excess liability insurance for Spectra-Physics USA and its subsidiaries through
American National Fire Insurance, policy no. 79668302-excess, expiring June 29,
1996.
Excess travel insurance in the amount of $175,000 insuring John O'Brien through
Transamerica Life Companies, policy no. 40407685, expiring May 6, 1996 (the
policy is in process of being renewed).
<PAGE> 126
Basic life insurance for the employees of Spectra-Physics USA and its
subsidiaries through Aetna, policy no. 393561-31-00003, expiring December 31,
1996.
Excess liability insurance in the amount of $5,000,000 insuring John O'Brien
through Chubb, policy no. 10677840-01, expiring January 12, 1997.
Note: Spectra-Physics AB Group insurance will not cover Scanning or TxCom once
Scanning is not a subsidiary of Seller.
<PAGE> 127
Schedule 2.1(t)
TRANSACTIONS WITH AFFILIATES
Supply arrangement for VLD/ASIC Drivers between Spectra-Physics Lasers, Inc.
and Scanning
License Agreement dated May ___, 1996, between Scanning, licensor, and
Spectra-Physics Holdings USA, Inc., licensee (in the form attached hereto - to
be signed prior to Closing).
License Agreement dated May ___, 1996, between Seller, licensor, and
Spectra-Physics Holdings USA, Inc., licensee (in the form attached hereto - to
be signed prior to Closing).
Agreement dated April 3, 1996 between Scanning and Spectra-Physics Laser Plane,
Inc. related to international purchases.
<PAGE> 128
PATENT LICENSE AGREEMENT
This is a Patent License Agreement (the "Agreement") dated as
of ____________ _______, 1996, (the "Effective Date") between Spectra-Physics
Scanning Systems, Inc. ("Licensor"), a Delaware corporation and
Spectra-Physics Holdings USA Inc. ("Licensee"), a Delaware corporation.
Background
Licensor owns the patents listed in the attached Exhibit A,
and any and all divisions, continuations-in-part and reissues thereof
(collectively, the "Licensed Patents"). Licensee desires to obtain, and
Licensor desires to grant, a license to use the Licensed Patents subject to the
terms and conditions herein.
NOW, THEREFORE, intending to be legally bound, Licensor and
Licensee agree as follows:
Terms
1. LICENSE.
1.1 Grant of Rights. Licensor hereby grants to Licensee a
non-exclusive, irrevocable (except as provided herein), perpetual (except as
provided herein), royalty-free right and license throughout the world to use
the Licensed Patents and any foreign equivalents or counterparts thereto in
connection with Licensee's and its Affiliates' business as of the Effective
Date and any reasonably related businesses hereafter conducted by Licensee or
its Affiliates (the "Business"). Notwithstanding the foregoing, Licensee, its
Affiliates, and any party granted a sublicense under this Agreement shall never
use the Licensed Patents in the business of designing, manufacturing or
marketing bar code scanners, or imagers, wireless radio frequency systems and
retail automation systems for the automatic identification and data collection
industry. Throughout this Agreement, unless noted otherwise, the right to
manufacture shall include the right to have manufactured by others for Licensee
or its Affiliates.
1.2 Dispute Resolution. If the parties disagree as to the scope
of the license granted pursuant to Section 1.1 and cannot settle such dispute
after a minimum of thirty (30) days of informal negotiations between officers
of each party, then the parties shall submit to non-binding arbitration. Each
party shall bear its own costs and expenses, including attorneys' fees, in the
arbitration.
<PAGE> 129
1.3 Maintenance of Licensed Patents and this License. Licensor
will provide reasonable notice to Licensee of its intent not to file necessary
documents, pay necessary fees, or take other actions necessary to ensure the
continued validity and enforceability of the Licensed Patents. If Licensor
chooses not to maintain the validity and enforceability of any of the Licensed
Patents, then Licensor shall permit Licensee to maintain some or all of the
Licensed Patents at its own expense. Licensor will reasonably cooperate with
Licensee in such maintenance. Licensee will pay Licensor's reasonable
out-of-pocket expenses of such cooperation.
2. INFRINGEMENT.
2.1 Notice of Infringement Claims. If Licensee becomes aware of
actual or threatened infringement by a third party of any of the Licensed
Patents used in the Business, or of any claim by a third party that the use of
the Licensed Patents in the business constitutes infringement, it shall
promptly notify Licensor in writing of such infringement, threat or claim.
2.2 Prosecution of Infringement Claims. After any notice provided
pursuant to Section 2.1, the parties will promptly consult in good faith as to
the steps to be taken with respect to such infringement, provided; however,
that in the absence of any agreement to the contrary, the Licensor will be
obliged either: (a) to promptly take such action at its expense as is
reasonably necessary to enjoin such infringement; or (b) to promptly notify
Licensee that Licensor has good cause for refraining from taking such action.
2.2.1 Licensor Prosecution. In the event that Licensor takes
action under Section 2.2(a), Licensee shall cooperate fully with Licensor in
such action, provided that Licensee is reimbursed for all of its reasonable
out-of-pocket expenses incurred in connection with such cooperation. In any
action relating to a Licensed Patent used in the Business, Licensor shall keep
Licensee informed on all material developments throughout the progress of any
such action. The Licensor shall retain all amounts recovered, whether by
judgment, award, settlement, license, sublicense or otherwise, in any such
action.
2.2.2 Licensee's Rights. In no event shall Licensee have any
right to prosecute any action to enforce any of the Licensed Patents or
participate in any administrative proceeding relating to the Licensed Patents
except upon the expressed written consent of Licensor, which consent shall be
in Licensor's sole discretion.
- 2 -
<PAGE> 130
3. DEFAULT AND TERMINATION.
3.1 Term. This Agreement shall commence on the Effective Date and,
unless terminated earlier pursuant to Section 3.2, shall terminate upon the
latest expiration date of any of the Licensed Patents.
3.2 Termination. Either party may terminate this Agreement only if
the other party materially fails to perform any obligation under this Agreement
and such failure continues, substantially uncured, for 60 days following notice
thereof by the terminating party. The contents of any notice tendered by the
terminating party pursuant to this Section 3.2 shall set forth with reasonable
specificity the claimed material failure of the other party.
4. ASSIGNMENT AND SUBLICENSING.
4.1 Assignment. Neither this Agreement nor any of the rights or
obligations hereunder may be assigned by Licensee without the prior written
consent of Licensor; provided, however, that Licensee may, without such
consent, assign such rights and such obligations set forth in this Agreement,
in whole or in part, to: (a) to any of Licensee's Affiliates; (b) in connection
with a sale of all or substantially all of the assets of Licensee, or its
Affiliates, or of the business of Licensee, or its Affiliates, in which the
Licensed Patents are principally used; or (c) to the surviving the entity after
a merger, reorganization or other corporate restructuring of Licensee, or its
Affiliates. This Agreement and all of the provisions hereof shall be binding
upon and shall inure to the benefit of the parties hereto and their respective
permitted successors and assigns. Licensor reserves the right to assign its
rights under this agreement at its discretion.
4.2 Sublicensing. Licensee may grant sublicenses of some or all of
the Licensed Patents to the same entities that Licensee could assign its rights
hereunder pursuant to Section 4.1. If Licensee grants a sublicense on a
royalty basis other than to an Affiliate, then Licensee shall pay Licensor
fifty percent of all royalty payments received under such sublicense.
4.3 Affiliates. For purposes of this Agreement, "Affiliate(s)" shall
mean each and every business entity controlling, controlled by or under common
control with a business entity. For purposes of this definition, "control"
shall mean ownership, directly or indirectly, of at least a majority of the
voting stock or shareholders' equity of a corporation or, in the case of a
non-corporate entity, a right to
- 3 -
<PAGE> 131
receive at least a majority of either the profits or the assets upon
dissolution of such entity.
5. MISCELLANEOUS.
5.1 Notices. Any notice or other communication required or permitted
under this Agreement shall be in writing and shall be deemed to have been duly
given: (a) on the date of delivery, if delivered personally; (b) on the
business day after dispatch by documented overnight delivery service such as
Federal Express, if sent in such manner; (c) on the date of transmission by
telecopy or telex or other means of electronic transmission, if so transmitted,
provided that a confirmation copy of any such electronic transmission is sent
no later than the business day following the date of electronic transmission by
documented overnight delivery service or first class mail, postage prepaid; or
(d) on the third business day after deposit in the United States mail, postage
prepaid. Notices or other communications shall be directed to the following
addresses:
5.1.1 Notices to Licensee:
Spectra-Physics Holdings USA Inc.
963 Hawthorn Drive
Itasca, Ill 60143
Telephone: (708) 875-8090
Fax: (708) 250-1050
Attention: John Carney, President
Copy to:
Dechert, Price & Rhoads
4000 Bell Atlantic Tower
1717 Arch Street
Philadelphia, PA 19103
Telephone: (215) 994-2971
Fax: (215) 994-2222
Attention: Carmen J. Romano
- 4 -
<PAGE> 132
5.1.2 Notices to Licensor:
Spectra-Physics Scanning Systems, Inc.
959 Terry Street
Eugene, Oregon 97402-9120
Telephone: ______________
Fax: ______________
Attention: ______________
Either party may change the addresses set forth above by providing written
notice to the other party.
5.2 Entire Agreement, Amendment, Waiver. This Agreement, and the
exhibits hereto, constitutes the entire understanding between the parties with
respect to the subject matter hereof, and supersedes all other understandings
and negotiations with respect thereto. This Agreement may be amended only in a
writing signed by both parties hereto. Any provision of this Agreement may be
waived only in a writing signed by the party to be charged with such waiver.
No course of dealing between the parties shall be effective to amend or waive
any provision of this Agreement.
5.3 Further Assurances. After the execution of this Agreement, each
party shall take further actions and execute such further documents as may be
necessary or reasonably requested by the other in order to effectuate the
intent of this Agreement and to provide such other party with the benefits of
this Agreement.
5.4 Insolvency. All rights and licenses granted under or pursuant
to this Agreement by Licensor to Licensee are, and shall otherwise be deemed to
be, for purposes of Section 365(n) of the United States Bankruptcy Code or
replacement provision therefor (the "Code"), license to rights to "intellectual
property" as defined in the Code. The parties agree that Licensee, as licensee
of such rights under this Agreement, shall retain and may fully exercise all of
its rights and elections under the Code.
5.5 Governing Law. This Agreement shall be governed by, interpreted
under, and construed and enforced in accordance with the internal laws, and not
the laws pertaining to conflicts or choice of laws, of the State of New York.
5.6 Captions. The captions in this Agreement are for purposes of
reference only and shall not limit or otherwise affect the interpretation
thereof.
- 5 -
<PAGE> 133
5.7 Severability. The provisions of this Agreement are severable.
In the event of the unenforceability or invalidity of any one or more of the
terms, covenants, conditions or provisions of this Agreement under applicable
law such unenforceability or invalidity shall not render any other of the
terms, covenants, conditions or provisions hereof unenforceable or invalid and
the parties hereto agree that this Agreement shall be construed as if such
unenforceable or invalid provision were never contained herein.
IN WITNESS WHEREOF, the parties have executed this Agreement
on the date first above written.
LICENSOR
By:_____________________
LICENSEE
By:______________________
- 6 -
<PAGE> 134
Exhibit A
LICENSED PATENTS
<TABLE>
<CAPTION>
Patent Number Description Issue Date
------------- ----------- ----------
<S> <C> <C>
5146463 Pointer Beam for Hand-Held Laser Scanner 09/08/92
Signal Processing Apparatus and Method
5298728 03/29/94
Multiple Interface Selection System for Computer
Peripherals
5330370 06/19/94
Multiple Interface Selection System for Computer
Peripherals
5347113 Variable Focus Optical System for Data Reading 09/13/94
Optical Processing System
5347121 Combined Scanner and Scale 09/13/94
Multiple Focus Optical System for Data Reading
5371361 Applications 12/06/94
5410108 Omnidirectional Scanning Method and Apparatus 04/25/95
5438187 Variable Focus Optical System for Data Reading 08/01/95
5446271 08/29/95
5479011 12/26/95
</TABLE>
- 7 -
<PAGE> 135
PATENT LICENSE AGREEMENT
This is a Patent License Agreement (the "Agreement") dated as
of ____________ _______, 1996, (the "Effective Date") between Spectra-Physics,
Inc. ("Licensor"), a Delaware corporation and Spectra-Physics Holdings USA Inc.
("Licensee"), a Delaware corporation.
Background
WHEREAS, Licensor, and PSC Inc. have entered into an Asset and
Stock Purchase Agreement dated as of the Effective Date;
WHEREAS Licensor owns the patents listed in the attached
Exhibit A, and any and all divisions, continuations-in-part and reissues
thereof (collectively, the "Licensed Patents"); and
WHEREAS Licensee desires to obtain, and Licensor desires to
grant, a license to use the Licensed Patents subject to the terms and
conditions herein.
NOW, THEREFORE, intending to be legally bound, Licensor and
Licensee agree as follows:
Terms
1. LICENSE.
1.1 Grant of Rights. Licensor hereby grants to Licensee a
non-exclusive, irrevocable (except as provided herein), perpetual (except as
provided herein), royalty-free right and license throughout the world to use
the Licensed Patents and any foreign equivalents or counterparts thereto in
connection with Licensee's and its Affiliates' business as of the Effective
Date and any reasonably related businesses hereafter conducted by Licensee or
its Affiliates (the "Business"). Notwithstanding the foregoing, Licensee, its
Affiliates, and any party granted a sublicense under this Agreement shall never
use the Licensed Patents in the business of designing, manufacturing or
marketing bar code scanners, or imagers, wireless radio frequency systems and
retail automation systems for the automatic identification and data collection
industry. Throughout this Agreement, unless noted otherwise, the right to
manufacture shall include the right to have manufactured by others for Licensee
or its Affiliates.
1.2 Dispute Resolution. If the parties disagree as to the scope
of the license granted pursuant to Section 1.1, and cannot
<PAGE> 136
settle such dispute after a minimum of thirty (30) days of informal
negotiations between officers of each party, then the parties shall submit to
non-binding arbitration. Each party shall bear its own costs and expenses,
including attorneys' fees, in the arbitration.
1.3 Maintenance of Licensed Patents and this License. Licensor will
provide reasonable notice to Licensee of its intent not to file necessary
documents, pay necessary fees, or take other actions necessary to ensure the
continued validity and enforceability of the Licensed Patents. If Licensor
chooses not to maintain the validity and enforceability of any of the Licensed
Patents, then Licensor shall permit Licensee to maintain some or all of the
Licensed Patents at its own expense. Licensor will reasonably cooperate with
Licensee in such maintenance. Licensee will pay Licensor's reasonable
out-of-pocket expenses of such cooperation.
2. INFRINGEMENT.
2.1 Notice of Infringement Claims. If Licensee becomes aware of
actual or threatened infringement by a third party of any of the Licensed
Patents used in the Business, or of any claim by a third party that the use of
the Licensed Patents in the business constitutes infringement, it shall
promptly notify Licensor in writing of such infringement, threat or claim.
2.2 Prosecution of Infringement Claims. After any notice provided
pursuant to Section 2.1, the parties will promptly consult in good faith as to
the steps to be taken with respect to such infringement, provided; however,
that in the absence of any agreement to the contrary, the Licensor will be
obliged either: (a) to promptly take such action at its expense as is
reasonably necessary to enjoin such infringement; or (b) to promptly notify
Licensee that Licensor has good cause for refraining from taking such action.
2.2.1 Licensor Prosecution. In the event that Licensor takes
action under Section 2.2(a), Licensee shall cooperate fully with Licensor in
such action, provided that Licensee is reimbursed for all of its reasonable
out-of-pocket expenses incurred in connection with such cooperation. In any
action relating to a Licensed Patent used in the Business, Licensor shall keep
Licensee informed on all material developments throughout the progress of any
such action. The Licensor shall retain all amounts recovered, whether by
judgment, award, settlement, license, sublicense or otherwise, in any such
action.
- 2 -
<PAGE> 137
2.2.2 Licensee's Rights. In no event shall Licensee have any
right to prosecute any action to enforce any of the Licensed Patents or
participate in any administrative proceeding relating to the Licensed Patents
except upon the expressed written consent of Licensor, which consent shall be
in Licensor's sole discretion.
3. DEFAULT AND TERMINATION.
3.1 Term. This Agreement shall commence on the Effective Date and,
unless terminated earlier pursuant to Section 3.2, shall terminate upon the
latest expiration date of any of the Licensed Patents.
3.2 Termination. Either party may terminate this Agreement only if
the other party materially fails to perform any obligation under this Agreement
and such failure continues, substantially uncured, for 60 days following notice
thereof by the terminating party. The contents of any notice tendered by the
terminating party pursuant to this Section 3.2 shall set forth with reasonable
specificity the claimed material failure of the other party.
4. ASSIGNMENT AND SUBLICENSING.
4.1 Assignment. Neither this Agreement nor any of the rights or
obligations hereunder may be assigned by Licensee without the prior written
consent of Licensor; provided, however, that Licensee may, without such
consent, assign such rights and such obligations set forth in this Agreement,
in whole or in part, to: (a) to any of Licensee's Affiliates; (b) in connection
with a sale of all or substantially all of the assets of Licensee, or its
Affiliates, or of the business of Licensee, or its Affiliates, in which the
Licensed Patents are principally used; or (c) to the surviving the entity after
a merger, reorganization or other corporate restructuring of Licensee, or its
Affiliates. This Agreement and all of the provisions hereof shall be binding
upon and shall inure to the benefit of the parties hereto and their respective
permitted successors and assigns. Licensor reserves the right to assign its
rights under this agreement at its discretion.
4.2 Sublicensing. Licensee may grant sublicenses of some or all of
the Licensed Patents to the same entities that Licensee could assign its rights
hereunder pursuant to Section 4.1. If Licensee grants a sublicense on a
royalty basis other than to an Affiliate, then Licensee shall pay Licensor
fifty percent of all royalty payments received under such sublicense.
- 3 -
<PAGE> 138
4.3 Affiliates. For purposes of this Agreement, "Affiliate(s)"
shall mean each and every business entity controlling, controlled by or under
common control with a business entity. For purposes of this definition,
"control" shall mean ownership, directly or indirectly, of at least a majority
of the voting stock or shareholders' equity of a corporation or, in the case of
a non-corporate entity, a right to receive at least a majority of either the
profits or the assets upon dissolution of such entity.
5. MISCELLANEOUS.
5.1 Notices. Any notice or other communication required or permitted
under this Agreement shall be in writing and shall be deemed to have been duly
given: (a) on the date of delivery, if delivered personally; (b) on the
business day after dispatch by documented overnight delivery service such as
Federal Express, if sent in such manner; (c) on the date of transmission by
telecopy or telex or other means of electronic transmission, if so transmitted,
provided that a confirmation copy of any such electronic transmission is sent
no later than the business day following the date of electronic transmission by
documented overnight delivery service or first class mail, postage prepaid; or
(d) on the third business day after deposit in the United States mail, postage
prepaid. Notices or other communications shall be directed to the following
addresses:
5.1.1 Notices to Licensee:
Spectra-Physics Holdings USA Inc.
963 Hawthorn Drive
Itasca, Ill 60143
Telephone: (708) 875-8090
Fax: (708) 250-1050
Attention: John Carney, President
Copy to:
Dechert, Price & Rhoads
4000 Bell Atlantic Tower
1717 Arch Street
Philadelphia, PA 19103
Telephone: (215) 994-2971
Fax: (215) 994-2222
Attention: Carmen J. Romano
- 4 -
<PAGE> 139
5.1.2 Notices to Licensor:
Spectra-Physics, Inc.
108 Webster Building
3411 Silverside Road
Wilmington, DE 19810
Telephone: (302) 478-4600
Fax: (302) 478-8962
Attention: Ms. Barbara Schenberg
Either party may change the addresses set forth above by providing written
notice to the other party.
5.2 Entire Agreement, Amendment, Waiver. This Agreement, and the
exhibits hereto, constitutes the entire understanding between the parties with
respect to the subject matter hereof, and supersedes all other understandings
and negotiations with respect thereto. This Agreement may be amended only in a
writing signed by both parties hereto. Any provision of this Agreement may be
waived only in a writing signed by the party to be charged with such waiver.
No course of dealing between the parties shall be effective to amend or waive
any provision of this Agreement.
5.3 Further Assurances. After the execution of this Agreement, each
party shall take further actions and execute such further documents as may be
necessary or reasonably requested by the other in order to effectuate the
intent of this Agreement and to provide such other party with the benefits of
this Agreement.
5.4 Insolvency. All rights and licenses granted under or pursuant
to this Agreement by Licensor to Licensee are, and shall otherwise be deemed to
be, for purposes of Section 365(n) of the United States Bankruptcy Code or
replacement provision therefor (the "Code"), license to rights to "intellectual
property" as defined in the Code. The parties agree that Licensee, as licensee
of such rights under this Agreement, shall retain and may fully exercise all of
its rights and elections under the Code.
5.5 Governing Law. This Agreement shall be governed by, interpreted
under, and construed and enforced in accordance with the internal laws, and not
the laws pertaining to conflicts or choice of laws, of the State of New York.
- 5 -
<PAGE> 140
5.6 Captions. The captions in this Agreement are for purposes of
reference only and shall not limit or otherwise affect the interpretation
thereof.
5.7 Severability. The provisions of this Agreement are severable.
In the event of the unenforceability or invalidity of any one or more of the
terms, covenants, conditions or provisions of this Agreement under applicable
law such unenforceability or invalidity shall not render any other of the
terms, covenants, conditions or provisions hereof unenforceable or invalid and
the parties hereto agree that this Agreement shall be construed as if such
unenforceable or invalid provision were never contained herein.
IN WITNESS WHEREOF, the parties have executed this Agreement
on the date first above written.
LICENSOR
By:_____________________
LICENSEE
By:______________________
- 6 -
<PAGE> 141
Exhibit A
LICENSED PATENTS
<TABLE>
<CAPTION>
Patent Number Description Issue Date
------------- ----------- ----------
<S> <C> <C>
4000397 Signal Processor Method and Apparatus 12/28/76
Laser Diode Mounting System
4601452 07/22/86
Trifocal Lens for Laser
4678288 07/07/87
Power Control System for Controlling the Power
4709369 Output of a Modulated Laser Diode 11/24/87
Signal Transition Detection Method and System
4749879 Beam Forming and Collection Lens Assembly for 07/07/88
Laser Scanner System
4786798 Laser Diode Power Control and Modulator Circuit 11/22/88
Brushless DC Motor Speed Control via Power Supply
Voltage Level Control
4868836 09/19/89
Laser Diode Assembly for Laser Scanner System
5001406 Laser Beam Scanner with Low Cost Ditherer 03/19/91
Mechanism
5327451 06/05/94
5329103 06/12/94
</TABLE>
- 7 -
<PAGE> 142
Patent Number Description Issue Date
- 8 -
<PAGE> 143
Schedule 2.1(v)
BANKS
General Accounts:
Corestates Bank of Delaware Signature: John O'Brien
Philadelphia, PA Roger Tedford
Account Number 0033-5636 Chet Galka
Rosemary Norton
Two signatures over $50,000
Philadelphia National Bank Signature: Roger Tedford
Philadelphia, PA Chet Galka
Account Number 0125 1178 Rosemary Norton
Unlimited amount but another who cannot
approve the wire has to initiate the wire
Bank of America Signature: Roger Tedford
Concord, CA Chet Galka
Account Number 10093004 Rosemary Norton
(Yen Account)
US Foreign Currency Unlimited amount but another who cannot
approve the wire has to initiate the wire
Canada Trust Signature: John O'Brien
Mississauga, Ontario Roger Tedford
Account Number 00334-800654 Chet Galka
Rosemary Norton
Two signatures over $50,000
Payroll Accounts:
US Bank ADP Payroll no checks/wire
Eugene, OR available
Account Number 015 0206 126
US Bank Signature: John O'Brien
Eugene, OR Roger Tedford
Account Number 015 0206 159 Chet Galka
Rosemary Norton
Two signatures over $50,000
Bank of Montreal ADP Payroll no checks/wire
Etobiooke Ontario Canada available
Account Number 1001-342
<PAGE> 144
Lockbox Accounts:
Bank of America Incoming Money only
Concord, CA
Account Number 12339 08793
<PAGE> 145
Schedule 2.1(w)
POWERS OF ATTORNEY
None
<PAGE> 146
Schedule 2.1(x)
SIGNIFICANT CUSTOMERS
None
<PAGE> 147
Schedule 2.1(y)
SEVERANCE BENEFITS
Foreign Business Employees of Spectra-Physics Ltd., Spectra-Physics GmbH,
Spectra-Physics Pty Ltd. and Spectra-Physics K.K. may in certain circumstances
be entitled to relocation assistance if they are required to relocate.
Foreign Business Employees of Spectra-Physics Pty Ltd. may be entitled to
severance benefits equal to one month's salary.
Pursuant to the Spectra-Physics K.K. Retirement (Severance) Plan, Foreign
Business Employees of Spectra-Physics K.K. will be entitled to a payout by
Nippon Danti Life Insurance Company, Ltd. (the current pension plan trustee) of
certain benefits upon consummation of the transaction contemplated hereby.
Future retirement benefit obligations to those employees will be reduced by the
amount of benefits paid out.
See also severance agreements and employment arrangements listed in Schedule
2.1(n).
