[EXECUTION COPY]
STOCK PURCHASE AGREEMENT
Among
INTERMAGNETICS GENERAL CORPORATION
IGC POLYCOLD SYSTEMS, INC.
and
HELIX TECHNOLOGY CORPORATION
Dated as of December 15, 2004
TABLE OF CONTENTS
PAGE
Article 1 DEFINITIONS....................................................................................1
Article 2 PURCHASE AND SALE OF SHARES....................................................................9
2.1 Agreement to Purchase and Sell.................................................................9
2.2 Purchase Price.................................................................................9
2.3 Closing........................................................................................9
2.4 Delivery of Shares.............................................................................9
Article 3 REPRESENTATIONS AND WARRANTIES.................................................................9
3.1 Representations and Warranties of the Seller and the Company...................................9
3.1.1 Authorizations, etc...................................................................9
3.1.2 Title to Shares......................................................................10
3.1.3 Corporate Status.....................................................................10
3.1.4 No Subsidiaries......................................................................11
3.1.5 Capitalization.......................................................................11
3.1.6 No Conflicts, etc....................................................................11
3.1.7 Financial Statements.................................................................11
3.1.8 Absence of Undisclosed Liabilities; Off-Balance Sheet Transactions...................12
3.1.9 Taxes................................................................................12
3.1.10 Absence of Changes...................................................................13
3.1.11 Litigation...........................................................................15
3.1.12 Governmental Approvals...............................................................15
3.1.13 Compliance with Laws.................................................................15
3.1.14 Title to Assets......................................................................15
3.1.15 Contracts............................................................................16
3.1.16 Proprietary Rights...................................................................16
3.1.17 Real Property........................................................................17
3.1.18 Environmental Matters................................................................18
3.1.19 Employees, Labor Matters, etc........................................................18
3.1.20 Employee Benefit Plans and Related Matters...........................................19
3.1.21 Related Party Transactions...........................................................20
3.1.22 Insurance............................................................................20
3.1.23 Accounts Receivable..................................................................21
-i-
TABLE OF CONTENTS
(continued)
PAGE
3.1.24 Product and Service Warranties.......................................................21
3.1.25 Bank Accounts........................................................................21
3.1.26 Brokers, Finders, etc................................................................21
3.1.27 Commercial Relationships.............................................................21
3.1.28 Inventories..........................................................................21
3.1.29 Product Liability....................................................................22
3.1.30 Disclosure...........................................................................22
3.2 Representations and Warranties of the Buyer...................................................22
3.2.1 Corporate Status; Authorization, etc.................................................22
3.2.2 No Conflicts, etc....................................................................22
3.2.3 Governmental Approvals...............................................................23
3.2.4 Brokers, Finders, etc................................................................23
3.2.5 Financial Arrangements of the Buyer..................................................23
3.2.6 Securities Law Matters...............................................................23
Article 4 COVENANTS.....................................................................................23
4.1 Conduct of Business...........................................................................23
4.2 No Solicitation...............................................................................25
4.3 Access and Information........................................................................25
4.4 Public Announcements..........................................................................26
4.5 Further Actions...............................................................................26
4.6 Use of Seller's Names and Marks...............................................................26
4.7 Return of Confidential Materials..............................................................26
4.8 Directors and Officers........................................................................26
4.9 Insurance.....................................................................................27
4.10 Tax Matters...................................................................................27
4.11 Company Employees.............................................................................32
4.12 Benefit Plan Matters..........................................................................33
4.13 Notification..................................................................................34
-ii-
TABLE OF CONTENTS
(continued)
PAGE
4.14 Non-Competition...............................................................................35
4.15 Non-Solicitation of Employees.................................................................35
4.16 Certain Proprietary Rights Matters............................................................36
Article 5 CONDITIONS PRECEDENT..........................................................................36
5.1 Conditions to Obligations of Each Party.......................................................36
5.1.1 No Injunction, etc...................................................................36
5.1.2 HSR Act..............................................................................36
5.1.3 Approvals and Licenses, etc..........................................................37
5.1.4 Lender Approval......................................................................37
5.1.5 Elimination of Intercompany Items....................................................37
5.2 Conditions to Obligations of the Buyer........................................................37
5.2.1 Representations, Performance, etc....................................................37
5.2.2 Delivery of Shares...................................................................37
5.2.3 Consents.............................................................................37
5.2.4 Resignation of Directors and Officers................................................38
5.2.5 Ancillary Documents..................................................................38
5.3 Conditions to Obligations of the Seller.......................................................38
5.3.1 Representations, Performance, etc....................................................38
5.3.2 Conditions on Governmental Approvals.................................................38
5.3.3 Ancillary Documents..................................................................38
5.3.4 Release of Lease Guaranty............................................................38
Article 6 TERMINATION...................................................................................39
6.1 Termination...................................................................................39
6.2 Effect of Termination.........................................................................39
Article 7 INDEMNIFICATION...............................................................................40
7.1 Survival......................................................................................40
7.2 Indemnification by the Seller.................................................................40
7.3 Indemnification by the Buyer..................................................................41
7.4 Notification of Claims........................................................................42
7.5 Third Party Claims............................................................................42
7.6 Exclusive Remedy..............................................................................43
-iii-
TABLE OF CONTENTS
(continued)
PAGE
Article 8 GROSSED-UP TAX PAYMENT COVENANT FOR THE SECTION 338(H)(10) ELECTION...........................43
8.1 338 Tax Payment...............................................................................43
8.2 Tax Payments..................................................................................44
8.3 Cooperation...................................................................................45
Article 9 MISCELLANEOUS.................................................................................45
9.1 Expenses......................................................................................45
9.2 Severability..................................................................................45
9.3 Notices.......................................................................................45
9.4 Entire Agreement..............................................................................46
9.5 Counterparts; Headings........................................................................46
9.6 Governing Law, etc............................................................................46
9.7 Binding Effect; No Third Party Beneficiaries..................................................47
9.8 Assignment....................................................................................47
9.9 Amendment; Waivers, etc.......................................................................47
9.10 Waiver of Certain Conflicts...................................................................48
-iv-
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (this "Agreement") is made and entered
into as of December 15, 2004, by and among INTERMAGNETICS GENERAL CORPORATION, a
Delaware corporation (the "Seller"), IGC POLYCOLD SYSTEMS, INC., a Delaware
corporation and a wholly-owned subsidiary of the Seller (the "Company"), and
HELIX TECHNOLOGY CORPORATION, a Delaware corporation (the "Buyer").
W I T N E S S E T H :
WHEREAS, the Company is a manufacturer of low temperature refrigeration
systems which are used in a wide variety of market applications, including
optical coating, semiconductor manufacturing, magnetic media, decorative
coating, optical coating, flat panel displays, detector cooling and roll/web
coating;
WHEREAS, the Seller is the holder of 100 shares (the "Shares") of
common stock, par value $0.01 per share, of the Company ("Common Stock"), which
shares constitute all of the issued and outstanding shares of capital stock of
the Company;
WHEREAS, the Buyer desires to purchase, and the Seller desires to sell,
all of the Shares upon the terms and subject to the conditions set forth in this
Agreement;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained and for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
ARTICLE 1
DEFINITIONS
-----------
The terms defined in this Article 1, whenever used in this Agreement
(including in the Schedules), shall have the respective meanings indicated below
for all purposes of this Agreement (each such meaning to be equally applicable
to the singular and the plural forms of the respective terms so defined). All
references herein to a Section, Article or Schedule are to a Section, Article or
Schedule of or to this Agreement, unless otherwise indicated. The words
"hereby", "herein", "hereof", "hereunder" and words of similar import refer to
this Agreement as a whole (including any Exhibits and Schedules hereto) and not
merely to the specific section, paragraph or clause in which such word appears.
The words "include", "includes", and "including" shall be deemed to be followed
by the phrase "without limitation." Whenever the context may require, any
pronoun shall include the corresponding masculine, feminine and neuter forms.
Except as otherwise expressly provided herein, all references to "dollars" and
"$" shall be deemed references to the lawful money of the United States of
America.
Accounts Receivable: as defined in Section 3.1.23.
Acquired Operations: as defined in Section 4.14(b).
-5-
Affiliate: of a Person means a Person that directly or indirectly
through one or more intermediaries, controls, is controlled by, or is under
common control with, the first Person. "Control" (including the terms
"controlled by" and "under common control with") means the possession, directly
or indirectly, of the power to direct or cause the direction of the management
policies of a Person, whether through the ownership of voting securities, by
contract or credit arrangement, as trustee or executor, or otherwise.
Agreement: this Stock Purchase Agreement, including the Schedules and
Exhibits hereto, as the same may be amended from time to time.
Ancillary Documents: Transition Services Agreement and any
certificates, instruments, agreements, and other documents contemplated by this
Agreement.
Allocation Agreement: as defined in Section 4.10(e)(iv).
Applicable Law: All applicable provisions of all (i) constitutions,
treaties, statutes, laws (including the common law), rules, regulations,
ordinances, codes or orders of any Governmental Authority, (ii) Governmental
Approvals and (iii) orders, decisions, injunctions, judgments, awards and
decrees of or agreements with any Governmental Authority.
Balance Sheet: as defined in Section 3.1.8.
Benefits Vendors: as defined in Section 4.12(d).
BS&K: as defined in Section 9.10.
Business: the business, operations, assets and properties of the
Company.
Business Day: a day other than a Saturday, Sunday or other day on which
commercial banks in the State of New York are authorized or required to close by
Applicable Law.
Buyer: as defined in the first paragraph of this Agreement.
Buyer Damages: as defined Section 7.2.
Buyer Deductible: as defined in Section 7.2(a).
Buyer Indemnitees: as defined in Section 7.2.
Closing: as defined in Section 2.3.
Closing Date: as defined in Section 2.3.
COBRA: continuation of group health coverage pursuant to Section 4980B
of the Code and Part 6 of Title I of ERISA.
Code: the Internal Revenue Code of 1986, as amended.
-6-
Common Stock: as defined in the recitals to this Agreement.
Company: as defined in the first paragraph of this Agreement.
Company Benefit Plan: each Employee Benefit Plan currently sponsored,
maintained, or contributed to by the Company (including by way of intracompany
transfers to an ERISA Affiliate), or for which the Company has any liability or
contingent liability.
Confidentiality Agreement: the Confidentiality Agreement, dated August
9, 2004, by and between the Seller and the Buyer.
Consent: any consent, approval, authorization, waiver, permit, grant,
franchise, concession, agreement, license, certificate, exemption, order,
registration, declaration, filing, report or notice of, with or to any Person,
other than any Governmental Approval.
Continuing Employees: as defined in Section 4.11.
Contract: any agreement, contract, license, commitment, instrument,
undertaking, understanding or arrangement, whether written or oral.
Coverage Termination Date: as defined in Section 4.12(b).
Covered Party: as defined in Section 4.8.
Covered Person: as defined in Section 4.12(b).
Credit Agreement: The Credit Agreement, dated as of December 17, 2003,
as amended, by and among the Seller, the Company, certain other domestic
subsidiaries of the Seller, certain banks and other financial institutions which
are lenders thereunder, and Wachovia Bank, National Association, as
administrative agent.
Current Benefit Levels: as defined in Section 4.12(b).
DGCL: the General Corporation Law of the State of Delaware.
Employee Benefit Plan: with respect to any Person, each plan, fund,
program, agreement, arrangement or scheme, including each plan, fund, program,
agreement, arrangement or scheme maintained or required to be maintained under
the laws of a jurisdiction outside the United States of America, in each case,
that is at any time sponsored or maintained or required to be sponsored or
maintained by such Person or to which such Person makes or has made, or
previously had an obligation to make, contributions providing for employee
benefits or for the remuneration, direct or indirect, of the employees, former
employees, directors, officers, agents, consultants, independent contractors,
contingent workers, or leased employees of such Person, or the dependents of any
of them (whether written or oral), including each deferred compensation, bonus,
incentive compensation, pension, retirement, stock purchase, stock option and
other equity compensation plan, "welfare plan" (within the meaning of section
3(1) of ERISA, determined without regard to whether such plan is subject to
ERISA), each "pension plan" (within the meaning of section 3(2) of ERISA,
determined without regard to whether such plan is subject to ERISA), each
severance plan or agreement, and each health, vacation, summer hours,
supplemental unemployment benefit, hospitalization insurance, medical, dental,
legal, and other employee benefit plan, fund, program, agreement, arrangement,
or scheme.
-7-
Employment and Withholding Taxes: any federal, state, provincial,
local, foreign or other employment, unemployment insurance, social security,
disability, workers' compensation, payroll, health care or other similar Tax,
estimated Tax, duty or other governmental charge or assessment or deficiencies
thereof and all Taxes required to be withheld by or on behalf of the Company or
any of its Subsidiaries in connection with amounts paid, deemed paid, or owing
or deemed owing to any employee, independent contractor, creditor or other
party, in each case, on or in respect of the Company or the Business (including,
but not limited to, all interest and penalties thereon and additions thereto,
whether disputed or not).
Environmental Laws: all Applicable Laws in effect as of the date of
this Agreement relating to the protection of the environment, to human health
and safety, or to any use, sale, manufacture, treatment, generation, processing,
storage, disposal, abatement, existence, Release, threatened Release,
transportation or handling of any Hazardous Substance, including, without
limitation, (i) the Comprehensive Environmental Response, Compensation and
Liability Act, the Resource Conservation and Recovery Act, and the Occupational
Safety and Health Act, (ii) all other requirements pertaining to reporting,
licensing, permitting, investigation or remediation of Releases or threatened
Releases of Hazardous Substances into the air, surface water, groundwater or
land, or relating to the manufacture, processing, distribution, use, sale,
treatment, receipt, storage, disposal, transport or handling of Hazardous
Substances and (iii) all other requirements pertaining to the protection of the
health and safety of employees or the public.
ERISA: the Employee Retirement Income Security Act of 1974, as amended.
ERISA Affiliate: any Person (whether incorporated or not) that together
with the Company would be deemed a "single employer" within the meaning of
section 414 of the Code or section 4001 of ERISA.
ERISA Affiliate Plan: each Employee Benefit Plan sponsored or
maintained, or required to be sponsored or maintained at any time, by any ERISA
Affiliate, or to which such ERISA Affiliate makes or has made, or has or
previously had an obligation to make, contributions at any time.
Exchange Act: the Securities Exchange Act of 1934, as amended.
Existing Coverage: as defined in Section 4.9.
Final Date: as defined in Section 6.1(b).
Financial Statements: as defined in Section 3.1.7.
-8-
Flexible Spending Accounts: as defined in Section 4.12(d).
GAAP: generally accepted accounting principles as in effect in the
United States.
Governmental Approval: any consent, approval, authorization, waiver,
permit, concession, agreement, license, exemption or order of, declaration or
filing with, or report or notice to, any Governmental Authority.
Governmental Authority: any Federal, state, local or foreign court,
arbitrator or governmental agency, authority, instrumentality or regulatory
body, and any self-regulatory organization.
Gross-Up Amount: as defined in Section 8.1.
Hazardous Substances: any substance that: (i) is or contains asbestos,
urea formaldehyde foam insulation, polychlorinated biphenyls, petroleum or
petroleum-derived substances or wastes, radon gas or related materials, (ii) is
defined, listed or identified as a "hazardous waste" or "hazardous substance"
under any Environmental Law, or (iii) is toxic, explosive, corrosive, flammable,
infectious, radioactive, carcinogenic, mutagenic, or otherwise hazardous and is
regulated by any Governmental Authority or Environmental Law.
HSR Act: The Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976.
IGC Savings Plan: as defined in Section 4.12.
Indebtedness for Borrowed Money: any and all indebtedness of the
Company for money borrowed or for the extension of credit, including, without
limitation, the capital leases and indebtedness listed or reflected on the
Balance Sheet dated November 28, 2004, to the extent outstanding.
Independent Accounting Firm: An accounting firm with nationally
recognized standing reasonably satisfactory to, and mutually agreed upon by, the
parties to a dispute, as described in Section 4.10(e)(v).
Indemnified Party: as defined in Section 7.4.
Indemnifying Party: as defined in Section 7.4.
IRS: the Internal Revenue Service.
Knowledge of the Company: the actual knowledge, after reasonable
inquiry, of (1) Xxxxxx Xxxxxxx, Xxxx Xxxxxx, Xxxx Xxxxxxxx, Xxxxx Xxxxx, Xxxxxx
Xxxxxx, and Xxxxxxxxx X. Xxxxxxx, (2) the Chief Executive Officer and Chief
Financial Officer of Seller and (3) Xxxxx Xxxxxxxx and Xxxxxxx Xxxxxxxxx, but
only with respect to the time period during which each of them served as an
employee of the Company.
