EXHIBIT 2
PURCHASE AGREEMENT
AMONG
XXXXX ACQUISITION, INC.,
XXXXX INDUSTRIES, INC.,
PRINCETON INSTRUMENTS, INC.
AND
XX. XXXX XXXXX
DATED MAY 16, 1997
TABLE OF CONTENTS
Page
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1. Definitions........................................................... 2
2. Purchase and Sale of the Acquired Assets, Shares and Real Property.... 11
(a) Purchase and Sale.............................................. 11
(b) Assumption of Liabilities...................................... 12
(f) Closing and Preclosing Distributions........................... 12
(g) The Closing.................................................... 14
(h) Deliveries at the Closing...................................... 14
(i) Allocation .................................................... 15
(j) Proration of Lease Payments, Utility Charges and Other Payments 15
(k) Proration of Taxes............................................. 15
(l) Condition of Acquired Assets................................... 15
3. Representations and Warranties of PII................................. 15
(a) Organization of the Acquired Companies; Investment Interest... 16
(b) Authorization of Transaction.................................. 16
(c) Noncontravention.............................................. 17
(d) Brokers' Fees................................................. 17
(e) Title to Assets............................................... 17
(f) Shares........................................................ 18
(g) Financial Statements.......................................... 18
(h) Events Subsequent to the Date of the Financial Statements..... 18
(i) Undisclosed Liabilities....................................... 20
(j) Legal Compliance.............................................. 20
(k) Tax Matters................................................... 21
(l) Real Property................................................. 22
(m) Intellectual Property......................................... 26
(n) Tangible Assets............................................... 28
(o) [Intentionally omitted.]...................................... 28
(p) Contracts..................................................... 28
(q) Notes and Accounts Receivable................................. 30
(r) Powers of Attorney............................................ 30
(s) Insurance..................................................... 30
(t) Litigation.................................................... 31
(u) Product Warranty.............................................. 31
i
(v) Product Liability............................................. 31
(w) Employees..................................................... 32
(x) Employee Benefits............................................. 32
(y) Guaranties.................................................... 33
(z) Environment, Health, and Safety............................... 33
(aa) Certain Business Relationships With the Acquired Companies.... 33
(ab) Disclosure.................................................... 33
4. Representations and Warranties of the Buyer and Parent................ 34
(a) Organization of the Buyer...................................... 34
(b) Authorization of Transaction................................... 34
(c) Noncontravention............................................... 34
(d) Broker's Fees.................................................. 34
(e) Disclosure..................................................... 35
(f) Parent Shares.................................................. 35
(g) Financial Statements........................................... 35
(h) Events Subsequent to Most Recent Fiscal Quarter End............ 35
(i) Due Diligence Review........................................... 36
(j) Public Information............................................. 36
5. Conditions to Obligation to Close..................................... 36
(a) Conditions to Obligation of Parent and the Buyer............... 36
(b) Conditions to Obligation of PII and the Stockholder............ 38
6. Pre-Closing Covenants of the Parties.................................. 39
(a) ............................................................... 39
(b) Access and Investigation....................................... 39
(c) Operation of the Businesses of the Acquired Companies.......... 39
(d) Negative Covenant.............................................. 40
(e) Name of PII.................................................... 40
(f) Required Approvals............................................. 40
(g) Notification................................................... 40
(h) Best Efforts................................................... 41
7. Post-Closing Covenants................................................ 41
(a) General........................................................ 41
(b) Litigation Support............................................. 41
(c) Transition..................................................... 41
(d) Confidentiality................................................ 41
(e) Retirement Plan................................................ 42
(f) Registration Rights............................................ 42
(g) Employee Matters............................................... 50
(h) Tax Matters.................................................... 50
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8. Remedies Under This Agreement......................................... 51
(a) Survival of Representations and Warranties..................... 51
(b) Indemnification Provisions for Benefit of Parent and the Buyer. 51
(c) Indemnification Provisions for Benefit of PII and the
Stockholder.................................................... 53
(d) Method of Asserting Claims..................................... 54
(e) Arbitration.................................................... 56
(f) Determination of Losses........................................ 56
9. Miscellaneous......................................................... 56
(a) Press Releases and Public Announcements........................ 56
(b) Name of PII.................................................... 57
(c) No Third-Party Beneficiaries................................... 57
(d) Entire Agreement............................................... 57
(e) Succession and Assignment...................................... 57
(f) Counterparts................................................... 57
(g) Headings....................................................... 57
(h) Notices........................................................ 57
(i) Governing Law.................................................. 58
(j) Amendments and Waivers......................................... 58
(k) Severability................................................... 58
(l) Expenses....................................................... 59
(m) Construction................................................... 59
(n) Incorporation of Exhibits and Schedules........................ 59
(o) Specific Performance........................................... 59
(p) Submission to Jurisdiction .................................... 59
(q) Bulk Sale and Other Tax Filings................................ 60
(r) Transfer Taxes; Sales Tax...................................... 60
(s) No Assignment Causing Breach................................... 60
(t) Guaranty....................................................... 60
iii
PURCHASE AGREEMENT
This agreement ("Agreement") is entered into on May 16, 1997, by and
between XXXXX ACQUISITION, INC., a Delaware corporation (the "Buyer"), XXXXX
INDUSTRIES, INC., a Delaware corporation and parent of Buyer ("Parent"),
PRINCETON INSTRUMENTS, INC., a New Jersey corporation ("PII"), and XX. XXXX
XXXXX ("Stockholder"). The Buyer, Parent, PII and the Stockholder are referred
to herein as the "Parties."
RECITALS
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A. PII is engaged in the assembly, distribution and sale of certain
analytical and scientific laboratory instruments, directly and through certain
affiliated foreign companies (as hereinafter defined, the Affiliates");
B. All of the outstanding shares of capital stock of PII, and a majority
of the outstanding shares of capital stock of each of the Affiliates, are owned,
beneficially and of record, by the Stockholder;
C. Certain shares of capital stock of the Affiliates are owned,
beneficially and of record, by the Minority Shareholders (as hereinafter
defined) in the respective amounts set forth on Annex A;
D. The Stockholder is the owner of certain real property located at 0000
Xxxxxxxxxxxx Xxxx, Xxxxxxx, Xxx Xxxxxx (as hereinafter defined, the "Real
Property"), currently occupied and used by PII in connection with the conduct of
its business;
E. The Buyer wishes to purchase from PII, and PII wishes to sell to the
Buyer, substantially all of the Acquired Assets (as hereinafter defined) subject
to the assumption by the Buyer of the Assumed Liabilities (as hereinafter
defined), upon the terms and conditions set forth herein;
F. The Stockholder anticipates he will purchase the shares of the
Affiliates owned by the Minority Shareholders immediately prior to the Closing;
G. The Buyer also wishes to purchase from the Stockholder, and the
Stockholder wishes to sell to the Buyer, all of the capital stock of the
Affiliates (other than director's qualifying shares, if any), upon the terms and
conditions set forth herein; and
H. The Buyer also wishes to purchase from the Stockholder, and the
Stockholder wishes to sell to the Buyer, the Real Property, upon the terms and
conditions set forth herein.
NOW, THEREFORE, in consideration of the premises and the mutual promises
herein made, and in consideration of the representations, warranties, and
covenants herein contained, the Parties agree as follows.
1. DEFINITIONS.
"Accredited Investor" has the meaning set forth in Regulation D
promulgated under the Securities Act.
"Acquired Assets" means all right, title, and interest in and to all
of the assets of PII (except for those assets listed in clauses (i)-(vii) of
this definition), including, without limitation, all of its right, title and
interest in and to:
(a) leaseholds and subleaseholds of real property to which it is a
party, and all, improvements, fixtures, and fittings thereon, and
easements, rights-of-way, and other appurtenants thereto (such as
appurtenant rights in and to public streets);
(b) tangible personal property (such as machinery, equipment,
inventories of raw materials and supplies, manufactured and purchased
parts, goods in process and finished goods, furniture, automobiles, trucks,
tractors, trailers, tools, jigs, and dies) other than Cash;
(c) Intellectual Property, goodwill associated therewith, licenses and
sublicenses granted and obtained with respect thereto, and rights
thereunder, remedies against infringements thereof, and rights to
protection of interests therein under the laws of all jurisdictions;
(d) leases, subleases, and rights thereunder;
(e) agreements, contracts, indentures, mortgages, instruments,
Security Interests, guaranties, other similar arrangements, and rights
thereunder;
(f) accounts, notes, and other receivables;
(g) claims, deposits, prepayments, refunds, causes of action, choses
in action, rights of recovery, rights of set off, and rights of recoupment;
(h) franchises, approvals, permits, licenses, orders, registrations,
certificates, variances, and similar rights obtained from governments and
governmental agencies,
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exclusive of certain operating permits and licenses that are non-
transferable under federal or state law (including, for example, sales tax
permits);
(i) books, records, ledgers, files, documents, correspondence, lists,
plats, architectural plans, drawings, and specifications, creative
materials, advertising and promotional materials, studies, reports, and
other printed or written materials relating to the Business, except those
excluded under subparagraph (v) below; and
(j) All PII Cash (including Cash as of the date hereof existing in
PII's payroll account) and all bank accounts and brokerage accounts and
similar accounts (including xxxxx cash, foreign xxxxx, Canadian payroll,
CoreStates COD checking, CoreStates checking sweep, Xxxx Xxxxxx, Japanese
PI, Inc. accounts) and cash equivalents, including deposits in transit.
PROVIDED, HOWEVER, that notwithstanding the foregoing, the Acquired Assets shall
not include:
(i) Cash in excess of the amount referred to in subparagraph (j)
above to the extent such Cash is a Closing Stockholder Distribution
under Section 2(f) below;
(ii) any insurance policy of any kind;
(iii) prepaid insurance, prepaid taxes, and transfers and
exchanges;
(iv) any rights or interests in and with respect to the assets
associated with any Employee Benefit Plan;
(v) the corporate charter, qualifications to conduct business as
a foreign corporation, arrangements with registered agents relating to
foreign qualifications, taxpayer and other identification numbers,
seals, minute books, stock transfer books, blank stock certificates,
original Tax Returns and other documents relating to the organization,
maintenance, and existence of PII as a corporation;
(vi) any and all of the rights of PII under this Agreement (or
under any side agreement between PII and/or the Stockholder on the one
hand and Parent and/or the Buyer on the other hand entered into on or
after the date of this Agreement);
(vii) any right, title, or interest in and to PII's payroll
account; or
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(viii) any assets or rights which are not assignable pursuant to
the terms of the document or instrument creating same or which are
only assignable with the consent of a third party who refuses to grant
such consent. Stockholder and PII agree to diligently endeavor to
obtain such consent; provided, however, the failure to obtain same
shall not reduce the obligations of Buyer and Parent hereunder.
"Acquired Company" or "Acquired Companies" means PII and the
Affiliates.
"Affiliate" has the meaning set forth in the introductory paragraph to
this Agreement.
"Affiliated Group" means any affiliated group within the meaning of
Code Sec. 1504(a) (or any similar group defined under a similar provision of
state, local, or foreign law).
"Agreed Value" means that price per share of the Parent Shares which
is the average of the closing sales prices of the common stock of Xxxxx
Industries, Inc. for the three (3) trading days immediately preceding and the
three (3) trading days immediately after (each a "Trading Day") the Closing Date
as reported by the New York Stock Exchange ("NYSE").
"Applicable Rate" means the corporate base rate of interest announced
from time to time by NationsBank.
"April 30 Balance Sheet" has the meaning set forth in (S)2(c) hereof.