<PAGE> 148
Schedule 3.1(e)
BUYER NON-CONTRAVENTION
None
<PAGE> 149
Schedule 3.1(f)
BUYER GOVERNMENT CONSENTS AND APPROVALS
None
<PAGE> 150
Schedule 3.1(j)
CHANGES SINCE DECEMBER 31, 1995
None
<PAGE> 151
Schedule 3.1(k)
LITIGATION OR PROCEEDINGS
(1) On or about April 1, 1996, PSC filed suit in the United States
District Court for the Western District of New York located in
Rochester, New York, against Symbol Technologies, Inc. ("Symbol") for
violation of the antitrust laws, unfair trade practices and for
declaration of noninfringement and/or invalidity of about 32 Symbol
patents. On or about the same effective date, Symbol sued PSC for
patent infringement in the United States District Court for the
Southern District of New York in Manhattan, alleging infringement of
about 19 patents, as well as suing PSC's customer, Data General.
Symbol has also alleged breaches of the Symbol-PSC License Agreements
of 1991 and 1995 and violation of a 1991 Consent Judgment. Symbol has
also moved for a preliminary injunction in that proceeding on four
patents. Presently before the Southern District Court is a motion by
PSC to transfer the Southern District Action to Rochester. There is
no date set for a pre-motion conference as required under the Court's
rules, as to Symbol's request to perfect filing of its preliminary
injunction motion.
(2) On July 1, 1992, PSC filed two patent infringement lawsuits: one
against Spectra-Physics relating to the manufacture and sale of its
SP300 and SP400 models and one against Metrologic relating to the
manufacture and sale of its 900 Series, in each case in the United
States District Court for the Western District of New York located in
Rochester, New York. PSC alleges that each of Spectra-Physics and
Metrologic has infringed PSC's patent for an optical scanning device
for detecting bar codes, United States Letters Patent 4,652,750 (the
"750 Patent"), and seeks injunctions enjoining Spectra-Physics and
Metrologic from further infringement and damages to compensate it for
such acts of infringement. Spectra-Physics and Metrologic have each
filed answers alleging invalidity, non-infringement, and
unenforceability of the 750 patent. These actions are stayed pending
disposition of the appeal described below in item (3).
(3) On September 21, 1994, PSC filed a patent infringement lawsuit in the
United States District Court for the Western District of New York,
alleging that certain products of Accu-Sort infringe the 750 Patent.
The suit seeks an injunction to prevent further infringement and also
seeks damages to compensate for past infringement. Accu-Sort has
answered the complaint, asserting defenses of non-infringement and
invalidity and filed a counterclaim seeking
<PAGE> 152
a declaratory judgment that the 750 Patent is inter alia and not
infringed. PSC moved for summary judgment of infringement. Accu-Sort
has not alleged that PSC is infringing any Accu-Sort patent.
On October 13, 1995 the Court granted Accu-Sort's motion for summary
judgment of non-infringement, denied PSC's motion for summary judgment
of infringement, and dismissed that action. PSC has appealed all
rulings adverse to PSC in an appeal filed with the Court of Appeals
for the Federal Circuit. The Appeal is still pending.
(4) In May 1996, PSC received a Notice of Charge of Discrimination for age
relating to the termination of an employee whose position was
eliminated in November, 1995.
<PAGE> 153
Schedule 4.1
Scanning has made an additional investment of $252,307.50 in CECS. Scanning
may make other additional investments in CECS and purchases of shares of
capital stock of TxCom.
Scanning may undertake to perform the excavation and/or filling authorized
pursuant to Permit Nos. 00-8310 and 5158 listed in Schedule 2.1(j).
Scanning will dividend to Seller any notes receivable from Spectra-Physics AB
or its affiliates.
<PAGE> 154
Schedule 10.7
Seller
Ulf J. Johansson, President and Chief Executive Officer of
Spectra-Physics AB.
Lennart F. Rappe, Vice President and Chief Financial Officer of
Spectra-Physics AB.
John O'Brien, President of Scanning.
Roger Tedford, Vice President - Finance of Scanning.
Buyer
L. Michael Hone, President, Chief Executive Officer, and Chairman of
the Board
William J. Woodard, Vice President-Finance and Treasurer
Jay M. Eastman, Sr., Senior Vice President - Strategic Planning
<PAGE> 155
Exhibit A
Australia
AGREEMENT ON THE SALE AND PURCHASE OF A BUSINESS OPERATION
THIS Agreement on the Sale and Purchase of a Business Operation dated May [ ],
1996 (the "Agreement")
BETWEEN
Spectra Physics Pty. Ltd., a company incorporated under the laws of the State
of Victoria, Australia with its registered office located at [ ]
(hereinafter referred to as "the Seller"),
AND
[ ] (hereinafter referred to as "the Buyer").
WHEREAS, Seller is engaged in the business of marketing, selling and servicing
bar code scanners and scanner systems (the "Business") and
WHEREAS, upon the terms and subject to the conditions of this Agreement, Seller
desires to sell, convey, assign, transfer and deliver to Buyer substantially
all the assets and liabilities previously related to the Business and Buyer
desires to purchase and acquire from Seller such assets and liabilities,
NOW THEREFORE, in consideration of the promises and mutual covenants contained
herein, the parties agree as follows:
TERMS
In consideration of the mutual covenants contained herein and
intending to be legally bound hereby, the parties hereto agree as follows:
1. Sale and Purchase of Purchased Assets. As of the
date hereof, Seller hereby sells, conveys, assigns, transfers and delivers to
Buyer, and Buyer hereby purchases and acquires from Seller, the Purchased
Assets, subject to the Assumed Liabilities (each as defined below).
2. Certain Definitions.
<PAGE> 156
(a) The term "Purchased Assets" shall mean all
assets, properties and rights (contractual or otherwise) of every kind, nature
and description (including, without limitation, (i) furniture, machinery,
parts, tools and equipment, if any, (ii) inventory, (iii) accounts receivable,
(iv) license, distribution, dealer, sales representative, supplier, service,
and other commercial agreements, if any, (v) sales orders, purchase orders,
quotations, and bids, (vi) prepaid items, if any, (vii) licenses, permits,
authorizations and approvals, if any, (viii) customer lists, (ix) books and
records, (x) technical manuals and product and sales literature, (xi) all
rights under express or implied warranties, (xii) goodwill and (xiii) all
claims or defenses relating to any of the foregoing or to the Assumed
Liabilities) of Seller existing on the date hereof that are used primarily in
the Business, except for the Excluded Assets (as defined below). A list of the
Purchased Assets, by category, is attached as Exhibit A hereto.
(b) The term "Excluded Assets" shall mean cash
and cash equivalents, accounts receivable represented by discounted notes, any
assets or rights not used primarily in, or primarily benefitting, the Business
and any rights under insurance policies except for claims related to the
Business that are covered under such insurance policies but that have not yet
been submitted. Excluded Assets shall specifically include leasehold rights
and improvements, central management information systems and related office
equipment (but not including any readily-movable local area network and wide
area communication network used primarily in the Business), telephone systems,
other office equipment (such as photocopier and audio visual equipment) not
used exclusively in the Business, security deposits, any claims for refunds of
taxes paid by the Seller, and except as otherwise agreed in writing by or on
behalf of Buyer, any rights in or to the name "Spectra-Physics" or the
Spectra-Physics stylized "S" logo.
(c) The term "Assumed Liabilities" shall mean all
liabilities and obligations (contractual or otherwise) of every kind, nature
and description, known or unknown, of Seller that primarily relate to the
Business, the conduct of the Business or the Purchased Assets, excepting only
the Excluded Liabilities (as hereinafter defined).
(d) The term "Excluded Liabilities" shall mean
the following liabilities of the Seller: (i) liabilities for taxes, except as
otherwise agreed upon in writing by or on behalf of Buyer, (ii) liabilities or
obligations for facility costs, such as obligations under real estate leases,
(iii) trade
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<PAGE> 157
payables for goods and services relating to the overall operations of Seller,
such as for office supplies, facility maintenance services and telephone
service, and (iv) recourse liabilities in respect of accounts receivable
represented by discounted notes.
(e) The term "Business Employees" shall mean (i)
those employees of Seller who shall, as of the date hereof, become employees of
Buyer as agreed upon in writing by or on behalf of Buyer and (ii) any other
employees of Seller hired after May [ ], 1996 and employed by Seller on the
date hereof whose work relates to the business and operations of the Business,
such as employees who sell and service the products sold by the Business,
employees who process orders and collect receivables primarily with respect to
products sold by the Business, support staff whose primary function is to
support such salesmen, servicemen, order processors and accounts receivable
clerks and managerial employees whose function is to manage such salesmen,
servicemen, order processors, accounts receivable clerks and staff.
3. Purchase Price. The purchase price ("Purchase
Price") of the Purchased Assets shall correspond to an amount equal to 105% of
the aggregate net book value of the Purchased Assets and the Assumed
Liabilities (i.e., book value of such assets minus liabilities), as reflected
on a closing balance sheet to be prepared after the date hereof. Seller hereby
acknowledges receipt on the date hereof of payment of an estimate of the
Purchase Price. Such payment will be adjusted, as necessary, to reflect the
actual Purchase Price as determined pursuant to the closing balance sheet
referred to above.
4. Assumption of Liabilities. As of the date hereof,
Buyer hereby (i) assumes and agrees to pay, perform, satisfy or otherwise
discharge when due the Assumed Liabilities and (ii) agrees to indemnify, defend
and hold harmless Seller and its affiliates from and against any loss,
liability, claim, obligation, damage or expense (including reasonable legal
fees and expenses) that Seller may incur or suffer arising out of or resulting
from the Assumed Liabilities.
5. Personnel. Seller and Buyer acknowledge that, as of
the date hereof, the contracts of employment of the Business Employees are
hereby transferred by operation of law to Buyer.
6. Debts and Debtors. Seller shall be under no
obligation whatsoever to collect any of debts included among the Purchased
Assets but, insofar as in the normal course of trading
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Seller collects any of such debts, Seller shall forthwith account for the same
in full to Buyer.
7. Further Assurances. At and after the date hereof,
Seller will execute and deliver such further instruments of conveyance and
transfer as Buyer may reasonably request to convey and transfer effectively to
Buyer the Purchased Assets.
8. Governing Law. This Agreement shall be construed in
accordance with and be governed by the laws of Australia.
9. Amendments. Only those amendments and additions to
this contact that are made in writing and signed by the parties are valid.
10. Successors and Assigns. This Agreement, and all
rights and powers granted hereby, will bind and inure to the benefit of the
parties hereto and their respective successors and assigns.
11. Counterparts. This Agreement may be executed in two
or more counterparts, each of which shall be deemed an original but all of
which together shall constitute one and the same instrument.
12. Severability. If any provision of this Agreement or
part thereof shall to any extent be or become invalid or unenforceable the
validity of the remaining provisions will be unaffected. With regard to such
invalid or unenforceable provisions the parties shall agree upon any necessary
and reasonable adjustment of the Agreement in order to secure the vital
interests of the parties and the main objectives prevailing at the time of
execution of the Agreement.
_____________________
4
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This contract has been executed in two copies of which the parties
have taken one each.
Spectra Physics Pty. Ltd. [Buyer]
By: ____________________ By: _____________________
Title: _____________ Title:_______________
5
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EXHIBIT A
ASSETS
6
<PAGE> 161
Exhibit A
France
TRANSFER OF GOING BUSINESS
BETWEEN THE UNDERSIGNED :
SPECTRA-PHYSICS S.A., a French corporation ("societe anomyne") with a
share capital of FF 9,500,000, with its registered office at Avenue de
Scandinava, ZA de Courtaboeuf, BP 28, 91941 Les Ulis Cedex, France represented
by the managing director Mr. Nicholas de Moustier, duly authorized for the
purposes thereof,
hereinafter referred to as "the Seller,"
PARTY OF THE FIRST PART,
AND
[ ], a [ ] corporation ("societe anomyne") with a share
capital of FF [ ], with its registered office at [ ] represented by the
managing director [ ], duly authorized for the purposes thereof,
hereinafter referred to as "the Buyer,"
PARTY OF THE SECOND PART,
WHEREAS
A. Seller is engaged in the business of marketing, selling and
servicing bar code scanners and scanner systems (the "Business").
B. Upon the terms and subject to the conditions of this
Agreement, Seller desires to sell, convey, assign, transfer and deliver to
Buyer all the assets and liabilities previously related to the Business and
Buyer desires to purchase and acquire from Seller such assets and liabilities.
In consideration of the mutual covenants contained herein and
intending to be legally bound hereby, the parties hereto agree as follows:
<PAGE> 162
ARTICLE I
PURPOSE
As of the date hereof, Seller hereby sells, conveys, assigns,
transfers and delivers to Buyer, and Buyer hereby purchases and acquires from
Seller, the Purchased Assets, subject to the Assumed Liabilities.
ARTICLE II
DESCRIPTIONS OF THE ITEMS TRANSFERRED AND ITEMS EXCLUDED
2.1 ITEMS TRANSFERRED
2.1.1 Purchased Assets. The sale includes all
intangible and tangible elements of the Seller existing on the date hereof that
are used primarily in the Business, except for the Excluded Assets (as defined
below the "Purchased Assets"). Said elements of the going Business include:
A. Intangible elements
- the goodwill;
- license, distribution, dealer,
sales representative,
suppliers, service, and other
commercial agreements, if
any;
- sales orders, purchase orders,
quotations and bids;
- prepaid items, if any;
- licenses, permits,
authorizations and approvals,
if any;
- customer lists;
- books and records;
- technical manuals and product
and sales literature;
- all rights under express or
implied warranties; and
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<PAGE> 163
- all claims or defenses relating
to any of the foregoing or
the Assumed Liabilities.
B. Tangible elements
- machinery parts, tools,
equipment and furniture;
- inventory;
- accounts receivable;
2.1.2 Assumed Liabilities
The term "Assumed Liabilities" shall mean all
liabilities and obligations (contractual or otherwise) of every kind, nature
and description, known or unknown, of the Seller that relate primarily to the
Business, the conduct of the Business or the Purchased Assets, excepting only
the Excluded Liabilities (as hereinafter defined). For avoidance of doubt,
Assumed International Liabilities shall include all obligations related to the
Business's offices located in Belgium and Spain (the "Purchased International
Offices")(such locations being further specified in Exhibit 1 hereto).
2.2 ITEMS EXCLUDED
2.2.1 Excluded Assets
The term "Excluded Assets" shall mean cash and cash equivalents,
accounts receivable represented by discounted notes, any assets or rights not
used primarily in, or primarily benefitting, the Business and any rights under
insurance policies except for claims related to the Business that are covered
under such insurance policies but that have not yet been submitted. Excluded
Assets shall specifically include leasehold rights and improvements (other than
with respect to the Purchaed International Offices as hereinafter defined),
central management information systems and related office equipment (but not
including any readily-movable local area network and wide area communication
network used primarily in the Business), telephone systems, other office
equipment (such as photocopier and audio visual equipment) not used exclusively
in the Business), security deposits, any claims for refunds of taxes paid by
the Seller, and except as otherwise agreed in writing by or on behalf of Buyer,
any rights in or to the name "Spectra-Physics" or the Spectra-Physics stylized
"S" logo.
2.2.2 Excluded Liabilities
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<PAGE> 164
The term "Excluded Liabilities" shall mean the following liabilities
of the Seller: (i) liabilities for taxes, except as otherwise agreed upon in
writing by or on behalf of Buyer, (ii) liabilities or obligations for facility
costs, such as obligations under real estate leases (except with respect to the
Purchased International Offices), (iii) trade payables for goods and services
relating to the overall operations of Seller, such as for office supplies,
facility maintenance services and telephone service (except with respect to the
Purchased International Offices), and (iv) recourse liabilities in respect of
accounts receivable represented by discounted notes.
ARTICLE III
DECLARATIONS
3.1 DECLARATIONS OF SELLER.
(a) On the Title of the Property. Seller
certifies that it is the owner of the Business described above, having created
it in October 1987.
(b) On the Mortgage Registrations. Seller
declares that the going business transferred is not encumbered by any mortgage
registration, lien or any other type of security interest whatsoever.
(c) On the Turnover and Commercial Results.
Buyer acknowledges that the business transferred is only part of Seller's total
business and therefore accepts that the following financial data relating to
the business transferred are the only estimates:
(1) for the fiscal year 1995:
Turnover............ 56,240 FRF
Income (Loss)....... 1,175 FRF
(2) for the fiscal year 1994:
Turnover............ 63,767 FRF
Income (Loss)....... 7,466 FRF
(3) for the fiscal year 1993:
Turnover............ 48,703 FRF
Income (Loss)....... 3,500 FRF
(4) for the period January 1, 1996 to
March 31, 1996:
- 4 -
<PAGE> 165
Turnover............ 23,006 FRF
Income (Loss)....... 1,475 FRF
(d) Business Employees. The term "Business Employees"
shall mean (i) those employees of Seller who shall, as the date hereof, become
employees of Buyer as agreed upon in writing by or on behalf of Buyer and (ii)
any other employees of Seller on the date hereof whose work relates to the
business and operations of the Business, such as employees who sell and service
the products sold by the Business, employees who process orders and collect
receivables primarily with respect to products sold by the Business, support
staff whose primary function is to support such salesmen, servicemen, order
processors and accounts receivable clerks and managerial employees whose
function is to manage such salesmen, servicemen, order processors, accounts
receivable clerks and staff.
As of the date hereof, Seller and Buyer acknowledge that the
contracts of employment of the Business Employees are hereby transferred by
operation of law to Buyer. In this respect the provisions under article L
122-12 of French Labour Code have been acknowledged by Seller and Buyer.
3.2 DECLARATION BY THE BUYER. Buyer hereby (i) assumes
and agrees to pay, perform, satisfy or otherwise discharge when due the Assumed
Liabilities and (ii) agrees to indemnify, defend and hold harmless Seller and
its affiliates from and against any loss, liability, claim, obligation, damage
or expense (including reasonable legal fees and expenses) that Seller may incur
or suffer arising out of or resulting from the Assumed Liabilities.
ARTICLE IV
PRICE
This transfer is accepted in consideration for a price of the
equivalent in FF of USD [ ] for the Purchased Assets(1), as described under
articles 2.1.1, excluding duties and taxes.
This price can be broken down as follows, the itemization set
forth below being provided only for the purposes of complying with the
provisions of article 1 of the law of March
- -------------
(1) Amount shall equal U.S. dollar equivalent of 100% of the book
value of the tangible elements,inventory and accounts
receivable, plus 105% of the book value of the intangible
elements.
- 5 -
<PAGE> 166
17, 1909, but shall entail no consequences or claims regarding the valuation of
the individual assets:
<TABLE>
<S> <C> <C>
- - Intangible elements equivalent in FF of USD [ ]
- - Tangible elements equivalent in FF of USD [ ]
- - Inventory equivalent in FF of USD [ ]
- - Accounts receivable equivalent in FF of USD [ ]
--------
TOTAL equivalent in FF of USD [ ]
</TABLE>
The above prices shall be increased by the VAT in force for
each category of assets transferred as are subject to VAT. An invoice shall be
issued for the transfer of such assets subject to VAT.
In accordance, however, with the provisions of the
administrative directive of February 22, 1990, published in the Official Tax
Bulletin 3A-6-90 in respect of articles 261-3 1 a and 210 Section 3 of Annex II
of the General Tax Code, the Buyer shall undertake, in exchange for exemption
for the investment assets transferred, the obligation to submit any later
transfer of these investment assets to VAT, and, if the case should arise, to
carry out the regularizations as required by articles 210 and 215 of Annex II
of the General Tax Code.
The Seller shall provide the Buyer with the standard tax form
in order to allow the latter to fulfill its obligations under Decree n 91-1146
dated November 7, 1991.
The price and the above allocation thereof shall be adjusted
upwards or downward to the extent that the amount which equals 105% of the
aggregate net book value of the Purchased Assets and the Assumed Liabilities
(i.e., book value of such assets minus liabilities), as reflected on a closing
balance sheet to be prepared after the date hereof, is greater or lesser than
USD [ ].(2)
- ------------------
(2) Amount shall equal U.S. dollar equivalent of 105% of aggregate
net book value of the Purchase Assets and the Assumed
Liabilities.
- 6 -
<PAGE> 167
ARTICLE V
PAYMENT
The price specified in Article IV is being paid by the Buyer
by check or wire transfer in the amount of USD [ ] in cash and the
balance (USD [ ]) by assumption of the Assumed Liabilities.
Any adjustment to the price required by Article IV will be
settled between the parties after the date hereof.
ARTICLE VI
FORMALITIES, PUBLICITY
The Buyer shall fulfill the publicity formalities required by
the Law of March 17, 1909, and any objections shall be received at the office
of the Seller indicated here above.
In addition, the Buyer shall be in charge of notifying this
Agreement wherever required, and in particular, to the Social Security and Tax
Administrations.
ARTICLE VII
DECLARATION TO THE TAX ADMINISTRATION
Each of the undersigned parties has affirmed, subject to the
penalties provided by Article 8 of the Law of April 18, 1918, (Article 1837 of
the French Tax Code) that this agreement states the total agreed price.
They acknowledge that they are aware of the penalties incurred
in the event of the inaccuracy of this affirmation.
ARTICLE VIII
MISCELLANEOUS
8.1 Further Assurances. At and after the date hereof,
Seller will execute and deliver such further instruments of conveyance and
transfer as Buyer may reasonably request to convey and transfer effectively to
Buyer the Purchased Assets.
8.2 Governing Law. This Agreement shall be construed in
accordance with and be governed by the laws of France.
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<PAGE> 168
8.3 Amendments. Only those amendments and additions to
this contact that are made in writing and signed by the parties are valid.
8.4 Successors and Assigns. This Agreement, and all
rights and powers granted hereby, will bind and inure to the benefit of the
parties hereto and their respective successors and assigns.
8.5 Counterparts. This Agreement may be executed in two
or more counterparts, each of which shall be deemed an original but all of
which together shall constitute one and the same instrument.
8.6 Severability. If any provision of this Agreement or
part thereof shall to any extent be or become invalid or unenforceable the
validity of the remaining provisions will be unaffected. With regard to such
invalid or unenforceable provisions, the parties shall agree upon any necessary
and reasonable adjustment of the Agreement in order to secure the vital
interests of the parties and the main objectives prevailing at the time of
execution of the Agreement.
8.7 Authorizations. The bearer of an original hereof has
full authorization for the purpose of effecting all registration and publicity
formalities required by law.
_____________________
This contract has been duplicated in the French and the English language, both
texts being equally authentic, and executed in two copies in each language of
which the parties have taken one copy each. In case of any divergence of
interpretation the English text shall prevail.
Spectra Physics SA [Buyer]
By: _____________________ By: ______________________
Title: ______________ Title: _______________
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<PAGE> 169
Exhibit 1
Assumed Leases
[Madrid Sales Office Lease]
[Brussels Sales Office Lease]
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<PAGE> 170
Exhibit A
Germany
AGREEMENT ON THE SALE AND PURCHASE OF A BUSINESS OPERATION
THIS Agreement on the Sale and Purchase of a Business Operation dated May [ ],
1996 (the "Agreement")
BETWEEN
Spectra Physics GmbH (Registered at Amtsgericht Darmstadt, number HR B 1356), a
company incorporated under the laws of Germany with its registered office
located at Siemennastrasse 20, D-64213 Darmstadt, Germany (hereinafter referred
to as "the Seller"),
AND
[ ] (hereinafter referred to as "the Buyer").
WHEREAS, Seller is engaged in the business of marketing, selling and servicing
bar code scanners and scanner systems (the "Business") and
WHEREAS, upon the terms and subject to the conditions of this Agreement, Seller
desires to sell, convey, assign, transfer and deliver to Buyer substantially
all the assets and liabilities previously related to the Business and Buyer
desires to purchase and acquire from Seller such assets and liabilities,
NOW THEREFORE, in consideration of the promises and mutual covenants contained
herein, the parties agree as follows:
TERMS
In consideration of the mutual covenants contained herein and
intending to be legally bound hereby, the parties hereto agree as follows:
1. Sale and Purchase of Purchased Assets. As of the
date hereof, Seller hereby sells, conveys, assigns, transfers and delivers to
Buyer, and Buyer hereby purchases and acquires from Seller, the Purchased
Assets, subject to the Assumed Liabilities (each as defined below).
2. Certain Definitions.
- 1 -
<PAGE> 171
(a) The term "Purchased Assets" shall mean all
assets, properties and rights (contractual or otherwise) of every kind, nature
and description (including, without limitation, (i) furniture, machinery,
parts, tools and equipment, if any, (ii) inventory, (iii) accounts receivable,
(iv) license, distribution, dealer, sales representative, supplier, service,
and other commercial agreements, if any, (v) sales orders, purchase orders,
quotations, and bids, (vi) prepaid items, if any, (vii) licenses, permits,
authorizations and approvals, if any, (viii) customer lists, (ix) books and
records, (x) technical manuals and product and sales literature, (xi) all
rights under express or implied warranties, (xii) goodwill and (xiii) all
claims or defenses relating to any of the foregoing or to the Assumed
Liabilities) of Seller existing on the date hereof that are used primarily in
the Business, except for the Excluded Assets (as defined below). The Purchased
Assets are listed on Schedule A hereto.
(b) The term "Excluded Assets" shall mean cash
and cash equivalents, accounts receivable represented by discounted notes, any
assets or rights not used primarily in, or primarily benefitting, the Business
and any rights under insurance policies except for claims related to the
Business that are covered under such insurance policies but that have not yet
been submitted. Excluded Assets shall specifically include leasehold rights
and improvements, central management information systems and related office
equipment (but not including any readily-movable local area network and wide
area communication network used primarily in the Business), telephone systems,
other office equipment (such as photocopier and audio visual equipment) not
used exclusively in the Business, security deposits, any claims for refunds of
taxes paid by the Seller, and except as otherwise agreed in writing by or on
behalf of Buyer, any rights in or to the name "Spectra-Physics" or the
Spectra-Physics stylized "S" logo.
(c) The term "Assumed Liabilities" shall mean all
liabilities and obligations (contractual or otherwise) of every kind, nature
and description, known or unknown, of Seller that primarily relate to the
Business, the conduct of the Business or the Purchased Assets, excepting only
the Excluded Liabilities (as hereinafter defined). The Assumed Liabilities are
listed on Schedule B hereto.