-9-
Lease: the Lease, dated September 1, 2001, by and among the Xxxxx
Xxxxxxxx and Xxxxx X. Xxxxxxxx Revocable Living Trust Dated May 15, 1986, the
Xxxxxxx and Xxxxx X. Xxxxxxxx Family Trust Dated August 8, 1984, and the
Company, in respect of the premises consisting of approximately 72,300 sq. ft.
of office and warehouse space located at 0000 Xxxxxxxxx Xxxxxxx, Xxxxxxxx,
Xxxxxxxxxx.
Lien: any mortgage, pledge, hypothecation, right of others, claim,
security interest, encumbrance, lease, sublease, license, occupancy agreement,
adverse claim or interest, easement, covenant, encroachment, burden, title
defect, title retention agreement, voting trust agreement, interest, equity,
option, lien, right of first refusal, charge or other restrictions or
limitations of any nature whatsoever, including but not limited to such as may
arise under any Contracts.
Litigation: any action, cause of action, claim, demand, suit,
proceeding, citation, summons, subpoena, inquiry or investigation of any nature,
civil, criminal, regulatory or otherwise, in law or in equity, by or before any
court, tribunal, arbitrator or other Governmental Authority.
Material Adverse Effect: with respect to any party hereto, any event,
occurrence, fact, condition, change or effect that (i) is materially adverse to
the business, operations, results of operations, financial condition,
properties, assets or liabilities of such party, taken as a whole, or (ii) would
materially impair the ability of such party to perform its obligations hereunder
or under any Ancillary Documents to which it is a party; provided, however, that
in determining whether a Material Adverse Effect has occurred there shall be
excluded any effect on the referenced party the primary cause of which is (i)
any change in Applicable Law of general applicability or interpretations thereof
by any Governmental Authorities, (ii) any change in GAAP or regulatory
accounting requirements applicable to companies in the referenced party's
industry generally, (iii) general changes in conditions in the referenced
party's industry or in the global or United States economy or financial markets,
(iv) any change arising out of or attributable to the execution and delivery of
this Agreement, or the public announcement thereof, and (v) any action or
omission of the referenced party or any of its Subsidiaries taken with the prior
written consent of the other party to this Agreement in contemplation of the
Merger.
Material Contracts: as defined in Section 3.1.15.
Modified 338 Form: as defined in Section 4.10(e)(ii).
New Insurance Policies: as defined in Section 4.12(b).
Non-Competition Period: as defined in Section 4.14.
Old Target: has the meaning set forth in the Treasury Regulations
promulgated under Section 338.
Permits: all licenses, permits, franchises, registrations, approvals,
authorizations, consents, waivers, exemptions, releases, variances or orders of,
or filings with, or issued by, any Governmental Authority.
-10-
Permitted Liens: (i) Liens for Taxes not yet due and payable or which
are being contested in good faith and by appropriate proceedings, (ii)
carriers', warehousemen's, mechanics', materialmen's, repairmen's and other like
Liens imposed by law, arising in the ordinary course of business and securing
obligations that are not overdue by more than 30 days or are being contested in
good faith, (iii) pledges and deposits made in the ordinary course of business
in compliance with workers' compensation, unemployment insurance and other
social security laws or regulations, (iv) deposits to secure the performance of
bids, trade contracts, leases, statutory obligations, surety and appeal bonds,
performance bonds and other obligations of a like nature, in each case in the
ordinary course of business; (v) easements, rights-of-way, restrictions or other
similar encumbrances on Real Property that do not, individually or in the
aggregate, materially detract from the value of such Real Property or materially
interfere with the current use thereof, or (vi) Liens that, individually and in
the aggregate, do not and would not materially detract from the value of any of
the property or assets of the Company or materially interfere with the current
use thereof, excluding Liens arising from Indebtedness for Borrowed Money.
Person: any natural person, firm, partnership, limited liability
company, association, corporation, company, trust, business trust, Governmental
Authority or other entity.
Post-Closing Period: all taxable periods beginning after the Closing
Date and the portion beginning after the Closing Date of any Straddle Period.
Post-Closing Seller Provided Coverage: as defined in Section 4.12(b).
Pre-Closing Period: all taxable periods ending on or before the Closing
Date and the portion ending on the Closing Date of any Straddle Period.
Prohibited Activities: as defined in Section 4.14.
Proprietary Rights: as defined in Section 3.1.16.
Purchase Price: as defined in Section 2.2.
Real Property: the real property leased by the Company pursuant to the
Lease.
Release: any releasing, disposing, discharging, injecting, spilling,
leaking, leaching, pumping, dumping, emitting, escaping, emptying, seeping,
dispersal, migration, transporting, placing and the like, including without
limitation, the moving of any materials through, into or upon, any land, soil,
surface water, ground water or air, or otherwise entering into the environment.
Section 338(h)(10) Election: an election under Section 338(h)(10) of
the Code (and any corresponding election under state, local, and foreign tax
law) with respect to the purchase and sale of the Shares pursuant to this
Agreement.
Seller: as defined in the first paragraph of this Agreement.
-11-
Seller Damages: as defined in Section 7.3.
Seller Deductible: as defined in Section 7.3.
Seller Indemnitees: as defined in Section 7.3.
Seller Sponsored Plan: as defined in Section 4.12(b).
Seller 338 Tax: as defined in Section 8.1.
Shares: as defined in the Recitals hereto.
Software: all computer programs, including all source code and object
code versions thereof, in any and all forms and media, whether recorded on
paper, magnetic media or other electronic or non-electronic media, and all
documentation relating thereto, including, but not limited to user manuals and
training materials.
Straddle Period: a taxable period which begins before the Closing Date
and ends after the Closing Date.
Subsidiary: each corporation or other Person in which a Person owns or
controls, directly or indirectly, capital stock or other equity interests
representing at least 50% of the outstanding combined voting power or other
equity interests.
Survival Period: as defined in Section 7.1.
Tax Payments: as defined in Section 8.2.
Tax Returns: as defined in Section 3.1.9.
Taxes: any federal, state, provincial, local, foreign or other income,
alternative, minimum, accumulated earnings, personal holding company, franchise,
capital stock, net worth, capital, profits, windfall profits, gross receipts,
value added, sales (including, without limitation, bulk sales), use, goods and
services, excise, customs duties, transfer, conveyance, mortgage, registration,
stamp, documentary, recording, premium, severance, environmental real property,
personal property, ad valorem, intangibles, rent, occupancy, license,
occupational, employment, unemployment insurance, social security, disability,
workers' compensation, payroll, health care, withholding, estimated or other
similar tax, levy, impost, fee, duty or other governmental charge or assessment
or deficiencies thereof (including, but not limited to, all interest and
penalties thereon and additions thereto, whether disputed or not) imposed by any
Governmental Authority or other taxing authority.
338 Forms: as defined in Section 4.10(e)(ii).
338 Tax: as defined in Section 8.1.
338 Estimated Tax Payment: as defined in Section 8.2.
338 Tax Payment: as defined in Section 8.1.
Treasury Regulations: the regulations prescribed under the Code.
-12-
ARTICLE 2
PURCHASE AND SALE OF SHARES
---------------------------
2.1 Agreement to Purchase and Sell. Upon the terms and conditions set
forth herein, at the Closing, the Seller shall sell, assign and transfer to the
Buyer, and the Buyer shall purchase from the Seller, all of the Shares, free and
clear of all Liens.
2.2 Purchase Price. The aggregate purchase price for the Shares of
forty-nine million two hundred thousand dollars ($49,200,000) (the "Purchase
Price") shall be payable at the Closing by wire transfer of immediately
available funds to an account designated by the Seller.
2.3 Closing. The closing of the sale and purchase of the Shares (the
"Closing") shall take place at the offices of Bond, Xxxxxxxxx & Xxxx, PLLC, 000
Xxxxxxxxxx Xxxxxx, Xxxxxx XX 00000-0000, at 10:00 A.M. Eastern Time, on February
15, 2005 or, in the event that any conditions have not been satisfied or waived
on such date, on the third Business Day after the conditions to each party's
obligations hereunder (other than receipt of closing deliveries) have been
satisfied or waived, or such other time and place upon which the parties may
agree. The date on which the Closing actually occurs is herein referred to as
the "Closing Date."
2.4 Delivery of Shares. At the Closing, the Seller shall deliver to the
Buyer, free and clear of any Liens, one or more certificates representing in the
aggregate all of the Shares, duly endorsed in blank or accompanied by stock
powers duly executed in blank by the Seller, and accompanied by all requisite
stock transfer stamps, if any.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES
------------------------------
3.1 Representations and Warranties of the Seller and the Company.
Except as otherwise set forth in the Schedules to this Agreement, the Seller and
the Company, jointly and severally, hereby represent and warrant to the Buyer as
follows (the disclosures in any section or subsection of the Schedules shall
qualify each other sections and subsections in this Article 3 to the extent it
is reasonably apparent from a reading of the disclosure that such disclosure is
applicable to such other sections and subsections):
3.1.1 Authorizations, etc. The Seller and the Company each has
full power and authority to execute and deliver this Agreement and the Ancillary
Documents to which each is or will be a party, to perform fully its obligations
hereunder or thereunder, and to consummate the transactions contemplated hereby
and thereby. Except as set forth in Schedule 3.1.1, all actions, authorizations
and consents required by any Applicable Law for the execution, delivery and
performance by the Seller or the Company of this Agreement and each of the
Ancillary Documents to which each is or will be a party, and the consummation of
the transactions contemplated thereby, have been properly taken or obtained. The
Seller and the Company have duly executed and delivered this Agreement and, on
the Closing Date, will have duly executed and delivered each of the Ancillary
Documents to which the Seller and the Company are a party. This Agreement
constitutes, and on the Closing Date each of such Ancillary Documents will
-13-
constitute, the legal, valid and binding obligations of the Seller and the
Company enforceable against each in accordance with their respective terms,
subject to applicable bankruptcy, insolvency, reorganization, moratorium and
other laws affecting creditors' rights generally and general principles of
equity.
3.1.2 Title to Shares. The Seller owns beneficially and of
record, free and clear of any Liens, the Shares. The Shares constitute, and at
all times from the date hereof to and including the Closing Date will
constitute, the only shares of capital stock of the Company issued and
outstanding. The delivery of a certificate or certificates at the Closing
representing the Shares in the manner provided in Section 2.4 will transfer to
Buyer good and valid title to the Shares, free and clear of any Liens.
3.1.3 Corporate Status. (a) The Seller is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware.
(b) The Company is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware, with full
corporate power and authority to carry on its business and to own or lease and
to operate its properties as and in the places where its business is conducted
and such properties are owned, leased or operated.
(c) The Company is duly qualified or licensed to do
business and is in good standing in each of the jurisdictions specified in
Schedule 3.1.3(c), which are the only jurisdictions in which the operation of
the Business or the character of the properties owned, leased or operated by it
in connection with the Business makes such qualification or licensing necessary,
except where the failure to obtain such qualification or licensing would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect on the Company.
(d) The Seller has delivered or made available to the
Buyer complete and correct copies of the certificate of incorporation and
by-laws of the Company as amended through, and in full force and effect on, the
date hereof. The books of account, minute books and other records of or
pertaining to the Company, all of which have been made available to the Buyer,
are accurate and complete, except where the failure to be so accurate and
complete, would not, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect on the Company. The books of account, minute
books and other records of or pertaining to the Company have been maintained in
accordance with sound business practices and the requirements of Section
13(b)(2) of the Exchange Act (regardless of whether the Company is subject to
that Section), including the maintenance of an adequate system of internal
controls, except where the failure to be so maintained would not, individually
or in the aggregate, reasonably be expected to have a Material Adverse Effect on
the Company. Each material transaction of the Company is properly and accurately
recorded on the books and records of the Company, and each document (including
any agreement, invoice or receipt) on which entries in such books and records
are based is accurate and complete in all material respects. The minute books of
the Company contain in all material respects accurate and complete records of
all corporate actions taken by the stockholder(s) and directors of the Company
and no such action has been taken for which minutes have not been prepared and
are not contained in such minute books. At the time of Closing, all of those
books and records will be in the possession of the Company.
-14-
3.1.4 No Subsidiaries. The Company has no subsidiaries and no
ownership interest in any corporation, joint venture, trust, partnership,
limited liability company, or any other entity.
3.1.5 Capitalization. The authorized capital stock of the
Company consists of 3,000 shares of Common Stock, of which 100 shares are issued
and outstanding. All of the Shares have been duly authorized and validly issued
and are fully paid and nonassessable. There are no (i) options, warrants, calls,
preemptive rights, subscriptions or other rights, convertible securities,
agreements or commitments of any character obligating the Company or the Seller
to issue, transfer or sell any shares of capital stock, options, warrants, calls
or other equity interest of any kind whatsoever in the Company or securities
convertible into or exchangeable for such shares or equity interests, (ii)
contractual obligations of the Company or the Seller to repurchase, redeem or
otherwise acquire any capital stock or equity interest of the Company, or (iii)
voting trusts, proxies or similar agreements to which the Company or the Seller
is a party with respect to the voting of the capital stock of the Company.
3.1.6 No Conflicts, etc. (a) The execution, delivery and
performance by the Seller and the Company of this Agreement and the Ancillary
Documents to which either is or will be a party, and the consummation of the
transactions contemplated hereby and thereby, do not and will not (with or
without the giving of notice, the lapse of time, or both): conflict with;
contravene; result in a violation or breach of; result in a default under; give
rise to a right of, acceleration, amendment, cancellation, modification,
termination or vesting under; result in a decreased right of the Company or
obligation of any other Person under; result in an increased or additional
obligation of the Company or right of any other Person under (i) assuming the
receipt of all requisite Governmental Approvals for the transactions
contemplated by this Agreement, any Applicable Law, (ii) the articles or
certificate of incorporation or by-laws of the Seller or the Company, (iii)
except as set forth in Schedule 3.1.6(a), any Material Contract to which the
Seller or the Company is a party or by which the Seller or the Company or any of
its material properties or assets may be bound or affected.
(b) Except as specified in Schedule 3.1.6(b), no
Governmental Approval or other Consent is required to be obtained or made by the
Seller or the Company in connection with the execution and delivery of this
Agreement and the Ancillary Documents to which each is a party, or the
consummation of the transactions contemplated hereby and thereby, except where
the failure to obtain such Governmental Approval or Consent would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect on the Company.
-15-
3.1.7 Financial Statements. The Seller has previously
delivered or made available to the Buyer complete and correct copies of audited
financial statements of the Company for the two-year periods ending May 25, 2003
and May 30, 2004, the unaudited financial statements of the Company for the
three-month period ended August 29, 2004, and the unaudited balance sheet of the
Company as of November 28, 2004 (collectively, the "Financial Statements"). The
Financial Statements were prepared in accordance with GAAP applied on a
consistent basis during the periods involved and fairly present, in all material
respects, the financial position of the Company as of the respective dates
thereof and the results of operations and cash flows for the respective periods
then ended, except that the Financial Statements may not contain all footnotes
required by GAAP and the interim Financial Statements may be subject to normal
and recurring year-end adjustments, none of which adjustments, in the aggregate
or individually, are material. The Company maintains a system of internal
accounting controls sufficient to provide reasonable assurances that (i)
transactions are executed in accordance with management's general or specific
authorization; (ii) transactions are recorded as necessary to permit preparation
of financial statements in conformity with generally accepted accounting
principles and to maintain accountability for assets; (iii) access to assets is
permitted only in accordance with management's general or specific
authorization; and (iv) the recorded accountability for assets is compared with
the existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.
3.1.8 Absence of Undisclosed Liabilities; Off-Balance Sheet
Transactions. To the Knowledge of the Company, the Company has no material
liabilities or obligations of a nature required to be disclosed on a balance
sheet prepared in accordance with GAAP, whether known, absolute, accrued,
contingent or otherwise and whether due or to become due, except (a) as and to
the extent disclosed, provided or reserved for in the unaudited balance sheet
(the "Balance Sheet") of the Company as of November 28, 2004, included in the
Financial Statements and (b) for liabilities and obligations that (i) were
incurred after the date of the Balance Sheet in the ordinary course of business;
(ii) individually and in the aggregate would not reasonably be expected to have
a Material Adverse Effect on the Company; and (iii) do not and will not
materially impair the ability of the Company, in the aggregate, to conduct the
Business from and after the Closing substantially in the same manner as before
the Closing. The Company has no "off-balance sheet arrangements" (as defined in
Item 303(a)(4) of Regulation S-K promulgated under the Exchange Act), which the
Company would be required to disclose under Item 303(a) of Regulation S-K if the
Company were subject to the periodic reporting requirements of the Exchange Act.