"Assumed Liabilities" means (except for those liabilities expressly
excluded in clauses (A) through (M) below):
(a) all Liabilities of PII to the extent reserved or accrued as
current liabilities on the Financial Statements;
(b) all current Liabilities of PII which have arisen after March 31,
1997, in the Ordinary Course of Business (other than any current liability
relating to the operation of the Company prior to such date resulting from,
arising out of, or caused by any (i) breach of contract, (ii) breach of
warranty claims which are not Product Warranty Claims, (iii) tort, (iv)
infringement, or (v) violation of law (other than failure to comply with
any bulk sales laws));
(c) all Liabilities of PII to be performed following the Closing
expressly provided for under or incurred pursuant to the terms of the
written agreements, contracts, leases, licenses, instruments and other
items which are included as Acquired Assets or which may be listed in (S)
3(p) of the PII Disclosure Schedule or are not required to be
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so listed because of the failure of such item to meet the materiality
standards set forth therein;
(d) Liabilities specifically disclosed on Exhibit 1(d); and
(e) all Liabilities for Product Warranty Claims;
PROVIDED, HOWEVER, that notwithstanding the foregoing, the Assumed Liabilities
shall not include:
(A) any accrued royalties payable;
(B) any Liability of PII for income, and other Taxes arising in
connection with the consummation of the transactions contemplated
hereby except as otherwise provided under this Agreement;
(C) any Liability of PII for ad valorem taxes pertaining to the
Business and operations of PII conducted prior to the Closing Date;
(D) any Liability of PII for the unpaid taxes of any Person
(other than PII), whether as a transferee or successor, by contract,
or otherwise;
(E) any Liability of PII in connection with any insurance policy
of any kind;
(F) any Liability of PII with respect to any of its Employee
Benefit Plans;
(G) except as otherwise provided for in this Agreement, any
Liability of PII for costs and expenses incurred in connection with
this Agreement and the transactions contemplated hereby;
(H) any Liability of PII under this Agreement (or under any side
agreement between PII and/or the Stockholder on the one hand and the
Buyer and/or Parent on the other hand entered into on or after the
date of this Agreement) for failure to perform its obligations
hereunder;
(I) any Liability other than a Product Warranty Claim arising
from any use of or defect in any PII products sold prior to the
Closing Date (regardless of the date of any loss, bodily injury, or
property damage claimed to have resulted from such uses or defects);
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(J) any environmental liabilities or contamination, including but
not limited to liabilities arising from Environmental, Health and
Safety Laws, which arise or result, directly or indirectly, from
conditions existing at the Real Property prior to the Closing Date;
(K) any post-retirement benefits, if any, for employees of the
Acquired Companies who have retired prior to the Closing Date;
(L) except as otherwise assumed hereunder, any claim or Liability
(including, without limitation, severance and benefits) relating to
employees of PII who do not become employees of Buyer; or
(M) Liabilities which have accrued or arise prior to the Closing
which are not "Assumed Liabilities" hereunder.
"Basis" means any past or present fact, situation, circumstance,
status, condition, activity, practice, occurrence, event, incident, action,
failure to act, or transaction that forms or could reasonably be expected to
form the basis for any specified consequence.
"Business" means the business conducted or proposed or planned to be
conducted by the Acquired Companies on a consolidated basis on and as of the
Closing Date.
"Buyer" has the meaning set forth in the preface above.
"Cash" means cash and cash equivalents (including marketable
securities and short term investments) calculated in accordance with GAAP
applied on a basis consistent with the preparation of the Financial Statements,
inclusive of deposits-in-transit and after deduction for outstanding checks.
"Closing" has the meaning set forth in (S) 2(g) below.
"Closing Date" has the meaning set forth in (S) 2(g) below.
"Code" means the Internal Revenue Code of 1986, as amended.
"Confidential Information" means: (a) confidential data and
confidential information relating to the business of any Party (the "Protected
Party") which is or has been disclosed to another Party (the "Recipient") or of
which the Recipient became aware as a consequence of or through its relationship
with the Protected Party and which has value to the Protected Party and is not
generally known to its competitors and which is designated by the Protected
Party as confidential or otherwise restricted; and (b) information of the
Protected Party, without regard to form, including, but not limited to,
Intellectual Property, technical or nontechnical data, algorithms, formulas,
patents, compilations, programs, devices, methods,
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techniques, drawings, processes, financial data, financial plans, product or
service plans or lists of customers or suppliers which is not commonly known or
available to the public and which information (i) derives economic value from
not being generally known to, and not being readily ascertainable by proper
means by, other Persons who can obtain economic value from its disclosure or
use, and (ii) is the subject of efforts that are reasonable under the
circumstances to maintain its secrecy. Notwithstanding anything to the contrary
contained herein, Confidential Information shall not include any data or
information that (a) has been voluntarily disclosed to the public by the
Protected Party, (b) has been independently developed and disclosed to the
public by others, (c) otherwise enters the public domain through lawful means,
(d) was already known by Recipient prior to such disclosure or was lawfully and
rightfully disclosed to Recipient by another Person, or (e) that is required to
be disclosed by law or order.
"Controlled Group of Corporations" has the meaning set forth in Code
Sec. 1563.
"Employee Benefit Plan" means any (a) nonqualified deferred
compensation or retirement plan or arrangement which is an Employee Pension
Benefit Plan (as defined in ERISA Sec. 3(2)), (b) qualified defined contribution
retirement plan or arrangement which is an Employee Pension Benefit Plan
(including any Multiemployer Plan), (c) qualified defined benefit retirement
plan or arrangement which is an Employee Pension Benefit Plan (including any
Multiemployer Plan), or (d) Employee Welfare Benefit Plan (as defined in ERISA
Sec. 3(1)) or material fringe benefit plan or program.
"Environmental, Health, and Safety Laws" means the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, the Resource
Conservation and Recovery Act of 1976, and the Occupational Safety and Health
Act of 1970, each as amended and as in effect on the Closing Date, together with
all other laws in effect on the Closing Date (including rules, regulations,
codes, plans, injunctions, judgments, orders, decrees, rulings, and charges
thereunder) of federal, state, local and foreign governments (and all agencies
thereof) concerning pollution or protection of the environment, natural
resources, public health and safety, or employee health and safety, including
laws relating to omissions, discharges, releases, or threatened releases of
Hazardous Substances in air, surface water, ground water, or lands or otherwise
relating to the manufacture, processing, distribution, use, treatment, storage,
disposal, transport, or handling of Hazardous Substances.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"Escrow Agreement" means the Escrow Agreement dated the Closing Date
entered into among the Parties with respect to the indemnification obligations
of PII and the Stockholder under (S) 8 of this Agreement.
"Extremely Hazardous Substance" has the meaning set forth in Sec. 302
of the Emergency Planning and Community Right-to-Know Act of 1986, as amended.
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"Fiduciary" has the meaning set forth in ERISA Sec. 3(21).
"Financial Statements" has the meaning set forth in (S) 3(g) below.
"GAAP" means United States generally accepted accounting principles as
in effect as of the date hereof.
"Xxxx-Xxxxx-Xxxxxx Act" means the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 1976, as amended.
"Hazardous Substances" means pollutants, contaminants, petroleum,
asbestos or chemical, industrial, hazardous or toxic material or wastes.
"Indemnified Party" has the meaning set forth in (S) 8(d) below.
"Indemnifying Party" has the meaning set forth in (S) 8(d) below.
"Intellectual Property" means with respect to the Business:
(a) all inventions (whether patentable or unpatentable and whether or
not reduced to practice), all rights to research and development, all
innovations, all improvements thereto, and all patents, patent
applications, and patent disclosures, together with all reissuances,
continuations, continuations-in-part, revisions, extensions, and
reexaminations thereof;
(b) all trademarks, service marks, trade dress, logos, trade names and
corporate names, together with all translations, adaptations, derivations,
and combinations thereof and including all goodwill associated therewith,
and all applications, registrations, and renewals in connection therewith;
(c) all copyrightable works, all copyrights, and all applications,
registrations, and renewals in connection therewith;
(d) all mask works and all applications, registrations, and renewals
in connection therewith;
(e) all trade secrets and confidential business information (including
ideas, research and development, know-how, formulae, compositions,
manufacturing and production processes and techniques, technical data,
designs, drawings, specifications, customer and supplier lists, pricing and
cost information, and business and marketing plans and proposals but
excluding any such information received from Advanced Microscopy
Techniques);
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(f) all computer software (including data and related documentation);
(g) all other proprietary rights relative to any of the foregoing; and
(h) all copies and tangible embodiments thereof (in whatever form or
medium).
"Knowledge" means actual knowledge of the Stockholder, Xxxx Xxxx,
Xxxxx Xxxxxx and the Presidents of each of the Affiliates.
"Liability" or "Liabilities" means any direct or indirect
indebtedness, liability, claim, loss, damage, deficiency, obligation or
responsibility, fixed or unfixed, xxxxxx or inchoate, liquidated or
unliquidated, secured or unsecured, accrued, absolute, contingent or otherwise.
"Losses" means all economic losses, liabilities, obligations, amounts
paid in settlement, costs and expenses, including court costs, and reasonable
attorneys' fees and expenses, incurred in connection with any action, suit,
proceeding, hearing, investigation, charge, complaint, claim, demand,
injunction, judgment, order, decree, ruling; provided, however, that "Losses"
shall not include any of the foregoing attributable to an Indemnified Party's
conduct which occurs as a result of the Indemnified Party's failure (i) to
exercise its reasonable business judgment, (ii) to defend or contest in good
faith with respect to any of the foregoing, or (iii) to mitigate any of the
foregoing in accordance with sound and prudent business practices.
"Material Adverse Effect" means, in the case of any Person, any change
or changes or effect or effects that individually or in the aggregate are or may
reasonably be expected to be materially adverse to (i) the business, financial
condition, operations or results of operations of such Person or (ii) the
ability of such Person to perform its obligations under this Agreement.
"Multiemployer Plan" has the meaning set forth in ERISA Sec. 3(37).
"Ordinary Course of Business" means the ordinary course of business of
the Acquired Companies consistent with past custom and practice (including with
respect to quantity and frequency) and not inconsistent with the standards,
practices and principles reflected in the PII Financial Statements.
"Parent Shares" means the shares of common stock, par value $.01, of
Parent which shares shall be delivered as provided in (S) 2(c) below without
registration (but with registration rights as set forth in (S) 7(e) hereunder)
under, and subject to the restrictions imposed by, the Securities Act.
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"Party" has the meaning set forth in the preface above.
"PBGC" means the Pension Benefit Guaranty Corporation.
"Person" means an individual, a partnership, a corporation, an
association, a joint stock company, a trust, a joint venture, an unincorporated
organization, a limited liability company, or a governmental entity (or any
department, agency, or political subdivision thereof).
"PII" has the meaning set forth in the preface above.
"PII Disclosure Schedule" has the meaning set forth in (S) 3 below.
"PII Share" means any share of the Common Stock, par value $.10 per
share, of PII.
"Process Agent" has the meaning set forth in (S) 9(p) below.
"Product Warranty Claims" means claims of PII customers and/or users
made during the twelve (12) month period following Closing in the Ordinary
Course of Business with respect to products sold by PII on and prior to the
Closing Date which (i) are based solely on PII's written product warranties
disclosed to the Buyer, and (ii) are only for the repair or replacement or
reimbursement remedies expressed in such written product warranties.
"Prohibited Transaction" has the meaning set forth in ERISA Sec. 406
and Code Sec. 4975.
"Public Information" means all Forms 00-X, 00-X, 0-X, and proxy
statements of the Parent with respect to the October 31, 1996 fiscal year and
all subsequent periods.
"Purchase Price" means the payments required by (S) 2(c), (d) and (e)
below.
"Real Property" means the real property, fixtures and improvements
(inclusive of warranties, guaranties, permits and licenses in connection
therewith) including contiguous real property owned by the Stockholder and used
by PII, which is located at Quaker Bridge Road, Trenton, New Jersey.
"Reportable Event" has the meaning set forth in ERISA Sec. 4043.
"Securities Act" means the Securities Act of 1933, as amended.
"Securities Exchange Act" means the Securities Exchange Act of 1934,
as amended.
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"Security Interest" means any mortgage, pledge, lien, encumbrance,
charge, or other security interest, other than (a) mechanic's, materialmen's,
and similar liens, (b) liens for Taxes not yet due and payable or for Taxes that
the taxpayer is contesting in good faith through appropriate proceedings, (c)
purchase money liens and liens securing rental payments under capital lease
arrangements, (d) other liens arising in the Ordinary Course of Business and not
incurred in connection with the borrowing of money, and (e) liens arising as a
result of any act or omission of the Buyer or Parent.
"Shares" means all of the issued and outstanding shares of capital
stock or other equity interests of the Affiliates.
"Stockholder" means Xx. Xxxx Xxxxx, who is the only stockholder of PII
and at the Closing Date will be the only stockholder of the Affiliates.
"Subsidiary" means any corporation with respect to which a specified
Person (or a Subsidiary thereof) owns a majority of the common stock or has the
power to vote or direct the voting of sufficient securities to elect a majority
of the directors.