(d) The term "Excluded Liabilities" shall mean
the following liabilities of the Seller: (i) liabilities for taxes, except as
otherwise agreed upon in writing by or on behalf of Buyer, (ii) liabilities or
obligations for facility costs, such as obligations under real estate leases,
(iii) trade
2
<PAGE> 172
payables for goods and services relating to the overall operations of Seller,
such as for office supplies, facility maintenance services and telephone
service, and (iv) recourse liabilities in respect of accounts receivable
represented by discounted notes.
(e) The term "Business Employees" shall mean (i)
those employees of Seller who shall, as of the date hereof, become employees of
Buyer as agreed upon in writing by or on behalf of Buyer and (ii) any other
employees of Seller hired after May [ ], 1996 and employed by Seller on the
date hereof whose work relates to the business and operations of the Business,
such as employees who sell and service the products sold by the Business,
employees who process orders and collect receivables primarily with respect to
products sold by the Business, support staff whose primary function is to
support such salesmen, servicemen, order processors and accounts receivable
clerks and managerial employees whose function is to manage such salesmen,
servicemen, order processors, accounts receivable clerks and staff.
3. Purchase Price. The purchase price ("Purchase
Price") of the Purchased Assets shall correspond to an amount equal to 150% of
the aggregate net book value of the Purchased Assets and the Assumed
Liabilities (i.e., book value of such assets minus liabilities), as reflected
on a closing balance sheet to be prepared after the date hereof. Seller hereby
acknowledges receipt on the date hereof of payment of an estimate of the
Purchase Price. Such payment will be adjusted, as necessary, to reflect the
actual Purchase Price as determined pursuant to the closing balance sheet
referred to above.
4. Assumption of Liabilities. As of the date hereof,
Buyer hereby (i) assumes and agrees to pay, perform, satisfy or otherwise
discharge when due the Assumed Liabilities and (ii) agrees to indemnify, defend
and hold harmless Seller and its affiliates from and against any loss,
liability, claim, obligation, damage or expense (including reasonable legal
fees and expenses) that Seller may incur or suffer arising out of or resulting
from the Assumed Liabilities.
5. Personnel. Seller and Buyer acknowledge that, as of
the date hereof, the contracts of employment of the Business Employees are
hereby transferred by operation of law to Buyer, subject to the satisfaction of
any legal requirements regarding the transfer of employment of such employees.
In this respect the provisions under Section 613(a) BGB have been acknowledged
by Seller and Buyer.
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<PAGE> 173
6. Debts and Debtors. Seller shall be under no
obligation whatsoever to collect any of debts included among the Purchased
Assets but, insofar as in the normal course of trading Seller collects any of
such debts, Seller shall forthwith account for the same in full to Buyer.
7. Value Added Tax. The purchase price is exclusive of
value-add tax ("VAT"), if any. The parties hereto intend that Section 1a
Umsatzsteuergesetz (German VAT code) and no. 5 of the "Richtlinien Zu Section 1
Umsatzsteuergesetz" (directives to Section 1 German VAT Code) shall apply to
the transfer of the Business and Purchased Assets and Assumed Liabilities so
that the sale is treated a neither a supply of goods nor a supply of services.
If any VAT is chargeable on any supply by Seller under this
Agreement, Buyer shall pay to Seller the amount of that VAT and Seller shall
issue to Buyer a proper tax invoice in respect of that VAT.
8. Further Assurances. At and after the date hereof,
Seller will execute and deliver such further instruments of conveyance and
transfer as Buyer may reasonably request to convey and transfer effectively to
Buyer the Purchased Assets.
9. Governing Law. This Agreement shall be construed in
accordance with and be governed by the laws of Germany.
10. Amendments. Only those amendments and additions to
this contact that are made in writing and signed by the parties are valid.
11. Successors and Assigns. This Agreement, and all
rights and powers granted hereby, will bind and inure to the benefit of the
parties hereto and their respective successors and assigns.
12. Counterparts. This Agreement may be executed in two
or more counterparts, each of which shall be deemed an original but all of
which together shall constitute one and the same instrument.
13. Severability. If any provision of this Agreement or
part thereof shall to any extent be or become invalid or unenforceable, the
validity of the remaining provisions will be unaffected. With regard to such
invalid or unenforceable provisions, the parties shall agree upon any necessary
and reasonable adjustment of the Agreement in order to secure the
4
<PAGE> 174
vital interests of the parties and the main objectives prevailing at the time
of execution of the Agreement.
_____________________
This contract has been executed in two copies of which the parties
have taken one each. Should this agreement be issued in different languages,
the English text shall prevail.
Spectra Physics GmbH [Buyer]
By: _____________________ By: ______________________
Title: ______________ Title: _______________
5
<PAGE> 175
Schedule A
Purchased Assets
6
<PAGE> 176
Schedule B
Assumed Liabililities
7
<PAGE> 177
Exhibit A
Italy
AGREEMENT ON THE SALE AND PURCHASE OF A BUSINESS OPERATION
THIS Agreement on the Sale and Purchase of a Business Operation dated May [ ],
1996 (the "Agreement")
BETWEEN
Spectra Physics S.r.l. (Registered no. P.IVA e C.F. 07501230150), a company
incorporated under the laws of Italy with its registered office located at
Centro Direzionale Lombardo, Plazzo E/1 - Via Roma, 108, 20060 Cassina de
Pecchi (MI), Italy (hereinafter referred to as "the Seller"),
represented by Mr. Nicholas Bisconti, Financial Affaires Manager of Seller,
duly empowered for the purposes of this Agreement,
AND
[ ] (hereinafter referred to as "the Buyer")
represented by [ ], duly empowered for the purposes of this
Agreement.
WHEREAS, Seller is engaged in the business of marketing, selling and servicing
bar code scanners and scanner systems (the "Business") and
WHEREAS, upon the terms and subject to the conditions of this Agreement, Seller
desires to sell, convey, assign, transfer and deliver to Buyer substantially
all the assets and liabilities previously related to the Business and Buyer
desires to purchase and acquire from Seller such assets and liabilities,
NOW THEREFORE, in consideration of the promises and mutual covenants contained
herein, the parties agree as follows:
TERMS
In consideration of the mutual covenants contained herein and
intending to be legally bound hereby, the parties hereto agree as follows:
1
<PAGE> 178
1. Sale and Purchase of Purchased Assets. As of the
date hereof, Seller hereby sells, conveys, assigns, transfers and delivers to
Buyer, and Buyer hereby purchases and acquires from Seller, the Purchased
Assets, subject to the Assumed Liabilities (each as defined below).
2. Certain Definitions.
(a) The term "Purchased Assets" shall mean all
assets, properties and rights (contractual or otherwise) of every kind, nature
and description (including, without limitation, (i) furniture, machinery,
parts, tools and equipment, if any, (ii) inventory, (iii) accounts receivable,
(iv) license, distribution, dealer, sales representative, supplier, service,
and other commercial agreements, if any, (v) sales orders, purchase orders,
quotations, and bids, (vi) prepaid items, if any, (vii) licenses, permits,
authorizations and approvals, if any, (viii) customer lists, (ix) books and
records, (x) technical manuals and product and sales literature, (xi) all
rights under express or implied warranties, (xii) goodwill and (xiii) all
claims or defenses relating to any of the foregoing or to the Assumed
Liabilities) of Seller existing on the date hereof that are used primarily in
the Business, except for the Excluded Assets (as defined below). A list of the
Purchased Assets, by category, is attached as Exhibit A hereto.
(b) The term "Excluded Assets" shall mean cash
and cash equivalents, accounts receivable represented by discounted notes, any
assets or rights not used primarily in, or primarily benefitting, the Business
and any rights under insurance policies except for claims related to the
Business that are covered under such insurance policies but that have not yet
been submitted. Excluded Assets shall specifically include leasehold rights
and improvements, central management information systems and related office
equipment (but not including any readily-movable local area network and wide
area communication network used primarily in the Business), telephone systems,
other office equipment (such as photocopier and audio visual equipment) not
used exclusively in the Business, security deposits, any claims for refunds of
taxes paid by the Seller, and except as otherwise agreed in writing by or on
behalf of Buyer, any rights in or to the name "Spectra-Physics" or the
Spectra-Physics stylized "S" logo.
(c) The term "Assumed Liabilities" shall mean all
liabilities and obligations (contractual or otherwise) of every kind, nature
and description, known or unknown, of Seller that
- 2 -
<PAGE> 179
primarily relate to the Business, the conduct of the Business or the Purchased
Assets, excepting only the Excluded Liabilities (as hereinafter defined).
(d) The term "Excluded Liabilities" shall mean
the following liabilities of the Seller: (i) liabilities for taxes, except as
otherwise agreed upon in writing by or on behalf of Buyer, (ii) liabilities or
obligations for facility costs, such as obligations under real estate leases,
(iii) trade payables for goods and services relating to the overall operations
of Seller, such as for office supplies, facility maintenance services and
telephone service, and (iv) recourse liabilities in respect of accounts
receivable represented by discounted notes.
(e) The term "Business Employees" shall mean (i)
those employees of Seller who shall, as of the date hereof, become employees of
Buyer as agreed upon in writing by or on behalf of Buyer and (ii) any other
employees of Seller hired after May [ ], 1996 and employed by Seller on the
date hereof whose work relates to the business and operations of the Business,
such as employees who sell and service the products sold by the Business,
employees who process orders and collect receivables primarily with respect to
products sold by the Business, support staff whose primary function is to
support such salesmen, servicemen, order processors and accounts receivable
clerks and managerial employees whose function is to manage such salesmen,
servicemen, order processors, accounts receivable clerks and staff.
3. Purchase Price. The purchase price ("Purchase
Price") of the Purchased Asset shall correspond to an amount equal to the
aggregate net book value of the Purchased Assets and the Assumed Liabilities
(i.e., book value of such assets minus liabilities), as reflected on a closing
balance sheet to be prepared after the date hereof, plus US $300,000. Seller
hereby acknowledges receipt on the date hereof of payment of an estimate of the
Purchase Price. Such payment will be adjusted, as necessary, to reflect the
actual Purchase Price as determined pursuant to the closing balance sheet
referred to above.
4. Assumption of Liabilities. As of the date hereof,
Buyer hereby (i) assumes and agrees to pay, perform, satisfy or otherwise
discharge when due the Assumed Liabilities and (ii) agrees to indemnify, defend
and hold harmless Seller and its affiliates from and against any loss,
liability, claim, obligation, damage or expense (including reasonable legal
fees
- 3 -
<PAGE> 180
and expenses) that Seller may incur or suffer arising out of or resulting from
the Assumed Liabilities.
5. Personnel. As of the date hereof, Buyer agrees to
employ the Business Employees on the terms and conditions as they are currently
employed. All costs relating to the Business Employees shall be assumed
by Buyer.
Buyer acknowledges that Seller is not required to give notice
pursuant to Article 47 of Law 428/90.
6. Further Assurances. At and after the date hereof,
Seller will execute and deliver such further instruments of conveyance and
transfer as Buyer may reasonably request to convey and transfer effectively to
Buyer the Purchased Assets.
7. Governing Law. This Agreement shall be construed in
accordance with and be governed by the laws of Italy.
8. Amendments. Only those amendments and additions to
this contact that are made in writing and signed by the parties are valid.
9. Successors and Assigns. This Agreement, and all
rights and powers granted hereby, will bind and inure to the benefit of the
parties hereto and their respective successors and assigns.
10. Counterparts. This Agreement may be executed in two
or more counterparts, each of which shall be deemed an original but all of
which together shall constitute one and the same instrument.
11. Severability. If any provision of this Agreement or
part thereof shall to any extent be or become invalid or unenforceable the
validity of the remaining provisions will be unaffected with regard to such
invalid or unenforceable provisions, the parties shall agree upon any necessary
and reasonable adjustment of the Agreement in order to secure the vital
interests of the parties and the main objectives prevailing at the time of
execution of the Agreement.
_____________________
This contract has been executed in two copies of which the parties
have taken one each. Should the contract be issued in different languages, the
English text shall prevail.
- 4 -
<PAGE> 181
Spectra Physics S.R.L. [Buyer]
By: _____________________ By: ____________________
Title: ______________ Title: _____________
- 5 -
<PAGE> 182
EXHIBIT A
ASSETS
- 6 -
<PAGE> 183
Exhibit A
Japan
AGREEMENT ON THE SALE AND PURCHASE OF A BUSINESS OPERATION
THIS Agreement on the Sale and Purchase of a Business Operation dated May [ ],
1996 (the "Agreement")
BETWEEN
Spectra Physics K.K., a company incorporated under the laws of Japan with its
registered office located at Daiwa Nakameguro Building, 4-6-1, Nakameguro,
Megouro-ku, Tokyo 153, Japan (hereinafter referred to as "the Seller"),
AND
[ ] (hereinafter referred to as "the Buyer").
WHEREAS, Seller is engaged in the business of marketing, selling and servicing
bar code scanners and scanner systems (the "Business") and
WHEREAS, upon the terms and subject to the conditions of this Agreement, Seller
desires to sell, convey, assign, transfer and deliver to Buyer substantially
all the assets and liabilities previously related to the Business and Buyer
desires to purchase and acquire from Seller such assets and liabilities,
NOW THEREFORE, in consideration of the promises and mutual covenants contained
herein, the parties agree as follows:
TERMS
In consideration of the mutual covenants contained herein and
intending to be legally bound hereby, the parties hereto agree as follows:
1. Sale and Purchase of Purchased Assets. As of the
date hereof, Seller hereby sells, conveys, assigns, transfers and delivers to
Buyer, and Buyer hereby purchases and acquires from Seller, the Purchased
Assets, subject to the Assumed Liabilities (each as defined below).
2. Certain Definitions.
(a) The term "Purchased Assets" shall mean all
assets, properties and rights (contractual or otherwise) of every
<PAGE> 184
kind, nature and description (including, without limitation, (i) furniture,
machinery, parts, tools and equipment, if any, (ii) inventory, (iii) accounts
receivable, (iv) license, distribution, dealer, sales representative, supplier,
service, and other commercial agreements, if any, (v) sales orders, purchase
orders, quotations, and bids, (vi) prepaid items, if any, (vii) licenses,
permits, authorizations and approvals, if any, (viii) customer lists, (ix)
books and records, (x) technical manuals and product and sales literature, (xi)
all rights under express or implied warranties, (xii) goodwill and (xiii) all
claims or defenses relating to any of the foregoing or to the Assumed
Liabilities) of Seller existing on the date hereof that are used primarily in
the Business, except for the Excluded Assets (as defined below). A list of the
Purchased Assets, by category, is attached as Exhibit A hereto.
(b) The term "Excluded Assets" shall mean cash
and cash equivalents, accounts receivable represented by discounted notes, any
assets or rights not used primarily in, or primarily benefitting, the Business
and any rights under insurance policies except for claims related to the
Business that are covered under such insurance policies but that have not yet
been submitted. Excluded Assets shall specifically include leasehold rights
and improvements, central management information systems and related office
equipment (but not including any readily-movable local area network and wide
area communication network used primarily in the Business), telephone systems,
other office equipment (such as photocopier and audio visual equipment) not
used exclusively in the Business, security deposits, any claims for refunds of
taxes paid by the Seller, and except as otherwise agreed in writing by or on
behalf of Buyer, any rights in or to the name "Spectra-Physics" or the
Spectra-Physics stylized "S" logo.
(c) The term "Assumed Liabilities" shall mean all
liabilities and obligations (contractual or otherwise) of every kind, nature
and description, known or unknown, of Seller that primarily relate to the
Business, the conduct of the Business or the Purchased Assets, excepting only
the Excluded Liabilities (as hereinafter defined).
(d) The term "Excluded Liabilities" shall mean
the following liabilities of the Seller: (i) liabilities for taxes, except as
otherwise agreed upon in writing by or on behalf of Buyer, (ii) liabilities or
obligations for facility costs, such as obligations under real estate leases,
(iii) trade payables for goods and services relating to the overall operations
of Seller, such as for office supplies, facility
2
<PAGE> 185
maintenance services and telephone service, and (iv) recourse liabilities in
respect of accounts receivable represented by discounted notes.
(e) The term "Business Employees" shall mean (i)
those employees of Seller who shall, as of the date hereof, become employees of
Buyer as agreed upon in writing by or on behalf of Buyer and (ii) any other
employees of Seller hired after May [ ], 1996 and employed by Seller on the
date hereof whose work relates to the business and operations of the Business,
such as employees who sell and service the products sold by the Business,
employees who process orders and collect receivables primarily with respect to
products sold by the Business, support staff whose primary function is to
support such salesmen, servicemen, order processors and accounts receivable
clerks and managerial employees whose function is to manage such salesmen,
servicemen, order processors, accounts receivable clerks and staff.
3. Purchase Price. The purchase price ("Purchase
Price") of the Purchased Assets shall correspond to an amount equal to 105% of
the aggregate net book value of the Purchased Assets and the Assumed
Liabilities (i.e., book value of such assets minus liabilities), as reflected
on a closing balance sheet to be prepared after the date hereof. Seller hereby
acknowledges receipt on the date hereof of payment of an estimate of the
Purchase Price. Such payment will be adjusted, as necessary, to reflect the
actual Purchase Price as determined pursuant to the closing balance sheet
referred to above.
4. Assumption of Liabilities. As of the date hereof,
Buyer hereby (i) assumes and agrees to pay, perform, satisfy or otherwise
discharge when due the Assumed Liabilities and (ii) agrees to indemnify, defend
and hold harmless Seller and its affiliates from and against any loss,
liability, claim, obligation, damage or expense (including reasonable legal
fees and expenses) that Seller may incur or suffer arising out of or resulting
from the Assumed Liabilities.
5. Personnel. Seller and Buyer acknowledge that, as of
the date hereof, the contracts of employment of the Business Employees are
hereby transferred to Buyer, subject to the satisfaction of any legal
requirements regarding the transfer of employment of such employees.
6. Debts and Debtors. Seller shall be under no
obligation whatsoever to collect any of debts included among the Purchased
Assets but, insofar as in the normal course of trading
3
<PAGE> 186
Seller collects any of such debts, Seller shall forthwith account for the same
in full to Buyer.
7. Further Assurances. At and after the date hereof,
Seller will execute and deliver such further instruments of conveyance and
transfer as Buyer may reasonably request to convey and transfer effectively to
Buyer the Purchased Assets.
8. Governing Law. This Agreement shall be construed in
accordance with and be governed by the laws of Japan.
9. Amendments. Only those amendments and additions to
this contact that are made in writing and signed by the parties are valid.
10. Successors and Assigns. This Agreement, and all
rights and powers granted hereby, will bind and inure to the benefit of the
parties hereto and their respective successors and assigns.
11. Counterparts. This Agreement may be executed in two
or more counterparts, each of which shall be deemed an original but all of
which together shall constitute one and the same instrument.
12. Severability. If any provision of this Agreement or
part thereof shall to any extent be or become invalid or unenforceable the
validity of the remaining provisions will be unaffected with regard to such
invalid or unenforcable provisions, the parties shall agree upon any necessary
and reasonable adjustment of the Agreement in order to secure the vital
interests of the parties and the main objectives prevailing at the time of
execution of the Agreement.
_____________________
This contract has been executed in two copies of which the parties
have taken one each. Should this agreement be issued in different languages,
the English text shall prevail.
Spectra Physics K.K. [Buyer]
By: _____________________ By: ___________________
Title: ______________ Title: ____________
4
<PAGE> 187
EXHIBIT A
ASSETS
5
<PAGE> 188
Exhibit A
United Kingdom
AGREEMENT ON THE SALE AND PURCHASE OF A BUSINESS OPERATION
THIS Agreement on the Sale and Purchase of a Business Operation dated May [ ],
1996 (the "Agreement")
BETWEEN
Spectra Physics Ltd. (no. 909156), a company incorporated under the laws of
England with its registered office located at Boundary Way, Hemel Hempstead,
Hertfordshire, HP2 7SH, England (hereinafter referred to as "the Seller"),
AND
[ ] (hereinafter referred to as "the Buyer").
WHEREAS, Seller is engaged in the business of marketing, selling and servicing
bar code scanners and scanner systems (the "Business") and
WHEREAS, upon the terms and subject to the conditions of this Agreement, Seller
desires to sell, convey, assign, transfer and deliver to Buyer on a going
concern basis substantially all the assets and liabilities previously related
to the Business and Buyer desires to purchase and acquire from Seller such
assets and liabilities,
NOW THEREFORE, in consideration of the promises and mutual covenants contained
herein, the parties agree as follows:
TERMS
In consideration of the mutual covenants contained herein and
intending to be legally bound hereby, the parties hereto agree as follows:
1. Sale and Purchase of Purchased Assets. As of the
date hereof, Seller hereby sells, conveys, assigns, transfers and delivers to
Buyer, and Buyer hereby purchases and acquires from Seller, the Purchased
Assets on a going concern basis, subject to the Assumed Liabilities (each as
defined below).
<PAGE> 189
2. Certain Definitions.
(a) The term "Purchased Assets" shall mean all
assets, properties and rights (contractual or otherwise) of every kind, nature
and description (including, without limitation, (i) furniture, machinery,
parts, tools and equipment, if any, (ii) inventory, (iii) accounts receivable,
(iv) license, distribution, dealer, sales representative, supplier, service,
and other commercial agreements, if any, (v) sales orders, purchase orders,
quotations, and bids, (vi) prepaid items, if any, (vii) licenses, permits,
authorizations and approvals, if any, (viii) customer lists, (ix) books and
records, (x) technical manuals and product and sales literature, (xi) all
rights under express or implied warranties, (xii) goodwill and (xiii) all
claims or defenses relating to any of the foregoing or to the Assumed
Liabilities) of Seller existing on the date hereof that are used primarily in
the Business, except for the Excluded Assets (as defined below).
(b) The term "Excluded Assets" shall mean cash
and cash equivalents, accounts receivable represented by discounted notes, any
assets or rights not used primarily in, or primarily benefitting, the Business
and any rights under insurance policies except for claims related to the
Business that are covered under such insurance policies but that have not yet
been submitted. Excluded Assets shall specifically include leasehold rights
and improvements, central management information systems and related office
equipment (but not including any readily-movable local area network and wide
area communication network used primarily in the Business), telephone systems,
other office equipment (such as photocopier and audio visual equipment) not
used exclusively in the Business, security deposits, any claims for refunds of
taxes paid by the Seller, and except as otherwise agreed in writing by or on
behalf of Buyer, any rights in or to the name "Spectra-Physics" or the
Spectra-Physics stylized "S" logo.
(c) The term "Assumed Liabilities" shall mean all
liabilities and obligations (contractual or otherwise) of every kind, nature
and description, known or unknown, of Seller that primarily relate to the
Business, the conduct of the Business or the Purchased Assets, excepting only
the Excluded Liabilities (as hereinafter defined).
(d) The term "Excluded Liabilities" shall mean
the following liabilities of the Seller: (i) liabilities for taxes, except as
otherwise agreed upon in writing by or on behalf of Buyer, (ii) liabilities or
obligations for facility costs,
2
<PAGE> 190
such as obligations under real estate leases, (iii) trade payables for goods
and services relating to the overall operations of Seller, such as for office
supplies, facility maintenance services and telephone service, and (iv)
recourse liabilities in respect of accounts receivable represented by
discounted notes.
(e) The term "Business Employees" shall mean (i)
those employees of Seller who shall, as of the date hereof, become employees of
Buyer as agreed upon in writing by or on behalf of Buyer and (ii) any other
employees of Seller hired after May [ ], 1996 and employed by Seller on the
date hereof whose work relates to the business and operations of the Business,
such as employees who sell and service the products sold by the Business,
employees who process orders and collect receivables primarily with respect to
products sold by the Business, support staff whose primary function is to
support such salesmen, servicemen, order processors and accounts receivable
clerks and managerial employees whose function is to manage such salesmen,
servicemen, order processors, accounts receivable clerks and staff.
3. Purchase Price. The purchase price ("Purchase
Price") of the Purchased Asset shall correspond to an amount equal to (i) 105%
of the aggregate net book value of the Purchased Assets and the Assumed
Liabilities (i.e., book value of such assets minus liabilities), as reflected
on a closing balance sheet to be prepared after the date hereof, plus (ii) the
further sum of L.2 for the benefit of the assignment of any contracts and the
purchase of goodwill. Seller hereby acknowledges receipt on the date hereof of
payment of an estimate of the Purchase Price. Such payment will be adjusted, as
necessary, to reflect the actual Purchase Price as determined pursuant to the
closing balance sheet referred to above.
4. Assumption of Liabilities. As of the date hereof,
Buyer hereby (i) assumes and agrees to pay, perform, satisfy or otherwise
discharge when due the Assumed Liabilities and (ii) agrees to indemnify, defend
and hold harmless Seller and its affiliates from and against any loss,
liability, claim, obligation, damage or expense (including reasonable legal
fees and expenses) that Seller may incur or suffer arising out of or resulting
from the Assumed Liabilities.
5. Personnel. Seller and Buyer acknowledge that, as of
the date hereof, the contracts of employment of the Business Employees are
hereby transferred by operation of law to Buyer.
3
<PAGE> 191
6. Debts and Debtors. Seller shall be under no
obligation whatsoever to collect any of debts included among the Purchased
Assets but, insofar as in the normal course of trading Seller collects any of
such debts, Seller shall forthwith account for the same in full to Buyer.
7. Value Added Tax. The purchase price is exclusive of
VAT, if any. The parties hereto intend that Article 5 of the VAT (Special
Provisions) Order 1992 shall apply to the transfer of the Business and
Purchased Assets and Assumed Liabilities so that the sale is treated a neither
a supply of goods nor a supply of services.