3.1.9 Taxes. (a) The Seller or the Company has timely filed
with the appropriate taxing authorities all returns and reports in respect of
Taxes (the "Tax Returns") required to be filed by each of them in respect of the
Business (taking into account any extension of time to file granted with respect
thereto). The information on such Tax Returns is complete and accurate in all
material respects. The Seller or the Company has paid on a timely basis all
Taxes (whether or not shown on any Tax Return) due and payable in respect of the
Business. There are no Liens for Taxes (other than for current Taxes not yet due
and payable) upon the assets of the Company.
-16-
(b) Except as disclosed on Schedule 3.1.9(b), no unpaid
(or unreserved in accordance with GAAP applied on a consistent basis)
deficiencies for Taxes have been claimed, proposed or assessed by any taxing
authority or other Governmental Authority with respect to the Company for any
Pre-Closing Period and, to the Knowledge of the Company, there are no pending
audits, investigations or claims for or relating to any liability in respect of
Taxes of the Company, nor has the Company been notified of any request for such
an audit, investigation or claim. Except as disclosed on Schedule 3.1.9(b), the
Company has not requested any extension of time within which to file any
currently unfiled returns in respect of any Taxes of the Business. No extension
of a statute of limitations relating to any Taxes is in effect with respect to
the Business.
(c) (1) The Seller or the Company has made or will make
provision for all Taxes payable by it with respect to the Business for any
Pre-Closing Period which are not payable prior to the Closing Date; (2) the
provisions for such Taxes with respect to the Company for the Pre-Closing Period
are adequate to cover all such Taxes with respect to such period; (3) the Seller
or the Company has withheld and paid all Taxes required to have been withheld
and paid in connection with amounts paid or owing to any employee, independent
contractor, creditor, shareholder or other third party with respect to the
Business; (4) the Company is not liable for Taxes of any other Person, or is
currently under any contractual obligation to indemnify any Person with respect
to Taxes, or is a party to any tax sharing agreement or any other agreement
providing for payments by the Company with respect to Taxes; and (5) Schedule
3.1.9(c)(5) contains a list of all jurisdictions in the Seller or the Company
files Tax Returns in respect of the Business.
(d) In connection with the transaction contemplated by
this Agreement, the Company has not made any payments, is not obligated to make
any payments, and is not a party to any agreement that could obligate the
Company to make any payments that will not be deductible by reason of section
280G of the Code.
3.1.10 Absence of Changes. Except as set forth in Schedule
3.1.10, since the date of the Balance Sheet, there have not been any changes in
the financial condition or results of operations of the Company, except for any
changes that would not reasonably be expected to result in a Material Adverse
Effect on the Company. Without limiting the generality of the foregoing, except
(i) as set forth in Schedule 3.1.10, (ii) as may be required to comply with
Material Contracts, or (iii) as may be reasonably required to satisfy the
condition in Section 5.1.5, since the date of the Balance Sheet, neither the
Company nor with respect to the Business, the Seller have taken any of the
following actions (or permitted any of the following events to occur):
-17-
(a) declared, set aside, made, set a record date for or
paid any dividend or other distribution in respect of its capital stock or
otherwise purchased or redeemed, directly or indirectly, any shares of its
capital stock;
(b) issued or sold any shares of any class of its
capital stock or other ownership interest, or any securities convertible into or
exchangeable for any such shares or interest, or issued, sold, granted or
entered into any subscription, options, warrants, conversion or other rights,
agreements, commitments, arrangements or understandings of any kind,
contingently or otherwise, to purchase or otherwise acquire any such shares or
interest or any securities convertible into or exchangeable for any such shares
or interest;
(c) incurred any material obligation or liability except
current liabilities for trade or business obligations incurred in connection
with the purchase of goods or services in the ordinary course of business;
(d) discharged or satisfied any Lien, other than those
required to be discharged or satisfied, or paid any obligation or liability,
absolute, accrued, contingent or otherwise, whether due or to become due, other
than (i) current liabilities shown on the Balance Sheet, (ii) current
liabilities incurred since the date thereof in the ordinary course of business,
and (iii) scheduled payments of principal or interest on any Indebtedness for
Borrowed Money through the Closing Date;
(e) subjected any of the Assets to any Lien other than
any Permitted Lien;
(f) sold, transferred, leased to others or otherwise
disposed of any of the Assets, except in the ordinary course of business or
fixed assets having an aggregate value of less than $250,000, or canceled or
compromised any debt or claim in excess of $100,000 in each case or $250,000 in
the aggregate, or waived or released any right of substantial value, except in
the ordinary course of business;
(g) received any written notice of termination of any
Material Contract;
(h) suffered any damage, destruction or loss (whether or
not covered by insurance) in excess of $250,000 to any of its assets;
(i) changed in any material respect its tax or
accounting practices, policies or principles except as required by any
Applicable Law or GAAP;
(j) granted or committed to grant any increase in any
remuneration (including salary, incentive, change in control, retention or
severance compensation or benefits) of any current or former employee making
more than $100,000 per annum in base salary, or any director or officer of the
Company, other than in the ordinary course of business consistent with past
practice, or, except as contemplated by Section 4.12, established, amended, or
terminated any Company Benefit Plan;
-18-
(k) made or committed to make any capital expenditures
or capital additions or improvements in excess of an aggregate of $250,000,
except for capital expenditures or capital additions or improvements made in the
ordinary course of business or contemplated by an approved budget of the
Company;
(l) instituted, settled or agreed to settle any
litigation, action or proceeding before any Governmental Authority relating to
the Company, other than in the ordinary course of business;
(m) transferred or granted any material rights or
licenses under, or entered into any settlement regarding the infringement of,
its Proprietary Rights or entered into any licensing or similar agreements or
arrangements with respect thereto (other than any shrink-wrap Software license);
(n) accelerated or delayed the payment of accounts
payable, or the collection of accounts receivable of the Company, other than in
the ordinary course of business;
(o) received any written notice from any material
customer or supplier of an intention to discontinue or change in any material
respect the terms of its relationship with the Company; or
(p) made a commitment to take any of the foregoing
actions.
3.1.11 Litigation. Except as disclosed on Schedule 3.1.11,
there is no Litigation pending or, to the Knowledge of the Company, threatened
in writing, against the Company or its assets, and there is no Litigation
pending, or to the Knowledge of the Company, threatened in writing, against the
Seller or the Company seeking to prevent, hinder or delay the transactions
contemplated by this Agreement or any of the Ancillary Documents. No citations,
fines or penalties have been asserted in writing against the Company under any
Applicable Law which remain outstanding, except for traffic citations or where
any citations, fines or penalties would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect on the Company. There
are no outstanding orders, judgments, decrees or injunctions issued by any
Governmental Authority against the Company.
3.1.12 Governmental Approvals. Schedule 3.1.12 sets forth all
Governmental Approvals used in the Business or otherwise material to the conduct
of the Business. All such Governmental Approvals have been duly obtained and are
in full force and effect, and the Company is in compliance with each such
Governmental Approval, except where the failure of any such Governmental
Approval to be so obtained or in full force and effect, or the failure of the
Company to be in compliance with any such Governmental Approval, would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect on the Company.
3.1.13 Compliance with Laws. The Company is in compliance with
all Applicable Laws, except where the failure to so comply would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect on the Company. The Company has not received any written notice
alleging any violation or breach of, or failure to be in compliance with, any
Applicable Law that has not been cured or waived. The Company holds and has
-19-
maintained all Permits applicable to the Business required by Applicable Law,
except where the failure to obtain or maintain such Permits would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect on the Company. The Company is in compliance with the terms of
such Permits, except where the failure to so comply would not, individually or
in the aggregate, reasonably be expected to have a Material Adverse Effect on
the Company. No proceeding is pending, or to the Knowledge of the Company,
threatened to revoke or limit any Permit.
3.1.14 Title to Assets. Except as disclosed on Schedule
3.1.14, the Company has good and marketable title to all of the material
tangible and intangible assets owned by it, free and clear of any Liens other
than Permitted Liens. Except as disclosed on Schedule 3.1.14, the Company owns,
leases, licenses or otherwise has the contractual right to use all of the assets
used in or necessary for the conduct of the Business as currently conducted,
except where the failure to so own, lease, license or possess such right would
not, individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect on the Company.
3.1.15 Contracts. Schedule 3.1.15 sets forth a true and
complete list, and the Seller has provided access to the Buyer the complete
copies (including all amendments and extensions thereof) or, if oral, an
accurate and complete description of all material terms, of each of the
following to which the Company is a party or is otherwise bound (each, a
"Material Contract"):
(i) all loan agreements, indentures, mortgages,
notes, installment obligations, capital leases, or other agreements or
instruments relating to Indebtedness for Borrowed Money (or guarantees thereof);
(ii) all continuing contracts or commitments for
the future purchase, sale or manufacture of products, materials, supplies,
equipment, or services requiring payment to or from the Company in an amount in
excess of $250,000 per annum which are not terminable on 90 days' or less notice
without material cost or other material liability;
(iii) all lease and other agreements pertaining to
the Real Property;
(iv) all collective bargaining, employment,
severance and other agreements requiring change of control or parachute payments
from the Company, or any other type of contract or understanding between the
Company and any of its officers, directors, consultants, or employees, other
than pursuant to a Company Benefit Plan disclosed on Schedule 3.1.20(a), which
is not terminable by the Company upon 30 days' or less notice without cost or
other liability;
-20-
(v) all joint venture, partnership or other
contracts involving a sharing of profits, losses, costs or liabilities by the
Company with any other Person;
(vi) all agreements containing covenants that in
any way purport to restrict the business activity of the Company or limit the
freedom of the Company to engage in any line of business or to compete with any
Person; and
(vii) any other agreement, the performance of
which would reasonably be expected to have a Material Adverse Effect on the
Company.
Except as disclosed on Schedule 3.1.15, the Company is
not in material default, and to the Knowledge of the Company, no other party is
in material default, under any Material Contract and no event has occurred which
(after notice or lapse of time or both) would become a breach or default under,
or would otherwise permit modification, cancellation, acceleration or
termination of, any Material Contract or would result in the creation of or
right to obtain any Lien upon, or any Person obtaining any right to acquire, any
assets, rights or interests of the Company. Except as disclosed on Schedule
3.1.15: (i) each Material Contract is in full force and effect and is a valid
and binding obligation of the Company and, to the Knowledge of the Company, the
other parties thereto; and (ii) the Company has not received written notice from
any party to a Material Contract that such party intends either to modify,
cancel or terminate a Material Contract.
3.1.16 Proprietary Rights.
(a) Except as set forth on Schedule 3.1.16(a), the
Company owns or possesses licenses or other rights to use all trademarks, trade
and business names, internet domain names, service marks, service names,
copyrights, customer lists, trade secrets and inventions (whether or not
patentable) (collectively, "Proprietary Rights") that are necessary to the
conduct of the Business as currently conducted. To the Knowledge of the Company,
all Proprietary Rights are valid and enforceable and no assertions have been
made with respect to the validity, enforceability, or ownership of the
Proprietary Rights.
(b) Schedule 3.1.16(b) sets forth a true and complete
list of all registered trademarks, trade names, service marks, service names,
internet domain names, copyrights and patents included in the Proprietary Rights
of the Company (identifying which are owned and which are licensed), including
all United States, state and foreign registrations or applications for
registration thereof and all agreements relating thereto.
(c) Except as disclosed in Schedule 3.1.16(c), to the
Knowledge of the Company, the Company is not required to pay any royalty,
license fee or similar compensation in connection with the conduct of the
Business as currently conducted.
(d) To the Knowledge of the Company, no claims have been
asserted by any Person alleging that the Company infringed upon the Proprietary
Rights of any other Person. To the Knowledge of the Company, the Company does
not infringe upon the Proprietary Rights of any other person.
-21-
(e) To the Knowledge of the Company, no Person is
infringing upon its Proprietary Rights.
(f) Except as set forth in Schedule 3.1.16(f), neither
the Company nor Seller has granted to any third party any license or right to
the commercial use of any Proprietary Rights of the Business as currently
conducted.
3.1.17 Real Property. (a) Except for the Lease and except as
disclosed on Schedule 3.1.17(a), the Company is not a party to any real property
leases, subleases or occupancy agreements pursuant to which the Company is the
lessee, sublessee, licensee or occupant of any real property. The Lease is in
full force and effect and, to the Knowledge of the Company, neither the Company
nor the lessor is in material default thereunder. The Company does not own any
real property.
(b) To the Knowledge of the Company, (i) all buildings
and improvements which in part comprise the Real Property comply in all material
respects with all size, height, set back, use and other zoning restrictions and
regulations applicable thereto, including, without limitation, the parking space
requirements of all applicable zoning ordinances and regulations and (ii) the
Company or its landlord has obtained all licenses, permits, approvals,
certificates, and other authorizations required by applicable Laws for the use
and occupancy of the Real Property as it is currently being utilized, except
where the failure to obtain such licenses, permits, approvals, certificates or
other authorizations would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect on the Company.
3.1.18 Environmental Matters. Except as disclosed in Schedule
3.1.18:
(a) During the period that the Company has owned, leased
or operated any properties or facilities, it has not Released, or participated
in or authorized the Release or threatened Release of Hazardous Substances on,
from or under such properties or facilities in violation of applicable
Environmental Law, except where such Release or threatened Release would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect on the Company. To the Knowledge of the Company, there has not
been any disposal or Release or threatened Release of Hazardous Substances on,
from or under any of such properties or facilities, at any time prior to the
Company or any Subsidiary having taken possession of any of such properties or
facilities.
(b) The operations of the Company are in compliance with
applicable Environmental Law, except where the failure to so comply would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect on the Company. During the time that the Company has owned or
leased its properties and facilities, the Company has not used, generated,
manufactured or stored on, under or about such properties or facilities or
transported or arranged for disposal to or from such properties or facilities,
any Hazardous Substances in violation of applicable Environmental Law, except
where such violation would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect on the Company.
-22-
(c) During the time that the Company has owned or leased
its properties and facilities, there has been no litigation brought or, to the
Knowledge of the Company, threatened against the Company by, or any settlement
reached the Company with, any party or parties alleging the presence, disposal,
Release or threatened Release of any Hazardous Substances on from or under any
of such properties or facilities.
(d) Schedule 3.1.18(d) lists all Permits held by the
Company in order to comply with Environmental Laws. The Company has obtained all
Permits required by Environmental Law necessary to enable it to conduct its
business and the Company is in compliance with the Permits, except where the
failure to obtain, or comply with, such Permits would not, individually or in
the aggregate, reasonably be expected to have a Material Adverse Effect on the
Company. The Company previously has furnished or made available to the Buyer
accurate, true, and complete copies of any and all environmental audits or risk
assessments, site assessments, documentation regarding on- or off-site disposal
of Hazardous Substances or Release of Hazardous Substances, spill control plans,
and all other material correspondence, documents or communications with any
Governmental Authority or other entity regarding the foregoing, that the Company
currently has in its possession, or otherwise exists to the knowledge of the
Company (in which case, the Company has previously disclosed the existence of
such documents and the identity of the party possessing the same, if known).
3.1.19 Employees, Labor Matters, etc. The Company is not a
party to or bound by any collective bargaining agreement, and there are no labor
unions or other organizations representing or, to the Knowledge of the Company,
purporting or attempting to represent any employee of the Company. No strike,
slowdown, picketing, work stoppage, concerted refusal to work overtime or other
similar labor activity with respect to any current employee of the Company is
currently ongoing or, to the Knowledge of the Company, has been threatened since
January 1, 2002. The Company has complied in all material respects with all
applicable provisions of Applicable Law pertaining to the employment or
termination of employment of any Person, including, without limitation, all such
Applicable Laws relating to labor relations, equal employment, fair employment
practices, entitlements, prohibited discrimination, immigration status, Tax
information reporting, Employment and Withholding Taxes or other similar
employment practices or acts.
3.1.20 Employee Benefit Plans and Related Matters. (a)
Schedule 3.1.20(a) sets forth a true and complete list of each Company Benefit
Plan.