"Tax" and "Taxes" means all taxes, charges, fees, levies or other
assessments imposed by any federal, state, local or foreign taxing authority,
whether disputed or not, including without limitation, income, capital,
estimated, excise, property, sales, transfer, withholding, employment, payroll,
and franchise taxes and such terms shall include any interest, penalties or
additions attributable to or imposed on or with respect to such assessments and
any expenses incurred in connection with the settlement of any tax liability.
"Tax Return" means any return, declaration, report, claim for refund,
or information return or statement relating to Taxes, including any schedule or
attachment thereto, and including any amendment thereof.
2. PURCHASE AND SALE OF THE ACQUIRED ASSETS, SHARES AND REAL PROPERTY.
(a) Purchase and Sale. In simultaneous transactions, on and subject
to the terms and conditions of this Agreement:
(i) the Buyer agrees to purchase from PII, and PII agrees to
sell, transfer, convey, assign and deliver to the Buyer, all of the
Acquired Assets at the Closing for the consideration specified below
in (S) 2(c) below;
(ii) the Buyer agrees to purchase from the Stockholder and the
Stockholder agrees to sell, transfer, convey, assign and deliver to
the Buyer, the Shares at the Closing for the consideration specified
in (S) 2(d) below; and
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(iii) the Buyer agrees to purchase from the Stockholder, and the
Stockholder agrees to sell, transfer, convey, assign and deliver to
the Buyer, the Real Property at the Closing for the consideration
specified below in (S) 2(e).
(b) Assumption of Liabilities. On and subject to the terms and
conditions of this Agreement, the Buyer agrees to assume and become
responsible for the Assumed Liabilities at the Closing. The Buyer will not
assume or have any responsibility, however, with respect to any Liability
or obligation of PII or the Stockholder not included within the definition
of Assumed Liabilities.
(c) Purchase Price of Acquired Assets. Buyer shall make the following
payments to PII in respect of the Acquired Assets:
(i) At Closing, TWENTY-FOUR MILLION EIGHT HUNDRED SEVENTY-FIVE
THOUSAND DOLLARS ($24,875,000) in cash, payable by wire transfer or
delivery of other immediately available funds;
(ii) On the fifth Trading Day following the Closing Date, that
number of Parent Shares (rounded up to the next whole share) which
results from dividing the Agreed Value into THREE MILLION DOLLARS
($3,000,000).
(d) Purchase Price of Shares. Buyer shall pay to the Stockholder at
Closing the aggregate sum of $6,980,000, in cash, payable by wire transfer
or delivery of other immediately available funds as the purchase price of
the Shares.
(e) Purchase Price of Real Property. Buyer agrees to pay at Closing
to the Stockholder the sum of $5,520,000 in cash, payable by wire transfer
or delivery of other immediately available funds as the purchase price of
the Real Property.
(f) Closing and Preclosing Distributions. The parties acknowledge
and agree that the Purchase Price was based in part on (i) the Acquired
Companies having Cash as of April 30, 1997 (that would be reflected in a
balance sheet as of such date) in the aggregate amount of $1,050,000, and
(ii) the maintenance within the Business until Closing of an amount of
additional Cash, if any, necessary for working capital needs and, with
respect to the Affiliates, cash as required under existing bank covenants
or requirements regarding reserves, collateral and similar obligations.
The parties have agreed that the Stockholder may make a distribution of
excess cash of the Acquired Companies (without adjustment of the aggregate
Purchase Price) at or prior to the Closing (or the parties will make an
appropriate adjustment at Closing in the event Stockholder does not make
such distribution) in amounts determined as follows:
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FIRST, there shall be estimated by the Stockholder an amount
(herein called the "April Available Cash") equal to the excess of (i)
the total amount of Cash that would be reflected in a balance sheet of
the Acquired Companies as of April 30, 1997 (the "Total Cash"), less
(ii) additional Cash in the amount of not less than $500,000 (the
"Restriction Base"). Cash in the amount of the Restriction Base plus
the Threshold Amount (hereinafter referred to) is necessary to enable
the day-to-day operation of the Acquired Companies. The Stockholder
has separately furnished to Parent estimates of such April Available
Cash. For purposes of computations hereunder, 127 yen = $1.00.
SECOND, there shall be subtracted from April Available Cash the
aggregate agreed sum of $1,050,000 (the "Threshold Amount"). The
result of April Available Cash less the Threshold Amount is referred
to as the "Tentative Amount." Amounts not to exceed the Tentative
Amount may be withdrawn by Stockholder from the Acquired Companies
prior to Closing; provided that the Stockholder will advise Parent in
writing on a timely basis of any such distribution in reasonable
detail.
THIRD, prior to the Closing, there shall be determined the actual
Total Cash as of April 30, 1997. The Threshold Amount is then
subtracted from the actual Total Cash and the result is referred to as
the "Excess Cash."
FOURTH, the Stockholder at Closing shall be entitled to a
distribution from the Acquired Companies equal to the amount (the
"Closing Stockholder Distribution"), if any, by which the Excess Cash
exceeds the amount actually withdrawn by Stockholder pursuant to the
provisions of the last sentence of item "Second" above (the "Withdrawn
Amount"), which distribution shall be calculated by the Acquired
Companies and Stockholder and reviewed and subject to confirmation by
Buyer. The Closing Stockholder Distribution shall be allocated among
the Acquired Companies in a manner that will, to the extent possible,
not result in any withholding or similar Tax liability for the
Acquired Companies; in such event, the Closing Stockholder
Distribution shall be reduced dollar for dollar for the net after tax
cost to the Acquired Companies of such withholding or similar Tax
liability). The Closing Stockholder Distribution shall be made
immediately prior to Closing, with prior notice to and coordination
with Buyer. If the Excess Cash shall be less than the Withdrawn
Amount, the
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Stockholder shall, at Closing, return Cash to the Acquired Companies
in the amount of such excess. To the extent the Closing Stockholder
Distribution or the return of Cash to the Acquired Companies pursuant
to the preceding sentence made immediately prior to the Closing is
erroneous, the parties shall, within 90 days following Closing,
determine the correct amount and cause a reimbursement or payment to
be made in the amount of such error.
FIFTH, the parties agree that subsequent to April 30, 1997, the
Japanese debt of Nippon Princeton Instruments was inadvertently paid
down in part. Accordingly, it is agreed that for purposes of this
Agreement, the amount of such paydown shall be treated as if it were
Cash (and did not reduce the Cash in the amount of such repayment).
SIXTH, if and to the extent PII or Stockholder shall have posted
any security to secure the Japanese Indebtedness of Nippon Princeton
Instruments, such security shall be returned to PII or Stockholder at
Closing in addition to but not in duplication of the other payments
made to PII or Stockholder pursuant to this subdivision (b).
(g) The Closing. The closing of the transactions contemplated by this
Agreement (the "Closing") shall take place at the offices of Powell,
Goldstein, Xxxxxx & Xxxxxx LLP, 000 Xxxxxxxxx Xxxxxx XX, Xxxxx 0000,
Xxxxxxx, Xxxxxxx, on May 16, 1997, or such other date as the parties may
mutually determine (the "Closing Date").
(h) Deliveries at the Closing. (i) At the Closing PII will deliver to
the Buyer the various certificates, instruments, and documents referred to
in (S) 5(a) below; (ii) the Buyer will deliver to PII or the Stockholder,
as the case may be, the various certificates, instruments, and documents
referred to in (S) 5(b) below; (iii) PII and the Stockholder will execute,
acknowledge (if appropriate), and deliver to the Buyer (A) Real Property
deed of bargain and sale without covenant against grantor's acts, in
reasonable customary forms and containing a list of permitted exceptions
referenced in Section 3(l)(i)(E), (B) such other instruments of sale,
transfer, conveyance, and assignment as the Buyer and its counsel may
reasonably request; and (C) the Non-Competition Agreement between the
Stockholder and the Buyer attached hereto as Exhibit 2(h)(iii)(C), (iv) the
Buyer will execute, acknowledge (if appropriate), and deliver to PII such
instruments of assumption as PII and the Stockholder and their counsel
reasonably may request; and (v) the Buyer will deliver to PII or the
Stockholder, as the case may be, the consideration specified in (S)
2(c)(i), (S) 2(d) and (S) 2(e) above.
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(i) Allocation. The Parties agree to allocate the Purchase Price and
the Assumed Liabilities (and all other capitalizable costs) among the
Acquired Assets for tax purposes as follows: fixed assets, current assets
and Assumed Liabilities, at their respective book value as of the Closing
Date, prepared consistent with the Financial Statements; non-compete
obligations at $300,000; and the balance of the Purchase Price to goodwill.
(j) Proration of Lease Payments, Utility Charges and Other Payments.
If the Closing Date shall fall on a date other than the date on which
payments are due with respect to (i) any lease or sublease of PII or (ii)
utility or similar regular periodic charges with respect to the Assets for
which a final billing has not been received by PII, any installment of
rental payments and any such utility or similar charge payable with respect
to the current period in which the Closing Date occurs shall be paid by PII
on the basis of the actual number of days elapsed from the first day of
such period to the Closing Date and the balance shall be paid by the Buyer,
and any such amounts paid in advance prior to the Closing Date allocable to
periods from and after the Closing Date shall be reimbursed by the Buyer to
PII on the Closing Date.
(k) Proration of Taxes. Property taxes, ad valorem taxes and similar
taxes associated with the assets owed or payable by PII, special
assessments payable with respect to a taxable period beginning and ending
before the Closing Date, but not yet due as of the Closing Date, with
respect to the Real Property or any Acquired Assets shall be paid by PII.
In the case of any such taxes or assessments payable with respect to a
taxable period beginning before the Closing Date and ending after the
Closing Date, but not yet due as of the Closing Date, PII shall pay that
portion of such taxes times a fraction, the numerator of which is the
number of days from the beginning of such taxable period through and
including the Closing Date, and the denominator of which is 365, and the
balance shall be paid by the Buyer, and any amounts paid in advance prior
to the Closing Date allocable to periods from and after the Closing Date
shall be reimbursed by the Buyer to PII on the Closing Date.
(l) Condition of Acquired Assets. Except as expressly set forth in
Article 3 of this Agreement, no representation or warranty is made by PII
or the Stockholder to the Buyer or Parent, whether express or implied, as
to the merchantability of the Acquired Assets or as to the fitness thereof
for any particular purpose, it being understood that except as otherwise
provided by this Agreement, the Acquired Assets are being sold in "as-is"
condition.
3. REPRESENTATIONS AND WARRANTIES OF PII. PII and the Stockholder
jointly and severally represent and warrant to the Buyer and Parent that the
statements contained in this (S) 3 are correct and complete, except as specified
to the contrary in the disclosure schedule prepared by PII accompanying this
Agreement and initialed by PII and the Buyer (the "PII Disclosure
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Schedule"). The PII Disclosure Schedule will be arranged in paragraphs
corresponding to the lettered and numbered paragraphs contained in this (S) 3.
(a) Organization of the Acquired Companies; Investment Interest.
(i) Each of the Acquired Companies is a corporation duly
organized, validly existing, and in good standing under the laws of
the jurisdiction of its incorporation. The capital stock of PII is,
and, as of the Closing Date, the Shares will be held, of record and
beneficially by the Stockholder as described in (S) 3(a)(i) of the PII
Disclosure Schedule.
(ii) Each of the Stockholder and PII is an Accredited Investor.
The Stockholder and PII understands that the Parent Shares being
acquired by PII have not been, and are not proposed to be, registered
under the Securities Act or any state securities laws, and are being
offered and sold in reliance upon United States federal and state
exemptions for transactions not involving any public offering. PII
acknowledges that it is acquiring the Parent Shares for investment
purposes and not with a view to, or intention to effect, the
distribution thereof in violation of the Securities Act or any
applicable state securities laws, and that such Parent Shares may not
be disposed of in contravention of the Securities Act or any
applicable state securities laws. PII and the Stockholder represent
that they are each a sophisticated investor with knowledge and
experience in business and financial matters, are able to evaluate the
risks and benefits of the investment in its Parent Shares, have
received the Public Information concerning the Buyer and have had the
opportunity to obtain additional information as desired in order to
evaluate the merits of and the risks inherent in acquiring such Parent
Shares. Notwithstanding the foregoing, the Buyer and Parent
acknowledge and agree that Parent Shares having an Agreed Value not in
excess of $1.0 million may be distributed to Xxx Xxxxxxx and Xxxx Xxxx
in partial satisfaction of obligations under agreements existing at
Closing provided that Messrs. Xxxxxxx and West unconditionally waive
and release the Acquired Companies, the Stockholder, Parent and Buyer
from any further liability or obligation as of the Closing Date.