If any VAT is chargeable on any supply by Seller under this
Agreement, Buyer shall pay to Seller the amount of that VAT and Seller shall
issue to Buyer a proper tax invoice in respect of that VAT.
8. Further Assurances. At and after the date hereof,
Seller will execute and deliver such further instruments of conveyance and
transfer as Buyer may reasonably request to convey and transfer effectively to
Buyer the Purchased Assets.
9. Governing Law. This Agreement shall be construed in
accordance with and be governed by the laws of England.
10. Amendments. Only those amendments and additions to
this contact that are made in writing and signed by the parties are valid.
11. Successors and Assigns. This Agreement, and all
rights and powers granted hereby, will bind and inure to the benefit of the
parties hereto and their respective successors and assigns.
12. Counterparts. This Agreement may be executed in two
or more counterparts, each of which shall be deemed an original but all of
which together shall constitute one and the same instrument.
13. Severability. If any provision of this Agreement or
part thereof shall to any extent be or become invalid or unenforceable the
validity of the remaining provisions will be unaffected. With regard to such
invalid or unenforceable provisions, the parties shall agree upon any necessary
and reasonable adjustment of the Agreement in order to secure the vital
interests of the parties and the main objectives prevailing at the time of
execution of the Agreement.
4
<PAGE> 192
_____________________
This contract has been executed in two copies of which the parties
have taken one each.
Spectra Physics Ltd. [Buyer]
By: _____________________ By: _____________________
Title: ______________ Title: ______________
5
<PAGE> 193
NUMERO DESIGNATION DE LA SOCIETE CODE(1)
T.X.C.O.M.
ORDRE DE MOUVEMENT
DE VALEURS MOBILIERES NON ADMISES EN SICOVAM
(Loi de finances pour 1982 - Decret du 2 mai 1983)
NATURE DE TITRES(2) JOUISSANCE:
Shares having a par value of F 100
NATURE DU MOUVEMENT (3) Transfer of Ownership
en lettres
en chiffres
QUANTITE Seven Thousand Two Hundred Thirty-Five
7235
TITULAIRE
<TABLE>
<S> <C>
N de compte d'Actionnaire: Shareholder's Stock Register Account Number
NOM et PRENOM: Spectra-Physics Holding, S.A.
(ou Raison sociale)
Adresse: Z.A. de Courtaboeurf
Avenue de Scandainavie; 91941 Les Ulis
Administrateur des Titres:
(s'il y a lieu) Demande la realisation du Mouvement ci-dessus designee
</TABLE>
BENEFICIAIRE
<TABLE>
<S> <C>
N de compte d'Actionnaire: New Shareholders' Stock Register Account Number
NOM et PRENOM: Corporate Name (PSC Inc./PSC Subsidiary)
(ou Raison sociale)
Adresse: Address
Administrateur des Titres:
(s'il y a lieu) En cas de nouvel Actionnaire, voir renseignements au verso.
</TABLE>
<TABLE>
<CAPTION>
VISA DE L'EMETTEUR ORDRE EMIS LE:
<S> <C> <C>
Le a Place of Signature le Date
N/A Good for Transfer of Ownership of 7235 shares -- Signature of SP
Holding, S.A.
Signature Habilitee Signature du Titulaire, Heritier ou Mandataire (4)
INSCRIPTION AU COMPTE DU BENEFICIAIRE Certifie I _____ signature ____ ci-dessus de M.
Le
Qualite du Signataire Signature ou Sceau
</TABLE>
TO BE COMPLETED AND EXECUTED IN FRENCH
<PAGE> 194
Exhibit C
TXCOM ASSIGNMENT AND ASSUMPTION AGREEMENT
This is a TXCOM ASSIGNMENT AND ASSUMPTION AGREEMENT (the
"TxCom Agreement") dated ______________, 1996 between Spectra-Physics Holding
S.A., a French corporation ("Seller"), Spectra-Physics AB, a Swedish
corporation ("SPAB") and ______________________, a [ ] corporation
("Buyer").
In consideration of the covenants contained herein and
intending to be legally bound hereby, the parties hereto agree as follows:
Seller and SPAB hereby assign, transfer and convey to Buyer
the (i) Share Purchase Agreement by and between Compagnie Auxiliaire de
Telecommunication, Ali Ben Ameur, GH Conseil, Christian Hart de Keating,
Philippe Malaise, Joseph Boissy, Vincent Baumier, Daniel Mawas, Bernard
Malaise, Alain Bonodot, Seller and Spectra-Physics Scanning Systems, Inc.
("Scanning"), (ii) Shareholders and Management Agreement by and between SPAB,
Scanning, Seller, Vincent Baumier, Bernard Malaise, Daniel Mawas and Alain
Bonodot, and (iii) Representation and Warranty Agreement by and between TxCom,
Seller, Vincent Baumier, Bernard Malaise, Daniel Mawas and Alain Bonodot, all
dated as of August 28, 1995 (collectively, the "TxCom Contracts"). Buyer
hereby accepts such assignment and assumes and agrees to pay, perform, satisfy
and otherwise discharge when due all of the liabilities and obligations of
Seller and SPAB under the TxCom Contracts.
This agreement has been executed in seven originals, one of which has
been taken by each party hereto and four of which are for service of process.
IN WITNESS WHEREOF, the parties have executed this Agreement
on the day and year first above written.
SELLER: [BUYER]:
SPECTRA-PHYSICS HOLDING S.A.:
By:_________________________ By:_______________________
Title: Title:
SPECTRA-PHYSICS AB
By:_________________________
Title:
<PAGE> 195
EXHIBIT D
TERMS OF NOTE
<TABLE>
<S> <C>
ISSUER: PSC Inc. If necessary to achieve installment sale treatment for the Note,
the Note will be issued by the purchaser of the shares and be guaranteed by
PSC Inc.
AMOUNT: U.S. $5,000,000
OPTIONAL Prepayable in whole or in part at any time without
PREPAYMENT: premium or penalty
MATURITY: 5 years after Closing Date
AMORTIZATION: Principal payable in 16 equal consecutive quarterly installments of $312,500
each commencing 15 months after Closing
INTEREST: Interest payable quarterly at 100 basis points in excess of the rate of
interest announced from time to time by CoreStates Bank as its base or prime
rate
OTHER: The Note will have the same covenants, events of default, subordination and
other provisions as are set forth in the subordinated loan agreement and
related note contemplated by the Subordinated Debt Commitment Letters
referred to in Section 3.1(q) of the Agreement (the "Subordinated Loan
Agreement"); provided that the Note will be subordinated to the indebtedness
under the Subordinated Loan Agreement to the same extent that such
indebtedness is subordinated to the senior secured bank financing
contemplated by the commitment letter between Fleet National Bank and PSC
Inc. referred to in Section 3.1(q) of the Agreement.
</TABLE>
<PAGE> 196
EXHIBIT E
ESCROW AGREEMENT
THIS ESCROW AGREEMENT is dated as of May ___, 1996 (the
"Agreement"), by and among PSC Inc., a New York corporation ("PSC"),
Spectra-Physics, Inc., a Delaware corporation ("SPI") and Chase Manhattan Bank,
N.A., as escrow agent (the "Escrow Agent").
Background
A. PSC, SPI and Spectra-Physics Holding S.A., a French
corporation ("SP Holding"), have entered into a certain Asset and Stock
Purchase Agreement dated May __, 1996 (the "Purchase Agreement"). All
capitalized terms used but not otherwise defined herein shall have the meanings
ascribed to them in the Purchase Agreement.
B. Pursuant to Section 1.5(d) of the Purchase Agreement,
PSC has agreed to deposit the Escrowed Shares into escrow with the Escrow Agent
as security for certain indemnification obligations of SPI and SP Holding under
the Purchase Agreement.
C. A copy of the Purchase Agreement has been delivered
to the Escrow Agent and the Escrow Agent is willing to act as escrow agent
hereunder.
Terms
In consideration of the mutual covenants and promises
contained in this Agreement and the Purchase Agreement and intending to be
legally bound, the parties hereto do hereby agree as follows:
1. ESTABLISHMENT OF ESCROW FUND. Concurrently with the
execution hereof, PSC has, in accordance with the Purchase Agreement, delivered
to the Escrow Agent certificates representing the Escrowed Shares, and SPI has
delivered to the Escrow Agent stock powers for such Escrowed Shares duly
executed in blank. The Escrow Agent hereby acknowledges receipt of the
Escrowed Shares. The Escrowed Shares, together with any other shares of PSC or
other securities or cash which may be held from time to time by the Escrow
Agent pursuant to the terms hereof, are herein referred to as the "Escrow
Fund". The Escrow Fund shall be held by the Escrow Agent in accordance with
the terms and conditions hereinafter set forth. The Escrow Agent is hereby
empowered to accept any securities into which the Escrowed Shares may be
converted by virtue of any merger or other reorganization during the term of
the escrow and any such securities are herein also referred to as the "Escrowed
Shares".
<PAGE> 197
2. REPLACEMENT OF THE ESCROWED SHARES. At any time and
from time to time during the term of the escrow, SPI may direct the Escrow
Agent to, and upon receipt of such direction the Escrow Agent shall, transfer
any or all of the Escrowed Shares to SPI or as SPI may otherwise direct,
provided that at the time of such transfer SPI delivers to the Escrow Agent, in
substitution therefor, cash in an amount equal to the number of Escrowed Shares
to be so transferred multiplied by ____________ dollars ($_____) per share
[insert price used to calculate number of shares of Buyer Stock to be placed in
escrow pursuant to Section 1.5(d) of the Purchase Agreement] (appropriately
adjusted to reflect any stock splits or stock dividends by PSC) (the "Agreed
Value").
3. INVESTMENTS.
3.1 The Escrow Agent shall invest any cash in the
Escrow Fund at the written direction of SPI in (i) marketable direct
obligations issued or unconditionally guaranteed by the United States
Government or issued by any agency thereof and backed by the full faith and
credit of the United States; (ii) marketable direct obligations issued by any
state of the United States of America or any political subdivision of any such
state or any public instrumentality thereof, having the first or second highest
rating obtainable from either Standard & Poor's Corporation ("S&P") or Moody's
Investors Service, Inc. ("Moody's"); (iii) commercial paper having, at the time
of acquisition, a rating of A-1 or P-1 or better from either S&P or Moody's;
(iv) certificates of deposit or bankers' acceptances issued by any commercial
bank organized under the laws of the United States of America or any state
thereof or the District of Columbia having combined capital and surplus of not
less than $100,000,000, provided that if such commercial bank is not organized
under the laws of the United States of America, it must be a member of the
Federal Deposit Insurance Corporation, (v) money market mutual funds registered
under the Investment Company Act of 1940 that invest primarily in investments
described in clauses (i), (ii) and (iii) above or (vi) repurchase agreements
secured by such investments.
3.2 Any interest or dividends earned on the
Escrow Fund shall not be part of the Escrow Fund and shall be paid to SPI by
the Escrow Agent promptly after receipt thereof by the Escrow Agent.
3.3 SPI shall furnish the Escrow Agent with such
tax information or documents as the Escrow Agent may reasonably require to
comply with its obligations under any tax law or regulation.
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<PAGE> 198
4. RIGHTS AS TO ESCROWED SHARES. SPI shall, during all
times any Escrowed Shares are in the Escrow Fund, have the right:
4.1 to vote and otherwise exercise all other
shareholder rights with respect to the Escrowed Shares;
4.2 to receive and to exercise any right to
acquire further PSC stock or other securities distributed with respect to the
Escrowed Shares; and
4.3 to receive any dividends or other
distributions declared and paid on the Escrowed Shares.
5. CLAIMS OF PSC AGAINST THE ESCROW FUND.
5.1 In the event PSC shall assert a claim for
indemnification pursuant to Article VIII of the Purchase Agreement (an
"Indemnification Claim"), PSC shall send written notice of the Indemnification
Claim to the Escrow Agent and to SPI in accordance with Section 10 hereof.
Such notice shall state the basis for the Indemnification Claim and the total
amount claimed and show in reasonable detail how such amount was computed. If
SPI shall object to the Indemnification Claim made by PSC hereunder, it shall
give written notice of such objection to the Escrow Agent and to PSC within
thirty (30) days after PSC's mailing of its notice. If no such objection to
the Indemnification Claim shall have been so sent to the Escrow Agent and to
PSC within such thirty (30)-day period, then SPI shall be deemed to have
acknowledged the correctness and validity of the Indemnification Claim for the
full amount thereof, and the Escrow Agent shall, in satisfaction of such
Indemnification Claim (to the extent the Escrow Fund is not exhausted),
transfer to PSC out of the Escrow Fund (a) such number of Escrowed Shares
having a value equal to the amount of the Indemnification Claim (such Escrowed
Shares being valued at the Agreed Value), plus (b) to the extent the
Indemnification Claim exceeds the value of the Escrowed Shares, cash or other
property included in the Escrow Fund having a value equal to such excess.
5.2 In the event that SPI shall have made timely
objection to PSC's Indemnification Claim, and SPI and PSC shall have failed to
resolve or compromise the Indemnification Claim within thirty (30) days from
the date on which SPI shall have mailed notice of such objection, then the
validity of the Indemnification Claim shall be settled by a court of competent
jurisdiction or in such other manner as PSC and SPI shall agree in writing. In
the event that a court of competent jurisdiction or other party designated by
PSC and SPI finally determines (all appeals from any such decision having been
exhausted) that PSC is entitled to any recovery by reason of its
Indemnification Claim,
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<PAGE> 199
the Escrow Agent shall, in satisfaction of such Indemnification Claim (to the
extent the Escrow Fund is not exhausted), thereupon transfer to PSC out of the
Escrow Fund (a) such number of Escrowed Shares having a value equal to the
amount of the such recovery (such Escrowed Shares being valued at the Agreed
Value), plus (b) to the extent the recovery exceeds the value of the Escrowed
Shares, cash or other property included in the Escrow Fund having a value equal
to such excess.
5.3 Nothing in this Escrow Agreement shall limit
PSC's right to indemnification for any Damages not paid in full out of the
Escrow Fund.
6. FIRST RELEASE OF THE ESCROW FUND.
6.1 On the First Release Date (as defined below),
the Escrow Agent shall transfer to SPI the entire balance of the Escrow Fund
except (a) such number of Escrowed Shares having a value equal to the Retention
Value (as defined below) (such Escrowed Shares being valued at the Agreed
Value), plus (b) to the extent the Retention Value exceeds the value of the
Escrowed Shares, cash or other property included in the Escrow Fund having a
value equal to such excess.
6.2 As used herein, the term "First Release Date"
shall mean the earlier of the following dates: (i) the date six (6) months
after the Closing Date, or (ii) the first date on which PSC consummates a
public offering of its equity securities following the Closing Date.
6.3 As used herein, the term "Retention Value" shall
mean (a) five hundred thousand dollars ($500,000), plus (b) the amount of any
Indemnification Claims which remain outstanding on the First Release Date (as
certified in good faith by PSC in writing to the Escrow Agent and SPI, as an
amount reasonably calculated by PSC to be sufficient to satisfy such
outstanding Indemnification Claims (the "Certified Value")).
6.4 On the date any Indemnification Claim
outstanding on the First Release Date is paid or decided or is otherwise
resolved in accordance with Section 5 hereof, the Escrow Agent shall transfer
to SPI, out of the Escrow Fund, Escrowed Shares, cash or other property having
a value equal to the amount, if any, by which the Certified Value for such
Indemnification Claim exceeds the amount, if any, paid to PSC in accordance
with Section 5 hereof in satisfaction of such Indemnification Claim
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<PAGE> 200
7. FINAL RELEASE OF THE ESCROW FUND.
7.1 On the date twelve (12) months after the Closing
Date (the "Final Release Date"), the Escrow Agent shall transfer to SPI the
entire balance of the Escrow Fund except (a) such number of Escrowed Shares
having a value equal to the Certified Value of any Indemnification Claims which
remain outstanding on the Final Release Date (such Escrowed Shares being valued
at the Agreed Value), plus (b) to the extent the Certified Value of such
outstanding Indemnification Claims exceeds the value of the Escrowed Shares
(being valued at the Agreed Value), cash or other property included in the
Escrow Fund having a value equal to such excess.
7.2 On the date any Indemnification Claim
outstanding on the Final Release Date is paid or decided or otherwise resolved
in accordance with Section 5 hereof, the Escrow Agent shall transfer to SPI,
out of the Escrow Fund, Escrowed Shares, cash or other property having a value
equal to the amount, if any, by which the Certified Value for such
Indemnification Claim exceeds the amount, if any, paid to PSC in accordance
with Section 5 hereof in satisfaction of such Indemnification Claim.
8. TERMINATION OF ESCROW. The escrow provided for
hereunder shall terminate upon the earlier of the following dates: (i) the
date on which the Escrow Fund is exhausted, (ii) the first date after the Final
Release Date on which no Indemnification Claim remains outstanding, or (iii)
the date on which both PSC and SPI have notified the Escrow Agent that PSC and
SPI have mutually agreed to terminate the escrow. Upon termination of the
escrow, the Escrow Agent shall transfer to SPI any Escrowed Shares and cash or
other property remaining in the Escrow Fund, unless PSC and SPI otherwise
direct the Escrow Agent in writing.
9. ESCROW AGENT.
9.1 The Escrow Agent shall be entitled to receive
the aggregate sum of _____________ dollars ($________) as compensation for its
services as Escrow Agent hereunder. Such compensation shall be paid by PSC.
9.2 In taking any action hereunder, the Escrow Agent
shall be entitled to rely upon any written notice or other document believed by
it to be genuine and signed or presented by the proper person, or upon any
evidence deemed by it to be sufficient, and in no event shall be liable for any
act performed or omitted to be performed by it hereunder in the absence of
gross negligence or wilful misconduct; and it shall be under no obligation to
institute or to defend any action, suit or legal
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<PAGE> 201
proceeding in connection herewith or to take any other action likely to involve
it in expense unless first indemnified to its satisfaction. The Escrow Agent
may consult with counsel in connection with its duties hereunder and shall be
fully protected by any act taken, suffered or permitted by it in good faith in
accordance with the advice of such counsel.
9.3 The Escrow Agent hereby accepts its appointment
and agrees to act as Escrow Agent under the terms and conditions of this
Agreement.
9.4 The Escrow Agent (or any successor) may at any
time during the term hereof resign its position hereunder by giving written
notice of its intention to resign to PSC and SPI. Such resignation shall be
effective upon the appointment of a successor who shall have agreed to serve in
accordance with the terms hereof. Upon receipt of such a notice of
resignation, PSC and SPI shall use their best efforts to assure the prompt
appointment of a successor.
10. NOTICES. All notices, requests, demands, objections
and other communications hereunder shall be in writing and shall be deemed to
have been duly given if personally delivered or, if mailed, three business days
after being mailed by United States first-class, certified or registered mail,
postage prepaid, or, if sent by overnight delivery by a nationally recognized
courier such as Federal Express, one business day after deposit with such
courier, or, if sent by telecopy, upon confirmation of receipt, to the other
party at the following addresses (or at such other address as shall be given in
writing by any party to the others):
If to SPI to:
Spectra-Physics, Inc.
108 Webster Building
3411 Silverside Road
Wilmington, DE 19810
Telephone: (302) 478-4600
Fax: (302) 478-8962
Attn: Ms. Barbara Schoenberg
With required copies to:
Spectra-Physics AB
Box 5226
Sturegatan 32
Fourth Floor
2-102 45 Stockholm, Sweden
Telephone: 011-468-783-0725
Fax: 011-468-660-9226
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<PAGE> 202
Attn: Mr. Ulf Johansson
and
Dechert Price & Rhoads
4000 Bell Atlantic Tower
1717 Arch Street
Philadelphia, PA 19103
Telephone: (215) 994-2971
Fax: (215) 994-2222
Attn: Carmen J. Romano, Esq.
If to PSC to:
PSC Inc.
675 Basket Road
Webster, New York 14580
Telephone: (716) 265-1600
Fax: (716) 265-6402
Attn: William J. Woodard, Vice President - Finance
With required copies to:
Boylan, Brown, Code, Fowler, Vigdor & Wilson, LLP
2400 Chase Square
Rochester, NY 14604
Telephone: (716) 232-5300
Fax: (716) 232-3528
Attn: Martin S. Weingarten, Esq.
If to the Escrow Agent:
Chase Manhattan Bank, N.A.
[Address to be supplied]
11. BINDING EFFECT; THIRD PARTIES. This Agreement shall
be binding upon and inure to the benefit of the parties hereto and their
respective heirs, executors, administrators, representatives, successors and
assigns. This Agreement is not intended to confer any rights or remedies
hereunder on any other person other than the parties hereto.
12. AMENDMENTS. This Agreement may be amended or
modified at any time or from time to time in a writing executed by SPI, PSC and
the Escrow Agent. No supplement, modification or amendment of this Agreement
shall be binding unless executed in writing by each of the parties. No waiver
of any of the provisions of this Agreement shall be deemed to constitute a
waiver of any other provision hereof, whether or not similar, nor
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<PAGE> 203
shall any waiver constitute a continuing waiver. No waiver shall be binding
unless executed in writing by the party making the waiver.
13. GOVERNING LAW. This Agreement shall be construed and
enforced in accordance with the laws of the State of New York.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first written above.
SPECTRA-PHYSICS, INC.
By: _________________________
Title: _________________
PSC INC.
By: _________________________
Title: _________________
CHASE MANHATTAN BANK, N.A.
By: _________________________
Title: _________________
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<PAGE> 204
EXHIBIT F
Purchase Price Allocation
The Purchase Price shall be allocated as follows:
(i) First, to the Non-Compete Agreement in the
amount of US $5,000,000.
(ii) Next, to the U.S. Assets in the amount of US
$5,000,000.
(iii) Next, to the International Assets of each
Seller Subsidiary in an amount equal to the
Assumed International Liabilities of such
Seller Subsidiary plus 105% (150% in the case
of Spectra-Physics GmbH) of the aggregate net
book value of the International Assets and
Assumed International Liabilities of such
Seller Subsidiary (i.e., book value of such
assets minus liabilities) at the Closing
Date, in each case as reflected in the
Closing Date Balance Sheet; provided,
however, that the premium over book value in
the case of Spectra-Physics S.r.l. shall
equal US $300,000.
(iv) Next, to the TxCom Shares and the TxCom
Rights, in an amount equal to US $14,050,000.
(v) Lastly, to the Shares.
Within 30 days after the determination of the Closing Date
Balance Sheet, Scanning shall prepare and submit to Seller and Buyer a
statement allocating the Purchase Price, which statement shall be prepared in
accordance with the allocation set forth above.
<PAGE> 205
Exhibit G
Opinion of Seller's Counsel
May [ ], 1996
PSC Inc.
675 Basket Road
Webster, NY 14580
Re: Sale of Spectra-Physics Scanning Systems,
Inc., T.X.C.O.M., S.A. and certain related
assets and liabilities to PSC Inc.
Gentlemen:
We have acted as counsel to Spectra-Physics, Inc., a Delaware
corporation ("Seller"), in connection with the Asset and Stock Purchase
Agreement (the "Agreement"), dated May [ ], 1996, by and among you, Seller and
Spectra-Physics Holdings, S.A., a French corporation. This opinion is being
delivered to you pursuant to Section 6.1(c) of the Agreement. Capitalized
terms not otherwise defined herein are used as defined in the Agreement.
We have participated in the negotiation and preparation of the
Agreement and have examined (i) corporate proceedings relating to Seller's
authorization, execution and delivery of the Agreement and the other documents
to be executed by Seller in connection therewith and (ii) such governmental and
corporate certificates and records, matters of law and other documents as we
have deemed appropriate to enable us to render this opinion.
In making such examination and rendering the opinions set
forth below, we have assumed the genuineness of all signatures, the
authenticity of all documents submitted to us as originals and the conformity
to authentic original documents of all documents submitted to us as certified,
conformed or photostatic copies and the authenticity of the originals of such
documents. As to questions of fact material to our opinions, we have relied
upon representations of the Seller in the Agreement and on certificates of
officers of the Seller and of public officials.
<PAGE> 206
Based upon the foregoing and subject to the assumptions and
qualifications set forth above and below, we are of the opinion that:
1. Each of Seller and Scanning is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization.
2. The authorized capital stock of Scanning consists of
100 shares of common stock, $.01 par value per share, all of which are issued
and presently outstanding and none of which are held in its treasury. All such
outstanding shares have been duly authorized and validly issued and are fully
paid and non-assessable. To our knowledge, based upon our review of Scanning's
minutes of meetings of the company's Board of Directors and stockholders, there
are no options, warrants, convertible instruments, or other rights, agreements
or commitments obligating Scanning to issue or sell shares of its capital
stock. Based upon our review of Scanning's stock records, Seller is the record
owner of the Shares.
3. Seller has the corporate power and corporate
authority to execute, deliver and perform the Agreement and to consummate the
transactions contemplated hereby. The Agreement has been duly and validly
authorized by all necessary corporate, and, if necessary, shareholder, action
on the part of Seller. The Agreement has been duly and validly executed and
delivered by Seller and, assuming due execution and delivery by Buyer,
constitutes the valid and binding obligations of Seller, enforceable against
Seller in accordance with its terms, subject to applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium or other similar
laws relating to creditors' rights generally and subject to general principles
of equity (regardless of whether enforcement is sought in a proceeding at law
or in equity).
4. Except for a filing under the Hart-Scott-Rodino
Antitrust Improvement Act of 1976, as amended, no consent, approval or
authorization of, or registration or filing with any federal or state
governmental authority or other regulatory agency of the United States, is
required for the valid execution and delivery by the Seller of the Agreement or
the consummation by Seller of the transactions contemplated thereby.
The opinions expressed herein are limited to the laws of the
United States of America, the State of New York and the General Corporation Law
of the State of Delaware, and we express no opinion concerning the laws of any
other jurisdiction.