(b) Each Company Benefit Plan intended to be qualified
under section 401(a) of the Code, and the trust (if any) forming a part thereof,
has received a favorable determination letter from the IRS as to its
qualification under the Code and to the effect that each such trust is exempt
from taxation under section 501(a) of the Code, and, to the Knowledge of the
Company, no fact or circumstance exists that could reasonably be expected to
result in the revocation of such favorable determination letter or to adversely
affect the tax-exempt status of such Company Benefit Plan.
-23-
(c) (i) Except as set forth in Schedule 3.1.20(c), no
Company Benefit Plan is or was subject to Title IV of ERISA or section 412 of
the Code. Each ERISA Affiliate Plan subject to section 412 of the Code or
section 302 of ERISA meets the minimum funding requirements of those sections.
No Company Benefit Plan or ERISA Affiliate Plan is or was a "multiemployer
pension plan" (within the meaning of section 4001(a)(3) of ERISA) or a "multiple
employer welfare arrangement" (within the meaning of section 3(40) of ERISA).
(ii) The Company has not incurred, and no fact
exists that reasonably could be expected to result in, the Company incurring any
liability as a result of a termination, withdrawal, or funding waiver with
respect to any ERISA Affiliate Plan subject to Title IV of ERISA or Section 412
of the Code.
(iii) Except as set forth on Schedule 3.1.20(c),
each of the Company Benefit Plans has been established, operated, and
administered in all material respects in accordance with its terms and in
compliance with all Applicable Laws. There are no pending or, to the Knowledge
of the Company, threatened claims, examinations, investigations, proceedings, or
actions by or on behalf of any of the Company Benefit Plans, by any Governmental
Authority, by any Person or otherwise involving any such Company Benefit Plan or
the assets of any Company Benefit Plan (other than routine claims for benefits)
that could reasonably be expected to result in any liability to the Company or
any of its officers or directors, and, to the Knowledge of the Company, there
exist no facts that after notice or lapse of time or both reasonably could be
expected to give rise to any such claim, examination, investigation, proceeding,
or action.
(iv) All contributions, premiums and expenses
payable to or in respect of any Company Benefit Plan or the operation or
administration thereof that relate to or arose with respect to any period on or
prior to the date hereof have been paid or will be adequately accrued on the
Balance Sheet.
(v) Except as disclosed on Schedule 3.1.20(c)(v),
the consummation of the transactions contemplated by this Agreement or any of
the Ancillary Documents will not result in (x) the entitlement of any Person to
severance pay, transaction bonuses, or similar contingent payments, (y) an
increase in the amount of compensation or benefits of any Person, or (z) the
acceleration of the vesting or timing of payment of any compensation or benefits
payable to or in respect of any Person.
(vi) The Seller has provided the Buyer with true
and complete copies of all Company Benefit Plans and, upon the Buyer's request,
any documents related thereto or to any ERISA Affiliate Plan.
(vii) Except as disclosed on Schedule
3.1.20(c)(vii), no Company Benefit Plan provides medical, surgical,
hospitalization, death, or similar benefits (whether or not insured) for current
or former employees, directors, officers, agents, consultants, independent
contractors, contingent workers, or leased employees of the Company, or any of
their dependents, spouses, domestic partners, or beneficiaries, for periods
extending beyond their termination of employment or other termination of
service, other than COBRA coverage and only to the extent required by COBRA.
-24-
(viii) Schedule 3.1.20(c)(viii) contains in all
material respects an accurate and complete record of the employment or service
histories of Company employees, independent contractors, contingent workers and
leased employees, including their hours of service required to be credited
pursuant to Section 4.12, and the common-law employee or independent contractor
status of all individuals engaged by the Company are accurately reflected in the
records of the Company.
3.1.21 Related Party Transactions. Except as set forth on
Schedule 3.1.21, neither the Seller nor any of its Affiliates (i) has been since
January 1, 2003 or is involved in any business arrangement or relationship with
the Company that is material to the Business, (ii) owns any property or right,
tangible or intangible, which is used in and material to the Business, or (iii)
owes any money to, or is owed any money by, the Company.
3.1.22 Insurance. Schedule 3.1.22 sets forth a true and
correct list of all insurance policies maintained by or for the benefit of the
Company, including fire and extended coverage and casualty, liability and other
forms of insurance. The Company, or the Seller on behalf of the Company,
maintains in full force and effect insurance policies covering the Company's
insurable business risks and liabilities in adequate amounts to provide
reasonable protection for the business of and the properties owned and used by
the Company. Schedule 3.1.22 also contains a list and brief description of all
potential claims, claims, damages, injuries, occurrences, losses, and lawsuits
for which the Company, or any person on its behalf, has provided notice to any
insurer or otherwise sought coverage under any insurance policy or program
identified in Schedule 3.1.22, provided such claim is (i) outstanding or (ii)
was made within the last twelve months. The Seller and the Company have complied
with each such insurance policy and program and have not failed to give any
notice or present any claim thereunder in a due and timely manner which failure
could reasonably be expected to result in a loss or forfeiture of any material
right thereunder.
3.1.23 Accounts Receivable. All accounts receivable of the
Company that are reflected on the Financial Statements or on the accounting
records of the Company as of the Closing Date (collectively, "Accounts
Receivable") represent or will represent valid obligations arising from sales
actually made or services actually performed in the ordinary course of business.
Except as set forth on Schedule 3.1.23, there is no contest, claim or right of
set-off, other than returns in the ordinary course of business, under any
Contract with an obligor of any Accounts Receivable relating to the amount or
validity of such Accounts Receivable.
3.1.24 Product and Service Warranties. Set forth on Schedule
3.1.24 are copies of the standard forms of warranty offered by the Company to
third parties with respect to each of the products marketed by the Company at
any time since January 1, 2002. Since January 1, 2002, the Company has not
offered or extended any warranty to third parties with respect to the products
manufactured by the Company, other than the standard forms of warranty set forth
on Schedule 3.1.24, except where such extension would not, individually or in
the aggregate, reasonably be expected to have a Material Adverse Effect on the
Company.
-25-
3.1.25 Bank Accounts. Set forth on Schedule 3.1.25 is a list
of the names and locations of all financial institutions at which the Company
maintains a checking, savings, deposit or securities account, or a safety
deposit box or other deposit or safekeeping arrangement, and the name number or
other means of identification of each such account and arrangement.
3.1.26 Brokers, Finders, etc. All negotiations relating to
this Agreement and the transactions contemplated hereby, have been carried on
without the participation of any Person acting on behalf of the Company or the
Seller or their respective Affiliates in such manner as to give rise to any
valid claim against the Buyer or the Company for any brokerage or finder's
commission, fee or similar compensation.
3.1.27 Commercial Relationships. Schedule 3.1.27 lists the
names and addresses of the five (5) largest customers and the five (5) largest
suppliers (measured in each case by dollar volume of purchases or sales during
the last completed fiscal year) of the Company and the dollar amount of
purchases or sales which each such customer or supplier represented during the
last completed fiscal year. To the Company's knowledge, its relationships with
its customers, suppliers, distributors, collaborators, licensors, and licensees
are generally good commercial working relationships. During the last 12 months,
no such entity has canceled or otherwise terminated its relationship with the
Company or has materially altered its relationship with the Company. The Company
has not received any written threat or notice from any such entity, to
terminate, cancel, or otherwise materially modify its relationship with the
Company. No customer of the Company has any right to any credit or refund for
products sold or services rendered or to be rendered by the Company pursuant to
any agreement, understanding, or practice of the Company other than pursuant to
the normal course return policy of the Company described in Schedule 3.1.27.
3.1.28 Inventories. All inventory pertaining to the Business
reflected on the Balance Sheet is usable and saleable in the ordinary course of
business, except for excess and obsolete items and items of below-standard
quality, all of which have been written-off or written-down to net realizable
value on the Balance Sheet. All inventories not written-off have been priced at
the lower of cost or market value on a first-in, first-out basis.
3.1.29 Product Liability. Except as set forth on Schedule
3.1.29: (a) there are no material defects in the design or manufacture of any of
the products sold by the Company; (b) the Company has not initiated a recall of
any of the products sold by the Company during the last three years; and (c)
during the last three years, the Company has not received any written, oral, or
other notice of a claim, and, to the Knowledge of the Company, there is no
anticipated or threatened claim against the Company alleging a design or
manufacturing defect in the products sold the Company, in each case, excluding
any and all requests for product returns in the ordinary course of business
which have not had and are not expected to result in a Material Adverse Effect.
-26-
3.1.30 Disclosure. No representation or warranty of the
Company or the Seller in this Agreement and no statement in the Schedules
contains any material untrue statement or omits to state a material fact
necessary to make the statements herein or therein, in light of the
circumstances in which they were made, not misleading.
3.2 Representations and Warranties of the Buyer. The Buyer represents
and warrants to the Seller as follows:
3.2.1 Corporate Status; Authorization, etc. The Buyer is a
corporation duly incorporated, validly existing and in good standing under the
laws of the State of Delaware. The Buyer has the corporate power and authority
to execute and deliver this Agreement and the Ancillary Documents to which it is
or will be a party, to perform its obligations hereunder and thereunder and to
consummate the transactions contemplated hereby and thereby. The execution and
delivery of this Agreement and the Ancillary Documents to which it will be a
party, and the consummation of the transactions contemplated hereby or thereby
have been duly authorized by all requisite corporate action of the Buyer. The
Buyer has duly executed and delivered this Agreement and on the Closing Date
will have duly executed and delivered the Ancillary Documents to which the Buyer
will be a party. This Agreement is, and on the Closing Date each of the
Ancillary Documents to which the Buyer will be a party will be, valid and
legally binding obligations of the Buyer, enforceable against the Buyer in
accordance with their respective terms, subject to applicable bankruptcy,
insolvency, reorganization, moratorium or other laws affecting creditors' rights
generally and general principles of equity.
3.2.2 No Conflicts, etc. The execution, delivery and
performance by the Buyer of this Agreement and the Ancillary Documents to which
it will be a party, and the consummation of the transactions contemplated hereby
and thereby, do not and will not conflict with or result in a violation of or a
default under or give rise to a right of acceleration, termination or vesting
under (with or without the giving of notice or the lapse of time, or both) (i)
the certificate of incorporation or by-laws of the Buyer, (ii) any Applicable
Law applicable to the Buyer or any Affiliate thereof or any properties or assets
of such Buyer or Affiliate or (iii) any material contract, agreement or other
instrument applicable to the Buyer or any Affiliate thereof or any of their
respective properties or assets.
3.2.3 Governmental Approvals. Schedule 3.2.3 sets forth all
Governmental Approvals required on the part of the Buyer to consummate the
transactions contemplated by this Agreement and the Ancillary Documents, except
where the failure to obtain such Governmental Approvals would not, individually
or in the aggregate, reasonably be expected to have a Material Adverse Effect on
the Buyer. The Buyer is qualified to obtain, and there are no conditions in
existence which could reasonably be expected to delay, impede or condition the
receipt by the Buyer of the required Governmental Approvals.
-27-
3.2.4 Brokers, Finders, etc. All negotiations relating to this
Agreement and the transactions contemplated hereby have been carried on without
the participation of any Person acting on behalf of the Buyer or its Affiliates
in such manner as to give rise to any valid claim against the Seller for any
brokerage or finder's commission, fee or similar compensation.
3.2.5 Financial Arrangements of the Buyer. The Buyer has an
adequate amount of cash on hand to pay the Purchase Price and the payment
contemplated by Article 8.
3.2.6 Securities Law Matters. The Buyer is acquiring the
Shares for its own account and not with a view to the distribution thereof
within the meaning of the Securities Act of 1933, as amended. The Buyer has such
knowledge and experience in financial and business matters as to be capable of
evaluating the merits and risks of an investment in the Shares and to understand
the risks of and other consideration relating to its purchase of the Shares.
ARTICLE 4
COVENANTS
---------
4.1 Conduct of Business. From the date hereof to the Closing, except as
expressly permitted or required by this Agreement or as otherwise consented to
by the Buyer in writing, the Seller agrees to use its commercially reasonable
efforts to cause the Company to (i) carry on the Business in the ordinary
course, in substantially the same manner as heretofore conducted, and to
preserve intact in all material respects the present business organization of
the Company, maintain the properties thereof in good operating condition and
repair, keep available the services of the present officers and significant
employees thereof, and preserve the relationship with customers thereof,
suppliers thereof and others having business dealings with the Company; and (ii)
not take any action or omit to take any action, which action or omission would
result in a breach of any of the representations and warranties of the Seller
and the Company set forth herein that would entitle the Buyer to terminate this
Agreement under Section 6.1. Without limiting the generality of the foregoing,
except (i) as set forth on Schedule 4.1, (ii) as may be required by any Material
Contract, or (iii) as may be reasonably required to satisfy the condition set
forth in Section 5.1.5, neither the Company, nor with respect to the Business,
the Seller, shall, without the written consent of Buyer (which consent shall not
be unreasonably withheld, delayed or conditioned):
(i) authorize, issue, sell or transfer any capital stock of
the Company or any other securities of the Company, including any securities
convertible or exercisable into or exchangeable for any capital stock or other
securities of, or any warrants, options or other rights to acquire any capital
stock or other securities of the Company;
(ii) change or authorize any change in the charter or by-laws
of the Company;
(iii) declare or pay any dividend on, or make any other
distribution with respect to, any securities of the Company;
-28-
(iv) acquire (whether by merger, consolidation,
recapitalization or otherwise) the shares of capital stock or any other equity
interest in, or a substantial portion of the assets of, any Person and/or any
division or business thereof, or otherwise acquire any assets (other than
inventory and other assets in the ordinary course of business) in any amount,
individually or in the aggregate, that is material to the Company;
(v) incur any Indebtedness for Borrowed Money or assume,
guarantee, or otherwise become responsible for the obligations of, or make any
loans or advances of any money or other property to, any other Person including,
without limitation, to any director, officer or employee of the Company (other
than in the ordinary course of business);
(vi) waive or release any rights of material value, or cancel,
compromise, release or assign any material indebtedness owed to the Company or
any material claims held by the Company, other than in the ordinary course of
business;
(vii) settle or compromise any Litigation involving amounts in
excess of $100,000;
(viii) make any capital expenditures in excess of $250,000
individually or $500,000 in the aggregate;
(ix) (A) modify, amend, terminate or assign the Lease or any
other leases of the Company or (B) waive, release, relinquish or assign any of
the material rights of the Company under such Lease;
(x) sell, assign, license, lease, or otherwise dispose of any
assets, rights or properties which are material, individually or in the
aggregate, to the Company, except in the ordinary course of business;
(xi) mortgage, pledge or otherwise encumber or subject to a
Lien (other than a Permitted Lien) any of the Company's properties or assets;
(xii) make any changes in any accounting method, principle or
practice other than those required by GAAP or consistent with past practice;
(xiii) accelerate the delivery or sale of products, or offer
discounts or price protection on the sale of products or premiums on the
purchase of raw materials, except in the ordinary course of business;
(xiv) make any changes in the selling, distribution,
advertising, promotion, terms of sale or collection, purchase or payment
practices of the Company other than in the ordinary course of business;
(xv) purchase, order or otherwise acquire inventory in excess
of reasonably forecasted requirements in the ordinary course of business;
-29-
(xvi) increase in any manner the base compensation of, or
enter into any new bonus or incentive agreement or arrangement with, any of its
employees, officers, directors, or consultants, except for any such increases
that are granted to employees making less than $100,000 per year in the ordinary
course of business consistent with past Company practices;
(xvii) other than as contemplated by Section 4.12, adopt,
amend, suspend, or terminate any Company Benefit Plan in any manner that could
reasonably be expected to increase the costs, liabilities, or obligations of the
Company;
(xviii) other than benefits or payments that become effective
with the passage of time pursuant to the terms of existing Company Benefits
Plans or as disclosed in Schedule 3.1.20(c)(v), accelerate the vesting or timing
of any payment or benefit under any Company Benefit Plan, for any current or
former employee, officer, director, consultants, or independent contractor of
the Company in a manner which could reasonably be expected to increase costs,
liabilities, or obligations of the Company;
(xix) enter into, amend, or terminate any employment contract,
consulting agreement, termination or severance agreement, change of control
agreement, or any other agreement containing the terms and conditions of
employment, service, or payment of compensation with respect to any future,
current, or former employee, officer, director, consultant, or independent
contractor; or
(xx) agree or make a commitment, whether in writing or
otherwise, to do any of the foregoing.