(b) Authorization of Transaction. PII and the Stockholder have full
power and authority (including full corporate power and authority) to
execute and deliver this Agreement and to perform its or his obligations
hereunder. Without limiting the generality of the foregoing, the board of
directors of PII and the stockholders of PII have duly authorized the
execution, delivery, and performance of this Agreement by PII. This
Agreement constitutes the valid and legally binding obligation of PII and
the Stockholder, enforceable in accordance with its terms and conditions,
subject to the qualifications that enforcement of the rights and remedies
created hereby is subject to (a) bankruptcy, insolvency, reorganization,
moratorium and other laws of general application affecting the rights and
remedies of creditors and (b) general principles of equity (regardless of
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whether such enforcement is considered in a proceeding in equity or at
law). PII and the Stockholder do not need to give any notice to, make any
filing with, or obtain any authorization, consent, or approval of any
governmental agency in order for the Parties to consummate the transactions
contemplated by this Agreement (including the assignments and assumptions
referred to in (S) 2 above) other than the notification and expiration of
the waiting period under the Xxxx-Xxxxx-Xxxxxx Act and the Industrial Site
Reclamation Act of New Jersey.
(c) Noncontravention. Neither the execution and the delivery of this
Agreement, nor the consummation of the transactions contemplated hereby
(including the assignments and assumptions referred to in (S) 2 above),
will (i) violate any constitution, statute, regulation, rule, injunction,
judgment, order, decree, ruling, charge, or other restriction of any
government, governmental agency, or court to which an Acquired Company or
the Stockholder is subject, (ii) violate any provision of the charter or
bylaws of an Acquired Company, or (iii) conflict with, result in a breach
of, constitute a default under, result in the acceleration of, create in
any party the right to accelerate, terminate, modify, or cancel, or require
any notice under any agreement, contract, lease, license, instrument, or
other arrangement to which an Acquired Company or the Stockholder is a
party or by which it or he is bound or to which any of its or his assets is
subject (or result in the imposition of any Security Interest upon any of
its or his assets) other than, in each case, any of the foregoing resulting
from the failure to obtain necessary consents to assignments of any such
agreement, contract, lease, license, instrument or other arrangement listed
in the PII Disclosure Schedule.
(d) Brokers' Fees. Neither an Acquired Company nor the Stockholder
has any Liability or obligation to pay any fees or commissions to any
broker, finder, or agent with respect to the transactions contemplated by
this Agreement.
(e) Title to Assets. Except for Cash, the Acquired Assets, the Real
Property and the assets of the Affiliates constitute all of the property
and assets necessary to conduct the Business as presently conducted. PII
has good title to, or a valid leasehold interest in, all of the Acquired
Assets and the Affiliates have good title to, or a valid leasehold interest
in, all assets owned by them, free and clear of any Security Interest which
are not Assumed Liabilities. PII has the right to convey, and upon the
transfer of the Acquired Assets to the Buyer, PII will have conveyed all of
its right, title and interest in and to the Acquired Assets free and clear
of all Security Interests which are not Assumed Liabilities.
At Closing, the Stockholder will have good and marketable title
to the Real Property, free and clear of any Security Interest or
restriction on transfer, subject only to the permitted exceptions referred
to in Section 3(l)(i)(E).
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(f) Shares. The Shares constitute all of the issued and outstanding
capital stock of the Affiliates. The Shares are validly issued, fully paid
and non-assessable except as provided by applicable law and owned,
beneficially and of record, at the Closing by the Stockholder and no Shares
are subject to, nor have any been issued in violation of, pre-emptive or
similar rights. No options, warrants, conversion or other rights,
agreements, commitments, arrangements or understandings of any kind
obligating any Affiliate or the Stockholder, contingently or otherwise, to
issue or sell any shares of common stock or securities convertible into or
exchangeable for any such shares or any other securities, are outstanding,
and no authorization therefor has been given. All issuances, sales and
repurchases of equity interests by the Acquired Companies have been
effected in substantial compliance with all applicable laws. At Closing
the Stockholder will have good title to the Shares and upon consummation of
the transactions provided for in this Agreement and in accordance with the
terms hereof, will have conveyed good title to the Shares free and clear of
any Security Interest. The stock ledger and other corporate records of the
Affiliates contain a complete and correct record of all issuance and
transfer of equity interests of the Affiliates.
(g) Financial Statements. The financial statements (the "Financial
Statements") prepared by PII, consisting of balance sheets, statements of
income and changes in stockholders' equity as of the fiscal period ended
March 31, 1997 for each of PII and the Affiliates have heretofore been
delivered.
When delivered, the Financial Statements (including any notes thereto) will
have been prepared on an accrual basis in accordance with GAAP, will
present fairly the financial condition of the Acquired Companies as of such
dates and the results of operations of the Acquired Companies for such
periods, and, to the knowledge of PII and the Stockholder, will be correct
and complete, and will be consistent with the books and records of the
Acquired Companies.
(h) Events Subsequent to the Date of the Financial Statements. Since
the date of the Financial Statements, there has not been any material
adverse change in the business, financial condition, operations, or results
of operations of any of the Acquired Companies. Without limiting the
generality of the foregoing, since that date, except as permitted by this
Agreement or with the written consent of the Buyer, none of the Acquired
Companies:
(i) has sold, leased, transferred, or assigned any of its assets,
tangible or intangible outside the Ordinary Course of Business;
(ii) has entered into any agreement, contract, lease, or license
(or series of related agreements, contracts, leases, and licenses)
other than sales orders either involving more than $50,000 or outside
the Ordinary Course of Business or any sales order not in the Ordinary
Course of Business;
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(iii) has (and to the Knowledge of the Acquired Companies and the
Stockholder no other party has as a result of any default by an
Acquired Company), accelerated, terminated, modified, or canceled any
agreement, contract, lease, or license (or series of related
agreements, contracts, leases, and licenses) involving more than
$50,000 to which an Acquired Company is a party or by which it is
bound;
(iv) has imposed or permitted any Security Interest upon any of
its assets, tangible or intangible;
(v) has made any capital expenditure (or series of related
capital expenditures) either involving more than $50,000 or outside
the Ordinary Course of Business;
(vi) has made any capital investment in, any loan to, or any
acquisition of the securities or assets of, any other Person;
(vii) has issued any note, bond, or other debt security or
created, incurred, assumed, or guaranteed any indebtedness for
borrowed money or capitalized lease obligation;
(viii) has delayed or postponed the payment of accounts payable
or other Liabilities outside of the Ordinary Course of Business;
(ix) has canceled, compromised, waived, or released any material
right or claim (or series of related rights and claims) outside the
Ordinary Course of Business;
(x) has granted any license or sublicense of any rights under or
with respect to any Intellectual Property outside of the Ordinary
Course of Business;
(xi) has changed or authorized any change in the charter or
bylaws of an Acquired Company;
(xii) has experienced any material damage, destruction, or loss
to its property not covered by insurance;
(xiii) has made any loan to, or entered into any other
transaction with, any of its directors, officers, and employees;
(xiv) has entered into any employment contract or collective
bargaining agreement, written or oral, or modified the terms of any
existing such contract
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or agreement other than contracts with Messrs. Xxxxxxx and West which
shall not be Assumed Liabilities and shall be in effect as of the
Closing;
(xv) has granted any increase in the base compensation of any of
its directors, officers, and employees;
(xvi) has adopted, amended, modified or terminated any bonus,
profit-sharing incentive, severance, or other plan, contract, or
commitment for the benefit of any of its directors, officers, and
employees (or taken any such action with respect to any other Employee
Benefit Plan);
(xvii) has made any other change in employment terms for any of
its directors, officers, and key employees;
(xviii) has made or pledged to make any charitable or other
capital contribution;
(xix) has suffered or experienced any other occurrence, event,
incident, action, failure to act, or transaction outside the Ordinary
Course of Business which could reasonably be expected to cause or
result in Losses;
(xx) has declared or paid any dividend or other distribution,
whether in cash or other property, other than the Permitted
Stockholder Distribution;
(xxi) has violated any covenant contained in Section 6 hereof;
or
(xxii) entered into any commitment to do any of the foregoing.
(i) Undisclosed Liabilities. To the Knowledge of PII and the
Stockholder, the Acquired Companies have no Liability (and there is no
Basis for any present or future action, suit, proceeding, hearing,
investigation, charge, complaint, claim or demand against the Acquired
Companies giving rise to any Liability), except for (i) Liabilities set
forth on the face of the Financial Statements and (ii) Liabilities which
have arisen or first been asserted after the date of the Financial
Statements in the Ordinary Course of Business (none of which items in
subparagraphs (i) and (ii) results from, arises out of, or was caused by
any (i) breach of contract, (ii) breach of warranty claims which are not
Product Warranty Claims, (iii) tort, (iv) infringement, or (v) violation of
law other than failure to comply with any bulk sales law).
(j) Legal Compliance. To the Knowledge of the Acquired Companies, the
Acquired Companies have complied with all applicable laws (including rules,
regulations, codes, injunctions, judgments, orders, decrees, rulings, and
charges thereunder) of federal, state, local, and foreign governments (and
all agencies thereof), the failure to
-20-
comply with which could reasonably be expected to result in Losses the
costs of which will exceed $30,000, and no action, suit, proceeding,
hearing, investigation, charge, complaint, claim, demand, or notice has
been filed or commenced against an Acquired Company alleging any failure so
to comply.
(k) Tax Matters.
(i) The Acquired Companies have filed all Tax Returns that they
were required to file and were due. All such Tax Returns were correct
and complete in all material respects. All Taxes owed by the Acquired
Companies and the Stockholder (whether or not shown on any Tax Return)
have been paid. No claim has ever been made by an authority in a
jurisdiction where an Acquired Company does not file Tax Returns that
such Person is or may be subject to taxation by that jurisdiction.
There are no Security Interests on any of the assets of any of the
Acquired Companies that arose in connection with any failure (or
alleged failure) to pay any Tax. No Acquired Company has been a
member of an Affiliated Group that has filed a "consolidated return"
within the meaning of Code Sec. 1501, or has filed a combined or
consolidated return with another corporation with any other taxing
authority.
(ii) Each of the Acquired Companies 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, stockholder, or other third party.
(iii) No Acquired Company has received any notice or other
indication that any authority is considering assessing any additional
Taxes for any period for which Tax Returns have been filed. There is
no dispute or claim concerning any Tax Liability of an Acquired
Company either (A) claimed or raised by any authority in writing or
(B) as to which an Acquired Company or any Stockholder has knowledge
based upon personal contact with any agent or representative of such
authority. (S) 3(k) of the PII Disclosure Schedule lists all federal,
state, local, and foreign income Tax returns filed with respect to an
Acquired Company for taxable periods ended on or after December 31,
1991, indicates those Tax Returns that have been audited, and
indicates those Tax Returns that currently are the subject of audit.
(iv) No Acquired Company has waived any statute of limitations in
respect of Taxes or agreed to any extension of time with respect to a
Tax assessment or deficiency.
(v) PII has not made any payments, is not obligated to make any
payments, and is not a party to any agreement that under certain
circumstances
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could obligate it to make any payments that will not be deductible
under Code Sec. 280G. PII is not a party to any Tax allocation or
sharing agreement. PII (A) has not been a member of an Affiliated
Group filing a consolidated federal income Tax Return (other than a
group the common the common parent of which was the PII) and (B) has
no Liability for the Taxes of any Person (other than the Acquired
Companies) under Treas. Reg. (S) 1.1502-6 (or any similar provision of
state, local, or foreign law), as a transferee or successor, by
contract, or otherwise.
(l) Real Property.
(i) No Acquired Company owns any real property. The Stockholder
owns the Real Property. With respect to the Real Property, the Buyer
and the Stockholder agree as follows:
(A) The Buyer and the Stockholder agree to adjust the
following expenses as of the Closing Date: real estate taxes and
assessments; municipal water and sewer charges, if any.