<PAGE> 207
Our opinions expressed herein are solely for your benefit and,
without our express written consent, neither our opinion nor this opinion
letter may be assigned, quoted, circulated or be furnished to or relied upon by
any other person.
Very truly yours,
<PAGE> 208
Exhibit H
NON-COMPETE AGREEMENT
Agreement made this ____ day of May, 1996 by and between
Spectra-Physics AB, a Swedish corporation ("Spectra-Physics"), and PSC Inc., a
New York corporation ("Buyer").
Spectra-Physics, Inc., a Delaware corporation, Buyer, and
Spectra-Physics Holdings, S.A., a French corporation, have entered into an
Asset and Stock Purchase Agreement, dated May [ ], 1996 (the "Agreement.")
Capitalized terms used and not defined herein shall have the meaning ascribed
to them in the Agreement.
Terms
In consideration of the covenants set forth herein, and intending to
be legally bound hereby, the parties agree as follows:
SECTION 1. Compensation. In consideration of Spectra-Physics'
obligations under this Agreement, Buyer shall pay Spectra-Physics the total sum
of Five Million Dollars ($US5,000,000) on the date hereof.
SECTION 2. Restrictive Covenant. In consideration of the payment
referred to in Section 1, Spectra-Physics agrees that for a period of three (3)
years from the Closing, it shall not, directly or indirectly through any
subsidiary or affiliate, own, manage, operate, join, control or participate in
the ownership, management, operation or control of any business which at any
relevant time during such period competes with the Business as conducted as of
the Closing Date in any part of the world.
Notwithstanding anything to the contrary contained in this Section 2,
Buyer hereby agrees that the foregoing covenant shall not be deemed breached as
a result of (A) the ownership by Spectra-Physics or any subsidiary of
Spectra-Physics of, in the aggregate, 10% or less of the outstanding capital
stock of any corporation whose securities are registered pursuant to Section
12 of the Securities and Exchange Act of 1934, as amended, or (B) the
acquisition by Spectra-Physics of any interest in any entity
<PAGE> 209
of which any line of business competes with the Business as conducted as of the
Closing Date, directly or indirectly, in any part of the world, if within 180
days thereafter, Spectra-Physics disposes of or enters into a definitive
agreement with an unaffiliated third party to dispose of such interest.
SECTION 3. Remedies. Spectra-Physics agrees that Buyer's remedies at
law for any breach by Spectra-Physics of the provisions of Section 2 hereof
will be inadequate, and that Buyer shall be entitled to an injunction or
injunctions to prevent breaches of the provisions of Section 2 hereof and to
enforce specifically such terms and provision.
SECTION 4. Waiver of Breach. The waiver by Buyer of a breach of any
provision of this Agreement by Spectra-Physics shall not operate or be
construed as a waiver of any other or subsequent breach by Spectra-Physics of
such or any other provision.
SECTION 5. Notices. All notices, requests, demands and other
communications hereunder shall be in writing and shall be deemed to have been
duly given if personally delivered or, if mailed, three business days after
being mailed by United States first-class, certified or registered mail,
postage prepaid, or, if sent by overnight delivery by a nationally recognized
courier such as Federal Express, one business day after deposit with such
courier, or, if sent by telecopy, upon confirmation of receipt, to the other
party at the following addresses (or at such other address as shall be given in
writing by any party to the other):
If to Spectra-Physics, to:
Spectra-Physics AB
Box 5226
Sturegatan 32
Fourth Floor
S-102 45 Stockholm, Sweden
Telephone: 011-468-663-1602
Fax: 011-468-660-9226
Attn: Mr. Ulf Johansson
With required copies to:
Dechert Price & Rhoads
4000 Bell Atlantic Tower
1717 Arch Street
Philadelphia, PA 19103
Telephone: (215) 994-2971
Fax: (215) 994-2222
<PAGE> 210
Attention: Carmen J. Romano, Esquire
If to Buyer, to:
PSC Inc.
675 Basket Road
Webster, NY 14580
Telephone: (716) 265-1600
Fax: (716) 265-6402
Attention: William W. Woodard, Vice-President -
Finance
With required copies to:
Boylan, Brown, Code, Fowler, Vigdor
& Wilson, LLP
2400 Chase Square
Rochester, NY 14604
Telephone: (716) 232-5300
Fax: (716) 232-3528
Attention: Martin S. Weingarten, Esq.
SECTION 6. Severability. If any term or provision of this Agreement
or the application thereof to any person or circumstance shall, to any extent,
be held invalid or unenforceable by a court of competent jurisdiction, the
remainder of this Agreement or the application of any such term or provision to
persons or circumstances other than those as to which it is held invalid or
unenforceable shall not be affected thereby, and each term and provision of
this Agreement shall be valid and enforceable to the fullest extent permitted
by law. If any of the provisions contained in this Agreement shall for any
reason be held to be excessively broad as to duration, scope, activity or
subject, it shall be construed by limiting and reducing it, so as to be valid
and enforceable to the extent compatible with the applicable law or the
determination by a court of competent jurisdiction.
SECTION 7. Consent to Jurisdiction. Spectra-Physics and Buyer each
irrevocably submits to the jurisdiction of (a) the courts of the State of New
York, situated in the county of New York and (b) the United States District
Court for the Southern District of New York, for the purposes of any suit,
action or other proceeding arising out of or related to this Agreement.
Spectra-Physics and Buyer each hereby irrevocably consent to the service of
summons, complaint and any and all other process in any such action or
proceeding brought in such jurisdictions within the State of New York by
delivery of copies of such process to it, at its address specified in Section 5
of this
<PAGE> 211
Agreement or by certified mail to such address. Spectra-Physics and Buyer each
hereby waives any objection that it may have based upon lack of personal
jurisdiction, including, without limitation, any objection to the laying of
venue or based on grounds of forum non conveniens, which it may now or
hereafter have to the bringing of any such action or proceeding in such
jurisdiction.
SECTION 8. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York.
SECTION 9. Successors and Assigns. This Agreement, and all rights
and powers granted hereby, will bind and inure to the benefit of the parties
hereto and their respective successors and assigns. No party hereto may assign
its rights or delegate its duties and obligations under this Agreement without
the prior written consent of the other party hereto.
SECTION 10. Headings. The headings preceding the text of the sections
hereof are inserted solely for convenience of reference, and shall not
constitute a part of this Agreement, nor shall they affect its meaning,
construction or effect.
SECTION 11. Amendments. No amendment to this Agreement shall be
effective unless it shall be in writing and signed by the party against which
it is to be enforced.
SECTION 12. Entire Agreement. This Agreement sets forth all of the
promises, covenants, agreements, conditions and undertakings between the
parties hereto with respect to the subject matter hereof, and supersedes all
prior and contemporaneous agreements and undertakings, inducements or
conditions, express or implied, oral or written, with respect to the subject
matter hereof.
<PAGE> 212
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement on the day and year first above written.
SPECTRA-PHYSICS AB
By:_________________________
Title:
By:_________________________
Title:
PSC Inc.
By:_________________________
Title:
<PAGE> 213
EXHIBIT I
FORM OF TRANSITION SERVICES AGREEMENT(1)
TRANSITION SERVICES AGREEMENT, dated May [ ], 1996, by and
between [ ], a [ ] corporation ("Seller Subsidiary") and
[ ], a [ ] corporation ("Buyer Subsidiary") (the
"Transition Services Agreement").
Spectra-Physics, Inc., a Delaware corporation ("Seller"), PSC
Inc., a New York corporation ("Buyer"), and Spectra-Physics Holding, S.A., a
French corporation, have entered into an Asset and Stock Purchase Agreement,
dated May [ ], 1996, (the "Agreement"). Capitalized terms used and not
defined herein shall have the meaning ascribed to them in the Agreement.
Pursuant to the Agreement, Buyer is acquiring, inter alia, certain of the
assets of the Seller Subsidiaries and, in connection therewith, Seller
Subsidiary and Buyer Subsidiary have agreed to the following transition
arrangements:
1. Transition Services.
(a) During the Transition Period (as defined below), Seller
Subsidiary shall provide to Buyer Subsidiary the services indicated on Annex A
hereto. Such services will be provided at a cost equal to [105% of (for SP
K.K. only)] the fully-burdened costs of Seller Subsidiary as determined in
accordance with Annex B hereto.
[(b) During the Transition Period, Seller Subsidiary agrees to
cause Agema Infrared Systems AB ("Agema") to continue (i) to provide to Buyer
Subsidiary the services currently provided to Spectra-Physics Ltd. pursuant to
the Consultancy Agreement between Agema and Spectra-Physics Ltd., dated October
25, 1994 (the "Consultancy Agreement") on the terms contained in the
Consultancy Agreement and (ii) to employ at Buyer Subsidiary's expense Lars
Anderson (or his designated successor) to provide such services to Buyer
Subsidiary. Buyer Subsidiary shall be responsible for all costs, expenses or
other obligations associated with the employment by Agema of Lars Anderson (or
his designated successor), including costs, expenses or other obligations
incurred in connection with the termination of such person's employment with
Agema at the end of the Transition Period. Buyer Subsidiary releases Agema
from and agrees to indemnify Agema against all obligations or liability
- --------------------------
1. Each Seller Subsidiary shall enter into a Transition Services
Agreement, including an Agreement for Leased Properties, with the
appropriate Buyer Subsidiary substantially in the form hereof.
Bracketed language referring to the Agema sales representative
arrangement shall be included only in the agreement signed by the
Buyer Subsidiary located in the United Kingdom.
<PAGE> 214
related to or arising from the provision of services under this Transition
Services Agreement or the Consultancy Agreement (other than pursuant to Section
7 thereof).]
2. Office Space. Seller Subsidiary shall lease to Buyer
Subsidiary for the Transition Period the office space described on Annex A
hereto pursuant to a lease agreement substantially in the form of Annex C,
modified, as appropriate, to conform to local law and customary practice.
3. Billing and Payment. Buyer Subsidiary agrees to pay
within 15 calendar days after receipt any bills and invoices that it receives
from Seller Subsidiary [or Agema] for services provided pursuant to this
Transition Services Agreement, subject to prior receipt, if requested, of any
appropriate support documentation for such bills and invoices, and provided
that the amounts shown as due on such bills or invoices are calculated in
accordance with paragraph 1 above. Such charges shall be billed at the end of
each calendar month of the Transition Period.
4. Term and Termination. The term of this Transition
Services Agreement will commence on the date hereof and will continue until one
(1) year from the date hereof, such period being the "Transition Period."
Buyer Subsidiary may discontinue upon thirty (30) days prior written notice to
Seller Subsidiary, the receipt of any or all services provided under paragraph
1 above (such notice specifying the services and the location in which such
services shall be discontinued).
5. Governing Law. This Transition Services Agreement
shall be governed by and construed in accordance with the laws of the [country
in which services are to be provided].
6. Counterparts. This Transition Services Agreement may
be executed in one or more counterparts, all of which shall be considered one
and the same agreement, and shall become effective when one or more
counterparts have been signed by each of the parties and delivered to the other
parties.
- 2 -
<PAGE> 215
IN WITNESS WHEREOF, the parties have signed this Transition
Services Agreement on the date first set forth above.
[Seller Subsidiary]
By:___________________________
Title:
[Buyer Subsidiary]
By:___________________________
Title:
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<PAGE> 216
ANNEX A
SUMMARY OF TRANSITION SERVICES TO BE PROVIDED TO BUYER SUBSIDIARY
May [ ], 1996
Seller Subsidiary will perform the services indicated for Buyer
Subsidiary in the following jurisdiction: _____________________*
<TABLE>
<CAPTION>
U.K. ITALY FRANCE GERMANY JAPAN AUSTRALIA
<S> <C> <C> <C> <C> <C> <C>
WAREHOUSE
RECEIVING GOODS Yes No Yes Yes Yes Yes
CHECKING GOODS Yes Yes Yes Yes Yes Yes
PICKING & PACKING Yes Yes Yes Yes Yes Yes
SHIPPING Yes Yes Yes Yes Yes Yes
ORDERING SPARES No No Yes No Yes Yes
ORDERING PACKAGING Yes Yes Yes Yes Yes Yes
MIN/MAX REVIEW (WHERE APPLICABLE) No No No No No No
CARRIER INTERFACE AS NECESSARY Yes No Yes Yes Yes Yes
RETURNS TO USA Yes Yes No Yes Yes Yes
STOCK CHECKS Yes Yes Yes Yes No Yes
BONDED WAREHOUSE N/A N/A Yes No N/A Yes
ACCOUNTING
MANAGEMENT REPORTING Yes Yes Yes Yes Yes Yes
MONTHLY CLOSING SUPPORT Yes Yes Yes Yes Yes Yes
ACCOUNT RECONCILIATION SUPPORT Yes Yes Yes Yes Yes Yes
GENERAL LEDGER SUPPORT Yes Yes Yes Yes Yes Yes
BANK RECONCILIATION & SUPPORT Yes Yes Yes Yes Yes Yes
DUTY DEFERMENT Yes Yes Yes Yes N/A Yes
PAYROLL SERVICES Yes Yes Yes Yes Yes Yes
MISC OFFICE SUPPLIES Yes Yes Yes Yes Yes Yes
ACCOUNTS RECEIVABLE MANAGEMENT
CREDIT CONTROL Yes Yes Yes Yes Yes Yes
COLLECTION SUPPORT No Yes Yes Yes Yes Yes
POSTING CASH No Yes Yes Yes Yes Yes
TRANSFER OF CASH TO SUBSIDIARY Yes Yes Yes Yes Yes Yes
</TABLE>
<PAGE> 217
<TABLE>
<CAPTION>
U.K. ITALY FRANCE GERMANY JAPAN AUSTRALIA
<S> <C> <C> <C> <C> <C> <C>
PURCHASING
LOCAL PURCHASES Yes No Yes Yes Yes Yes
PROCESSING OF SUPPLIER INVOICES Yes Yes Yes Yes Yes Yes
ORDERING No No No No No Yes
COMPUTER SYSTEMS
GENERAL LEDGER Yes Yes Yes Yes Yes Yes
ORDER PROCESSING No No No No Yes Yes
INVENTORY MANAGEMENT No No Yes No No Yes
MAIL ROOM SUPPORT Yes Yes Yes Yes Yes Yes
RECEPTION WHERE APPLICABLE No Yes Yes Yes N/A Yes
CAFETERIA SERVICES N/A N/A N/A Yes No No
CREATION OF SUBSIDIARY GENERAL LEDGER (IF
NEEDED) Yes Yes Yes Yes Yes Yes
AUDIT SUPPORT Yes Yes Yes Yes Yes Yes
TAX SUPPORT Yes Yes Yes Yes Yes Yes
OTHER LEGAL COMPLIANCE SUPPORT Yes Yes Yes Yes Yes Yes
PAYROLL TRANSFER Yes Yes Yes Yes Yes Yes
EMPLOYEE BENEFIT TRANSFER Yes Yes Yes Yes Yes Yes
FACILITIES
HOUSEKEEPING Yes Yes Yes Yes Yes Yes
SPACE UTILIZATION Yes Yes Yes Yes Yes Yes
UTILITIES Yes Yes Yes Yes Yes Yes
TELEPHONE Yes Yes Yes Yes Yes Yes
MAINTENANCE Yes Yes Yes Yes Yes Yes
COPIERS Yes Yes Yes Yes Yes Yes
OTHER FACILITIES RELATED SUPPORT Yes Yes Yes Yes Yes Yes
SPACE ALLOCATED (sq. meters) 564 220 520 553 218 335
</TABLE>
A-2
<PAGE> 218
*The following arrangements apply to Seller Subsidiary unless otherwise
noted:
(1) All inventory or other purchases made on behalf of Buyer Subsidiary
will be funded directly from Buyer Subsidiary's bank account(s)
pursuant to arrangements established by Buyer Subsidiary.
(2) Although applicable Seller Subsidiary will provide payroll processing
services, the payroll (including the payroll expense of the Agema
sales representative) will be funded from Buyer Subsidiary's bank
account(s) pursuant to arrangements established by Buyer Subsidiary,
and Buyer Subsidiary shall be responsible for all insurance and
employee benefits attributable to the Foreign Business Employees.
(3) All ongoing responsibilities such as credit cards, Compuserve
registrations, vehicle leases, telephone leases, etc. will be
transferred to Buyer Subsidiary. To the extent that they cannot be
transferred, they will be cancelled and reinstated under Buyer
Subsidiary. If costs are incurred between the Closing and the
transfer or cancellation, the costs will be invoiced to Buyer
Subsidiary.
(4) Buyer Subsidiary will be responsible for the printing of new invoicing
documents and any other required documents.
(5) All tax, employee, banking, and statutory filing requirements will be
the responsibility of Buyer Subsidiary.
(6) No access is available to the Spectra-Physics bonded warehouse
(applicable to Spectra-Physics GmbH only).
A-3
<PAGE> 219
ANNEX B
Fully-burdened costs consist of any direct costs of providing
the service plus an allocated portion of certain overhead functions, including
the following:
FUNCTION
- - Finance and Admin. Manager
- - Accounting personnel
- - Payroll
- - Stock keeping
- - MIS
- - Other services
- - Office supplies
- - Travel expenses
- - Other expenses
Salaries and wages include all payroll related expenses.
The costs of these functions will be allocated to the Business in a
manner consistent with the budgeted allocation included in the Data Capture
Group 1996 Administrative Allocation Budget reproduced below.
1996 Administrative Allocation
(figures in dollars, in thousands)
<TABLE>
<CAPTION>
Italy UK France GmbH Japan1 Australia
<S> <C> <C> <C> <C> <C> <C>
Budget
FAM-related Costs
Salaries 137 65 231 101 145 62
Purchased Services 18 23 52 42 10 9
Supplies 7 7 20 7 13 10
Travel 9 8 13 0 20 13
Telephone 0 0 7 0 16 0
Training/other -2 2 25 0 32 5
Total FAM 169 105 348 150 237 99
</TABLE>
- ------------------
2. Figures do not reflect 5% premium that will be charged in Japan.
<PAGE> 220
ANNEX C
AGREEMENT FOR LEASE PROPERTIES
Lease Agreement between:
[Seller Subsidiary]
("Landlord")
and
[Buyer Subsidiary]
("Tenant")
dated May [ ], 1996.
It is mutually agreed pursuant to this lease agreement (the "Lease Agreement")
by and between the Landlord and Tenant as follows:
1. PROPERTY. Landlord hereby leases to Tenant and Tenant hereby leases
from Landlord, subject to the conditions and covenants hereinafter set forth,
the property indicated on Schedule A (each such space being the "Leased Space")
which includes [For Spectra-Physics S.r.l only - and Landlord grants] access to
and use of common spaces (such as hallways, walkways, warehouse canteen
facilities and conference facilities)(the "Common Space") consistent with
normal use of such common spaces related to or associated with such property.
2. TERM. The term of the Lease for each property shall be for one year,
commencing on the date hereof and ending one year from the date hereof.
3. RENT. The monthly rental charge shall be the amount indicated on
Schedule A hereto.
Landlord shall invoice Tenant at the end of each calendar month for
rental charge of the leased space and Tenant shall pay such amounts within 15
calendar days of receipt of such bill or invoice.
4. USE.
a. The leased properties shall only be used by the Tenant for
general business offices, depot service, and such other use as is normally
incident to its business.
b. Tenant agrees not to use or permit the use of the leased
properties for any purpose prohibited by law.
<PAGE> 221
c. Tenant agrees not to make any structural alterations or
additions to the leased properties without the prior written consent of the
Landlord.
5. NOTICES. In addition to any other parties to whom notices must be
sent as elsewhere agreed upon in writing by the parties, both parties must send
any notice concurrently to the Financial Accounting Manager of each impacted
facility.
6. ASSIGNMENT AND SUBLETTING. No assignment or subletting of the leased
properties or any part thereof shall be made by Tenant without Landlord's prior
written consent, which shall not be unreasonably withheld.
7. SERVICES PROVIDED. Landlord shall be responsible for all gas,
electric, heating, air conditioning, water, and sewer utilities, janitorial
services and trash removal, landscape maintenance, parking lot maintenance and
snow removal for the leased properties. [For Spectra-Physics S.r.l. only -
Tenant shall be responsible for all gas, electric, heating, air conditioning,
water, sewer utilities, and janitorial services for the leased properties and
Landlord shall be responsible for all trash removal, landscape maintenance,
parking lot maintenance and snow removal for the leased properties.] Where
parking is currently provided, at least the same number of parking spaces will
be provided during the term of this lease.
8. SEVERABILITY. Should any provision of this Lease be determined to be
void or unenforceable, the remaining provisions of this Lease shall remain in
full force and effect.
9. INSURANCE. The Landlord and the Tenant each certify that they have
the necessary insurance coverage to indemnify each other in the event of an
enforceable claim.
10. MAINTENANCE BY LANDLORD. The Landlord shall maintain the structure of
the properties, including but not limited to the foundation, walls, columns,
beams, and roof, as well as the utilities delivery and removal services and
heating, ventilating, and air conditioning (where installed) facilities of each
leased property.
11. SPACE ALLOCATION. The area of space rented and the distribution of
space within the facility may be varied within the term of this Agreement with
the mutual written consent of the Landlord and Tenant.
12. SURRENDER OF THE PREMISES. At the expiration or termination of this
Lease, the Tenant shall surrender the leased properties to the Landlord in the
same condition as they were at the commencement of the Lease, normal wear and
tear excepted.
C-2
<PAGE> 222
13. QUIET ENJOYMENT. The Tenant shall not commit or suffer to be
committed any waste upon the leased properties or any nuisance or other thing
which may disturb the quiet enjoyment of any other tenant of the properties.
14. RIGHT OF ENTRY. The Landlord and its agents have the right to enter
the leased properties during reasonable business hours and with the prior
written consent of the Tenant to examine the same and to make such repairs,
improvements or additions as the Landlord considers necessary or desirable.
15. SIGNS. The Tenant shall have the right, at its sole cost, to erect
such signs on the exterior or interior of the leased properties as it may
require to identify the business, subject to the approval of the Landlord,
which shall not be unreasonably withheld. All signs shall be in conformity
with the applicable laws and regulations of any governmental or private
authority with jurisdiction.
16. TERMINATION. Tenant may terminate this Lease upon six (6) months
prior written notice to Landlord. Upon such termination, Tenant shall have no
further obligations under this Lease, except for obligations accruing prior to
such termination.
17. REGULATORY COMPLIANCE. The Tenant shall comply with all applicable
laws and regulations imposed by governmental authorities with jurisdiction.
IN WITNESS WHEREOF, the parties have signed this Lease
Agreement on the date first set forth above.
[Seller Subsidiary]
By:___________________________
Title:
[Buyer Subsidiary]
By:___________________________
Title:
C-3
<PAGE> 223
SCHEDULE A
<TABLE>
<CAPTION>
Leased Leased Space Monthly Rental Charges
Property Location (in sq. meters)(3) (in local currency)(4)
- -------- -------- --------------- -------------------
<S> <C> <C> <C>
_____________ Spectra-Physics Ltd. 564 5,405.00 BP
_____________ Spectra-Physics GmbH 553 11,428.67 DM
_____________ Spectra-Physics S.r.l. 220 4,895,000.00 IL
_____________ Spectra-Physics S.A. 520 44,583.33 FF
_____________ Spectra-Physics K.K. 218 1,651,037.50 JY
_____________ Spectra-Physics Pty. Ltd 335 3,333.33 AD
</TABLE>
- ---------------
3. Amounts include both exclusive space and a pro-rata allocation of common
space; provided, however, that the Spectra-Physics S.r.l. figure reflects
exclusive space only.
4. Monthly rental charges for Spectra-Physics Ltd., Spectra-Physics GmbH,
Spectra-Physics S.A., Spectra-Physics Pty Ltd. and Spectra-Physics K.K. include
all building-related charges (such as utilities, maintenance and taxes but
excluding telephone). Buyer shall also pay Seller an additional amount equal to
the cost of Buyer's actual telephone usage; provided that Buyer shall pay
Spectra-Physics K.K. a fixed monthly fee of 140,350 JY for its telephone usage.
Monthly rental charges for Spectra-Physics S.r.l. do not include amounts for
utilities, maintenance or telephone. Buyer shall independently arrange and pay
for such services.
C-4
<PAGE> 224
Exhibit J
Opinion of Buyer's Counsel
May [ ], 1996
Spectra-Physics, Inc. Spectra-Physics Holding, S.A.
108 Webster Building Z.A. de Courtaboeurf
3411 Silverside Road Avenue de Scandanavie
Wilmington, DE 19810 91941 Les Ulis
Re: Sale of Spectra-Physics Scanning Systems, Inc.,
T.X.C.O.M., S.A. and certain related assets and
liabilities to PSC Inc.
Gentlemen:
We have acted as counsel to PSC Inc., a New York corporation
("Buyer"), in connection with the Asset and Stock Purchase Agreement (the
"Agreement"), dated May [ ], 1996, by and among each of you and Buyer. This
opinion is being delivered to you pursuant to Section 6.2(c) of the Agreement.
Capitalized terms not otherwise defined herein are used as defined in the
Agreement.
We have participated in the negotiation and preparation of the
Agreement and have examined (i) corporate proceedings relating to Buyer's
authorization, execution and delivery of the Agreement and the other documents
to be executed by Buyer in connection therewith and (ii) such governmental and
corporate certificates and records, matters of law and other documents as we
have deemed appropriate to enable us to render this opinion.
In making such examination and rendering the opinions set
forth below, we have assumed the genuineness of all signatures, the
authenticity of all documents submitted to us as originals and the conformity
to authentic original documents of all documents submitted to us as certified,
conformed or photostatic copies and the authenticity of the originals of such
documents. As to questions of fact material to our opinions, we have relied
upon representations of the Buyer in the Agreement and on certificates of
officers of the Buyer and of public officials.