4.2 No Solicitation. From the date hereof to the Closing, neither the
Seller nor the Company (or any Person acting on their behalf) shall (i) solicit
or encourage any inquiries or proposals for, or enter into any discussions with
respect to, the acquisition of any of the Shares or all or substantially all of
the assets of the Company, or (ii) furnish or cause to be furnished any
non-public information concerning the Company to any Person (other than the
Buyer and its agents and representatives), other than in the ordinary course of
business or pursuant to Applicable Law.
4.3 Access and Information. From the date hereof to the Closing, the
Seller will give, and will cause the Company to give, the Buyer and the Buyer's
accountants, counsel, consultants, employees and agents, full, complete and
timely access during normal business hours upon reasonable prior notice to, and
furnish them with all documents, records, Tax Returns, and information with
respect to, all properties, assets, books, Contracts, reports, records and
senior management personnel, in each case, relating to the Company, as the Buyer
shall from time to time reasonably request; provided, however, that such
investigation shall be conducted in a manner so as to minimize any unreasonable
disruptions to the operations of the Business and, consistent with the
confidential nature of the transaction, the Buyer shall not contact any
customers, distributors, suppliers or employees of the Company or the Seller
without prior written consent of the Seller.
-30-
4.4 Public Announcements. Except as required by Applicable Law or rules
of a national stock exchange or Nasdaq Stock Market, Inc., each party shall not,
and shall not permit its Affiliates to, make any public announcement in respect
of this Agreement or the transactions contemplated hereby without the prior
consent of the other party.
4.5 Further Actions. (a) From the date hereof to the Closing, each
party agrees to use its commercially reasonable efforts to take all actions and
to do all things necessary or appropriate to consummate the transactions
contemplated hereby, and the transactions contemplated by the Ancillary
Documents to which it will be a party, including, without limitation: (i) filing
or supplying all applications, notifications and information required to be
filed or supplied by it pursuant to Applicable Law, (ii) obtaining all Consents
and Governmental Approvals necessary to be obtained by it in order to consummate
transactions contemplated hereby and thereby, and (iii) coordinating and
cooperating with the other party in exchanging such information and providing
such reasonable assistance as may be reasonably requested by the other party.
(b) At all times prior to the Closing, each party shall
promptly notify the other party in writing of any fact, condition, event or
occurrence that will or is reasonably likely to result in the failure of any of
the conditions contained in Section 5.1, 5.2, or 5.3 to be satisfied.
4.6 Use of Seller's Names and Marks. No later than two (2) Business
Days following the Closing Date, the Buyer shall cause the legal name of the
Company to be changed to a name not containing the term "IGC", by filing an
amendment to the certificate of incorporation of the Company. As soon as
reasonably practicable following the Closing Date, but no later than 60 days
after the Closing Date, the Buyer shall cause the removal of all of the Seller's
name and marks from the Company's property, including without limitation, its
signs, vehicles, uniforms, business cards, internet website and promotional
materials and other literature, and shall cause the Company to otherwise refrain
from using such name or marks, except for inadvertent uses of such names and
marks that may arise in the ordinary course of business.
4.7 Return of Confidential Materials. In the event the transactions
contemplated hereby are not consummated and this Agreement is terminated
pursuant to Section 6.1, each party hereto shall return all confidential
materials to the appropriate other party or destroy such confidential materials
exchanged in connection with this Agreement or the Ancillary Documents.
4.8 Directors and Officers. (a) Neither the Buyer nor the Company shall
take, cause or permit to be taken or caused by any person any action to alter or
impair any exculpatory or indemnification provisions, now existing in the
charter or by-laws of the Company, for the benefit of any individual who served
as a director or officer of the Company at any time prior to the Closing Date,
except for any changes that may be required to conform with changes in
applicable law that do not affect the application of such provisions to acts or
omissions of such individuals prior to the Closing Date.
(b) In the event of any threatened or actual claim, action,
suit, proceeding or investigation, whether civil, criminal or administrative,
including, without limitation, any such claim, action, suit, proceeding or
investigation in which any person (the "Covered Party") who is now, or has been
at any time prior to the date of this Agreement, or who becomes prior to the
Closing Date, a director or officer of the Company is, or is threatened to be,
-31-
made a party based in whole or in part on, or arising in whole or in part out
of, or pertaining to (i) the fact that he or she is or was a director, officer
or employee of the Company, or (ii) this Agreement or any of the transactions
contemplated hereby, whether in any case asserted or arising before or after the
Closing Date, the Seller hereby agrees to indemnify and hold harmless, to the
fullest extent permitted by law, each such Covered Party against any losses,
claims, damages, liabilities, costs, expenses (including reasonable attorney's
fees and expenses in advance of the final disposition of any claim, suit,
proceeding or investigation to each Covered Party to the fullest extent
permitted by the DGCL upon receipt of any undertaking required by the DGCL),
judgments, fines and amounts paid in settlement in connection with any such
threatened or actual claim, action, suit, proceeding or investigation, and in
the event of any such threatened or actual claim, action, suit, proceeding or
investigation (whether asserted or arising before or after the Closing Date),
the Covered Parties may retain counsel reasonably satisfactory to them after
consultation with the Seller.
4.9 Insurance. (a) The Buyer agrees and acknowledges that, at or at any
time after the Closing and without any notice, Seller and/or its Affiliates
shall be entitled to terminate any and all insurance coverage maintained by
Seller or such Affiliates in respect of the properties, operations, business and
assets of the Company (the "Existing Coverage"). The Buyer further agrees and
acknowledges that, from and after the Closing, it shall be the sole obligation
of the Buyer and the Company to procure and maintain insurance for the
properties, operations, business and assets of the Company to replace the
Existing Coverage previously provided by Seller and/or Affiliates. Any refund or
return of any premium payable in connection with or as a result of the
termination of the Existing Coverage shall inure to the sole benefit of Seller
and/or its Affiliates.
(b) Following the Closing, the Company may submit claims under
any applicable policy under the terms of which the Existing Coverage is provided
with respect to claims, occurrences or omissions arising prior to the Closing.
Seller shall, or shall cause the applicable Affiliate thereof to, provide
commercially reasonable cooperation to the Company in submitting any such claims
under such applicable policy, but Seller shall thereupon have no further
obligations in respect of such claims, occurrences or omissions, and all such
claims shall in any case be subject to the terms, conditions, deductibles,
retentions and exclusions set forth in such policies as in effect immediately
prior to the Closing. Seller shall, or shall cause the applicable Affiliate
thereof to, pay the Company any insurance proceeds actually received by any of
them in respect of any such claims, as soon as reasonably practicable after
receipt thereof by Seller or such Affiliate.
4.10 Tax Matters.
(a) Preparation and Filing of Tax Returns.
(i) The Seller shall prepare and timely file, or cause
to be prepared and timely filed, all Tax Returns for all consolidated, combined
or unitary groups that include the Company through the Closing Date and all Tax
-32-
Returns with respect to the Company required to be filed on a separate basis for
taxable periods ending on or before the Closing Date. All such Tax Returns shall
be prepared in accordance with past practice (unless a contrary position is
required by law), to the extent any position taken in such returns may affect
the tax liability of the Company after the Closing. Notwithstanding anything to
the contrary in the preceding sentence, the parties agree that for U.S. federal
income Tax purposes, Tax items of the Company shall be apportioned between the
taxable period ending on the Closing Date and the taxable period beginning after
the Closing Date in accordance with U.S. Treasury Regulations Section
1.1502-76(b), which regulations shall be reasonably interpreted by the parties.
For income tax purposes, Seller and Buyer will not exercise any option or
election (including any election under Treasury Regulation Section
1.1502-76(b)(2)(ii)) to ratably allocate tax items of the Company between the
taxable period ending on the Closing Date and the taxable period beginning after
the Closing Date.
(ii) The Buyer shall prepare and timely file, or shall
cause to be prepared and timely filed, all other Tax Returns with respect to the
Company or in respect of its business, assets or operations, including without
limitation, all Tax Returns for any Straddle Period.
(iii) The Seller shall pay or cause to be paid all Taxes
in respect of the Company or for which the Company is liable for taxable periods
ending on or before the Closing Date. The Buyer shall pay or cause to be paid
all Taxes in respect of the Company for any Straddle Period and any taxable
period beginning after the Closing Date; provided, however, in the case of Taxes
in respect of the Company for any Straddle Period, the Seller shall indemnify
and hold harmless the Buyer and the Company from and against the Taxes for such
Straddle Period allocated to the Pre-Closing Period under Section 4.10(b) within
ten (10) business days after such amount is determined in accordance with
paragraph (iv) below.
(iv) For Taxes of the Company relating to a Straddle
Period, or Taxes of the Company relating to a Pre-Closing Period that are
claimed to be owing but not paid through an assessment, demand or other type of
governmental notice received by the Buyer and/or the Company, the Buyer shall
deliver to the Seller a notice which shall contain and/or have attached thereto,
to the extent applicable, (a) the Buyer's proposed calculation of such Taxes
that are allocable to Seller under this Agreement for a Straddle Period together
with a statement describing in reasonable detail the manner in which such
computation was made, (b) a copy of the Tax Return, and (c) a copy of any
assessment, demand or other type of governmental notice.
With respect to Straddle Period Taxes: The Seller
shall notify the Buyer whether or not it approves of the proposed amount of
Straddle Period Taxes that are allocable to the Seller within five (5) business
days after receiving the foregoing notice. If the Seller has not objected to the
proposed amount of Straddle Period Taxes allocable to the Seller within five (5)
business days after receiving the foregoing notice, the Seller shall be deemed
to accept liability for and shall pay to the Buyer the Seller's portion of the
Straddle Period Taxes as specified in such notice. If the Seller objects to the
Buyer's proposed amount of Straddle Period Taxes allocable to the Seller, the
Seller shall provide a notice of such objection together with a statement
describing in reasonable detail the basis for such objection to the Buyer and
the Buyer and the Seller shall resolve such dispute in accordance with Section
4.10(e)(v). Any resolution of the dispute in accordance with Section 4.10(e)(v)
shall be binding on the Buyer and the Seller.
-33-
With respect to Pre-Closing Period Taxes claimed
to be owed by the Company (Old Target) pursuant to an assessment, demand or
other type of governmental notice, the Seller shall have the right to dispute
such claim and shall direct and control the resolution thereof. With respect to
Post-Closing Period Taxes claimed to be owed by the Company pursuant to an
assessment, demand or other type of governmental notice, the Buyer shall have
the right to dispute such claim and shall direct and control the resolution
thereof.
(b) Allocation of Certain Taxes. In the case of any Tax that
is attributable to a Straddle Period, the amount of Taxes attributable to the
Pre-Closing Period and the Post-Closing Period shall be determined as follows:
(i) The parties hereto agree that if the Company is
permitted but not required under applicable foreign, state or local Tax laws to
treat the Closing Date as the last day of a taxable period, the Seller and the
Buyer shall treat such day as the last day of a taxable period.
(ii) Except to the extent provided in subparagraph (i)
of this Section 4.10(b), in the case of ad valorem Taxes imposed on the Company
and franchise or similar Taxes imposed on the Company based on capital
(including net worth or long-term debt) or number of shares of stock authorized,
issued or outstanding, such Taxes shall be allocated between the Pre-Closing
Period and the Post-Closing Period based upon the respective number of days in
each such period.
(iii) Except to the extent provided in subparagraphs (i)
and (ii) of this Section 4.10(b), all other Taxes shall be allocated between the
Pre-Closing Period and the Post Closing Period based upon an interim closing of
the books of the Company as of the end of the day of the Closing Date and the
computation of the Tax for each resulting period as if the period were a
separate taxable period; provided, however, that in no event shall the
hypothetical Tax for any period be less than zero.
(iv) Seller shall be liable for and pay any stock
transfer tax imposed by N.Y. Tax Law ss. 270 in connection with the transfer of
the stock of the company. Buyer shall be liable for and pay any other transfer
taxes arising in connection with the transfer of the stock of the Company.
(v) If Buyer receives a Tax refund with respect to Taxes
arising in a Pre-Closing Period, or a rebate of any stock transfer tax under
N.Y. Tax Law Section 270, Buyer shall pay, within the thirty (30) days following
the receipt of such Tax refund or rebate, the amount of such Tax refund to the
Seller. If Seller receives a Tax refund with respect to Taxes arising in a
Post-Closing Period, within thirty (30) days following the receipt of such Tax
refund, Seller will pay the amount of such Tax refund to Buyer.
-34-
(c) Cooperation on Tax Matters. The Seller and the Buyer and
their respective Affiliates shall cooperate in the preparation of all Tax
Returns for any Tax periods for which one party could reasonably require the
assistance of the other party in obtaining any necessary information concerning
the assets, business or operations of the Company. Such cooperation shall
include, but not be limited to, making the appropriate tax elections, furnishing
prior years' Tax Returns or Tax Return preparation packages illustrating
previous reporting practices or containing historical information relevant to
the preparation of such Tax Returns, and furnishing such other information
within such party's possession requested by the party filing such Tax Returns as
is relevant to their preparation. Such cooperation and information also shall
include without limitation promptly forwarding copies of appropriate notices and
forms or other communications received from or sent to any taxing authority
which relate to the Company, and providing copies of all relevant Tax returns,
together with accompanying schedules and related work papers, documents relating
to rulings or other determinations by any taxing authority and records
concerning the ownership and Tax basis of property, which the requested party
may possess. The Seller and its Affiliates and the Buyer, the Company and their
respective Affiliates shall make their respective employees and facilities
available on a mutually convenient basis to provide explanation of any documents
or information provided hereunder. Notwithstanding anything contained in this
Agreement to the contrary, no party hereto or its Affiliates shall be required
to disclose to another party hereto or its affiliates any information or
documentation that is protected by the attorney-client privilege or would
constitute attorney work-product.
(d) Certain Tax Elections.
(i) The Buyer shall elect under Treasury Regulation
1.1502-21T(b)(3)(ii)(B) to relinquish the portion of the carryback period ending
on the Closing Date with respect to all consolidated net operating losses
attributable to the Company.
(ii) The Buyer shall not, and after the Closing shall
not permit the Company to amend any Tax Return, report or filing with respect to
any Pre-Closing Period, including a Straddle Period, without Seller's prior
written consent (which consent shall not be unreasonably withheld) or as
required by applicable law. Following the Closing, the Buyer shall not make, and
shall not permit the Company to make, any elections or changes in accounting
methods if such elections or changes will materially adversely affect the tax
liabilities of the Company or the Seller for a Tax period ending on or prior to
the Closing Date, except as required by law after written notice to Seller. The
Seller shall not amend any Tax Return, report or filing with respect to a period
ending on or before the Closing Date without the Buyer's consent (which consent
shall not be unreasonably withheld) or as required by applicable law if the
filing of any such amended Tax Return will materially adversely affect the tax
liabilities of the Company or the Buyer for a Post-Closing Period.
(e) Section 338(h)(10) Election.
(i) The Seller agrees to join with the Buyer in making a
Section 338(h)(10) Election. At the Closing, contingent on Buyer paying the 338
Estimated Tax Payment to the Seller at the Closing as required by Section 8.2,
the Seller shall execute and deliver to the Buyer all necessary copies of IRS
Form 8023 and any applicable similar forms required by state or local law to
effectuate the Section 338 Election, subject to paragraph (ii) below. The Buyer
shall be responsible for the filing of such forms.
-35-
(ii) The Buyer shall be responsible for, and shall
control, the preparation of drafts of all proposed forms, elections, attachments
and schedules necessary to effectuate the Section 338(h)(10) Election
(collectively, the "338 Forms"). The Seller shall cooperate in good faith with
the Buyer and shall promptly provide the Buyer with all information reasonably
requested by the Buyer relevant to the preparation of the 338 Forms. If the 338
Forms do not require or contain (as a supplement, attachment or otherwise) any
more information than requested on the face of an IRS Form 8023, and all such
information is correct, the Buyer shall present such 338 Forms to the Seller at
the Closing and the Seller shall execute such 338 Forms. Notwithstanding the
foregoing sentence, if the 338 Forms require or contain more information than
requested on the face of an IRS Form 8023 (as a supplement, attachment or
otherwise), at least twenty (20) business days before the Closing, the Buyer
shall provide to the Seller a copy of such 338 Forms (the "Modified 338 Forms").