(B) The deed (the "Deed") to be delivered at Closing shall
be a customary bargain and sale deed without covenant.
(C) The Buyer, at its sole cost and expense, shall utilize a
reputable title insurer (the "Title Insurer") for the issuance of
a title policy (the "Title Policy") relating to the Real
Property. If the Buyer should claim that there are defects in or
objections to title (other than those referred to herein), the
Buyer shall furnish written notice thereof to the Stockholder's
attorney not later than five (5) business days prior to the date
set for closing of title or be deemed to have waived its rights
to object thereto and all such matters raised by the Title
Insurer which are not timely referenced in such notice shall be
deemed additional permitted exceptions to the Stockholder's title
to the Real Property, provided such time limitation shall not
apply to matters discovered by the Title Insurer on a subsequent
continuation search.
(D) Anything to the contrary notwithstanding:
(1) the Stockholder shall be under no obligation or
liability whatsoever to cure title defects or existing
conditions in order to satisfy the conditions precedent to
the Buyer's obligation to consummate the purchase of the
Property, except that the Stockholder agrees that the
Stockholder will be responsible for the removal of any
mortgage or other lien on the Real Property that
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secures an obligation that is in a liquidated dollar amount,
and which can be eliminated by the mere payment of funds in
such amount.
(2) If for any reason whatsoever the Stockholder is
unable or unwilling to convey title to the Buyer on the
Closing Date pursuant to the provisions of this Agreement,
Buyer shall have (A) the right to accept (and/or institute a
proceeding to compel the Stockholder to deliver) such title
to the Property as is then vested in the Stockholder and to
take title to the Real Property for the full Purchase Price
hereunder, without any abatement other than in the dollar
amount of any lien in a liquidated dollar amount that the
Stockholder is expressly required to remove pursuant to the
first sentence in subparagraph (1) above in full
satisfaction of the Stockholder's obligation hereunder,
except as expressly provided in subparagraph (3) below, or
(B) the Buyer shall have the right to rescind this
Agreement.
(3) In the event the Stockholder is unwilling to convey
title to the Real Property at the Closing, notwithstanding
Buyer's willingness to accept, in full satisfaction of the
Stockholder's obligation hereunder, such title as the
Stockholder has and to pay for such title in an amount equal
to the entire Purchase Price hereunder, without deduction
except for any reduction specifically referred to in
subparagraph (1) above, the Buyer shall have the right to
commence a proceeding for specific performance of the
Stockholder's obligation to convey such title as provided
for in subparagraph (2) above, with the Stockholder to be
liable for all costs and expenses incurred (including
reasonable legal fees and disbursements) by the Buyer in
prosecuting such proceeding.
(4) The Real Property and improvements thereon are
being sold in their "as-is" condition and state of repair
without any representation or warranty whatsoever as to
fitness for use, suitability, habitability, compliance with
laws and governmental regulations (including zoning), or
otherwise. The Buyer has conducted its own investigation as
to all such matters and has satisfied itself. The
Stockholder is hereby released from any and all liability
with respect to such matters.
(E) The Property is to be sold and conveyed subject to the
following permitted exceptions to title:
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(1) Matters referred to in the printed exceptions and
in Schedule B-2, (other than items J-2 and K-3 which relate
to the existing mortgage on the Real Property) to Chicago
Title Commitment No. 9727-00197, a copy of which has been
delivered to the Buyer.
(2) Minor inconsistencies between record lines of title
retaining walls and/or fences and/or any other state of
facts which may be disclosed in a current accurate Survey of
the Real Property hereof which do not reduce the market
value of the Real Property or the ability to use same for
its current use.
(3) matters or conditions which would be disclosed by a
physical inspection of the Real Property.
(4) Existing zoning and land use laws and regulations.
(5) Rights and easements, if any, acquired by any
public utility company or corporation to construct and
maintain its poles, pipes, conduits and appurtenances
thereto.
(6) Covenants and restrictions of record that restrict
non-residential use of the Real Property or as to which the
Title Insurer is willing to provide, at no increased cost to
the Buyer, affirmative insurance that no breach of such
covenants shall result in any reversion of the Real Property
or be collectible out of the Real Property.
(7) Liens for taxes, water charges, sewer rents, and
other governmental charges that are not yet due and payable
and for which adjustment is to be made at the Closing.
(8) Any judgments of record, liens for unpaid taxes of
any corporation in the chain of title to the Real Property,
and liens for estate, inheritance or similar taxes of any
person other than the Stockholder in the chain of title,
provided that the Title Insurer shall be willing to insure
the Buyer (the additional cost of such affirmative insurance
to be borne by the Stockholder) against collection of the
same out of the property.
(F) The acceptance by the Buyer of the delivery of the Deed
shall be deemed to be the full performance and discharge of every
condition, representation, covenant, warranty, agreement and/or
obligation
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on the part of the Stockholder to be performed pursuant to this
Agreement that relate to title to the Real Property and/or the
Stockholder's title thereto.
(G) The lease with respect to the Real Property between PII
and Stockholder will be terminated as of the Closing and rents
thereunder will be adjusted as of such date.
(ii) (S) 3(l)(ii) of the PII Disclosure Schedule lists and
describes briefly all real property leased to an Acquired Company.
PII has delivered to the Buyer correct and complete copies of the
leases listed in (S) 3(l)(ii) of the PII Disclosure Schedule (as
amended to date). With respect to each lease listed in (S) 3(l)(ii)
of the PII Disclosure Schedule:
(A) the lease or sublease is legal, valid, binding,
enforceable, and in full force and effect in accordance with its
terms, subject to the qualifications that enforcement of the
rights and remedies created hereby is subject to (a) bankruptcy,
insolvency, reorganization, moratorium and other laws of general
application affecting the rights and remedies of creditors and
(b) general principles of equity (regardless of whether such
enforcement is considered in a proceeding in equity or at law).
(B) the Acquired Companies are not, and to the Knowledge of
the Acquired Companies and the Stockholder no party to the lease
or sublease is, in breach or default, and no event has occurred
and is continuing which, with notice or lapse of time, would
constitute a breach or default or permit termination,
modification, or acceleration thereunder, except for breaches or
defaults which would not have a Material Adverse Effect;
(C) to the Knowledge of the Acquired Companies and the
Stockholder there are no disputes, oral agreements, or
forbearance programs in effect as to the lease that would have a
Material Adverse Effect;
(D) to the knowledge of the Acquired Companies and the
Stockholder, the Acquired Companies have not assigned,
transferred, conveyed, mortgaged, deeded in trust, or encumbered
any interest in the leasehold; or
(E) to the Knowledge of the Acquired Companies and the
Stockholder all facilities leased thereunder have received all
approvals of governmental authorities (including licenses and
permits) required in
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connection with the operation thereof and have been operated and
maintained in all material respects in accordance with applicable
laws, rules, and regulations.
(m) Intellectual Property.
(i) Each of the Acquired Companies owns or has the right to use
pursuant to license, sublicense, agreement, or permission of all
Intellectual Property used in the operation of their business as
presently conducted. Each item of Intellectual Property included
among the Acquired Assets, owned or used by the Acquired Companies
immediately prior to the Closing, or owned by Stockholder and used by
the Acquired Companies immediately prior to the Closing, will be owned
or available for use by the Buyer on identical terms and conditions
immediately subsequent to the Closing hereunder, subject to obtaining
required consents to any of the foregoing.
(ii) To the knowledge of PII and the Stockholder except as set
forth on (S) 3(m)(ii) of the PII Disclosure Schedule, none of the
Acquired Companies has interfered with, infringed upon,
misappropriated, or otherwise come into conflict with any Intellectual
Property rights of third parties, and none of the Acquired Companies
or the Stockholder has ever received any charge, complaint, claim,
demand, or notice alleging any such interference, infringement,
misappropriation, or violation (including any claim that any of the
Acquired Companies must license or refrain from using any Intellectual
Property rights of any third party). To the Knowledge of the Acquired
Companies and the Stockholder, no third party has interfered with,
infringed upon, misappropriated, or otherwise come into conflict with
any Intellectual Property rights of the Acquired Companies.
(iii) (S) 3(m)(iii) of the PII Disclosure Schedule identifies
each patent or registration which has been issued or transferred to
the Acquired Companies or the Stockholder with respect to any of its
Intellectual Property, identifies each pending patent application for
registration which the Acquired Companies or the Stockholder has made
with respect to any of its Intellectual Property, and identifies each
patent or trademark which any of the Acquired Companies or the
Stockholder has granted to any third party with respect to any of its
Intellectual Property. The Acquired Companies have delivered to the
Buyer correct and complete copies of all such patents, registrations,
applications, licenses, agreements, and permissions (as amended to
date) and has made available to the Buyer correct and complete copies
of all other written documentation evidencing ownership and
prosecution (if applicable) of each such item. (S) 3(m)(iii) of the
PII Disclosure Schedule also identifies each trade name or
unregistered trademark used by the Acquired Companies in connection
with the Business. With respect
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to each item of Intellectual Property required to be identified in (S)
3(m)(iii) of the PII Disclosure Schedule:
(A) the Acquired Companies possess all right, title, and
interest in and to the item, free and clear of any Security
Interest, license, or other restriction;
(B) to the Knowledge of the Acquired Companies, the item is
not subject to any outstanding injunction, judgment, order,
decree, ruling, or charge nor is any of the foregoing threatened;
(C) no action, suit, proceeding, hearing, investigation,
charge, complaint, claim, or demand is pending or, to the
Knowledge of the Acquired Companies threatened, which challenges
the legality, validity, enforceability, use, or ownership of the
item; and
(D) None of the Acquired Companies nor the Stockholder has
ever agreed to indemnify any Person for or against any
interference, infringement, misappropriation, or other conflict
with respect to the item.
(iv) (S) 3(m)(iv) of the PII Disclosure Schedule identifies each
item of Intellectual Property that any third party owns and that the
Acquired Companies use pursuant to license, sublicense, agreement, or
permission. PII has delivered to the Buyer correct and complete
copies of all such licenses, sublicenses, agreements, and permissions
(as amended to date). With respect to each item of Intellectual
Property required to be identified in (S) 3(m)(iv) of the PII
Disclosure Schedule:
(A) and except as set forth on (S) 3(m)(ii) or 3(m)(iii) of
the PII Disclosure Schedule, the license, sublicense, agreement,
or permission covering the item is legal, valid, binding,
enforceable, and in full force and effect, subject to the
qualifications that enforcement of the rights and remedies
created thereby is subject to (a) bankruptcy, insolvency,
reorganization, moratorium and other laws of general application
affecting the rights and remedies of creditors and (b) general
principals of equity (regardless of whether such enforcement is
considered in a proceeding in equity or at law);
(B) the license, sublicense, agreement, or permission will
continue to be legal, valid, binding, enforceable, and in full
force and effect on identical terms following the consummation of
the transactions contemplated hereby (including the assignments
and assumptions to the extent obtained);
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(C) none of the Acquired Companies, and to the Knowledge of
the Acquired Companies, no other party to the license,
sublicense, agreement, or permission, is in breach or default,
and no event has occurred which with notice of lapse of time
would constitute a breach or default or permit termination,
modification, or acceleration thereunder;
(D) none of the Acquired Companies has, and to the Knowledge
of the Acquired Companies, no other party to the license,
sublicense, agreement, or permission has repudiated any provision
thereof;
(E) to the Knowledge of the Acquired Companies, with respect
to each sublicense, the representations and warranties set forth
in subsections (A) through (D) above are true and correct with
respect to the underlying license;
(F) the underlying item of Intellectual Property is not
subject to any outstanding injunction, judgment, order, decree,
ruling, or charge;
(G) no action, suit, proceeding, hearing, investigation,
charge, complaint, claim or demand is pending or, to the
Knowledge of the Acquired Companies and the Stockholder,
threatened, which challenges the legality, validity, or
enforceability of the underlying item of Intellectual Property;
and
(H) None of the Acquired Companies has granted any
sublicense or similar right with respect to the license,
sublicense, agreement, or permission.
(n) Tangible Assets. Each of the Acquired Companies owns or leases
all buildings, machinery, equipment, and other tangible assets used and
necessary for the conduct of its businesses as presently conducted. To the
Knowledge of the Acquired Companies, each such tangible asset is free from
any known material defects, has been maintained in accordance with normal
industry practice, is in good operating condition and repair (subject to
normal wear and tear), and is suitable for the purposes for which it
presently is used.