<PAGE> 225
Based upon the foregoing and subject to the assumptions and
qualifications set forth above and below, we are of the opinion that:
1. Buyer is a corporation duly organized, validly
existing and in good standing under the laws of New York.
2. The authorized capital stock of Buyer consists of
40,000,000 shares of common stock, $.01 par value per share, of which 9,969,185
shares of common stock are issued and presently outstanding, 38,500 shares of
common stock are held in treasury and 4,016,149 shares of common stock are
reserved for issuance, and 10,000,000 shares of preferred stock, $.01 par value
per share, of which none are currently issued and outstanding. No shares of
preferred stock are held in Buyer's treasury. All such outstanding shares of
common stock have been duly authorized and validly issued and are fully paid
and non-assessable. Options to purchase 2,440,203 shares of common stock are
currently issued and outstanding. To our knowledge, based upon our review of
Buyer's minutes of meetings of the Company's Board of Directors and
stockholders, there are no other options, warrants, convertible instruments, or
other rights, agreements or commitments obligating Buyer to issue or sell
shares of its capital stock except for warrants to purchase 975,000 shares of
common stock of Buyer [issued pursuant to the Subordinated Debt Commitment
Letters referred to in Section 3.1(q) of the Agreement].
3. Buyer has the corporate power and corporate authority
to execute, deliver and perform the Agreement and to consummate the
transactions contemplated thereby. The execution, delivery and performance of
the Agreement has been duly and validly authorized by all necessary corporate,
and, if necessary, shareholder, action on the part of Buyer. The Agreement has
been duly and validly executed and delivered by Buyer and, assuming due
execution and delivery by Seller, constitutes the valid and binding obligation
of Buyer, enforceable against Buyer in accordance with its terms, subject to
applicable bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium or other similar laws relating to creditors' rights generally and
subject to general principles of equity (regardless of whether enforcement is
sought in a proceeding at law or in equity). The Note constitutes the valid
and binding obligation of Buyer, enforceable against Buyer in accordance with
its terms, subject to applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium or other similar laws relating to creditors' rights
generally and subject to general principles of equity (regardless of whether
enforcement is sought in a proceeding at law or in equity).
4. The issuance by Buyer of 977,135 shares of Buyer's
common stock, $.01 par value per share, to Seller pursuant to the Agreement has
been validly authorized and such shares are validly
<PAGE> 226
issued and are fully paid and non-assessable. Such shares have been authorized
for inclusion on the NASDAQ National Market upon official notice of issuance.
5. Except for a filing under the Hart-Scott-Rodino
Antitrust Improvement Act of 1976, as amended, no consent, approval or
authorization of, or registration or filing with any federal or state
governmental authority or other regulatory agency of the United States, is
required for the valid execution and delivery by the Buyer of the Agreement or
the consummation by Buyer of the transactions contemplated thereby.
The opinions expressed herein are limited to the laws of the
United States of America and the State of New York, and we express no opinion
concerning the laws of any other jurisdiction.
Our opinions expressed herein are solely for your benefit and,
without our express written consent, neither our opinion nor this opinion
letter may be assigned, quoted, circulated or be furnished to or relied upon by
any other person.
Very truly yours,
<PAGE> 227
EXHIBIT K
REGISTRATION RIGHTS and HOLDBACK AGREEMENT
This is a REGISTRATION RIGHTS AND HOLDBACK AGREEMENT, (the
"Agreement") dated as of May [ ], 1996, by and between SPECTRA-PHYSICS, INC.,
a Delaware corporation ("SPI") and PSC, Inc., a New York corporation ("PSC").
WHEREAS, SPI, PSC and Spectra-Physics Holdings, S.A., a French
corporation, have entered into an Asset and Stock Purchase Agreement (the
"Purchase Agreement"), dated May [ ], 1996 pursuant to which SPI will receive
[ ] shares of Buyer's common stock, par value $.01 per share; and
WHEREAS, PSC wishes to grant to SPI registration rights for
the shares of common stock of PSC that SPI acquired pursuant to the Purchase
Agreement, and SPI is willing to agree to certain restrictions on the sale of
such shares;
NOW, THEREFORE, in consideration of the premises and mutual
covenants herein contained, the parties hereby agree as follows:
1. Definitions.
As used herein, the following terms have the following
respective meanings:
"Common Stock" means the common stock, par value $.01 per
share, of PSC.
"Covered Shares" means the Registrable Securities of SPI
included in a registration statement pursuant to the terms hereof.
"Exchange Act" means the Securities and Exchange Act of 1934,
as amended.
"Indemnified Party" has the meaning given to that term in
Section 6 hereof.
"Indemnifying Party" has the meaning given to that term in
Section 6 hereof.
<PAGE> 228
"Lock-up Period" means the period beginning on the date hereof
and ending on the date that is the earlier of (i) one year from the date hereof
or (ii) 180 days from the date of the consummation of the first public offering
of equity securities by PSC after the date hereof.
"Piggyback Registration" has the meaning given to that term in
Section 3 hereof.
"Piggyback Registration Statement" means a registration
statement of PSC filed with the SEC on a form for which PSC then qualifies and
which includes the Registrable Securities to be registered for sale thereunder
pursuant to Section 3 hereof, including post-effective amendments, in each
case including the prospectus contained therein, all exhibits thereto and all
material incorporated by reference therein.
"Registrable Securities" means (i) the shares of Common Stock
received by SPI pursuant to the Purchase Agreement and (ii) any Common Stock
issued or issuable with respect to the Registrable Securities by way of a stock
dividend or stock split or in connection with a combination of shares,
recapitalization, merger, consolidation or other reorganization. Any
Registrable Security will cease to be a Registrable Security when (i) a
registration statement covering such Registrable Security has been declared
effective by the SEC and it has been disposed of pursuant to such effective
registration statement, (ii) it is sold under circumstances in which all of the
applicable conditions of Rule 144 are met, or (iii) it has been otherwise
transferred, PSC has delivered a new certificate or other evidence of ownership
for it not bearing any restrictive legend citing the absence of registration
thereof and it may be resold without subsequent registration under the
Securities Act.
"Registration Expenses" has the meaning given to that term in
Section 12 hereof.
"Registration Statement" means any Piggyback Registration
Statement or any shelf Registration Statement.
"SEC" means the U.S Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Shelf Registration" means a registration effected pursuant to
Section 2 hereof.
<PAGE> 229
"Shelf Registration Statement" means a "shelf" registration
statement of PSC filed pursuant to the provisions of Section 2 hereof with the
SEC which covers all of the Registrable Securities on an appropriate form under
Rule 415 under the Securities Act, or any similar rule that may be adopted by
the SEC, and any amendments and supplements to such registration statement,
including post-effective amendments, in each case including the prospectus
contained therein, all exhibits thereto and all material incorporated by
reference therein.
All capitalized terms used herein that are not otherwise
defined herein shall have the meanings ascribed thereto in the Purchase
Agreement.
2. Shelf Registration.
(a) On or before 90 days after the date hereof, PSC shall file
with the SEC a Shelf Registration Statement relating to the offer and sale of
the Registrable Securities by SPI from time to time in accordance with the
methods of distribution elected by SPI and set forth in such Shelf Registration
Statement and, thereafter, shall use its best efforts to cause such Shelf
Registration Statement to be declared effective under the Securities Act as
promptly as is practicable after the date of filing of such Registration
Statement.
(b) PSC shall use its best efforts to keep the Shelf
Registration Statement continuously effective in order to permit the prospectus
forming a part thereof to be useable by SPI for a period of three years from
the date the Shelf Registration Statement is declared effective or such shorter
period that will terminate when all covered Shares have been sold pursuant to a
Registration Statement or otherwise cease to be Registrable Securities;
provided that PSC's obligation to keep the Shelf Registration Statement
effective shall cease three months after such time as SPI owns less than 10% of
the Registrable Securities it owns on the date hereof unless the reason SPI's
ownership of Registrable Securities fell below the 10% level was due to the
"cut-back" provision contained in the last sentence of Section 3(b) hereof.
PSC shall be deemed not to have used its best efforts to keep the Shelf
Registration Statement effective during the requisite period if PSC voluntarily
takes any action that would result in SPI not being legally permitted to offer
and sell any Registrable Securities during that period unless (i) such action
is required by applicable law, (ii) upon the occurrence of any event that
requires a supplement or amendment to the Shelf Registration Statement as
described in Section 5(f) and such action is taken by PSC in good faith and for
valid business
- 3 -
<PAGE> 230
reasons or (iii) the continued effectiveness of the Shelf Registration
Statement would require PSC to disclose a material financing, acquisition or
other corporate transaction and the Board of Directors of PSC shall have
determined in good faith that such disclosure is not in the best interests of
PSC and its stockholders, and, in the case of clause (i) or (ii) above, PSC
thereafter promptly complies with the requirement of paragraph 5(f) below.
3. Piggy-Back Registration.
(a) Subject to the provisions of this Section 3, if PSC at
any time proposes to register any of its equity securities (as defined in the
Exchange Act) under the Securities Act, whether or not for sale for its own
account (other than pursuant to Section 2 hereof), and the registration form to
be used may be used for the registration of Registrable Securities, PSC each
such time will give written notice of such proposed filing to SPI as soon as
practicable (but in no event less than twenty days before the anticipated
filing date), and such notice shall offer SPI the opportunity to include such
number of Registrable Securities in the registration as SPI may request (the
"Piggyback Registration"); provided that SPI notify PSC of the amount of
Registrable Securities to be registered not less than ten days before the
anticipated filing date.
(b) PSC shall use its best efforts to cause the managing
underwriter or underwriters of a proposed underwritten offering to permit the
Registrable Securities requested to be included in the registration statement
for such offering on the same terms and conditions as any similar securities of
PSC included therein. Notwithstanding the foregoing, if the managing
underwriter of such registration advises PSC in writing (with a copy to SPI)
that, in its opinion, inclusion of the number of Registrable Securities
requested to be included in the registration would adversely affect the
marketing of the securities to be sold by PSC in such offering, then PSC will
include in such registration only the number of Registrable Securities
recommended by the managing underwriter that may be included without adversely
affecting the marketing of the securities to be sold by PSC in such offering.
4. Lock-up and Holdback Agreements.
(a) SPI Lock-up. (i) During the Lock-up Period,
without PSC's written consent, SPI agrees not to effect any public sale or
distribution of any of the Registrable Securities except pursuant to an
available Piggyback Registration.
- 4 -
<PAGE> 231
(ii) If PSC enters into an underwriting agreement in
connection with a firm underwritten offering of shares of its Common Stock, SPI
will not, if requested by the managing underwriter for such offering and PSC,
effect any public sale or distribution of Common Stock during the 1 days prior
to, and during the 90-day period beginning on, the effective date of such
registration statement.
(b) PSC Holdback. If SPI enters into an underwriting
agreement in connection with a firm underwritten offering of shares of
Registerable Securities (other than in connection with a Piggyback
Registration), PSC will not, if requested by the managing underwriter for such
offering and SPI, effect any public sale or distribution of any Common Stock or
securities convertible into or exchangeable or exercisable for such Common
Stock (other than pursuant to a registration statement on Form S-8 or any
successor form), during the 10 days before, and during the 90-day period
beginning on, the effective date of such registration statement.
5. Registration Procedures.
Whenever SPI has requested that any Registrable Securities be
registered pursuant to Sections 2 or 3 hereof, PSC will use its reasonable best
efforts to effect the registration of such Registrable Securities in accordance
with the intended method of disposition thereof as promptly as practicable, and
in connection with any such registration, PSC will as expeditiously as possible
(provided that nothing contained herein prohibits PSC from abandoning a
registration in which SPI has requested to participate pursuant to Section 3
hereof):
(a) with regard to a Piggyback Registration and, subject to
the provisions of Section 2, with regard to the Shelf Registration, prepare and
file with the SEC a registration statement and use its best efforts to cause
such filed registration statement to become effective; provided that (i) before
filing a Registration Statement or prospectus or any amendments or supplements
thereto, PSC will furnish to one counsel selected by SPI copies of all such
documents proposed to be filed sufficiently in advance of filing to provides
such counsel with a reasonable opportunity to review such documents and coment
thereon and (ii), after the filing of the Registration Statement, PSC will
promptly notify SPI of any stop order issued or, to the knowledge of PSC,
threatened by the SEC and take all reasonable actions required to prevent the
entry of such stop order or to remove it if entered;
- 5 -
<PAGE> 232
(b) prepare and file with the SEC such amendments and
supplements to the registration statement and the prospectus used in connection
therewith as may be necessary to (i) keep the Registration Statement effective
for a period which will terminate when all Covered Shares have been sold and
(ii) comply with the provisions of the Securities Act with respect to the
disposition of all Covered Shares during such period in accordance with the
intended methods of disposition by SPI thereof set forth in the registration
statement, including without limitation, such amendments and supplements to the
Shelf Registration Statement and related prospectus as may be necessary to
permit Covered Shares to be sold pursuant thereto in an underwritten offering;
(c) furnish to SPI, before filing the registration statement,
if requested, copies of the Registration Statement as proposed to be filed, and
thereafter furnish to SPI such number of copies of the Registration Statement,
each amendment and supplement thereto (in each case including all exhibits
thereto), the prospectus included in the Registration Statement (including each
preliminary prospectus) and such other document as SPI may reasonably request
in order to facilitate the disposition of the Covered Shares owned by SPI;
(d) use its best efforts to register or qualify the Covered
Shares under such other securities or blue sky laws of such jurisdictions in
the United States as SPI reasonably (in light of SPI's intended plan of
distribution) requests and do any and all other acts and things which may be
reasonably necessary or advisable to enable SPI to consummate the disposition
in such jurisdictions of its Covered Shares; provided that PSC will not be
required to (i) qualify generally to do business in any jurisdiction where it
would not otherwise be required to qualify but for this paragraph (d), (ii)
subject itself to taxation in any such jurisdiction or (iii) consent to general
service of process in any such jurisdiction;
(e) use its best efforts to cause the Covered Shares to be
registered with or approved by such other governmental agencies or authorities
as may be necessary by virtue of the business and operations of PSC to enable
SPI to consummate the disposition of the Covered Shares;
(f) notify SPI of the occurrence of an event requiring the
preparation of a supplement or amendment to a Registration Statement or a
prospectus contained therein so that, as thereafter delivered to the purchasers
of such Covered Shares, a Registration Statement or such prospectus will not
contain an untrue statement of a material fact or omit to state any material
- 6 -
<PAGE> 233
fact required to be stated therein or necessary to make the statements therein
not misleading and promptly make available to SPI any such supplement or
amendment;
(g) enter into customary agreements (including an
underwriting agreement in customary form if the distribution of the Covered
Shares is otherwise to be made in an underwritten offering) and take such other
actions as are reasonably required in order to expedite or facilitate the
disposition of such Covered Shares;
(h) make available for inspection by SPI, any underwriter
participating in any disposition pursuant to such Registration Statement and
any attorney, accountant or other professional retained by SPI or underwriter
(collectively, the "Inspectors"), all financial and other records, pertinent
corporate documents and properties of PSC (collectively, the "Records") as are
reasonably necessary to enable them to exercise due diligence, and cause PSC's
officers, directors and employees to supply all information reasonably
requested by any such Inspectors in connection with the registration statement;
(i) in the event an offering of Registrable Securities is
pursuant to an underwritten offering, use its best efforts to obtain a comfort
letter or comfort letters from PSC's independent public accountants in
customary form and covering such matters of the type customarily covered by
comfort letters as the managing underwriter reasonably requests;
(j) otherwise use its best efforts to comply with all
applicable rules and regulations of the SEC, and make generally available to
its security holders, as soon as reasonably practicable, an earnings statement
satisfying the provisions of Section 11(a) of the Securities Act and covering a
period of twelve months, beginning within three months after the effective date
of the registration statement;
(k) use its best efforts to cause all Covered Shares to be
listed on the NASDAQ National Market or listed on each national securities
exchange on which the Common Stock is then listed; and
(l) provide a transfer agent and registrar for all of the
Covered Shares not later than the effective date of such Registration
Statement.
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<PAGE> 234
6. Indemnification.
(a) Indemnification by PSC. PSC agrees to indemnify and hold
harmless SPI, its officers, directors, employees and agents, and each Person,
if any, who controls SPI within the meaning of Section 15 of the Securities Act
or Section 20 of the Exchange Act against any and all losses, claims, damages,
liabilities and expenses (including reasonable costs of investigation) arising
out of or based upon any untrue statement or alleged untrue statement of a
material fact contained in any Registration Statement or prospectus relating to
the Covered Shares, in any amendment or supplement thereto, in any preliminary
prospectus, or arising out of or based upon any omission or any alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, except insofar as such
losses, claims, damages, liabilities or expenses arise out of, or are based
upon, any such untrue statement or omission or allegation thereof based upon
information furnished in writing to PSC by SPI or on SPI's behalf expressly for
use therein.
(b) Indemnification by SPI. SPI agrees to indemnify and hold
harmless PSC, its directors and officers and each party, if any, who controls
PSC within the meaning of either Section 15 of the Securities Act or Section 20
of the Exchange Act to the same extent as the foregoing indemnity from PSC to
SPI, but only with respect to information furnished in writing by SPI or on
SPI's behalf expressly for use in any Registration Statement or prospectus
relating to the Covered Shares, or any amendment or supplement thereto, or any
preliminary prospectus.
(c) Conduct of Indemnification Proceedings. If any action or
proceeding (including any governmental investigation) is brought or asserted
against any party entitled to indemnification under clauses (a) or (b) above
(an "Indemnified Party") in respect of which indemnity may be sought from any
party who has agreed to provide such indemnification (an "Indemnifying Party"),
the Indemnifying Party will assume the defense thereof, including the
employment of counsel reasonably satisfactory to such Indemnified Party, and
will assume the payment of all expenses. Such Indemnified Party will have the
right to employ separate counsel in any such action and to participate in the
defense thereof, but the fees and expenses of such counsel will be at the
expense of such Indemnified Party unless (i) the Indemnifying Party has agreed
to pay such fees and expenses or (ii) the named parties to any such action or
proceeding (including any impleaded parties) include both such Indemnified
Party and the Indemnifying Party, and such Indemnified Party has been advised
by counsel that there is a
- 8 -
<PAGE> 235
conflict of interest on the part of counsel employed by the Indemnifying Party
to represent such Indemnified Party (in which case, if such Indemnified Party
notifies the Indemnifying Party in writing that it elects to employ separate
counsel at the expense of the Indemnifying Party, the Indemnifying Party will
not have the right to assume the defense of such action or proceeding on behalf
of such Indemnified Party; it being understood, however, that the Indemnifying
Party will not, in connection with any one such action or proceeding or
separate but substantially similar or related actions or proceedings in the
same jurisdiction arising out of the same general allegations or circumstances,
be liable for the fees and expenses of more than one separate firm of attorneys
(together with appropriate local counsel) at any time for all such Indemnified
Parties). The Indemnifying Party will not be liable for any settlement of any
such action or proceeding effected without its written consent, but if settled
with its written consent, or if there is a final judgment for the plaintiff in
any such action or proceeding, the Indemnifying Party will indemnify and hold
harmless such Indemnified Parties from and against any loss or liability (to
the extent stated above) by reason of such settlement or judgment.
7. Contribution.
If for any reason the indemnification provided for in the
preceding Sections 6(a) and 6(b) is unavailable to an Indemnified Party as
contemplated by those sections, then the Indemnifying Party will contribute to
the amount paid or payable by the Indemnified Party as a result of such loss,
claim, damage or liability in such proportion as is appropriate to reflect not
only the relative benefits received by the Indemnified Party and the
Indemnifying Party, but also the relative fault of the Indemnified Party and
the Indemnifying Party, as well as any other relevant equitable considerations,
provided that SPI will not be required to contribute in an amount greater than
the difference between the net proceeds received by SPI with respect to the
sale of any Registrable Securities and all amounts already contributed by SPI
with respect to such claims.
8. Participation in Underwritten Registrations.
With regard to a Piggyback Registration, SPI may not
participate in any underwritten registration hereunder unless SPI (a) agrees to
sell its securities on the basis provided in any underwriting arrangements
approved by the parties entitled to approve such arrangements; and (b)
completes and executes all questionnaires, powers of attorney, indemnities,
underwriting agreements and other documents reasonably required under the
- 9 -
<PAGE> 236
terms of such underwriting arrangements and this Agreement. Notwithstanding
the previous sentence, SPI shall not be required to make any representations or
warranties to, or make any agreements with, PSC or any underwriter other than
representations, warranties or agreements customary for a non-controlling
selling shareholder selling shares under similar circumstances. In the event
that the Covered Shares included in a Shelf Registrations Statement are to be
sold pursuant to an underwritten offering the managing underwriter for such
offering shall be a nationally recognized investment banking firm selected by
SPI and be reasonably acceptable to PSC.
9. Rule 144.
PSC covenants that it will file any reports required to be
filed by it under the Securities Act and the Exchange Act so as to enable SPI
to sell Common Stock without registration under the Securities Act within the
limitation of the exemptions provided by Rule 144. Upon the request of SPI,
PSC will deliver to SPI a written statement as to whether it has complied with
such requirements.
10. Information.
PSC may require SPI to promptly furnish in writing to PSC such
information regarding the distribution of the Registrable Securities as it may
from time to time reasonably request and such other information as may be
legally required or reasonably requested in connection with such registration.
11. Amended or Supplemented Prospectus.
SPI agrees that, upon receipt of any notice from PSC of the
happening of any event of the kind described in Section 5(f) hereof, SPI will
forthwith discontinue disposition of any Covered Shares pursuant to the
registration statement covering such Covered Shares until SPI's receipt of the
copies of the supplemented or amended prospectus contemplated by Section 5(f)
hereof, and, if so directed by PSC, SPI will deliver to PSC all copies, other
than permanent file copies then in SPI's possession, all prospectuses covering
such Covered Shares at the time of receipt of such notice, and shall not effect
any transaction with respect to any Covered Shares except pursuant to the
supplemented or amended prospectus. In the event PSC gives such notice, PSC
will extend the period during which such Registration Statement will be
maintained effective by the number of days during the period from and including
the date of the giving of notice pursuant to Section 5(f) hereof to the date
when
- 10 -
<PAGE> 237
PSC makes available to SPI a prospectus supplemented or amended to conform with
the requirements of Section 5(f) hereof.
12. Registration Expenses.
In connection with any registration statement filed pursuant
to Section 2 or Section 3 hereof, PSC will pay all registration expenses (the
"Registration Expenses"), including but not limited to: (i) all registration
and filing fees, (ii) fees and expenses of compliance with securities or blue
sky laws, subject to the provisions of Section 5(d), (including reasonable fees
and disbursements of counsel in connection with blue sky qualifications of the
Covered Shares), (iii) printing expenses, (iv) internal expenses of PSC
(including, without limitation, all salaries and expenses of its officers and
employees performing legal or accounting duties), (v) the fees and expenses
incurred in connection with the listing of the Covered Shares, (vi) fees and
disbursements of counsel for PSC and customary fees and expenses for
independent certified public accountants retained by PSC (including the
expenses of any comfort letters or costs associated with the delivery by
independent certified public accountants of a comfort letter or comfort letters
requested pursuant to Section 5(i) hereof), (vii) the fees and expenses of any
special experts retained by PSC in connection with such registration, and
(viii) reasonable fees and expenses of one law firm (designated by SPI and
reasonably acceptable to PSC) acting as counsel for SPI in connection with the
registration hereunder; provided, however, PSC will not have any obligation to
pay any underwriting fees, discounts or commissions attributable to the sale of
Covered Shares (which will be the obligation of SPI) or, except as otherwise
provided in clause (viii) above, any out-of-pocket expenses of SPI (or any
agents who manage its accounts) or fees and disbursements of any counsel for
any underwriter in any underwritten offering.
13. Registration Rights.
PSC agrees that it will not enter into any agreement or
arrangements which would grant any party a right to participate in any
registration that is superior to or in contravention of the rights to
participate set forth in this Agreement.
14. Parties in Interest.
All covenants and agreements contained in this Agreement by or
on behalf of either party hereto shall bind and inure to the benefit of the
respective successors and assigns of such party hereto, whether so expressed or
not, including subsequent holders of Registrable Securities.
- 11 -
<PAGE> 238
15. Notices.
All notices, requests, consents and other communications hereunder
shall be in writing and shall be mailed by first-class registered mail, postage
prepaid, or sent by recognized courier service addressed as follows:
(a) if to PSC, at
PSC, Inc.
675 Basket Road
Webster, NY 14580
Telephone: (716) 265-1600
Fax: (716) 265-6402
Attention: William W. Woodard,
Vice-President-Finance
with a copy to:
Baylor, Brown, Code, Fowler, Vigdor
& Wilson, L.L.P.
2480 Chase Square
Rochester, NY 14604
Telephone: (716) 232-5300
Fax: (716) 232-3528
Attention: Martin S. Weingarten, Esq.
(b) if to SPI:
Spectra-Physics, Inc.
108 Webster Building
3411 Silverside Road
Wilmington, DE 19810
Telephone: (302) 478-4600
Fax: (302) 478-8962
Attn: Ms. Barbara Schoenberg
with copies to:
Spectra-Physics AB
Box 5226
Sturegatan 32
Fourth Floor
S-102 45 Stockholm, Sweden
Telephone: 011-468-783-0725
Fax: 011-468-660-9226
Attn: Mr. Ulf Johansson
and
- 12 -
<PAGE> 239
Dechert Price & Rhoads
4000 Bell Atlantic Tower
1717 Arch Street
Philadelphia, PA 19103
Attention: Carmen J. Romano, Esquire;
or, in any such case, at such other address or addresses as shall have been
furnished in writing by such party to the others.