The Seller shall notify the Buyer whether or not it approves of the Modified 338
Forms within five (5) business days after receiving the same. If the Seller
objects to a proposed Modified 338 Form, the Seller shall provide the Buyer with
a notice setting forth such objection together with a statement describing in
reasonable detail the basis for such objection and the Buyer and the Seller
shall resolve their dispute in accordance with Section 4.10(e)(v). Any
resolution of the dispute in accordance with Section 4.10(e)(v) shall be binding
on the Buyer and the Seller and shall be incorporated into the Modified 338 Form
that will be signed by the Buyer and the Seller.
(iii) At the request of the Buyer, the Seller will, from
time to time after the Closing Date, execute and timely file or deliver to the
Buyer, at the Buyer's costs and expense, for timely filing in accordance with
applicable law, such additional returns, elections, schedules and other
documents as are reasonably necessary to effect and preserve the Section
338(h)(10) Election. All of the foregoing additional returns, elections,
schedules and other documents as are necessary to effect and preserve the
Section 338(h)(10) Election shall be subject to the Seller's review and approval
pursuant to the same procedure set forth in paragraph (ii) above. If the Seller
objects to any of the foregoing returns, elections, schedules and other
documents, the Seller shall provide the Buyer with a notice setting forth such
objection together with a statement describing in reasonable detail the basis
for such objection and the Buyer and the Seller shall resolve their dispute in
accordance with Section 4.10(e)(v). Any resolution of the dispute in accordance
with Section 4.10(e)(v) shall be binding upon the Buyer and the Seller and shall
be incorporated into the form, election, attachment or schedule that will be
signed by the Buyer and the Seller and filed to effect and preserve the Section
338(h)(10) Election.
(iv) The Seller and the Buyer agree that they shall use
their best efforts to enter into an agreement as soon as practicable after the
Closing Date concerning the computation and allocation of the ADSP (as such term
is defined in the applicable Treasury Regulations under Code Section 338) among
the assets of the Company (the "Allocation Agreement") in accordance with the
Treasury Regulations under Code Section 338. The Buyer shall deliver to the
Seller a proposed Allocation Agreement no later than ninety (90) days after the
Closing Date. If the Seller has not objected to such agreement within thirty
(30) days of receipt, such agreement shall be deemed accepted and shall be the
Allocation Agreement. If the Seller objects to the Buyer's proposed Allocation
Agreement, the Seller shall provide the Buyer with a notice setting forth such
objection together with a statement describing in reasonable detail the basis
for such objection and the Buyer and the Seller shall resolve their dispute in
accordance with Section 4.10(e)(v). The parties hereto shall not take any
position inconsistent with the final Allocation Agreement (whether mutually
agreed to by the parties and/or determined by the Independent Accounting Firm)
on any Tax Returns, and shall not voluntarily take any action inconsistent
therewith upon examination of any Tax Return, in any refund claim, in any
litigation or otherwise with respect to such Tax Returns.
-36-
(v) The resolution of a dispute regarding the allocation
of Straddle Period Taxes between the Buyer and the Seller shall be resolved in
accordance with this paragraph. The resolution of a dispute of a proposed form,
election, attachment or schedule necessary to effectuate or maintain the Section
338(h)(10) Election shall be resolved in accordance with this paragraph. The
resolution of a dispute relating to the proposed terms of the Allocation
Agreement shall also trigger the resolution of the final amount of the 338 Tax
Payment to be paid by the Buyer to the Seller in accordance with Section 8.1,
both of which shall be resolved together in accordance with this paragraph. The
resolution of a dispute relating to the final amount of the 338 Tax Payment to
be paid by the Buyer to the Seller in accordance with Section 8.1 (and not the
Allocation Agreement), shall be resolved in accordance with this paragraph.
First, the parties to the dispute shall use all
reasonable efforts to resolve their differences. Second, if the parties to the
dispute fail to resolve their differences within five (5) business days after
one party has given notice to the other regarding the dispute, the dispute shall
be resolved within ten (10) business days (or such greater number of days as the
parties mutually agree upon) after the foregoing notice by the Independent
Accounting Firm and such resolution shall be binding on the Buyer, the Company
and the Seller and shall be the resolution of the disputed amount and/or
incorporated into the final document, allocation, form, etc. The costs, expenses
and fees of the Independent Accounting Firm shall be borne equally by the
parties to the dispute.
(f) Retention of Records. The Buyer shall cause the Company
to, and the Company shall, retain all books and records and any other documents,
information, and files relating to any period ending on or prior to the Closing
Date for a period of six (6) years after the Closing Date. For so long as such
books and records or other documents, information, and files are required to be
retained by the Company pursuant to the terms hereof, the Seller shall have the
right, for the purpose of filing any Tax Returns as required by law and for the
purpose of preparing for or contesting any audit, proceeding, assessment or
reassessment of or relating to Taxes, or for any other legitimate business
purposes, inspect and make copies of the same at the Seller's expense.
(g) Termination of Existing Tax-Sharing Agreements. All
tax-sharing agreements or similar arrangement involving the Company or to which
the Company is a party shall be terminated with respect to the Company as of the
Closing Date, and, after the Closing Date, the Company shall not be bound
thereby or have any liability thereunder.
-37-
4.11 Company Employees. The Buyer agrees to cause the Company after the
Closing to, and the Company agrees to, initially employ those individuals who
are employed by the Company on the Closing Date (the "Continuing Employees"), on
substantially the same terms and conditions (including without limitation, base
salary or base hourly wage, as the case may be, and Employee Benefit Plans) in
effect immediately prior to the Closing Date. The Continuing Employees shall be
given credit for past service with the Company or its Affiliates for purposes of
determining eligibility for and vesting of employee benefits (but not for
benefit accrual purposes) under all Employee Benefit Plans sponsored,
maintained, or contributed to (including by way of intracompany transfers) by
the Company in which such employees participate following the Closing. For each
Continuing Employee, the Buyer shall cause the Company to honor in full all paid
personal leave accrued but not taken by such Continuing Employee as of the
Closing Date as disclosed on Schedule 4.11. In the event that the employment of
any Continuing Employee shall be terminated by the Company or the Buyer after
the Closing Date, such employee shall be entitled to receive such benefits, if
any, as then provided by the Company's Benefit Plans.
4.12 Benefit Plan Matters.
(a) Savings Plan. As of the Closing Date, Company will cease
to be a adopting employer under the IGC 401(k) Retirement Savings Plan (the "IGC
Savings Plan"). On or before the Closing Date, the Boards of Directors of Seller
and Company shall authorize and implement an amendment to the IGC Savings Plan,
(i) to cease participation by Company employees in the IGC Savings Plan as of
the Closing Date; (ii) to waive the requirement that a Participant (as defined
in the IGC Savings Plan) be employed on the last day of the Plan Year to receive
Employer Contributions otherwise conditioned on such employment, (iii) to permit
distributions of accrued benefits under the IGC Savings Plan on account of the
purchase of the Shares by Buyer, and (iv) to vest 100% employees of Company in
their Participant's Accounts (as defined under the IGC Savings Plan). Any
required contribution to the IGC Savings Plan for the Plan Year (as defined
under the IGC Savings Plan) ending May 31, 2005 on behalf of employees of
Company who are participants in the IGC Savings Plan, based on Compensation (as
defined under the IGC Savings Plan) earned by such employees through the Closing
Date, shall be paid by Company on or before the Closing.
(b) Certain Health and Welfare Benefits. Buyer shall assume
the health and welfare Company Benefit Plans in existence on the Closing Date
that are set forth on Schedule 4.12(b). Buyer and Seller will make a reasonable
good faith effort during the period prior to the Closing Date to cause the
insurance companies and other providers of benefit services to the Seller (the
"Benefits Vendors") to create separate insurance policies and arrangements for
the Company that are effective as of the Closing Date (the "New Insurance
Policies") to replace the dental, vision, flexible spending accounts, basic
life, accidental death and dismemberment, voluntary and supplemental life,
long-term disability, and short-term disability benefits and coverages as are
made available to the Company pursuant to the Employee Benefit Plans that are
sponsored, maintained, or administered by the Seller as disclosed on Schedule
4.12(b) (the "Seller-Sponsored Plans"). Except as waived by the Buyer, such New
Insurance Policies must provide for coverages, benefits, exclusions,
deductibles, co-payments, premium levels, employer costs, and other terms and
-38-
conditions that are substantially the same as to those presently available to
the Company, (the "Current Benefit Levels") and its employees (and their
respective dependents, spouses, domestic partners, and beneficiaries) under the
Seller-Sponsored Plans. In the event that the Benefit Vendors are unable or
unwilling to issue the New Insurance Policies to the Company, then the Seller
will continue to make available to the Continuing Employees, and will make
available to such other employees as may be hired by the Company following the
Closing, and their respective dependents, spouses, domestic partners, and
beneficiaries, (collectively, the "Covered Persons") the Current Benefit Levels
under the Seller-Sponsored Plans ("Post-Closing Seller Provided Coverage") until
the earlier of (i) the date that is 30 days after the Closing Date, or (ii) the
date that is 30 days after the Company provides written notice to the Seller
that the Company no longer requires the Post-Closing Seller Provided Coverage
(the "Coverage Termination Date"). To compensate Seller for providing the
Post-Closing Seller Provided Coverage, the Company will pay Seller each month in
advance the Seller's cost of providing the Post-Closing Seller Provided Coverage
to the Covered Persons plus an administrative fee of 2% of Seller's
out-of-pocket cost of providing such coverage for the period that such
Post-Closing Seller Provided Coverage is in effect.
(c) COBRA and Other Claims. Seller will retain all liability
under COBRA or otherwise for any claims incurred or qualifying events (within
the meaning of section 4980B(f)(3) of the Code) occurring under or with respect
to the Seller-Sponsored Plans, including any claims or qualifying events
relating to any Post-Closing Seller Provided Coverage. Except as provided by
Section 4.12(e) below, the Company will retain all liability under COBRA or
otherwise for any claims incurred or qualifying events occurring under or with
respect to the Company Benefit Plans disclosed on Schedule 3.1.20(a) that are
not Seller-Sponsored Plans.
(d) Other Benefits. Participation by employees of Company in
other Employee Benefit Plans maintained by the Seller that are set forth on
Schedule 4.12(d) shall terminate as of the Closing Date, except that Seller
shall continue to be responsible for the payment of any workers' compensation or
disability payable in connection with an injury sustained by an employee prior
to the Closing Date and for any other liabilities arising under such plans that
have been or are incurred or accrued through the Closing Date. To the extent
required by law, Buyer shall implement or cause the Company to implement workers
compensation and disability coverage for employees of Company as of the Closing
Date. Effective as of the Closing Date, Buyer shall establish or cause the
Company to establish health flexible spending and dependent care assistance
flexible spending accounts for Company employees (the "Flexible Spending
Accounts") that contain substantially the same terms and conditions as the
Seller-Sponsored Flexible Spending Accounts. On or as soon as practical
following the Closing Date, Seller shall transfer and Company shall accept all
assets and liabilities associated with the Flexible Spending Accounts of Company
employees.
(e) Retention of Liabilities. Seller shall retain all
liabilities for retirement plans, programs, and arrangements maintained by
Seller that cover current or former employees, officers, directors, or
consultants of the Company, including but not limited to liabilities related to
any tax-qualified retirement plan, any supplemental executive retirement plan,
any split dollar life insurance plan, and any retiree medical plan maintained by
Seller.
-39-
4.13 Notification. From the date hereof until the earlier of the
Closing Date or the termination of this Agreement pursuant to Section 6.1, each
of the parties hereto shall disclose to the other party in writing in reasonable
detail any material variances from the representations and warranties made by
such party in Article 3, and any other fact or event that would cause or
constitute a breach of the covenants in this Agreement made by such party. Such
disclosure shall not be deemed to amend or supplement the Schedules delivered on
the date hereof or cure any misrepresentation or breach, provided, however, that
if the party to whom such disclosure is made nevertheless elects to consummate
the transactions contemplated hereby, each such disclosure shall be deemed to
have been set forth on the Schedules for purposes of any indemnification claim
made under Article 7. Each party shall give prompt notice to the other parties
of any event or circumstance known to the notifying party that would reasonably
be expected to prevent or delay the consummation of the transactions
contemplated hereby.
4.14 Non-Competition.
(a) In order that the Buyer may have and enjoy the full
benefit of the Business, the Seller covenants and agrees that for a period of
five (5) years from the Closing Date (the "Non-Competition Period"), Seller and
its Affiliates shall not, directly or indirectly (including by means of a
management, advisory, operating, consulting or similar agreements or
arrangements or by any record or beneficial equity interest, either as a
principal, trustee, stockholder, partner, joint venture or otherwise, in any
Person), (i) engage in any activities, for its own account or for any other
Person, in any geographic location in competition with the Business as such
Business was conducted on the Closing Date, or (ii) sell, license, transfer or
otherwise permit any Person to access, use or benefit from, either directly or
indirectly, any of the Proprietary Rights used or usable in or for the Business
as such Business was conducted on the Closing Date, in competition with the
Company (collectively, the "Prohibited Activities").
(b) Notwithstanding anything in subsection (a) above, any
acquisition (by merger, consolidation, equity purchase, asset purchase or
otherwise) by Seller or any of its Affiliates of a Person not primarily engaged
in Prohibited Activities, or the continuation of such activities after such
acquisition, shall not, in itself, constitute a violation or breach of the
covenant set forth in this Section 4.14. In the event that Seller shall acquire
any Person, the operations of which engage in the Prohibited Activities
("Acquired Operations"), at any time prior to the expiration of the
Non-Competition Period, Seller shall, within 60 days of the acquisition thereof,
notify Buyer in writing of such acquisition, and Buyer shall have a right of
first negotiation for a period of 60 days after the giving of such notice to
negotiate with Seller an agreement to purchase such Acquired Operations. If, at
the end of such 60-day period, Buyer and Seller have not entered into a
definitive agreement relating to the sale of the Acquired Operations to Buyer,
Seller shall sell or dispose of such Acquired Operations within one year of the
date of such acquisition, provided that such one year period shall be extended
for such reasonable period as may be necessary to enable Seller or the
applicable Affiliate to complete any negotiations with a third party pending at
the end of such one year period and to enable Seller or such Affiliate to
complete the sale or other disposition of the Acquired Operations.
-40-
(c) Notwithstanding anything in subsection (a) above, the
Seller and its Affiliates may acquire an equity interest of less than five
percent (5%) in an enterprise engaged in the Business, provided that such
acquisition is and remains for investment purposes only, and the Seller may
enter into a joint venture with any such entity provided that such joint venture
does not involve or relate to the Business and that no such activity becomes the
subject of such joint venture.
4.15 Non-Solicitation of Employees. During the period commencing on the
Closing Date and ending on the second anniversary thereof, the Seller agrees
that neither it nor its Affiliates will, without the prior written consent of
the Buyer, directly or indirectly, induce or attempt to influence any director,
manager, officer or employee of the Company, during such two-year period to
terminate his or her employment with the Company; provided, however, that the
foregoing restrictions shall only apply with respect to Xxxxxx Xxxxxxx for a
period of six months after the Closing Date and for any time at which Xx.
Xxxxxxx is then party to an employment agreement with the Buyer; provided
further that this Section 4.15 will not be deemed to apply to a general
solicitation to the public or any unsolicited inquiries by such individuals.
Without limiting the generality of the foregoing, neither the Seller nor any of
its Affiliates shall employ Xxxxxx Xxxxxxx for a period of six months after the
Closing Date and at any time during the initial term of any employment agreement
that he may enter into with the Company, regardless of whether such term is
terminated prematurely as a result of his voluntary resignation or retirement
thereunder.
4.16 Certain Proprietary Rights Matters. (a) The Seller agrees to use
its commercially reasonable efforts, at its expense, to cause the assignment of
the Unassigned Proprietary Rights in favor of the Company, including recordation
of the full chains of title at the appropriate patent or trademark offices, as
soon as reasonably practicable after the date of the Agreement. As used herein,
"Unassigned Proprietary Rights" shall mean all patents, US and foreign, granted
and pending, as disclosed in Schedule 3.1.16(b), for which assignment of a full
chain of title to the Company has not yet been recorded at the appropriate
patent or trademark office. .
(b) Within 30 days after the date of this Agreement, the
Seller agrees to file in the United States Patent and Trademark Office a
petition to revive and a response to an office action for US patent application
number 10/281,881.
(c) Seller agrees to use its reasonable efforts to locate and
produce files for Proprietary Rights not previously provided and Buyer shall
have the opportunity to review such files to its satisfaction.