(o) [INTENTIONALLY OMITTED.]
(p) Contracts. (S) 3(p) of the PII Disclosure Schedule lists the
following contracts and other agreements, written or oral, to which any of
the Acquired Companies is a party:
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(i) any agreement (or group of related agreements) for the lease
of personal property to or from any Person providing for lease
payments in excess of $15,000 per annum;
(ii) except for sales of inventory in the Ordinary Course of
Business, any agreement (or group of related agreements) for the
purchase or sale of raw materials, commodities, supplies, products, or
other personal property, or for the furnishing or receipt of services,
the performance of which will extend over a period of more than one
year, or which to the Knowledge of PII, will result in Losses to the
Acquired Companies, or which involves amounts or consideration, in
excess of $50,000;
(iii) any agreement concerning the formation of a partnership or
joint venture;
(iv) any agreement (or group of related agreements) under which
it has created, incurred, assumed, or guaranteed any indebtedness for
borrowed money, or any capitalized lease obligation, under which it
has imposed a Security Interest on any of its assets, tangible or
intangible;
(v) any agreement imposing on any of the Acquired Companies a
material obligation of confidentiality or noncompetition to a third
party;
(vi) any agreement involving the Stockholder to which any
Acquired Company is a party;
(vii) any profit sharing, stock option, stock purchase, stock
appreciation, deferred compensation, severance, or other plan or
arrangement for the benefit of its current or former directors,
officers, and employees;
(viii) any agreement for the employment of any individual on a
full-time, part-time, consulting, or other basis providing annual
compensation in excess of $50,000 or providing severance benefits;
(ix) any agreement under which it has advanced or loaned any
amount to any of its directors, officers, and employees;
(x) any agreement under which the consequences of a default or
termination would require the payment of $50,000 or more; or
(xi) any other agreement (or group of related agreements) the
performance of which involves consideration in excess of $50,000.
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Except as set forth on the PII Disclosure Schedule, all such agreements
(the "Material Contracts") are, to the Knowledge of the Acquired Companies
and the Stockholder, valid, subsisting, in full force and effect and
binding upon the parties thereto in accordance with their terms, subject to
the qualifications that enforcement of the rights and remedies created
thereby is subject to (i) bankruptcy, insolvency, reorganization,
moratorium and other laws of general application affecting the rights and
remedies of creditors and (ii) general principles of equity (regardless of
whether such enforcement is considered in a proceeding in equity or at
law), and the Acquired Companies have satisfied in full or provided for all
of their liabilities and obligations thereunder requiring performance prior
to the date hereof in all respects, and are not in default under any of
them, nor does any condition exist that with notice or lapse of time or
both would constitute such a default. To the Knowledge of the Acquired
Companies and the Stockholder, no other party to any such Material Contract
is in default thereunder, nor does any condition exist that with notice or
lapse of time or both would constitute such a default. Subject to
obtaining any applicable consents, all of the Acquired Companies' rights
under such Material Contracts will be conveyed to the Buyer, upon
consummation of the transactions contemplated by this Agreement.
(q) Notes and Accounts Receivable. Notes and accounts receivable of
the Acquired Companies included among the Acquired Assets are at least in
the amounts reflected in the Financial Statements and all such notes and
accounts receivable are reflected properly on their books and records, are
valid receivables and, with respect to such items reflected on the
Financial Statements, are subject to no setoffs or counterclaims, are
current and collectible in accordance with their terms at their recorded
amounts, subject only to the reserve for bad debts set forth in the
Financial Statements.
(r) Powers of Attorney. There are no outstanding powers of attorney
executed on behalf of the Acquired Companies.
(s) Insurance. (S) 3(s) of the PII Disclosure Schedule sets forth the
following information with respect to each product liability insurance
policy to which any Acquired Company has been a party, a named insured, or
otherwise the beneficiary of coverage at any time within the past five (5)
years:
(i) the name of the insurer, the name of the policyholder, and
the name of each covered insured;
(ii) the policy number and the period of coverage;
(iii) the scope (including an indication of whether the coverage
was on a claims made, occurrence, or other basis) and amount
(including a description of how deductibles and ceilings are
calculated and operate) of coverage; and
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(iv) a description of any retroactive premium adjustments or
other loss-sharing arrangements.
With respect to each such insurance policy: (A) all policy premiums have
been paid in full, and to the Knowledge of the Acquired Companies and the
Stockholder, the policy is in full force and effect with respect to the
periods for which it purports to provide coverage; (B) none of the Acquired
Companies or, to the Knowledge of the Acquired Companies and the
Stockholder, any other party to the policy is in material breach or default
(including with respect to the payment of premiums or the giving of
notices), and no event has occurred and is continuing which, with notice or
the lapse of time, could reasonably be expected to constitute such a
material breach or default, or permit termination, modification, or
acceleration, under the policy; and (C) no party to the policy has
repudiated any provision thereof. (S) 3(s) of the PII Disclosure Schedule
describes any self-insurance arrangements affecting the Acquired Companies.
The Acquired Companies will deliver to the Buyer original copies of all
insurance policies of the Affiliates.
(t) Litigation. None of the Acquired Companies or the Stockholder (i)
is subject to any outstanding injunction, judgment, order, decree, ruling,
or charge and (ii) is not a party nor, to the Knowledge of the Acquired
Companies and the Stockholder, is threatened to be made a party to any
action, suit, proceeding, hearing, or investigation of, in, or before any
court or quasi-judicial or administrative agency of any federal, state,
local, or foreign jurisdiction or before any arbitrator.
(u) Product Warranty. To the knowledge of the Acquired Companies,
each product manufactured, sold, leased, or delivered by the Acquired
Companies has been in conformity in all material respects with all
applicable contractual commitments and all express and implied warranties,
and none of the Acquired Companies has any Liability (and there is no Basis
for any present or future action, suit, proceeding, hearing, investigation,
charge, complaint, claim, or demand against it which could reasonably be
expected to give rise to any Liability) for replacement or repair thereof
or other damages in connection therewith, subject only to any reserve for
product warranty claims set forth in the PII Balance Sheet. Except as
otherwise may be provided by applicable law, no product manufactured, sold,
leased, or delivered by the Acquired Companies is subject to any guaranty,
warranty, or other indemnity beyond the applicable standard terms and
conditions of sale or lease. (S) 3(u) of the PII Disclosure Schedule
includes copies of the standard terms and conditions of sale or lease for
the Acquired Companies (containing applicable guaranty, warranty, and
indemnity provisions).
(v) Product Liability. To the Knowledge of the Acquired Companies and
the Stockholder, except as set forth on (S) 3(v) of the Disclosure
Schedule, there are no existing or threatened claims against the Acquired
Companies arising out of any injury to individuals or property as a result
of the ownership, possession, or use of any product
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manufactured, sold, leased, or delivered by the Acquired Companies which
could result in Liability to the Acquired Companies.
(w) Employees. To the Knowledge of PII and the Stockholder, (i) no
executive, key employee, or group of employees has any plans to terminate
employment with the Acquired Companies, (ii) none of the Acquired Companies
is a party to or bound by any collective bargaining agreement, nor has any
of them experienced any strikes, grievances, or claims of unfair labor
practice, and (iii) none of the Acquired Companies has any Knowledge of any
organizational effort presently being made or threatened by or on behalf of
any labor union with respect to its employees.
(x) Employee Benefits.
(i) No other corporation, trade, business, or other entity,
would, together with PII, now or in the past 5 years, constitute a
single employer within the meaning of Code (S) 414.
(ii) (S) 3(x) of the PII Disclosure Schedule contains a true and
complete list of all of the Employee Benefit Plans which are presently
in effect or which have previously been in effect in the last 5 years
for the benefit of current or former employees, officers, directors or
consultants of the Acquired Companies (the "PII Plans").
(iii) Except as set forth in (S) 3(x) of the PII Disclosure
Schedule, PII does not maintain and has never maintained an "employee
benefit pension plan," within the meaning of ERISA (S) 3(2), that is
or was subject to Title IV of ERISA.
(iv) There is no lien outstanding upon any Acquired Assets
pursuant to Code (S) 412(n) in favor of any PII Plan. No Acquired
Assets or assets of any Affiliate have been provided as security to
any PII Plan pursuant to Code (S) 401(a)(29).
(v) Except as set forth in (S) 3(x) of the PII Disclosure
Schedule, PII has no past, present or future obligation or liability
to contribute to any multiemployer plan as defined in ERISA (S) 3(37).
(vi) PII has complied in all material respects with the
continuation health coverage requirements of Code (S) 4980B and ERISA
(S)(S) 601 through 608.
(vii) PII is not obligated, contingently or otherwise, under any
agreement to pay any amount which would be treated as a "parachute
payment," as defined in Code (S) 280G(b) (determined without regard to
Code (S) 280G(b)(2)(A)(ii)).
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(viii) There are no foreign Employee Benefit Plans.
(y) Guaranties. None of the Acquired Companies is a guarantor or
otherwise liable for any Liability or obligation (including indebtedness)
of any other Person.
(z) Environment, Health, and Safety. To the knowledge of the Acquired
Companies and the Stockholder:
(i) PII has complied with all Environmental, Health, and Safety
Laws, the failure to comply with which could result in Losses in an
amount in excess of $10,000 individually or in the aggregate, and no
action, suit, proceeding, hearing, charge, complaint, claim, demand,
or notice, and no investigation has been filed or commenced against
PII or the Stockholder alleging such failure.
(ii) Neither PII nor the Stockholder has Liability (and PII has
not handled, used, stored, recycled or disposed of any substance,
arranged for the disposal of any substance, exposed any employee or
other individual to any substance or condition, or owned or operated
any property or facility in any manner that could reasonably be
expected to form the Basis for any present or future action, suit,
proceeding, hearing, investigations, charge, complaint, claim or
demand giving rise to any Liability) for damage or remediation to any
site, location, body of water (surface or subsurface), for any illness
of or personal injury to any employee or other individual, or for any
reason under any Environmental, Health, and Safety Laws.
(iii) All properties and equipment used in the Business are free
of any amounts of Hazardous Substances, the presence of which could
result in Losses except for Losses which would not have a Material
Adverse Effect.
(iv) There are no in service or out of service underground
storage tanks located in or on the Real Property.
(v) This (S) 3(z) contains the sole representations of the
Stockholder and the Acquired Companies with respect to environmental
matters.
(aa) Certain Business Relationships With the Acquired Companies.
Except as set forth in (S) 3(aa) of the PII Disclosure Schedule, none of
the Stockholder or his relatives has been involved directly or indirectly
in any business arrangement or relationship with PII within the past 36
months, and, other than the Real Property, the Stockholder does not own any
asset, tangible or intangible, which is used in the Business.
(ab) Disclosure. To the Knowledge of the Acquired Companies and the
Stockholder, the representations and warranties contained in this (S) 3
(including the PII
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Disclosure Schedule as amended and supplemented prior to the Closing) do
not and, as of the Closing Date will not contain any untrue statement of a
material fact or omit to state any material fact necessary in order to make
the statement and information contained in this (S) 3 not misleading.
4. REPRESENTATIONS AND WARRANTIES OF THE BUYER AND PARENT. Parent and
the Buyer, jointly and severally, represent and warrant to PII and the
Stockholder that the statements contained in this (S) 4 are correct and complete
as of Closing Date.
(a) Organization of the Buyer. Each of Parent and the Buyer is a
corporation duly organized, validly existing, and in good standing under
the laws of the jurisdiction of its incorporation and is duly qualified as
a foreign corporation to do business in every jurisdiction where such
qualification is required. Buyer shall be qualified to do business in New
Jersey.
(b) Authorization of Transaction. Upon the approval of the
transactions contemplated hereby by the Boards of Directors of each of
Parent and Buyer: each of Parent and Buyer will have full power and
authority (including full corporate power and authority) to execute and
deliver this Agreement and to perform its obligations hereunder; and this
Agreement and each other document delivered by the Buyer or Parent pursuant
hereto will constitute the valid and legally binding obligation of Parent
and Buyer, enforceable in accordance with its terms and conditions. Parent
and Buyer need not give any notice to, make any filing with, or obtain any
authorization, consent, or approval of any government or governmental
agencies in order for the Parties to consummate the transactions
contemplated by this Agreement (including the assignment and assumption
referred to in (S) 2 above) other than the notification and approval under
the Xxxx-Xxxxx-Xxxxxx Act.