16. Law Governing.
This agreement shall be governed by and construed in accordance with
the laws of the state of New York.
17. Entire Agreement.
This Agreement constitutes the entire Agreement of the parties with
respect to the subject mater hereof and may not be modified or amended except
in writing.
18. Counterparts.
This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together constitute one and
the same instrument.
- 13 -
<PAGE> 240
IN WITNESS WHEREOF, the undersigned have executed this
Agreement as of the day and year first above written.
SPECTRA-PHYSICS, INC.
____________________________
By:
Title:
PSC, INC.
____________________________
By:
Title:
- 14 -
<PAGE> 241
Amendment to
Purchase Agreement
SPECTRA-PHYSICS, INC. SPECTRA-PHYSICS HOLDING, S.A.
108 Webster Building Avenue de Scandanavie
3411 Silverside Road ZA de Courtaboeuf
Wilmington, DE 19810 91940 Les Ulis
July 12, 1996
PSC Inc.
675 Basket Road
Webster, NY 14580
Gentlemen:
Reference is made to that certain Asset and Stock Purchase
Agreement dated May 20, 1996, by and among PSC Inc., Spectra-Physics, Inc.,
and Spectra-Physics Holding, S.A. (the "Purchase Agreement"). Capitalized
terms used but not defined herein shall have the meaning ascribed to them in
the Purchase Agreement.
This is to confirm our agreement to amend the Purchase
Agreement as follows:
1) Exhibit D, Terms of Note, to the Purchase Agreement is
amended so as to read in its entirety as is set forth on Attachment A hereto.
2) Exhibit F, Purchase Price Allocation, to the Purchase
Agreement is amended so as to read in its entirety as is set forth on
Attachment B hereto.
3) In addition to all amounts due under the Purchase
Agreements, PSC Inc. shall pay to Seller on the date hereof, as compensation
for the delay in the Closing, the amount of $365,173. Such amount shall be
treated as an increase in the Purchase Price and shall be wired to the account
specified in paragraph 2 of that certain letter regarding the Closing Cash
Payment dated the date hereof.
4) The number of Escrowed Shares shall be 315,789.
<PAGE> 242
On behalf of PSC Inc., please confirm that the foregoing correctly
sets forth our agreement by signing below.
Sincerely,
SPECTRA-PHYSICS, INC.
By: /s/ Lennart Rappe
------------------------------
Name: Lennart Rappe
----------------------------
Title: Auth. Rep.
----------------------------
SPECTRA-PHYSICS HOLDING, S.A.
By: /s/ Lennart Rappe
------------------------------
Name: Lennart Rappe
----------------------------
Title: Auth. Rep.
----------------------------
The undersigned hereby agrees with the foregoing:
PSC INC.
By: /s/ William J. Woodard
----------------------------
Name: William J. Woodard
Title: Vice President - Finance
<PAGE> 243
Attachment A
EXHIBIT D
TERMS OF NOTE
ISSUER: The Note will be issued by the purchaser of the U.S. Assets
and be guaranteed by PSC Inc.
AMOUNT: U.S. $5,000,000
OPTIONAL Prepayable in whole or in part at any time without
PREPAYMENT: premium or penalty
MATURITY: 5 years after Closing Date
AMORTIZATION: Principal payable in 16 equal consecutive quarterly
installments of $312,500 each commencing 15 months
after Closing
INTEREST: Interest payable quarterly at 100 basis points in excess of
the rate of interest announced from time to time by CoreStates
Bank as its base or prime rate
OTHER: The Note will have the same covenants, events of default,
subordination and other provisions as are set forth in the
subordinated loan agreement and related note contemplated by
the Subordinated Debt Commitment Letters referred to in
Section 3.1(q) of the Agreement (the "Subordinated Loan
Agreement"); provided that the Note will be subordinated to
the indebtedness under the Subordinated Loan Agreement to the
same extent that such indebtedness is subordinated to the
senior secured bank financing contemplated by the commitment
letter between Fleet National Bank and PSC Inc. referred to in
Section 3.1(q) of the Agreement.
<PAGE> 244
Attachment B
EXHIBIT F
Purchase Price Allocation
The Purchase Price shall be allocated as follows:
(a) The Note shall be allocated to the U.S.
Assets.
(b) The Buyer Stock shall be allocated to the
Shares.
(c) The balance of the Purchase Price shall be
allocated:
(i) First, to the Non-Compete Agreement
in the amount of US $5,000,000.
(ii) Next, to the International Assets of
each Seller Subsidiary in an amount
equal to the Assumed International
Liabilities of such Seller
Subsidiary plus 105% (150% in the
case of Spectra-Physics GmbH) of the
aggregate net book value of the
International Assets and Assumed
International Liabilities of such
Seller Subsidiary (i.e., book value
of such assets minus liabilities) at
the Closing Date, in each case as
reflected in the Closing Date
Balance Sheet; provided, however,
that the premium over book value in
the case of Spectra-Physics S.r.l.
shall equal US $300,000.
(iii) Next, to the TxCom Shares and the
TxCom Rights, in an amount equal
to US $14,050,000.
(iv) Lastly, to the Shares.
Within 30 days after the determination of the Closing Date
Balance Sheet, Scanning shall prepare and submit to Seller and Buyer a
statement allocating the Purchase Price, which statement shall be prepared in
accordance with the allocation set forth above.
<PAGE> 1
EXHIBIT B
ESCROW AGREEMENT
<PAGE> 2
ESCROW AGREEMENT
THIS ESCROW AGREEMENT is dated as of July 12, 1996 (the
"Agreement"), by and among PSC Inc., a New York corporation ("PSC"),
Spectra-Physics, Inc., a Delaware corporation ("SPI") and The Chase Manhattan
Bank, N.A., as escrow agent (the "Escrow Agent").
Background
----------
A. PSC, SPI and Spectra-Physics Holding S.A., a French
corporation ("SP Holding"), have entered into a certain Asset and Stock
Purchase Agreement dated May 20, 1996 (the "Purchase Agreement"). All
capitalized terms used but not otherwise defined herein shall have the meanings
ascribed to them in the Purchase Agreement.
B. Pursuant to Section 1.5(d) of the Purchase Agreement,
PSC has agreed to deposit the Escrowed Shares into escrow with the Escrow Agent
as security for certain indemnification obligations of SPI and SP Holding under
the Purchase Agreement.
C. A copy of the Purchase Agreement has been delivered
to the Escrow Agent and the Escrow Agent is willing to act as escrow agent
hereunder.
Terms
-----
In consideration of the mutual covenants and promises
contained in this Agreement and the Purchase Agreement and intending to be
legally bound, the parties hereto do hereby agree as follows:
1. ESTABLISHMENT OF ESCROW FUND. Concurrently with the
execution hereof, PSC has, in accordance with the Purchase Agreement, delivered
to the Escrow Agent certificates representing the Escrowed Shares, and SPI has
delivered to the Escrow Agent stock powers for such Escrowed Shares duly
executed in blank. The Escrow Agent hereby acknowledges receipt of the
Escrowed Shares as more fully described on the attached Schedule A. The
Escrowed Shares, together with any other shares of PSC or other securities or
cash which may be held from time to time by the Escrow Agent pursuant to the
terms hereof, are herein referred to as the "Escrow Fund". The Escrow Fund
shall be held by the Escrow Agent in accordance with the terms and conditions
hereinafter set forth. The Escrow Agent is hereby empowered to accept any
securities into which the Escrowed Shares may be converted by virtue of any
merger or other reorganization during
<PAGE> 3
the term of the escrow and any such securities are herein also referred to as
the "Escrowed Shares".
2. REPLACEMENT OF THE ESCROWED SHARES. At any time and
from time to time during the term of the escrow, SPI may direct the Escrow
Agent to, and upon receipt of such direction the Escrow Agent shall, transfer
any or all of the Escrowed Shares to SPI or as SPI may otherwise direct,
provided that at the time of such transfer SPI delivers to the Escrow Agent, in
substitution therefor, cash in an amount equal to the number of Escrowed Shares
to be so transferred multiplied by Nine and 50/100 dollars ($9.50) per share
(appropriately adjusted to reflect any stock splits or stock dividends by PSC)
(the "Agreed Value").
3. INVESTMENTS.
-----------
3.1 The Escrow Agent shall invest any cash in the
Escrow Fund at the written direction of SPI in (i) marketable direct
obligations issued or unconditionally guaranteed by the United States
Government or issued by any agency thereof and backed by the full faith and
credit of the United States; (ii) marketable direct obligations issued by any
state of the United States of America or any political subdivision of any such
state or any public instrumentality thereof, having the first or second highest
rating obtainable from either Standard & Poor's Corporation ("S&P") or Moody's
Investors Service, Inc. ("Moody's"); (iii) commercial paper having, at the time
of acquisition, a rating of A-1 or P-1 or better from either S&P or Moody's;
(iv) certificates of deposit or bankers' acceptances issued by any commercial
bank organized under the laws of the United States of America or any state
thereof or the District of Columbia having combined capital and surplus of not
less than $100,000,000, provided that if such commercial bank is not organized
under the laws of the United States of America, it must be a member of the
Federal Deposit Insurance Corporation, (v) money market mutual funds registered
under the Investment Company Act of 1940 that invest primarily in investments
described in clauses (i), (ii) and (iii) above including any proprietary funds
advised by the Escrow Agent, or (vi) repurchase agreements secured by such
investments.
3.2 Any interest or dividends earned on the
Escrow Fund shall not be part of the Escrow Fund and shall be paid to SPI by
the Escrow Agent promptly after receipt thereof by the Escrow Agent.
3.3 SPI shall furnish the Escrow Agent with such
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<PAGE> 4
tax information or documents as the Escrow Agent may reasonably require to
comply with its obligations under any tax law or regulation.
4. RIGHTS AS TO ESCROWED SHARES. SPI shall, during all
times any Escrowed Shares are in the Escrow Fund, have the right:
4.1 to vote and otherwise exercise all other
shareholder rights with respect to the Escrowed Shares;
4.2 to receive and to exercise any right to
acquire further PSC stock or other securities distributed with respect to the
Escrowed Shares; and
4.3 to receive any dividends or other
distributions declared and paid on the Escrowed Shares.
5. CLAIMS OF PSC AGAINST THE ESCROW FUND.
-------------------------------------
5.1 In the event PSC shall assert a claim for
indemnification pursuant to Article VIII of the Purchase Agreement (an
"Indemnification Claim"), PSC shall send written notice of the Indemnification
Claim to the Escrow Agent and to SPI in accordance with Section 10 hereof.
Such notice shall state the basis for the Indemnification Claim and the total
amount claimed and show in reasonable detail how such amount was computed. If
SPI shall object to the Indemnification Claim made by PSC hereunder, it shall
give written notice of such objection to the Escrow Agent and to PSC within
thirty (30) days after PSC's mailing of its notice. If no such objection to
the Indemnification Claim shall have been so sent to the Escrow Agent and to
PSC within such thirty (30)-day period, then SPI shall be deemed to have
acknowledged the correctness and validity of the Indemnification Claim for the
full amount thereof, and the Escrow Agent shall, in satisfaction of such
Indemnification Claim (to the extent the Escrow Fund is not exhausted),
transfer to PSC out of the Escrow Fund (a) such number of Escrowed Shares
having a value equal to the amount of the Indemnification Claim (such Escrowed
Shares being valued at the Agreed Value), plus (b) to the extent the
Indemnification Claim exceeds the value of the Escrowed Shares, cash or other
property included in the Escrow Fund having a value equal to such excess.
5.2 In the event that SPI shall have made timely
objection to PSC's Indemnification Claim, and SPI and PSC shall have failed to
resolve or compromise the Indemnification Claim within thirty (30) days from
the date on which SPI shall have
- 3 -
<PAGE> 5
mailed notice of such objection, then the validity of the Indemnification Claim
shall be settled by a court of competent jurisdiction or in such other manner
as PSC and SPI shall agree in writing. During the pendency of the resolution
of the objection to payment, the Escrow Agent shall have no obligation to make
any payment to either PSC or SPI. In the event that a court of competent
jurisdiction or other party designated by PSC and SPI finally determines (all
appeals from any such decision having been exhausted) that PSC is entitled to
any recovery by reason of its Indemnification Claim, the Escrow Agent shall
upon receipt of a signed statement executed by both PSC and SPI or receipt of a
final judicial order and affidavit from PSC stating that such order is
nonappealable, in satisfaction of such Indemnification Claim (to the extent the
Escrow Fund is not exhausted), thereupon transfer to PSC out of the Escrow Fund
(a) such number of Escrowed Shares having a value equal to the amount of the
such recovery (such Escrowed Shares being valued at the Agreed Value), plus (b)
to the extent the recovery exceeds the value of the Escrowed Shares, cash or
other property included in the Escrow Fund having a value equal to such excess.
5.3 Nothing in this Escrow Agreement shall limit
PSC's right to indemnification for any Damages not paid in full out of the
Escrow Fund.
6. FIRST RELEASE OF THE ESCROW FUND.
--------------------------------
6.1 On the First Release Date (as defined below),
the Escrow Agent shall transfer to SPI the entire balance of the Escrow Fund
except (a) such number of Escrowed Shares having a value equal to the Retention
Value (as defined below) (such Escrowed Shares being valued at the Agreed
Value), plus (b) to the extent the Retention Value exceeds the value of the
Escrowed Shares, cash or other property included in the Escrow Fund having a
value equal to such excess.
6.2 As used herein, the term "First Release Date"
shall mean the earlier of the following dates: (i) the date six (6) months
after the Closing Date, or (ii) the first date on which PSC consummates a
public offering of its equity securities following the Closing Date.
6.3 As used herein, the term "Retention Value" shall
mean (a) five hundred thousand dollars ($500,000), plus (b) the amount of any
Indemnification Claims which remain outstanding on the First Release Date (as
certified in good faith by PSC in writing to the Escrow Agent and SPI, as an
amount reasonably calculated by PSC to be sufficient to satisfy such
outstanding
- 4 -
<PAGE> 6
Indemnification Claims (the "Certified Value")).
6.4 On the date any Indemnification Claim
outstanding on the First Release Date is paid or decided or is otherwise
resolved in accordance with Section 5 hereof, the Escrow Agent shall transfer
to SPI, out of the Escrow Fund, Escrowed Shares, cash or other property having
a value equal to the amount, if any, by which the Certified Value for such
Indemnification Claim exceeds the amount, if any, paid to PSC in accordance
with Section 5 hereof in satisfaction of such Indemnification Claim.
7. FINAL RELEASE OF THE ESCROW FUND.
--------------------------------
7.1 On the date twelve (12) months after the Closing
Date (the "Final Release Date"), the Escrow Agent shall transfer to SPI the
entire balance of the Escrow Fund except (a) such number of Escrowed Shares
having a value equal to the Certified Value of any Indemnification Claims which
remain outstanding on the Final Release Date (such Escrowed Shares being valued
at the Agreed Value), plus (b) to the extent the Certified Value of such
outstanding Indemnification Claims exceeds the value of the Escrowed Shares
(being valued at the Agreed Value), cash or other property included in the
Escrow Fund having a value equal to such excess.
7.2 On the date any Indemnification Claim
outstanding on the Final Release Date is paid or decided or otherwise resolved
in accordance with Section 5 hereof, the Escrow Agent shall transfer to SPI,
out of the Escrow Fund, Escrowed Shares, cash or other property having a value
equal to the amount, if any, by which the Certified Value for such
Indemnification Claim exceeds the amount, if any, paid to PSC in accordance
with Section 5 hereof in satisfaction of such Indemnification Claim.
8. TERMINATION OF ESCROW. The escrow provided for
hereunder shall terminate upon the earlier of the following dates: (i) the date
on which the Escrow Fund is exhausted, (ii) the first date after the Final
Release Date on which no Indemnification Claim remains outstanding, or (iii)
the date on which both PSC and SPI have notified the Escrow Agent that PSC and
SPI have mutually agreed to terminate the escrow. Upon termination of the
escrow, the Escrow Agent shall transfer to SPI any Escrowed Shares and cash or
other property remaining in the Escrow Fund, unless PSC and SPI otherwise
direct the Escrow Agent in writing. Upon such release of the Escrow Fund the
Escrow Agent shall be irrevocably discharged and released from any and
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<PAGE> 7
all further responsibility or liability with respect to the Escrow Fund.
9. DUTIES OF ESCROW AGENT.
-----------------------
9.1 The acceptance by the Escrow Agent of its duties as
such under this Escrow Agreement is subject to the following terms and
conditions, which all parties to this Escrow Agreement hereby agree shall
govern and control with respect to the rights, duties, liabilities and
immunities of the Escrow Agent.
(a) The duties and responsibilities of the Escrow Agent shall be limited
to those expressly set forth in this Escrow Agreement, and the Escrow Agent
shall not be subject to, nor obligated to recognize, any other agreements to
which PSC, SPI or both are parties. Reference in this Escrow Agreement to the
Purchase Agreement is for identification purposes only and its terms and
conditions are not thereby incorporated herein.
(b) The duties of the Escrow Agent are only such as are herein
specifically provided and such duties are purely ministerial in nature. The
Escrow Agent's primary duty shall be to keep custody of and safeguard the
Escrow Fund during the period of the escrow, to invest the Escrow Fund in
accordance with the instructions given pursuant to Section 3 of this Agreement
and to make disbursement from the Escrow Fund in accordance with Sections 5, 6
and 7 hereof.
(c) The Escrow Agent shall be under no obligation in respect of the Escrow
Fund other than to faithfully follow the instructions contained herein or
delivered to the Escrow Agent in accordance with the Escrow Agreement. The
Escrow Agent may rely and act upon any written notice, instruction, direction,
request, waiver, consent, receipt or other paper or document which it in good
faith believes to be genuine and what it purports to be and the Escrow Agent
shall be subject to no liability with respect to the form, execution or
validity thereof.
(d) The Escrow Agent shall not be liable for any error of judgment, or for
any act done or step taken or omitted by it in good faith, or for any mistake of
fact or law, or for anything which it may in good faith do or refrain from doing
in connection herewith, except its own gross negligence or willful misconduct.
PSC and SPI, jointly and severally, shall defend, indemnify and hold the Escrow
Agent harmless from and against any and all claims, losses, damages, liabilities
and expenses, including reasonable attorney's fees, which may be imposed upon
the Escrow Agent or incurred by the Escrow Agent in connection with its
acceptance of the appointment as escrow agent hereunder or the
- 6 -
<PAGE> 8
performance of its duties hereunder, unless the Escrow Agent is determined to
have committed an intentional wrongful act or to have been grossly negligent
with respect to its duties under this Escrow Agreement.
(e) The Escrow Agent may consult with, and obtain advice from, legal
counsel (which may not be counsel for PSC or SPI) in the event of any dispute
or questions as to the construction of any of the provisions hereof or its
duties hereunder, and it shall incur no liability in acting in good faith in
accordance with the written opinion and instructions of such counsel. The fees
for consultation with such counsel shall be paid in accordance with Section 9.2
hereof.
9.2 The Escrow Agent shall be entitled to receive
the aggregate sum of One Thousand Five Hundred dollars ($1,500) per year as
compensation for its services as Escrow Agent hereunder, together with
reasonable counsel fees (including the allocated cost of in- house counsel) and
other out-of-pocket expenses incurred by the Escrow Agent in the performance of
its duties. The compensation, counsel fees, if any, and expenses so payable
shall be paid by PSC to the Escrow Agent, from time to time, upon the written
request of the Escrow Agent.
9.3 The Escrow Agent hereby accepts its appointment
and agrees to act as Escrow Agent under the terms and conditions of this
Agreement.
9.4 The Escrow Agent, or any successor to it
hereafter appointed, may at any time resign and be discharged of the duties and
obligations created by this Escrow Agreement by giving at least 30 days' prior
written notice to PSC and SPI. The Escrow Agent may be removed at any time
upon 60 days' notice by an instrument purportedly signed by an authorized
representative of PSC and an authorized representative of SPI. Any successor
Escrow Agent shall be appointed by PSC and approved by SPI. Any such successor
escrow agent shall deliver to both PSC and SPI a written instrument accepting
such appointment hereunder and thereupon it shall succeed to all of the rights
and duties of the Escrow Agent hereunder and shall take delivery of the Escrow
Fund to hold and distribute in accordance with the terms hereof. If no
successor escrow agent shall have been appointed within 30 days after PSC and
SPI are notified of the Escrow Agent's resignation or within 60 days after the
Escrow Agent is notified of its removal, the Escrow Agent shall deliver the
Escrow Fund to an attorney jointly designated by PSC and SPI who is not an
employee, officer or director of PSC or SPI. Upon the delivery of the Escrow
Fund in accordance with this Section
- 7 -
<PAGE> 9
9.4, the Escrow Agent shall be discharged from any further duties hereunder.
10. NOTICES. All notices, requests, demands, objections
and other communications hereunder shall be in writing and shall be deemed to
have been duly given if personally delivered or, if mailed, three business days
after being mailed by United States first-class, certified or registered mail,
postage prepaid, or, if sent by overnight delivery by a nationally recognized
courier such as Federal Express, one business day after deposit with such
courier, or, if sent by telecopy, upon confirmation of receipt, to the other
party at the following addresses (or at such other address as shall be given in
writing by any party to the others):
If to SPI to:
Spectra-Physics, Inc.
108 Webster Building
3411 Silverside Road
Wilmington, DE 19810
Telephone: (302) 478-4600
Fax: (302) 478-8962
Attn: Ms. Barbara Schoenberg
With required copies to:
Spectra-Physics AB
Box 5226
Sturegatan 32
Fourth Floor
2-102 45 Stockholm, Sweden
Telephone: 011-468-783-0725
Fax: 011-468-660-9226
Attn: Mr. Ulf Johansson
and
Dechert Price & Rhoads
4000 Bell Atlantic Tower
1717 Arch Street
Philadelphia, PA 19103
Telephone: (215) 994-2971
Fax: (215) 994-2222
Attn: Carmen J. Romano, Esq.
If to PSC to:
- 8 -
<PAGE> 10
PSC Inc.
675 Basket Road
Webster, New York 14580
Telephone: (716) 265-1600
Fax: (716) 265-6402
Attn: William J. Woodard, Vice President - Finance
With required copies to:
Boylan, Brown, Code, Fowler, Vigdor & Wilson, LLP
2400 Chase Square
Rochester, NY 14604
Telephone: (716) 232-5300
Fax: (716) 232-3528
Attn: Martin S. Weingarten, Esq.
If to the Escrow Agent:
Chase Manhattan Bank, N.A.
One Chase Square T-10
Rochester, New York 14643
Attn: Institutional Trust Department
11. BINDING EFFECT; THIRD PARTIES. This Agreement shall
be binding upon and inure to the benefit of the parties hereto and their
respective heirs, executors, administrators, representatives, successors and
assigns. This Agreement is not intended to confer any rights or remedies
hereunder on any other person other than the parties hereto.
12. AMENDMENTS. This Agreement may be amended or
modified at any time or from time to time in a writing executed by SPI, PSC and
the Escrow Agent. No supplement, modification or amendment of this Agreement
shall be binding unless executed in writing by each of the parties. No waiver
of any of the provisions of this Agreement shall be deemed to constitute a
waiver of any other provision hereof, whether or not similar, nor shall any
waiver constitute a continuing waiver. No waiver shall be binding unless
executed in writing by the party making the waiver.
13. GOVERNING LAW. This Escrow Agreement is made and
shall be governed by, construed and enforced in accordance with the laws of the
State of New York, exclusive of choice of laws provisions thereunder. The
parties consent to the personal jurisdiction of all courts of the State of
New York to resolve
- 9 -
<PAGE> 11
all disputes pertaining to this Escrow Agreement and any ancillary agreements
entered into pursuant hereto and agree that such jurisdiction shall be
exclusive. If any provision of this Escrow Agreement shall be prohibited or be
invalid under any law or regulation, that provision shall be ineffective to the
extent of such prohibition or invalidity without invalidating the remaining
provisions of this Agreement.
14. ASSIGNMENT. This Escrow Agreement shall be binding
upon and inure to the benefit of the parties and their legal representatives,
successors and assigns.
15. COUNTERPARTS. This Escrow Agreement may be executed
in one or more counterparts, each of which shall be deemed an original, but all
of which together shall constitute but one and the same instrument.
- 10 -
<PAGE> 12
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first written above.
SPECTRA-PHYSICS, INC.
By:
-------------------------------
Title:
---------------------
PSC INC.
By: /s/ L. Michael Hone
-------------------------------
Title: President & CEO
--------------------
THE CHASE MANHATTAN BANK, N.A.
By: /s/ Mary Pat Feeney
-------------------------------
Title: Second Vice Pres.
--------------------
- 10 -
<PAGE> 13
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first written above.
SPECTRA-PHYSICS, INC.
By: /s/ JOHN J. CARNEY
----------------------------
Title:
--------------
PSC INC.
By:
------------------------
Title:
----------
THE CHASE MANHATTAN BANK, N.A.
By:
--------------------------
Title:
-------------------
- 10 -
<PAGE> 14
"SCHEDULE A"
SEE REVERSE SIDE
FOR THE
RESTRICTIVE LEGEND
[PSC LOGO]
PSC INC.
<TABLE>
<CAPTION>
NUMBER INCORPORATED UNDER THE LAWS OF THE STATE OF NEW YORK SHARES
<S> <C>
R17920 **315789**
</TABLE>
CUSIP 69361E 10 7
SEE REVERSE FOR CERTAIN DEFINITIONS
THIS CERTIFIES THAT
-SPECTRA PHYSICS INC-
NCO 8984
is the owner of **THREE HUNDRED FIFTEEN THOUSAND SEVEN HUNDRED EIGHTY NINE**
FULLY PAID AND NON-ASSESSABLE SHARES OF COMON STOCK OF
PSC INC.