(d) Seller agrees to use its reasonable efforts at Buyer's
expense to obtain a translation of two Japanese publications cited by an
anonymous party in Japan against the Japanese equivalent patent application
corresponding to U.S. Xxx. No. 6,502,410, and of the corresponding statement by
the anonymous party asserting invalidity of the Japanese application; and Buyer
shall have the opportunity to review such files to its satisfaction.
-41-
ARTICLE 5
CONDITIONS PRECEDENT
--------------------
5.1 Conditions to Obligations of Each Party. The obligations of the
parties to consummate the transactions contemplated hereby shall be subject to
the fulfillment on or prior to the Closing Date of the following conditions:
5.1.1 No Injunction, etc. Consummation of the transactions
contemplated hereby shall not have been restrained, enjoined or otherwise
prohibited by any Applicable Law. No Governmental Authority shall have
determined that any Applicable Law will make illegal the consummation of the
transactions hereby, and no proceeding with respect to the application of any
such Applicable Law to such effect, or seeking to restrain, enjoin or prohibit
the transactions contemplated hereby, is pending.
5.1.2 HSR Act. Any waiting period (and any extension thereof)
applicable to the consummation of the transactions contemplated hereby under the
HSR Act shall have expired or been terminated.
5.1.3 Approvals and Licenses, etc. Each party shall have
obtained all Governmental Approval necessary for the consummation of the
transactions contemplated hereby and by the Ancillary Documents to which it will
be a party, and the carrying on of the Business by the Company following the
Closing.
5.1.4 Lender Approval. The Seller and the Company shall have
received the written consent of the required lenders under the Credit Agreement,
in form and substance reasonably acceptable to each of the parties hereto, in
respect of the transactions contemplated by this Agreement. The Buyer shall have
received reasonably satisfactory evidence of the Company being released as a
guarantor of the Credit Agreement.
5.1.5 Elimination of Intercompany Items. Effective as of the
Closing, all payables, receivables, liabilities and other obligations between
the Company, on the one hand, and the Seller and its Affiliates, on the other
hand, shall have been eliminated except to the extent expressly provided for
herein, and the parties hereto shall have received reasonably satisfactory
evidence of such elimination.
5.2 Conditions to Obligations of the Buyer. The obligations of the
Buyer to consummate the transactions contemplated hereby shall be subject to the
fulfillment (or waiver by the Buyer), on or prior to the Closing Date, of the
following additional conditions.
-42-
5.2.1 Representations, Performance, etc. The representations
and warranties of the Seller and the Company contained in Section 3.1 shall be
true and correct at and as of the date hereof and as of the Closing Date (or, in
the case of any representation and warranty which specifically relates to an
earlier date, as of such earlier date); provided, however, that (i) in
determining whether or not the condition contained in this sentence is
satisfied, no effect shall be given to any qualifications or exceptions
contained in such representations and warranties relating to materiality or
Material Adverse Effect, but (ii) the condition contained in this sentence shall
be deemed to be satisfied unless the failure of such representations and
warranties to be so true and correct constitute, individually or in the
aggregate, a Material Adverse Effect on the Company. Notwithstanding anything to
the contrary, the condition set forth in the preceding sentence shall not be
deemed to be satisfied unless the representations and warranties in Section
3.1.5 shall be true and correct in all respects as of the Closing Date. The
Seller shall have duly performed and complied in all material respects with all
agreements and conditions required by this Agreement to be performed or complied
with by the Seller prior to or at the Closing. The Seller shall have delivered
to the Buyer certificates, dated the Closing Date, duly signed by an officer of
each of the Seller and the Company to the foregoing effect.
5.2.2 Delivery of Shares. At the Closing the Seller shall have
delivered all of the certificates for the Shares as provided in Section 2.4 and
such Shares shall constitute all of the issued and outstanding shares of common
stock of the Company.
5.2.3 Consents. The Seller and the Company shall have obtained
and shall have delivered to the Buyer copies of (i) all Governmental Approvals
required to be obtained by the Seller, the Company or any Subsidiary in
connection with the execution and delivery of this Agreement and the Ancillary
Documents and the consummation of the transactions contemplated hereby or
thereby; and (ii) all Consents necessary to be obtained in order to consummate
the sale and transfer of the Shares pursuant to this Agreement and the
consummation of the other transactions contemplated hereby and by the Ancillary
Documents, except where the failure to obtain such Consent would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect on the Company.
5.2.4 Resignation of Directors and Officers. All directors and
officers of the Company whose resignations shall have been requested by the
Buyer not less than five days prior to the Closing Date shall have submitted
their resignations or been removed from office effective as of the Closing Date.
5.2.5 Ancillary Documents. The Seller shall have entered into
the Ancillary Documents, including the Transition Services Agreement in the form
attached hereto as Exhibit A.
5.3 Conditions to Obligations of the Seller. The obligation of the
Seller to consummate the transactions contemplated hereby shall be subject to
the fulfillment (or waiver by the Seller), on or prior to the Closing Date, of
the following additional conditions.
-43-
5.3.1 Representations, Performance, etc. The representations
and warranties of the Buyer contained in Section 3.2 shall be true and correct
in all material respects at and as of the date hereof and as of the Closing
Date. The Buyer shall have duly performed and complied in all material respects
with all agreements and conditions required by this Agreement to be performed or
complied with by the Buyer prior to or on the Closing Date. The Buyer shall have
delivered to the Seller a certificate, dated the Closing Date, duly signed by an
officer of the Buyer to the foregoing effect.
5.3.2 Conditions on Governmental Approvals. None of the
Governmental Approvals contemplated by Section 5.1.2 shall contain any
conditions or restrictions in respect of the business, operations, assets or
properties of Seller or any of its Affiliates which are unsatisfactory to Seller
in its sole discretion.
5.3.3 Ancillary Documents. The Buyer shall have entered into
each of the Ancillary Documents, including the Transition Services Agreement in
the form attached hereto as Exhibit A.
5.3.4 Release of Lease Guaranty. The lessor under the Lease
shall have executed and delivered a written instrument, in form and substance
reasonably acceptable to the Seller, releasing the Seller from its guaranty
securing the performance of the Company's obligations under the Lease; provided,
however, that the condition set forth in this Section 5.3.4 shall also be deemed
satisfied if the Buyer executes and delivers to the Seller an agreement, in form
and substance acceptable to the Seller, to indemnify the Seller in the event
that the Company defaults on its obligations under the Lease after the Closing
Date.
ARTICLE 6
TERMINATION
-----------
6.1 Termination. This Agreement may be terminated at any time prior to
the Closing Date:
(a) by the written agreement of the Seller and the Buyer;
(b) by the Buyer by written notice to the Seller if any of the
conditions set forth in Section 5.1 or 5.2 shall not have been, or if it becomes
reasonably apparent that any of such conditions will not be, fulfilled by 5:00
p.m. Eastern time, on March 31, 2005 (the "Final Date"), unless such failure
shall be primarily due to the failure of the Buyer to perform or comply with any
of the covenants, agreements or conditions hereof to be performed or complied
with by it prior to the Closing; provided, however, that the Seller and the
Company shall be entitled to cause such conditions to be fulfilled (including
without limitation, to the extent curable, curing any breach or inaccuracy of
representations, warranties and covenants) within 30 days of their receipt of
the Buyer's written notice to terminate this Agreement pursuant to this Section
6.1(b) (which notice shall specify in reasonable detail the basis for the
termination), and the Buyer shall not be entitled to terminate this Agreement
during such 30 day period and, if cured within such period, any such breach or
inaccuracy shall not be a basis for terminating this Agreement pursuant to this
Section 6.1(b);
-44-
(c) by the Seller by written notice to the Buyer if any of the
conditions set forth in Section 5.1 or 5.3 shall not have been, or if it becomes
reasonably apparent that any of such conditions will not be, fulfilled by 5:00
p.m. Eastern time, on the Final Date, unless such failure shall be primarily due
to the failure of the Seller or the Company to perform or comply with any of the
covenants, agreements or conditions hereof to be performed or complied with by
it prior to the Closing; provided, however, that the Buyer shall be entitled to
cause such conditions to be fulfilled (including without limitation, to the
extent curable, curing any breach or inaccuracy of representations, warranties
and covenants) within 30 days of its receipt of the Seller's written notice to
terminate this Agreement pursuant to this Section 6.1(c) (which notice shall
specify in reasonable detail the basis for the termination), and the Seller
shall not be entitled to terminate this Agreement during such 30 day period and,
if cured within such period, any such breach or inaccuracy shall not be a basis
for terminating this Agreement pursuant to this Section 6.1(c); or
(d) by any party hereto in writing, if the applications for
any required Governmental Approval have been finally denied, and the time period
for appeals and requests for reconsideration has expired, or if any Governmental
Authority of competent jurisdiction shall have issued a final nonappealable
order enjoining or otherwise prohibiting the transactions contemplated by this
Agreement or the Ancillary Documents.
6.2 Effect of Termination. In the event of the termination of this
Agreement pursuant to the provisions of Section 6.1, this Agreement shall become
void and have no further effect, without any liability to any Person in respect
hereof or of the transactions contemplated hereby on the part of any party
hereto, or any of its directors, officers, employees, agents, consultants,
representatives, advisers, stockholders or Affiliates, except as specified in
Section 4.8 and Section 9.1, and except for any liability resulting from any
party's willful breach of this Agreement.
ARTICLE 7.
INDEMNIFICATION
---------------
7.1 Survival. The representations and warranties of the parties shall
survive the Closing until the first anniversary of the Closing Date, except for
(i) those representations and warranties set forth in Section 3.1.2 (Title to
Shares), which shall survive in perpetuity, and (ii) the representations and
warranties set forth in Section 3.1.9 (Taxes), 3.1.18 (Environmental Matters),
3.1.20 (Employee Benefit Plans and Related Matters) or 3.1.29 (Product
Liability), which shall survive until the expiration of the applicable statute
of limitations (as applicable, the "Survival Period"). Nothing contained in the
foregoing sentence shall prevent recovery under this Article 7 after the
expiration of the Survival Period so long as the party making a claim or seeking
recovery complies with the provisions of clause (x) and (y) of the following
sentence. No party shall have any claim or right of recovery for any breach of a
representation, warranty, covenant or agreement unless (x) written notice is
given in good faith by that party to the other party of the representation,
warranty, covenant or agreement pursuant to which the claim is made or right of
recovery is sought setting forth in reasonable detail the basis for the
purported breach of the representation, warranty, covenant or agreement, the
amount or nature of the claim being made, if then ascertainable, and the general
basis therefor and (y) such notice is given prior to the expiration of the
Survival Period. No covenants which are intended to be performed before or at
the Closing shall survive the Closing.
-45-
7.2 Indemnification by the Seller. The Seller from and after the
Closing agrees to indemnify the Buyer and its officers, directors, shareholders,
employees, Affiliates, attorneys, accountants and agents (the "Buyer
Indemnitees"), and hold them harmless from and against, any and all damages,
losses, liabilities, costs and expenses (including, without limitation,
reasonable expenses of investigation and reasonable attorneys' fees and expenses
in connection with any action, suit or proceeding) (collectively, "Buyer
Damages") incurred or suffered by the Buyer Indemnitees as a result of any
breach or inaccuracy of any representation, warranty, covenant or agreement of
the Seller or the Company contained in this Agreement, or any certificate
delivered by the Seller or the Company pursuant to this Agreement.
Notwithstanding anything to the contrary in this Agreement:
(a) the Seller shall have no liability under this Section 7.2
arising out of or as a result of a breach of any covenant, representation,
warranty or agreement for any Buyer Damages incurred or suffered by the Buyer
Indemnitees unless and until the Buyer Damages exceed $500,000 in the aggregate
(the "Buyer Deductible") in which case the Seller shall be liable for all Buyer
Damages; notwithstanding the foregoing, this Section 7.2(a) shall not apply to
any Buyer Damages relating to or arising out of any breach by the Seller of its
covenants or agreements contained in Section 4.10 or Article 8 of this
Agreement;
(b) the Seller shall have no liability with respect to any
individual claim arising under Section 7.2 which involves Buyer Damages of less
than $10,000; provided that if the Buyer Damages with respect to such individual
claim equal or exceed $10,000 then the full amount of such claim shall be
payable, subject to the limitation contained in Section 7.2(a) above;
(c) the Buyer Indemnitees shall not be entitled to
indemnification to the extent that the Buyer Damages are increased or extended
by the negligence, willful misconduct, violation of Applicable Law or bad faith
of any Buyer Indemnitee after the Closing Date;
(d) the amount of any Buyer Damages shall be reduced by any
amount received by a Buyer Indemnitee with respect thereto under any insurance
coverage or from any other party alleged to be responsible therefor. The Buyer
Indemnitees shall not be entitled to indemnification to the extent they failed
to use their commercially reasonable efforts to obtain payment under available
insurance coverage or third party payments with respect to any Buyer Damages, or
to the extent that the Buyer Indemnitees allowed such insurance coverage
maintained by the Company at the Closing Date to lapse thereafter for any
reason. If a Buyer Indemnitee receives an amount under insurance coverage or a
third party payment with respect to Buyer Damages at any time subsequent to any
indemnification provided by the Seller pursuant to this Section 7.2, then such
Buyer Indemnitee shall promptly reimburse the Seller for any payment made by the
Seller in connection with providing such indemnification up to such amount
received by such Buyer Indemnitee;
-46-
(e) the amount of any Buyer Damages shall be reduced to the
extent the relevant Buyer Indemnitee actually receives Tax relief (in the form
of a Tax refund, reduction in Taxes payable, or credit against Taxes payable),
and shall be increased to take account of any net Tax detriment realized,
arising from the receipt of any indemnification payment for such Buyer Damages.
If a Buyer Indemnitee receives such actual Tax relief at any time subsequent to
the receipt of the relevant indemnity payment by the Seller pursuant to this
Section 7.2, then such Buyer Indemnitee shall promptly reimburse the Seller an
amount equal to the Tax relief actually received. If a Buyer Indemnitee realizes
such net Tax detriment at any time subsequent to the receipt of the relevant
indemnity payment by the Seller pursuant to this Section 7.2, then the Seller
shall promptly reimburse the Buyer Indemnitee an amount equal to the net Tax
detriment actually realized;
(f) For purposes of determining the amount of any Buyer
Damages under Section 7.2, such amount shall exclude any and all consequential,
lost profits, special and punitive damages; and
(g) the Seller's aggregate liability to the Buyer Indemnitees
pursuant to Section 7.2 shall not in any event exceed an amount equal to ten
percent (10.0%) of the Purchase Price.
7.3 Indemnification by the Buyer. The Buyer from and after the Closing
agrees to indemnify the Seller and its officers, directors, stockholders,
employees, Affiliates, attorneys, accountants and agents (the "Seller
Indemnitees") and hold them harmless from and against any and all damages,
losses, liabilities, costs and expenses (including, without limitation,
reasonable expenses of investigation and reasonable attorneys' fees and expenses
in connection with any action, suit or proceeding) (collectively, "Seller
Damages") incurred or suffered by the Seller Indemnitees arising out of any
breach of any representation, warranty, covenant or agreement of the Buyer.
Notwithstanding the foregoing, the Buyer shall have no liability under this
Section 7.3 arising out of or as a result of a breach of any covenant,
representation, warranty or agreement for any Seller Damages suffered by the
Seller Indemnitees unless and until the Seller Damages exceed $500,000 (the
"Seller Deductible"), in which case the Buyer shall be liable for all Seller
Damages. Notwithstanding the foregoing, the provisions of the immediately
preceding sentence shall not apply to any Seller Damages relating to or arising
out of any breach by the Buyer or the Company of the covenants or agreements
contained in Section 4.10 or Article 8 of this Agreement.
7.4 Notification of Claims. Upon any party (the "Indemnified Party")
becoming aware of a fact, condition or event that constitutes a basis for a
claim for Buyer Damages or Seller Damages, as the case may be, in respect
thereof against the other party (the "Indemnifying Party") under Section 7.2 or
7.3, if such a claim is to be made, the Indemnified Party will with reasonable
promptness and specificity notify the Indemnifying Party or Parties in writing
of such fact, condition or event. The failure to notify the Indemnifying Party
or Parties under this Section 7.4 shall not relieve any Indemnifying Party of
any liability that it may have to the Indemnified Party except to the extent
that such failure to notify shall have resulted in a waiver of any lawful and
valid affirmative defense to any third-party claim or otherwise materially
prejudices the Indemnifying Party or Parties in connection with the
administration or defense of such third-party claim.