(c) Noncontravention. Neither the execution and the delivery of this
Agreement, nor the consummation of the transactions contemplated hereby
(including the assignments and assumptions referred to in (S) 2 above) will
(i) violate any constitution, state, regulation, rule, injunction,
judgment, order, decree, ruling, charge, or other restriction of any
government, governmental agency, or court to which Parent or Buyer is
subject, or any provision of its charter or bylaws or (ii) conflict with,
result in a breach of, constitute a default under, result in the
acceleration of, create in any party the right to accelerate, terminate,
modify, or cancel, or require any notice under any agreement, contract,
lease, license, instrument, or other arrangement to which Parent or Buyer
is a party or by which they are bound or to which any of their assets are
subject.
(d) Broker's Fees. Neither Parent nor Buyer has Liability or
obligation to pay any fees or commissions to any broker, finder, or agent
with respect to the transactions contemplated by this Agreement.
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(e) Disclosure. To the Knowledge of Parent and Buyer, the
representations and warranties contained in this (S) 4 and the Public
Information do not contain any untrue statements of a material fact or omit
to state any material fact necessary in order to make the statements
contained in this (S) 4 or therein not misleading. The Parent and the
Buyer have the financial resources to pay the Purchase Price and perform
their obligations under this Agreement.
(f) Parent Shares. Upon their issuance and delivery to PII in
accordance with the terms hereof, the Parent Shares will be duly
authorized, validly issued, fully paid and non-assessable, and no Parent
Shares will be subject to, nor have been issued in violation of, pre-
emptive or similar rights. No options, warrants, conversion or other
rights, agreements, commitments, arrangements or understandings of any kind
obligating the Parent to issue or sell any shares of common stock or
securities convertible into or exchangeable for any such shares or any
other securities, are outstanding, and no authorization therefor has been
given. Upon consummation of the transactions provided for in this
Agreement and in accordance with the terms hereof, the Parent will have
conveyed good title to the Parent Shares free and clear of any Security
Interest or restriction on transfer.
(g) Financial Statements. Parent has delivered to PII the following
financial statements of the Parent (collectively the "Parent Financial
Statements"):
(i) audited balance sheets, statements of income, changes in
stockholders' equity, and cash flow as of and for the fiscal year
ended October 31, 1996; and
(ii) unaudited balance sheet and statement of income, change in
stockholders' equity, and cash flow as of and for the quarter ended
January 31, 1997.
The Parent Financial Statements (including the notes thereto) have been
prepared in accordance with GAAP applied on a consistent basis throughout
the periods covered thereby, present fairly the financial condition of
Parent as of such dates and the results of operations of Parent for such
periods (subject in the case of interim statements only to normal year-end
adjustments which in the aggregate are not material), are correct and
complete, and are consistent with the books and records of Parent (which
books and records are correct and complete).
(h) Events Subsequent to Most Recent Fiscal Quarter End. Since
January 31, 1997, there has not been any material adverse change in the
business, financial condition, operations, or results of operations of
Parent.
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(i) Due Diligence Review. The Buyer and Parent have had an
opportunity to review and inspect, and have actually conducted a review and
inspection of, PII and its business, the books and records of PII, and the
financial statements of the Affiliates, and have had an opportunity to ask
questions of the Stockholder, PII and the Affiliates, and their
representatives and agents. In addition, the Buyer and Parent hereby
acknowledge receipt of the information contained in the three binders
delivered by PII in response to the Buyer's due diligence document request.
(j) Public Information. The Parent has delivered to the Stockholder
(and each other Person who shall receive Parent Shares in connection with
the consummation of the transactions contemplated by this Agreement) all
Public Information currently available. All such Public Information, as of
its respective filing dates, compiled in all material respects with the
requirements of the rules and regulations promulgated by the Securities and
Exchange Commission (the "Commission") with respect thereto. The Parent
has filed all reports under the Securities Exchange Act that were required
to be filed as of the date hereof and has otherwise complied with all
material requirements of the Securities Act and the Securities Exchange
Act. The financial statements of Parent included in the Public Information
comply as to form in all material respects with applicable accounting
requirements and the published rules and regulations of the Commission with
respect thereto, have been prepared in accordance with GAAP applied on a
consistent basis during the respective periods covered and fairly present,
in all material respects, the financial positions of Parent as of the dates
thereof and the results of operations and changes in financial position for
the periods then ended.
5. CONDITIONS TO OBLIGATION TO CLOSE.
(a) Conditions to Obligation of Parent and the Buyer. The obligation
of Parent and Buyer to consummate the transactions to be performed by it in
connection with the Closing is subject to satisfaction of the following
conditions:
(i) the representations and warranties set forth in (S) 3 above
shall be true and correct in all material respects at and as of the
Closing Date, except the representations and warranties made only as
of a specific date, which shall remain true and correct as of such
date;
(ii) PII and the Stockholder shall have performed and complied
with all of their covenants hereunder in all material respects through
the Closing;
(iii) PII shall have procured all of the third party consents
specified on Exhibit 5(a)(iii) hereto;
(iv) no action, suit, or proceeding shall be pending or
threatened before any court or quasi-judicial or administrative agency
of any federal, state, local,
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or foreign jurisdiction or before any arbitrator wherein an
unfavorable injunction, judgment, order, decree, ruling, or charge
would (A) prevent consummation of any of the transactions contemplated
by this Agreement (B) cause any of the transactions contemplated by
this Agreement to be rescinded following consummation, or (C)
materially affect adversely the right of the Buyer to own the Acquired
Assets, the Shares, or the Real Property or to operate the Business
(and no such injunction, judgment, order, decree, ruling, or charge
shall be in effect);
(v) PII and the Stockholder shall have delivered to the Buyer a
certificate to the effect that each of the conditions specified above
in (S) 5(a)(i)-(iv) is satisfied in all respects;
(vi) all applicable waiting periods (and any extensions thereof)
under the Xxxx-Xxxxx-Xxxxxx Act shall have expired or otherwise been
terminated, and any necessary requirements under the Industrial Site
Reclamation Act of New Jersey shall have been complied with;
(vii) the Stockholder and Xxxx Xxxx shall have entered into
Consulting and Employment Agreements reasonably satisfactory to Parent
and Buyer and the Buyer, Parent and the Stockholder shall have entered
into a Noncompetition Agreement in form and substance as set forth in
Exhibit 2(h)(iii)(C) attached hereto and the same shall be in full
force and effect, and the Escrow Agreement shall have been executed
and delivered;
(viii) the Buyer shall have received from counsel to PII and the
Stockholder an opinion in form and substance as set forth in Exhibit
5(a)(viii) attached hereto, addressed to the Buyer, and dated as of
the Closing Date;
(ix) all actions to be taken by the Acquired Companies and the
Stockholder in connection with consummation of the transactions
contemplated hereby and all certificates, opinions, assignments,
assumptions, instruments, and other documents required to effect the
transactions contemplated hereby shall have been delivered and shall
be reasonably satisfactory in form and substance to the Buyer;
(x) this Agreement, and the consummation of the transactions
contemplated by this Agreement, shall have been approved by the Boards
of Directors of Buyer and Parent;
(xi) the PII Financial Statements, the PII Disclosure Schedule
and all other items contemplated to be delivered following the
execution hereof shall have been timely delivered in form and
substance satisfactory to Buyer;
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(xii) after the date hereof, no breach or inaccuracy of any
representation or warranty or covenant of PII or the Stockholder shall
have become known to the Buyer or Parent;
(xiii) Buyer shall have received results from environmental soil
sampling reasonably satisfactory to Buyer.
The Buyer may waive any condition specified in this (S) 5(a) if it executes
a writing so stating at or prior to the Closing.
(b) Conditions to Obligation of PII and the Stockholder. The
obligations of PII and the Stockholder to consummate the transactions to be
performed by it them connection with the Closing is subject to satisfaction
of the following conditions:
(i) the representations and warranties set forth in (S) 4 above
shall be true and correct in all material respects at and as of the
Closing Date;
(ii) Parent and the Buyer shall have paid the Purchase Price and
otherwise performed and complied with all of its covenants hereunder
in all material respects through the Closing;
(iii) no action, suit, or proceeding shall be pending or
threatened before any court or quasi-judicial or administrative agency
of any federal, state, local, or foreign jurisdiction or before any
arbitrator wherein an unfavorable injunction, judgment, order, decree,
ruling, or charge would (A) prevent consummation of any of the
transactions contemplated by this Agreement or (B) cause any of the
transactions contemplated by this Agreement to be rescinded following
consummation (and no such injunction, judgment, order, decree, ruling,
or charge shall be in effect);
(iv) the Buyer shall have delivered to PII a certificate to the
effect that each of the conditions specified above in (S) 5(b)(i)-
(iii) is satisfied in all respects;
(v) all applicable waiting periods (and any extensions thereof)
under the Xxxx-Xxxxx-Xxxxxx Act shall have expired or otherwise been
terminated and all necessary requirements under the Industrial Site
Reclamation Act of New Jersey shall have been complied with;
(vi) PII shall have received from counsel to the Buyer an opinion
form and substance as set forth in Exhibit 5(b)(vi) attached hereto,
addressed to PII, and dated as of the Closing Date;
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(vii) all actions to be taken by the Buyer in connection with
consummation of the transactions contemplated hereby and all
certificates, opinions, assumptions, instruments, and other documents
required to effect the transactions contemplated hereby will be
reasonably satisfactory in form and substance to PII; and
(viii) the Stockholder and Xxxx Xxxx, respectively, shall have
entered into Consulting and Employment Agreements reasonably
satisfactory to the Stockholder and Xxxx Xxxx.
PII and the Stockholder may waive any condition specified in this (S) 5(b)
by executing a writing so stating at or prior to the Closing.
6. PRE-CLOSING COVENANTS OF THE PARTIES.
(a) [INTENTIONALLY DELETED.]
(b) Access and Investigation. Between May 6, 1997, and the Closing
Date, PII and the Stockholder will, and will cause each Acquired Company
and its representatives to:
(i) afford Buyer and its representatives (collectively, "Buyer's
Advisors") reasonable access to each Acquired Company's personnel,
properties (including for purposes of environmental testing),
contracts, books and records, and other documents and data so as to
not unreasonably interfere with the conduct of the Business;
(ii) furnish Buyer with copies of all such contracts, books and
records, and other existing documents and data as Buyer may reasonably
request; and
(iii) furnish Buyer and Buyer's Advisors with such additional
financial, operating and other data and information as Buyer may
reasonably request.
(c) Operation of the Businesses of the Acquired Companies. Between
May 6, 1997, and the Closing Date, PII and the Stockholder will, and will
cause each Acquired Company to:
(i) conduct the business of each Acquired Company only in the
Ordinary Course of Business or otherwise with the written consent of
the Buyer; provided that there shall be no transactions between the
Stockholder and any of the Acquired Companies without the prior
written consent of Buyer;
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(ii) use their best efforts to preserve intact the current
business organization of each Acquired Company, keep available the
services of the current officers, employees, and agents of each
Acquired Company, and maintain the relations and good will with
suppliers, customers, landlords, creditors, employees, agents, and
others having business relationships with such Acquired Company; and
(iii) confer with Buyer concerning operational matters of a
material nature and the status of business operations and finances.
(d) Negative Covenant. Except as otherwise expressly permitted by
this Agreement, between May 6, 1997, and the Closing Date, PII and the
Stockholder will not, and will cause each Acquired Company not to, without
the prior consent of Buyer, take any affirmative action, or fail to take
any reasonable action within their or its control, which would cause or
result in an inaccuracy or breach of any of the representations, warranties
or covenants of PII and the Stockholder set forth in this Agreement.
(e) Name of PII. Between the date of this Agreement and the Closing,
PII shall take or shall cause to be taken any and all actions necessary in
order to change its name as of the Closing.
(f) Required Approvals. As promptly as practicable after the date of
this Agreement, PII and the Stockholder will, and will cause each Acquired
Company to, make all filings required to be made by them in order to
consummate the transactions contemplated hereby (including all filings
under the HSR Act.) Between the date of this Agreement and the Closing
Date, PII and the Stockholder will, and will cause each Acquired Company
to, cooperate with Buyer at Buyer's expense with respect to all filings
that Buyer elects to make or is required to make in connection with the
transactions contemplated hereby.