(herein called the "Corporation"), transferable on the books of the Corporation
by the holder hereof in person or by duly authorized attorney upon the
surrender of this certificate properly endorsed. This certificate is not valid
unless countersigned by the Transfer Agent.
WITNESS the facsimile seal of the Corporation and
the facsimile signatures of its duly authorized officers.
Dated: 07/10/96
/s/ Martin S. Weingarten /s/ L. Michael Hone
----------------------------- -------------------------------------
SECRETARY PRESIDENT AND CHIEF EXECUTIVE OFFICER
[SEAL]
<PAGE> 15
The following abbreviations, when used in the inscription on the face
of this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM--as tenants in common UNIF GIFT MIN ACT-......Custodian.....
TEN ENT--as tenants by the entireties (Cust) (Minor)
JT TEN --as joint tenants with right of under Uniform Gifts to Minors
survivorship and not as tenants Act..........................
in common (State)
Additional abbreviations may also be used though not in the above list.
For value received, ____________hereby sell, assign and
transfer unto PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
(PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING ZIP CODE, OF ASSIGNEE)
shares of the capital stock represented by the within
Certificate, and do hereby irrevocably constitute and appoint
Attorney to transfer the said stock, on the books of the
within named Corporation with full power of substitution in
the premises.
Dated
NOTICE: THE SIGNATURE TO THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME
AS WRITTEN UPON THE FACE OF THE CERTIFICATE IN EVERY PARTICULAR,
WITHOUT ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATEVER.
The shares represented by this certificate have not been
registered under the Securities Act of 1933. The shares have
been acquired for investment and may not be sold or
transferred in the absence of an effective Registration
Statement for the shares under the Securities Act of 1933 or
an opinion of counsel that registration is not required under
said Act.
<PAGE> 1
EXHIBIT C
REGISTRATION RIGHTS AND HOLDBACK AGREEMENT
<PAGE> 2
REGISTRATION RIGHTS and HOLDBACK AGREEMENT
This is a REGISTRATION RIGHTS AND HOLDBACK AGREEMENT, (the
"Agreement") dated as of July 12, 1996, by and between SPECTRA-PHYSICS, INC., a
Delaware corporation ("SPI") and PSC Inc., a New York corporation ("PSC").
WHEREAS, SPI, PSC and Spectra-Physics Holding, S.A., a French
corporation, have entered into an Asset and Stock Purchase Agreement (the
"Purchase Agreement"), dated May 20, 1996 pursuant to which SPI will receive
977,135 shares of Buyer's common stock, par value $.01 per share; and
WHEREAS, PSC wishes to grant to SPI registration rights for
the shares of common stock of PSC that SPI acquired pursuant to the Purchase
Agreement, and SPI is willing to agree to certain restrictions on the sale of
such shares;
NOW, THEREFORE, in consideration of the premises and mutual
covenants herein contained, the parties hereby agree as follows:
1. Definitions.
-----------
As used herein, the following terms have the following
respective meanings:
"Common Stock" means the common stock, par value $.01 per
share, of PSC.
"Covered Shares" means the Registrable Securities of SPI
included in a registration statement pursuant to the terms hereof.
"Exchange Act" means the Securities and Exchange Act of 1934,
as amended.
"Indemnified Party" has the meaning given to that term in
Section 6 hereof.
"Indemnifying Party" has the meaning given to that term in
Section 6 hereof.
-1-
<PAGE> 3
"Lock-up Period" means the period beginning on the date hereof
and ending on the date that is the earlier of (i) one year from the date hereof
or (ii) 180 days from the date of the consummation of the first public offering
of equity securities by PSC after the date hereof.
"Piggyback Registration" has the meaning given to that term in
Section 3 hereof.
"Piggyback Registration Statement" means a registration
statement of PSC filed with the SEC on a form for which PSC then qualifies and
which includes the Registrable Securities to be registered for sale thereunder
pursuant to Section 3 hereof, including post-effective amendments, in each case
including the prospectus contained therein, all exhibits thereto and all
material incorporated by reference therein.
"Registrable Securities" means (i) the shares of Common Stock
received by SPI pursuant to the Purchase Agreement and (ii) any Common Stock
issued or issuable with respect to the Registrable Securities by way of a stock
dividend or stock split or in connection with a combination of shares,
recapitalization, merger, consolidation or other reorganization. Any
Registrable Security will cease to be a Registrable Security when (i) a
registration statement covering such Registrable Security has been declared
effective by the SEC and it has been disposed of pursuant to such effective
registration statement, (ii) it is sold under circumstances in which all of the
applicable conditions of Rule 144 are met, or (iii) it has been otherwise
transferred, PSC has delivered a new certificate or other evidence of ownership
for it not bearing any restrictive legend citing the absence of registration
thereof and it may be resold without subsequent registration under the
Securities Act.
"Registration Expenses" has the meaning given to that term in
Section 12 hereof.
"Registration Statement" means any Piggyback Registration
Statement or any Shelf Registration Statement.
"SEC" means the U.S Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
-2-
<PAGE> 4
"Securities Purchase Agreements" shall mean those certain
Securities Purchase Agreements dated as of the date hereof by and between
SpectraScan, Inc., a Delaware corporation, PSC and the institutional investors
named therein, as such Securities Purchase Agreements exist on the date hereof.
"Shelf Registration" means a registration effected pursuant to
Section 2 hereof.
"Shelf Registration Statement" means a "shelf" registration
statement of PSC filed pursuant to the provisions of Section 2 hereof with the
SEC which covers all of the Registrable Securities on an appropriate form under
Rule 415 under the Securities Act, or any similar rule that may be adopted by
the SEC, and any amendments and supplements to such registration statement,
including post-effective amendments, in each case including the prospectus
contained therein, all exhibits thereto and all material incorporated by
reference therein.
All capitalized terms used herein that are not otherwise
defined herein shall have the meanings ascribed thereto in the Purchase
Agreement.
2. Shelf Registration.
------------------
(a) On or before 90 days after the date hereof, PSC shall file with
the SEC a Shelf Registration Statement relating to the offer and sale of the
Registrable Securities by SPI from time to time in accordance with the methods
of distribution elected by SPI and set forth in such Shelf Registration
Statement and, thereafter, shall use its best efforts to cause such Shelf
Registration Statement to be declared effective under the Securities Act as
promptly as is practicable after the date of filing of such Registration
Statement.
(b) PSC shall use its best efforts to keep the Shelf Registration
Statement continuously effective in order to permit the prospectus forming a
part thereof to be useable by SPI for a period of three years from the date the
Shelf Registration Statement is declared effective or such shorter period that
will terminate when all Covered Shares have been sold pursuant to a
Registration Statement or otherwise cease to be Registrable Securities;
provided that PSC's obligation to keep the Shelf Registration Statement
effective shall cease three months after such time as SPI owns less than 10% of
the Registrable Securities
-3-
<PAGE> 5
it owns on the date hereof unless the reason SPI's ownership of Registrable
Securities fell below the 10% level was due to the "cut-back" provision
contained in the last sentence of Section 3(b) hereof. PSC shall be deemed not
to have used its best efforts to keep the Shelf Registration Statement
effective during the requisite period if PSC voluntarily takes any action that
would result in SPI not being legally permitted to offer and sell any
Registrable Securities during that period unless (i) such action is required by
applicable law, (ii) upon the occurrence of any event that requires a
supplement or amendment to the Shelf Registration Statement as described in
Section 5(f) and such action is taken by PSC in good faith and for valid
business reasons or (iii) the continued effectiveness of the Shelf Registration
Statement would require PSC to disclose a material financing, acquisition or
other corporate transaction and the Board of Directors of PSC shall have
determined in good faith that such disclosure is not in the best interests of
PSC and its stockholders, and, in the case of clause (i) or (ii) above, PSC
thereafter promptly complies with the requirement of paragraph 5(f) below.
3. Piggy-Back Registration.
-----------------------
(a) Subject to the provisions of this Section 3, if PSC at
any time proposes to register any of its equity securities (as defined in the
Exchange Act) under the Securities Act, whether or not for sale for its own
account (other than pursuant to Section 2 hereof or other than pursuant to
Section 11.1 of the Securities Purchase Agreements), and the registration form
to be used may be used for the registration of Registrable Securities, PSC each
such time will give written notice of such proposed filing to SPI as soon as
practicable (but in no event less than twenty days before the anticipated
filing date), and such notice shall offer SPI the opportunity to include such
number of Registrable Securities in the registration as SPI may request (the
"Piggyback Registration"); provided that SPI notify PSC of the amount of
Registrable Securities to be registered not less than ten days before the
anticipated filing date.
(b) PSC shall use its best efforts to cause the managing
underwriter or underwriters of a proposed underwritten offering to permit the
Registrable Securities requested to be included in the registration statement
for such offering on the same terms and conditions as any similar securities of
PSC included therein. Notwithstanding the foregoing, if the managing
underwriter of such registration advises PSC in writing (with a copy to SPI)
that, in its opinion, inclusion of the number of Registrable Securities
requested to be included in the
-4-
<PAGE> 6
registration would adversely affect the marketing of the securities to be sold
by PSC in such offering, then PSC will include in such registration only the
number of Registrable Securities recommended by the managing underwriter that
may be included without adversely affecting the marketing of the securities to
be sold by PSC in such offering provided that, if any securities are being
offered for the account of any person other than PSC and the holders of the
Registrable Securities, the reduction in the number of Registrable Securities
included in such registration shall not represent a greater percentage of the
amount of Registrable Securities originally requested to be registered and sold
in such registration than the lowest such percentage reduction imposed upon any
other person.
4. Lock-up and Holdback Agreements.
-------------------------------
(a) SPI Lock-up. (i) During the Lock-up Period,
without PSC's prior written consent, SPI agrees not to effect any public sale
or distribution of any of the Registrable Securities except pursuant to an
available Piggyback Registration.
(ii) If PSC enters into an underwriting agreement in
connection with a firm underwritten offering of shares of its Common Stock, SPI
will not, if requested by the managing underwriter for such offering and PSC,
effect any public sale or distribution of Common Stock during the 10 days prior
to, and during the 90-day period beginning on, the effective date of such
registration statement.
(b) PSC Holdback. If SPI enters into an underwriting
agreement in connection with a firm underwritten offering of shares of
Registerable Securities (other than in connection with a Piggyback
Registration), PSC will not, if requested by the managing underwriter for such
offering and SPI, effect any public sale or distribution of any Common Stock or
securities convertible into or exchangeable or exercisable for such Common
Stock (other than pursuant to a registration statement on Form S-8 or any
successor form), during the 10 days before, and during the 90-day period
beginning on, the effective date of such registration statement.
5. Registration Procedures.
-----------------------
Whenever SPI has requested that any Registrable Securities be
registered pursuant to Sections 2 or 3 hereof, PSC will use its reasonable best
efforts to effect the registration of such Registrable Securities in accordance
with the intended method of disposition thereof as promptly as practicable, and
in
-5-
<PAGE> 7
connection with any such registration, PSC will as expeditiously as possible
(provided that nothing contained herein prohibits PSC from abandoning a
registration in which SPI has requested to participate pursuant to Section 3
hereof):
(a) with regard to a Piggyback Registration and, subject to
the provisions of Section 2, with regard to the Shelf Registration, prepare and
file with the SEC a Registration Statement and use its best efforts to cause
such filed Registration Statement to become effective; provided that (i) before
filing a Registration Statement or prospectus or any amendments or supplements
thereto, PSC will furnish to one counsel selected by SPI copies of all such
documents proposed to be filed sufficiently in advance of filing to provide
such counsel with a reasonable opportunity to review such documents and comment
thereon and (ii), after the filing of the Registration Statement, PSC will
promptly notify SPI of any stop order issued or, to the knowledge of PSC,
threatened by the SEC and take all reasonable actions required to prevent the
entry of such stop order or to remove it if entered;
(b) prepare and file with the SEC such amendments and
supplements to the Registration Statement and the prospectus used in connection
therewith as may be necessary to (i) keep the Registration Statement effective
for a period which will terminate when all Covered Shares have been sold and
(ii) comply with the provisions of the Securities Act with respect to the
disposition of all Covered Shares during such period in accordance with the
intended methods of disposition by SPI thereof set forth in the Registration
Statement, including without limitation, such amendments and supplements to the
Shelf Registration Statement and related prospectus as may be necessary to
permit Covered Shares to be sold pursuant thereto in an underwritten offering;
(c) furnish to SPI, before filing the Registration Statement,
if requested, copies of the Registration Statement as proposed to be filed, and
thereafter furnish to SPI such number of copies of the Registration Statement,
each amendment and supplement thereto (in each case including all exhibits
thereto), the prospectus included in the Registration Statement (including each
preliminary prospectus) and such other document as SPI may reasonably request
in order to facilitate the disposition of the Covered Shares owned by SPI;
(d) use its best efforts to register or qualify the Covered
Shares under such other securities or blue sky laws of such jurisdictions in
the United States as SPI reasonably (in
-6-
<PAGE> 8
light of SPI's intended plan of distribution) requests and do any and all other
acts and things which may be reasonably necessary or advisable to enable SPI to
consummate the disposition in such jurisdictions of its Covered Shares;
provided that PSC will not be required to (i) qualify generally to do business
in any jurisdiction where it would not otherwise be required to qualify but for
this paragraph (d), (ii) subject itself to taxation in any such jurisdiction or
(iii) consent to general service of process in any such jurisdiction;
(e) use its best efforts to cause the Covered Shares to be
registered with or approved by such other governmental agencies or authorities
as may be necessary by virtue of the business and operations of PSC to enable
SPI to consummate the disposition of the Covered Shares;
(f) notify SPI of the occurrence of an event requiring the
preparation of a supplement or amendment to a Registration Statement or a
prospectus contained therein so that, as thereafter delivered to the purchasers
of such Covered Shares, a Registration Statement or such prospectus will not
contain an untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein
not misleading and promptly make available to SPI any such supplement or
amendment;
(g) enter into customary agreements (including an
underwriting agreement in customary form if the distribution of the Covered
Shares is otherwise to be made in an underwritten offering) and take such other
actions as are reasonably required in order to expedite or facilitate the
disposition of such Covered Shares;
(h) make available for inspection by SPI, any underwriter
participating in any disposition pursuant to such Registration Statement and
any attorney, accountant or other professional retained by SPI or underwriter
(collectively, the "Inspectors"), all financial and other records, pertinent
corporate documents and properties of PSC (collectively, the "Records") as are
reasonably necessary to enable them to exercise due diligence, and cause PSC's
officers, directors and employees to supply all information reasonably
requested by any such Inspectors in connection with the Registration Statement;
(i) in the event an offering of Registrable Securities is
pursuant to an underwritten offering, use its best efforts to obtain a comfort
letter or comfort letters from PSC's independent public accountants in
customary form and covering such matters of
-7-
<PAGE> 9
the type customarily covered by comfort letters as the managing underwriter
reasonably requests;
(j) otherwise use its best efforts to comply with all
applicable rules and regulations of the SEC, and make generally available to
its security holders, as soon as reasonably practicable, an earnings statement
satisfying the provisions of Section 11(a) of the Securities Act and covering a
period of twelve months, beginning within three months after the effective date
of the registration statement;
(k) use its best efforts to cause all Covered Shares to be
listed on the NASDAQ National Market or listed on each national securities
exchange on which the Common Stock is then listed; and
(l) provide a transfer agent and registrar for all of the
Covered Shares not later than the effective date of such Registration
Statement.
6. Indemnification.
---------------
(a) Indemnification by PSC. PSC agrees to indemnify and hold
harmless SPI, its officers, directors, employees and agents, and each Person,
if any, who controls SPI within the meaning of Section 15 of the Securities Act
or Section 20 of the Exchange Act against any and all losses, claims, damages,
liabilities and expenses (including reasonable costs of investigation) arising
out of or based upon any untrue statement or alleged untrue statement of a
material fact contained in any Registration Statement or prospectus relating to
the Covered Shares, in any amendment or supplement thereto, in any preliminary
prospectus, or arising out of or based upon any omission or any alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, except insofar as such
losses, claims, damages, liabilities or expenses arise out of, or are based
upon, any such untrue statement or omission or allegation thereof based upon
information furnished in writing to PSC by SPI or on SPI's behalf expressly for
use therein.
(b) Indemnification by SPI. SPI agrees to indemnify and hold
harmless PSC, its directors and officers and each party, if any, who controls
PSC within the meaning of either Section 15 of the Securities Act or Section 20
of the Exchange Act to the same extent as the foregoing indemnity from PSC to
SPI, but only with respect to information furnished in writing by SPI or on
SPI's behalf expressly for use in any Registration Statement or
-8-
<PAGE> 10
prospectus relating to the Covered Shares, or any amendment or supplement
thereto, or any preliminary prospectus.
(c) Conduct of Indemnification Proceedings. If any action or
proceeding (including any governmental investigation) is brought or asserted
against any party entitled to indemnification under clauses (a) or (b) above
(an "Indemnified Party") in respect of which indemnity may be sought from any
party who has agreed to provide such indemnification (an "Indemnifying Party"),
the Indemnifying Party will assume the defense thereof, including the
employment of counsel reasonably satisfactory to such Indemnified Party, and
will assume the payment of all expenses. Such Indemnified Party will have the
right to employ separate counsel in any such action and to participate in the
defense thereof, but the fees and expenses of such counsel will be at the
expense of such Indemnified Party unless (i) the Indemnifying Party has agreed
to pay such fees and expenses or (ii) the named parties to any such action or
proceeding (including any impleaded parties) include both such Indemnified
Party and the Indemnifying Party, and such Indemnified Party has been advised
by counsel that there is a conflict of interest on the part of counsel employed
by the Indemnifying Party to represent such Indemnified Party (in which case,
if such Indemnified Party notifies the Indemnifying Party in writing that it
elects to employ separate counsel at the expense of the Indemnifying Party, the
Indemnifying Party will not have the right to assume the defense of such action
or proceeding on behalf of such Indemnified Party; it being understood,
however, that the Indemnifying Party will not, in connection with any one such
action or proceeding or separate but substantially similar or related actions
or proceedings in the same jurisdiction arising out of the same general
allegations or circumstances, be liable for the fees and expenses of more than
one separate firm of attorneys (together with appropriate local counsel) at any
time for all such Indemnified Parties). The Indemnifying Party will not be
liable for any settlement of any such action or proceeding effected without its
written consent, but if settled with its written consent, or if there is a
final judgment for the plaintiff in any such action or proceeding, the
Indemnifying Party will indemnify and hold harmless such Indemnified Parties
from and against any loss or liability (to the extent stated above) by reason
of such settlement or judgment.
7. Contribution.
------------
If for any reason the indemnification provided for in the
preceding Sections 6(a) and 6(b) is unavailable to an
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Indemnified Party as contemplated by those sections, then the Indemnifying
Party will contribute to the amount paid or payable by the Indemnified Party as
a result of such loss, claim, damage or liability in such proportion as is
appropriate to reflect not only the relative benefits received by the
Indemnified Party and the Indemnifying Party, but also the relative fault of
the Indemnified Party and the Indemnifying Party, as well as any other relevant
equitable considerations, provided that SPI will not be required to contribute
in an amount greater than the difference between the net proceeds received by
SPI with respect to the sale of any Registrable Securities and all amounts
already contributed by SPI with respect to such claims.
8. Participation in Underwritten Registrations.
-------------------------------------------
With regard to a Piggyback Registration, SPI may not
participate in any underwritten registration hereunder unless SPI (a) agrees to
sell its securities on the basis provided in any underwriting arrangements
approved by the parties entitled to approve such arrangements; and (b)
completes and executes all questionnaires, powers of attorney, indemnities,
underwriting agreements and other documents reasonably required under the terms
of such underwriting arrangements and this Agreement. Notwithstanding the
previous sentence, SPI shall not be required to make any representations or
warranties to, or make any agreements with, PSC or any underwriter other than
representations, warranties or agreements customary for a non-controlling
selling shareholder selling shares under similar circumstances. In the event
that the Covered Shares included in a Shelf Registrations Statement are to be
sold pursuant to an underwritten offering the managing underwriter for such
offering shall be a nationally recognized investment banking firm selected by
SPI and be reasonably acceptable to PSC.
9. Rule 144.
--------
PSC covenants that it will file any reports required to be
filed by it under the Securities Act and the Exchange Act so as to enable SPI
to sell Common Stock without registration under the Securities Act within the
limitation of the exemptions provided by Rule 144. Upon the request of SPI,
PSC will deliver to SPI a written statement as to whether it has complied with
such requirements.
10. Information.
-----------
PSC may require SPI to promptly furnish in writing to PSC such
information regarding the distribution of the
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Registrable Securities as it may from time to time reasonably request and such
other information as may be legally required or reasonably requested in
connection with such registration.
11. Amended or Supplemented Prospectus.
----------------------------------
SPI agrees that, upon receipt of any notice from PSC of the
happening of any event of the kind described in Section 5(f) hereof, SPI will
forthwith discontinue disposition of any Covered Shares pursuant to the
Registration Statement covering such Covered Shares until SPI's receipt of the
copies of the supplemented or amended prospectus contemplated by Section 5(f)
hereof, and, if so directed by PSC, SPI will deliver to PSC all copies, other
than permanent file copies then in SPI's possession, of all prospectuses
covering such Covered Shares at the time of receipt of such notice, and shall
not effect any transaction with respect to any Covered Shares except pursuant
to the supplemented or amended prospectus. In the event PSC gives such notice,
PSC will extend the period during which such Registration Statement will be
maintained effective by the number of days during the period from and including
the date of the giving of notice pursuant to Section 5(f) hereof to the date
when PSC makes available to SPI a prospectus supplemented or amended to conform
with the requirements of Section 5(f) hereof.
12. Registration Expenses.
---------------------
In connection with any Registration Statement filed pursuant
to Section 2 or Section 3 hereof, PSC will pay all registration expenses (the
"Registration Expenses"), including but not limited to: (i) all registration
and filing fees, (ii) fees and expenses of compliance with securities or blue
sky laws, subject to the provisions of Section 5(d), (including reasonable fees
and disbursements of counsel in connection with blue sky qualifications of the
Covered Shares), (iii) printing expenses, (iv) internal expenses of PSC
(including, without limitation, all salaries and expenses of its officers and
employees performing legal or accounting duties), (v) the fees and expenses
incurred in connection with the listing of the Covered Shares, (vi) fees and
disbursements of counsel for PSC and customary fees and expenses for
independent certified public accountants retained by PSC (including the
expenses of any comfort letters or costs associated with the delivery by
independent certified public accountants of a comfort letter or comfort letters
requested pursuant to Section 5(i) hereof), (vii) the fees and expenses of any
special experts retained by PSC in connection with such registration, and
(viii) reasonable fees and expenses of one law firm (designated by SPI and
reasonably
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acceptable to PSC) acting as counsel for SPI in connection with the
registration hereunder; provided, however, PSC will not have any obligation to
pay any underwriting fees, discounts or commissions attributable to the sale of
Covered Shares (which will be the obligation of SPI) or, except as otherwise
provided in clause (viii) above, any out-of-pocket expenses of SPI (or any
agents who manage its accounts) or fees and disbursements of any counsel for
any underwriter in any underwritten offering.
13. Registration Rights.
-------------------
PSC agrees that it will not enter into any agreement or
arrangements which would grant any party a right to participate in any
registration that is superior to or in contravention of the rights to
participate set forth in this Agreement.
14. Parties in Interest.
-------------------
All covenants and agreements contained in this Agreement by or
on behalf of either party hereto shall bind and inure to the benefit of the
respective successors and assigns of such party hereto, whether so expressed or
not, including subsequent holders of Registrable Securities.
15. Notices.
-------
All notices, requests, consents and other communications hereunder
shall be in writing and shall be mailed by first-class registered mail, postage
prepaid, or sent by recognized courier service addressed as follows:
(a) if to PSC:
PSC Inc.
675 Basket Road
Webster, NY 14580
Telephone: (716) 265-1600
Fax: (716) 265-6402
Attention: William J. Woodard, Vice-President -
Finance
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<PAGE> 14
with a copy to:
Boylan, Brown, Code, Fowler, Vigdor
& Wilson, LLP
2400 Chase Square
Rochester, NY 14604
Telephone: (716) 232-5300
Fax: (716) 232-3528
Attention: Martin S. Weingarten, Esq.
(b) if to SPI:
Spectra-Physics, Inc.
108 Webster Building
3411 Silverside Road
Wilmington, DE 19810
Telephone: (302) 478-4600
Fax: (302) 478-8962
Attn: Ms. Barbara Schoenberg
with copies to:
Spectra-Physics AB
Box 5226
Sturegatan 32
Fourth Floor
S-102 45 Stockholm, Sweden
Telephone: 011-468-783-0725
Fax: 011-468-660-9226
Attn: Mr. Ulf Johansson
and
Dechert Price & Rhoads
4000 Bell Atlantic Tower
1717 Arch Street
Philadelphia, PA 19103
Attention: Carmen J. Romano, Esquire;
or, in any such case, at such other address or addresses as shall have been
furnished in writing by such party to the others.
16. Law Governing.
-------------
This agreement shall be governed by and construed in accordance with
the laws of the state of New York.
17. Entire Agreement.
----------------
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<PAGE> 15
This Agreement constitutes the entire Agreement of the parties with
respect to the subject mater hereof and may not be modified or amended except
in writing.
18. Counterparts.
------------
This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together constitute one and
the same instrument.
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<PAGE> 16
IN WITNESS WHEREOF, the undersigned have executed this
Agreement as of the day and year first above written.
SPECTRA-PHYSICS, INC.
/s/ LENNART RAPPE
----------------------------
By: Lennart Rappe
Title: Authorized Representative
PSC INC.
/s/ WILLIAM J. WOODARD
----------------------------
By: William J. Woodard
Title: V.P. - Finance
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