-47-
7.5 Third Party Claims. (a) Upon receipt by the Indemnifying Party or
Parties of any notice of claim for indemnification hereunder arising from a
third party claim, the Indemnifying Party or Parties shall be entitled to
assume, upon written notice to the Indemnified Parties, the administration and
defense of such third party claim with counsel that is reasonably satisfactory
to the Indemnified Party and shall proceed with the administration and defense
of such third party claim diligently and in good faith. In such case, the
Indemnified Party shall have the right to participate in, but not control, the
defense of such claim(s) at the sole cost and expense of the Indemnified Party.
However, further provided, that no Indemnifying Party shall be entitled to
assume the administration and defense of any third-party claim that (i) seeks an
injunction or other equitable relief that might materially and adversely affect
any Indemnified Party, or (ii) involves any criminal action or any claim that
could reasonably be expected to result in a criminal action against any
Indemnified Party.
(b) If the Indemnifying Party does not assume the
administration and defense of such third party claim, then the Indemnified Party
shall assume the administration and defense of any such third party claim with
counsel that is reasonably satisfactory to the Indemnifying Party. In such
event, the Indemnified Party shall proceed with the administration and defense
of such third party claim(s) diligently and in good faith, and the Indemnifying
Party shall be fully consulted by the Indemnified Party or Parties and shall
have the right to participate, at its own expense, in the investigation,
administration and defense of such third party claim.
(c) Any party hereto receiving notice of any proposed
settlement of any such third party claim shall promptly provide a copy of such
notice to the other parties hereto. The Indemnifying Party or Parties shall not
have the right to settle or compromise any third party claim for which
indemnification is being sought hereunder without the consent of the Indemnified
Party (which consent shall not be unreasonably withheld or delayed) unless as a
result of such settlement or compromise the Indemnified Party is fully
discharged and released from any and all liability with respect to such third
party claim. The party not assuming the administration and defense of a third
party claim shall make available to the other party and its counsel all books,
records, documents and other information relating to any third party claim for
which indemnification is sought hereunder, and the parties to this Agreement
shall render to each other reasonable assistance in the defense of any such
third party claim. Each party's counsel in connection with the transactions
contemplated by this Agreement shall be deemed to be reasonably satisfactory to
the other party for purposes of this Agreement.
7.6 Exclusive Remedy. Except with respect to claims for equitable
relief, including specific performance, made with respect to breaches of any
covenant or agreement contained in Section 4.14 or 4.15, after the Closing, the
parties' sole and exclusive recourse against each other for any Seller Damages
or Buyer Damages, as the case may be, arising out of or relating to this
Agreement (including any claims or causes of action arising from or under any
statute or the common law) shall be expressly limited to this Article 7.
-48-
ARTICLE 8
GROSSED-UP TAX PAYMENT COVENANT FOR THE SECTION 338(H)(10) ELECTION
-------------------------------------------------------------------
8.1 338 Tax Payment.
(a) Subject to the offsetting provision of Section 8.2(b) for
338 Estimated Tax Payments, the Buyer shall pay to the Seller an amount (the
"338 Tax Payment") equal to the lesser of the "338 Tax" (defined below) or three
million three hundred thousand dollars ($3,300,000).
(b) The "338 Tax" is the sum of two (2) components: (i) the
"Seller 338 Tax", and (ii) the "Gross-Up Amount" (such terms are defined below).
(i) "Seller 338 Tax". The Seller 338 Tax is an amount
equal to the excess, if any, of
(A) the sum of all Taxes imposed (i) on the Seller,
and (ii) on the Company (i.e., Old Target) on a
separate Tax Return (rather than a Tax Return
of a consolidated, combined, unitary or similar
group of the Seller that includes the Company)
that the Company is required by applicable law
to file, in each case solely as a result of the
Section 338(h)(10) Election and based on an
amount of consideration equal to the Purchase
Price, the 338 Tax Payment and any other direct
or indirect payment that is consideration for
the deemed sale of the Company's assets for Tax
purposes, over
(B) the total amount of all Taxes that would have
been imposed on the gain that the Seller would
have recognized if no Section 338(h)(10)
Election had been made and the Seller had been
treated as selling the Shares to the Buyer for
an amount of consideration equal to the
Purchase Price.
(ii) "Gross-Up Amount". The Gross-Up Amount is the
additional amount needed (the "Gross-Up Amount") to make the Seller whole for
the net amount of additional Taxes payable by the Seller as a result of Buyer's
payment of the Seller 338 Tax and the Gross-Up Amount (after giving effect to
any deductions arising therefrom).
-49-
(c) Within twenty (20) days after the Buyer and the Seller
agree upon Allocation Agreement, the Seller shall deliver to the Buyer a notice
setting forth in reasonable detail the Seller's calculation of the proposed 338
Tax Payment. If the Buyer has not objected to the Seller's proposed 338 Tax
Payment within thirty (30) days of receipt of the notice thereof, such proposal
shall be deemed accepted by the Buyer and shall be the final 338 Tax Payment,
and the Buyer shall pay to Seller the final 338 Tax Payment. If the Buyer
objects to the Seller's proposed 338 Tax Payment, the Buyer shall provide the
Seller with a notice setting forth such objection in detail and the Buyer and
the Seller shall resolve their dispute in accordance with Section 4.10(e)(v). If
the dispute is to be resolved by an Independent Accounting Firm in accordance
with Section 4.10(e)(v), within ten (10) business days after the Buyer issues
the objection notice, the Buyer and the Seller hereby agree to provide the
Independent Accounting Firm with all information and materials as shall be
reasonably necessary or desirable in order for the Independent Accounting Firm
to make its determination. The determination of the Independent Accounting Firm
shall be the final 338 Tax Payment, which shall be binding and conclusive upon
the Buyer and the Seller.
(d) The Buyer shall pay to the Seller the 338 Tax Payment,
less any 338 Estimated Tax Payment made by the Buyer to the Seller in accordance
with Section 8.2, within ten (10) days after the final 338 Tax Payment is
determined.
8.2 Tax Payments.
(a) The Seller and/or the Company (i.e., Old Target) will have
to make estimated, final and/or year end Tax payments for Taxes for a Tax period
ending on or after the Closing Date (the "Tax Payments"). The Tax Payments must
include a payment for the 338 Tax. At least fifteen (15) days before the
Closing, the Seller shall send a notice to the Buyer which shall set forth a
good faith estimate of the 338 Tax Payment and the Buyer shall pay to the Seller
an amount equal to such good faith estimate (the "338 Estimated Tax Payment") at
the Closing.
(b) To the extent the Buyer's 338 Estimated Tax Payment
exceeds the final 338 Tax Payment, the Seller shall pay to the Buyer an amount
equal to such excess within ten (10) days after the final 338 Tax Payment is
determined. If the final 338 Tax Payment exceeds the 338 Estimated Tax Payment,
the Buyer shall pay to the Seller an amount equal to such excess within ten (10)
days after the final Seller 338 Tax is determined.
8.3 Cooperation. Seller and Buyer shall cooperate in good faith and
shall promptly provide each other with all information necessary to determine
the 338 Tax Payment and the 338 Estimated Tax Payment.
ARTICLE 9
MISCELLANEOUS
-------------
9.1 Expenses. Except as otherwise specifically provided herein, each of
the Seller, the Company and the Buyer shall pay its own expenses including, but
not limited to, attorneys' accountants', financial advisors', and brokers' or
finders' fees and expenses, incurred in connection with the transaction
contemplated hereby.
-50-
9.2 Severability. If any provision of this Agreement is inoperative or
unenforceable for any reason, such circumstances shall not have the effect of
rendering the provision in question inoperative or unenforceable in any other
case or circumstance, or of rendering any other provision or provisions herein
contained invalid, inoperative, or unenforceable to any extent whatsoever. The
invalidity of any one or more phrases, sentences, clauses, sections or
subsections of this Agreement shall not affect the remaining portions of this
Agreement.
9.3 Notices. All notices and other communications made in connection
with this Agreement shall be in writing and shall be deemed to have been duly
given if (a) mailed by first-class, registered or certified mail, return receipt
requested, postage prepaid, (b) transmitted by hand delivery, (c) sent by
next-day or overnight mail or delivery charges prepaid by a nationally
recognized overnight courier, or (d) sent by telecopy, in each case addressed as
follows:
(i) if to the Buyer or the Company (after the Closing),
Helix Technology Corporation
Nine Hampshire Street
Mansfield, MA 02048-9171
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
Attention: Chief Executive Officer
with copies to:
Xxxxxx & Dodge LLP
000 Xxxxxxxxxx Xxxxxx at Prudential Center
Boston, MA 02199-7613
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxxxx, Esq.
(ii) if to the Seller or the Company (before the Closing),
c/o Intermagnetics General Corporation
X.X. Xxx 000
000 Xxx Xxxxxxxxx Xxxx
Xxxxxx, XX 00000-0000
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
Attention: Xxxxxxxxx X. Xxxxxxx, Esq.,
General Counsel
-51-
or, in each case, at such other address as may be specified in writing to the
other party hereto in accordance with this Section. Notices sent by mail shall
be deemed given five Business Days after being deposited in the mail; notice
hand delivered shall be deemed given the day of delivery; notices sent by
next-day or overnight delivery shall be deemed given the next Business Day; and
notices sent by telecopy shall be deemed given upon confirmation of
transmission.
9.4 Entire Agreement. This Agreement (including the Exhibits and
Schedules hereto), the Ancillary Documents (when executed and delivered) and the
Confidentiality Agreement constitute the entire agreement and supersede all
prior agreements and understandings, both written and oral, between the parties
with respect to the subject matter hereof and thereof.
9.5 Counterparts; Headings. This Agreement may be executed in
counterparts, each of which shall be deemed an original and all of which shall
together constitute one and the same instrument. The headings contained in this
Agreement are for purposes of convenience only and shall not affect the meaning
or interpretation of this Agreement.
9.6 GOVERNING LAW, ETC. (a) THIS AGREEMENT SHALL BE GOVERNED IN ALL
RESPECTS, INCLUDING AS TO VALIDITY, INTERPRETATION AND EFFECT, BY THE INTERNAL
LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO THE CONFLICT OF LAWS
RULES THEREOF. EACH PARTY HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE
COURTS OF THE STATE OF NEW YORK AND THE FEDERAL COURTS OF THE UNITED STATES OF
AMERICA SITTING IN ALBANY COUNTY, NEW YORK IN RESPECT OF THE INTERPRETATION AND
ENFORCEMENT OF THE PROVISIONS OF THIS AGREEMENT AND OF THE DOCUMENTS REFERRED TO
IN THIS AGREEMENT, AND IN RESPECT OF THE TRANSACTIONS CONTEMPLATED HEREBY AND
THEREBY. EACH PARTY HEREBY WAIVES AND AGREES NOT TO ASSERT, AS A DEFENSE IN ANY
ACTION, SUIT OR PROCEEDING FOR THE INTERPRETATION AND ENFORCEMENT HEREOF, OR ANY
SUCH DOCUMENT OR IN RESPECT OF ANY SUCH TRANSACTION, THAT SUCH ACTION, SUIT OR
PROCEEDING MAY NOT BE BROUGHT OR IS NO MAINTAINABLE IN SUCH COURTS OR THAT THE
VENUE THEREOF MAY NOT BE APPROPRIATE OR THAT THIS AGREEMENT OR ANY SUCH DOCUMENT
MAY NOT BE ENFORCED IN OR BY SUCH COURTS. EACH PARTY HEREBY CONSENTS TO AND
GRANTS ANY SUCH COURT JURISDICTION OVER THE PERSON OF SUCH PARTIES AND OVER THE
SUBJECT MATTER OF ANY SUCH DISPUTE AND AGREES THAT THE MAILING OF PROCESS OR
OTHER PAPERS IN CONNECTION WITH ANY SUCH ACTION OR PROCEEDING IN THE MANNER
PROVIDED IN SECTION 9.3 OR IN SUCH OTHER MANNER AS MAY BE PERMITTED BY LAW,
SHALL BE VALID AND SUFFICIENT SERVICE THEREOF.
(b) EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY
WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND
DIFFICULT ISSUES, AND THEREFORE EACH PARTY HEREBY IRREVOCABLY AND
-52-
UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN
RESPECT OR ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO
THIS AGREEMENT, OR THE BREACH, TERMINATION OR VALIDITY OF THIS AGREEMENT, OR THE
TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. EACH PARTY CERTIFIES AND
ACKNOWLEDGES THAT (i) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY
HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE
EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (ii) EACH SUCH PARTY
UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (iii) EACH SUCH
PARTY MAKES THIS WAIVER VOLUNTARILY, AND (iv) EACH SUCH PARTY HAS BEEN INDUCED
TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION 9.6(b).
9.7 Binding Effect; No Third Party Beneficiaries. This Agreement shall
be binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns. Except as provided in Section 4.8
with respect to exculpation and indemnification contemplated therein and
Sections 7.2 and 7.3 with respect to indemnification of Indemnified Parties
hereunder, nothing in this Agreement shall confer any rights upon any person or
entity other than the parties hereto and their respective heirs, successors and
permitted assigns. None of the parties hereto assumes no liability to any third
party because of any reliance on any of their respective representations,
warranties, and agreements contained in this Agreement.
9.8 Assignment. This Agreement shall not be assignable by either party
without the prior written consent of the other party.
9.9 Amendment; Waivers, etc. No amendment, modification or discharge of
this Agreement, and no waiver hereunder, shall be valid or binding unless set
forth in writing and duly executed by the party against whom enforcement of the
amendment, modification, discharge or waiver is sought. Any such waiver shall
constitute a waiver only with respect to the specific matter described in such
writing and shall in no way impair the rights of the party granting such waiver
in any other respect or at any other time. Neither the waiver by any of the
parties hereto of a breach of or a default under any of the provisions of this
Agreement, nor the failure by any of the parties, on one or more occasions, to
enforce any of the provisions of this Agreement or to exercise any right or
privilege hereunder, shall be construed as a waiver of any other breach or
default of a similar nature, or as a waiver of any of such provisions, rights or
privileges hereunder. The rights and remedies of any party based upon, arising
out of or otherwise in respect of any inaccuracy or breach of any
representation, warranty, covenant or agreement or failure to fulfill any
condition shall in no way be limited by the fact that the act, omission,
occurrence or other state of facts upon which any claim of any such inaccuracy
or breach is based may also be the subject matter of any other representation,
warranty, covenant or agreement as to which there is no inaccuracy or breach.
9.10 Waiver of Certain Conflicts. The Buyer and the Company understand
and agree that the Seller will be entitled to retain the services of Bond,
Xxxxxxxxx & Xxxx, PLLC ("BS&K") as its attorneys in the event of any dispute
between the Buyer or the Company and the Seller concerning this Agreement or any
-53-
of the Ancillary Documents and the transactions contemplated hereby and thereby
or whether otherwise involving the Company notwithstanding any result of BS&K's
prior representation of the Company. Notwithstanding the sale of the Shares to
the Buyer, the Buyer and the Company agree that neither the Company nor the
Buyer shall have the right to assert the attorney/client privilege as to
pre-closing and post-closing communications between the Seller or the Company
(for the Company, only with respect to pre-closing communications), on one hand,
and its counsel, BS&K, on the other hand, to the extent that the privileged
communications relate to this Agreement or any of the Ancillary Documents or to
the transactions contemplated hereby and thereby. The parties agree that only
the Seller shall be entitled to assert such attorney/client privilege in
connection with such communications following the Closing of this Agreement. The
files generated and maintained by BS&K as a result of the law firm's
representation of the Seller and the Company in connection with this Agreement
or any of the Ancillary Documents or any of the transactions contemplated hereby
or thereby or any efforts to sell the Shares to the Buyer or any other Person
shall be and become the exclusive property of the Seller.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
-54-
IN WITNESS WHEREOF, the parties have duly executed this Stock Purchase
Agreement as of the date first above written.
INTERMAGNETICS GENERAL CORPORATION
By: /s/ Xxxxx X. Xxxxxxx
-------------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Chairman and Chief Executive Officer
IGC POLYCOLD SYSTEMS, INC.
By: /s/ Xxxxx X. Xxxxxxx
-------------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: President
HELIX TECHNOLOGY CORPORATION
By: /s/ Xxxxxx X. Xxxxxxxx
-------------------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: President and Chief Executive Officer
-55-