(g) Notification. Between May 6, 1997, and the Closing Date, PII and
the Stockholder will promptly notify Buyer in writing if any Acquired
Company or Stockholder becomes aware of any fact or condition that causes
or constitutes a material breach of any of the representations and
warranties of PII and the Stockholder as of the date of this Agreement, or
if such Acquired Company or Stockholder becomes aware of the occurrence
after the date of this Agreement of any fact or condition that would
(except as expressly contemplated by this Agreement) cause or constitute a
material breach of any such representation or warranty had such
representation or warranty been made as of the time of occurrence or
discovery of such fact or condition.
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(h) Best Efforts. Between the date of this Agreement and the Closing
Date, each of (i) PII and the Stockholder and (ii) Parent and Buyer will
use their respective best efforts to cause the conditions in (S) 5 to be
satisfied.
7. POST-CLOSING COVENANTS. The Parties agree as follows with respect to
the period following the Closing.
(a) General. In case at any time after the Closing any further action
is necessary to carry out the purposes of this Agreement, each of the
Stockholder, the Parent, PII and Buyer will take such further action
(including the execution and delivery of such further instruments and
documents) as any other Party reasonably may request, at the sole cost and
expense of the requesting Party (unless the requesting Party is entitled to
indemnification therefor hereunder). PII and the Stockholder acknowledge
and agree that from and after the Closing the Buyer will have the right but
not the obligation to possession of all documents, books, records
(including copies of Tax records), agreements, and financial data of any
sort relating to PII not excluded from the definition of Acquired Assets in
this Agreement; provided, however, that PII and the Stockholder shall have
the right to obtain access to such documents, books, records (including
copies of Tax records), agreements, and financial data and make photocopies
thereof for a proper purpose, such as in connection with the preparation of
their tax returns.
(b) Litigation Support. In the event and for so long as any Party
actively is contesting or defending against any action, suit, proceeding,
hearing, investigation, charge, complaint, claim or demand in connection
with (i) any transaction contemplated under this Agreement or (ii) any
fact, situation, circumstance, status, condition, activity, practice, plan,
occurrence, event, incident, action, failure to act, or transaction on or
prior to the Closing Date involving PII or the Stockholder, each of the
other Parties will reasonably cooperate with the contesting or defending
Party and his or its counsel in the contest or defense, make available his
or its personnel, and provide such testimony and access to his or its books
and records as shall be necessary in connection with the contest or
defense, all at the sole cost and expense of the contesting or defending
Party (unless the contesting or defending Party is entitled to
indemnification therefor under (S) 8 below).
(c) Transition. PII and the Stockholder will use its (his) best
efforts not to take any action that is designed or intended to have the
effect of discouraging any lessor, licensor, customer, supplier, or other
business associate of PII from maintaining the same business relationships
with the Buyer after the Closing as it maintained with PII prior to the
Closing.
(d) Confidentiality. PII, the Stockholder, Parent and Buyer will
treat and hold as confidential all of the Confidential Information, refrain
from using any of the Confidential Information and deliver promptly to the
party from whom the Confidential Information was received or destroy, at
the request and option of the party from whom
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the Confidential Information was received, all tangible embodiments (and
all copies) of the Confidential Information which are in his or its
possession. In the event that a party is requested or required (by oral
question or request for information or documents in any legal proceeding,
interrogatory, subpoena, civil investigative demand, or similar process) to
disclose any Confidential Information, that Party will notify the party
from whom the Confidential Information was received promptly of the request
or requirement so that the party from whom the Confidential Information was
received may seek an appropriate protective order or waive compliance with
the provisions of this (S) 7(d). If, in the absence of a protective order
or the receipt of a waiver hereunder, a party is, on the advice of counsel,
compelled to disclose any Confidential Information to any tribunal or else
stand liable for contempt, that Party may disclose the Confidential
Information to the tribunal; provided, however, that such party shall use
its reasonable efforts to obtain, at the reasonable request of the party
from whom the Confidential Information was received and at such party's
sole expense, an order or other assurance that confidential treatment will
be accorded to such portion of the Confidential Information required to be
disclosed as such party shall designate.
(e) Retirement Plan. PII shall terminate its tax-qualified retirement
plan (the "Qualified Plan") as of the Closing Date, and as soon as
practicable thereafter shall file a request with the appropriate Key
District Office of the Internal Revenue Service seeking a favorable
determination that the Qualified Plan continues to satisfy applicable tax-
qualification requirements upon termination. PII shall make all reasonable
efforts to secure such a favorable determination from the Internal Revenue
Service and, upon obtaining same, shall provide the Parent with a copy of
such favorable determination letter.
(f) Registration Rights.
(i) As used in this (S) 7(e), the following shall have the
following respective meanings:
"Commission" shall mean the Securities and Exchange
Commission, or any other federal agency at the time administering
the Securities Act.
"Holder" shall mean any holder of the outstanding Parent
Shares that have not been sold to the public. For purposes of
this (S) 7(e), "Parent Shares" shall include any shares of
capital stock issued in respect of the Parent Shares upon any
stock split, stock dividend or distribution, recapitalization or
similar event.
"Registration Statement" shall mean a registration statement
filed or to be filed by the Parent under the Securities Act which
is available to
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register under the Securities Act a sale of any of the Parent
Shares by or for the account of any Holder. Such term includes
any prospectus included in the Registration Statement.
"Transfer" shall mean any sale or other disposition of any
Parent Shares which would constitute a sale thereof under the
Securities Act.
(ii) Each certificate representing any Parent Shares and, except
as otherwise provided in (S) 7(e)(iii) hereof, each certificate issued
upon exchange or transfer of any Parent Shares (whether or not such
exchange or transfer shall constitute a Transfer) shall be stamped or
otherwise imprinted with a legend substantially in the following form:
"THE SHARES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER ANY SECURITIES LAWS AND MAY ONLY BE SOLD IN
COMPLIANCE WITH ANY APPLICABLE SECURITIES LAWS. IN PARTICULAR,
THE SHARES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE
TRANSFERRED OR OTHERWISE DISPOSED OF (1) UNLESS A REGISTRATION
STATEMENT UNDER THE SECURITIES ACT OF 1933, AS AMENDED, WITH
RESPECT TO SUCH SHARES SHALL THEN BE IN EFFECT OR UNLESS THE
COMPANY SHALL HAVE RECEIVED AN OPINION OF COUNSEL REASONABLY
SATISFACTORY TO THE COMPANY THAT ANY PROPOSED TRANSFER OR
DISPOSITION OF SUCH SHARES IS EXEMPT FROM REGISTRATION UNDER THE
SECURITIES ACT OF 1933, AS AMENDED.
(iii) Prior to any proposed Transfer of any Parent Shares (other
than under the circumstances described in (S) 7(e)(iv), the Holder
thereof shall give written notice to the Parent of the intention to
effect such Transfer. Each such notice shall describe the manner of
the proposed Transfer and shall be accompanied by an opinion of
counsel reasonably satisfactory to Parent to the effect that the
proposed transfer of Parent Shares may be effected without
registration under the Securities Act and under applicable state
securities or blue sky laws. Upon confirmation that such opinion is
reasonably satisfactory to Parent, the Holder of such Parent Shares
shall be entitled to transfer such Parent Shares in accordance with
the terms of its notice. Each certificate for Parent Shares
transferred as above provided shall bear the legend set forth in (S)
7(e)(ii) hereof except that such certificate shall not bear such
legend if (i) such Transfer is in accordance with provisions of Rule
144 (or any other rule permitting public sale without registration
under the Securities Act) or (ii) the opinion of counsel
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referred to above is to the further effect that the transferee and any
subsequent transferee (other than an affiliate of Parent) would be
entitled to Transfer such securities in a public sale without
registration under the Securities Act.
(iv) If following the Closing Date, Parent determines that it
will file a Registration Statement for any public offering of
securities, Parent shall give written notice to each Holder, at least
30 days in advance of filing such Registration Statement, that such
filing is expected to be made. Upon written request of any Holder
made within fifteen (15) days after receipt of Parent's written notice
and subject to the limitations set forth in this (S) 7(e)(iv), Parent
shall include in such Registration Statement the number of shares of
Parent Shares specified in the Holder's request for the purpose of
registering those Parent Shares for sale by or for the account of such
Holder (and any related qualification under blue sky or other state
securities laws) and in any underwriting involved therein. Subject to
the provisions of this (S) 7(e) Parent shall have exclusive control
over the filing, amending, withdrawal and other actions regarding such
Registration Statement. Notwithstanding anything in the foregoing to
the contrary, Parent shall have no obligation to give notice to any
Holder with respect to the filing of, or to include any Parent Shares
for any Holder in, any Registration Statement on Form S-8 or Form S-4.
(v) If the securities to be sold by Parent pursuant to a
Registration Statement described in (S) 7(e)(iv) hereof are to be sold
in any underwritten public offering, the right of any Holder to have
Parent Shares included in the same Registration Statement shall be
conditioned upon the inclusion by the managing underwriter of such
Holder's Parent Shares in the same underwriting. Parent, all Holders
and all other security holders proposing to sell securities in such
underwriting shall enter into an underwriting agreement in customary
form with the underwriter or underwriters selected by Parent.
Notwithstanding any other provisions of this (S) 7(e)(v), if the
managing underwriter determines that marketing factors require a
limitation of the number of securities to be included in the
underwriting, the managing underwriter and Parent may limit the number
of Parent Shares to be included in the underwriting for all Holders,
in the aggregate, to any number which, together with any other
securities of the same class that Parent may be contractually
obligated to register for others, shall not be less than 10 percent
(10%) of the total number included in the underwriting. Parent shall
advise all Holders who shall have requested inclusion of their Parent
Shares in the same underwriting of the aggregate number of Parent
Shares that may be included for all Holders. Such aggregate number
shall be allocated among all such Holders in proportion, as nearly as
practical, to the number of Parent Shares for which each Holder
requested registration, provided that any decrease in the number of
shares to be included in the Registration Statement pursuant to the
provisions of this (S) 7(e)(v) shall be allocated, as nearly as
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practicable, first among selling shareholders holding shares of
capital stock as to which the Parent is not contractually obligated to
register, and second, among selling shareholders having such
contractual rights, as nearly as practicable, in proportion to the
number of shares of capital stock for which such selling shareholders
requested registration. No Parent Shares excluded from an
underwriting by reason of such marketing limitation shall be included
in the Registration Statement. If any Holder disapproves of the terms
of the underwriting, he may elect to withdraw his Parent Shares by
giving written notice to Parent and the managing underwriter. After
receiving any such notice, Parent shall withdraw such Holder's Parent
Shares from the Registration Statement. If a withdrawal of Parent
Shares or any withdrawal of other securities (except a complete
withdrawal of all securities that were to be sold by Parent, in which
case Parent may withdraw the Registration Statement in its entirety)
makes it possible, with the marketing limitation set by the managing
underwriter and Parent, to include in the underwriting a greater
number of Parent Shares held by other Holders participating in such
underwriting, then to the extent practical, without delaying the
underwriting, Parent shall offer to all Holders who then have Parent
Shares included in the underwriting an opportunity to include
additional Parent Shares in the proportion previously described in
this (S) 7(e)(v).
(vi) In connection with the registration under the Securities Act
of any sale of Parent Shares by or for the account of any Holder
pursuant to (S) 7(iv) hereof, Parent shall file on a timely basis
appropriate applications or other instruments to register, qualify or
obtain exemptions for the sale under such state securities or blue sky
laws as the managing underwriter shall reasonably specify or, if the
sale is not to be an underwritten public offering, such state
securities or blue sky laws as the Holder may reasonably request.
Parent, however, shall have no obligation to file any applications or
other instruments in any jurisdiction in which either (i) no such
filing is required with respect to the proposed sale of Parent Shares
by or for the account of the Holder, in the opinion of qualified
counsel selected by Parent, or (ii) Parent would be required to
execute a general consent to service of process, to register as a
broker or dealer or to cause any officer or employee of Parent to
register as a dealer, broker, or salesman or in any similar capacity.
Parent shall use its best efforts in good faith to obtain and maintain
for a reasonable period, up to six months, an effective registration,
qualification or exemption under the applications or other instruments
filed by Parent pursuant to this (S) 7(e)(vi).
(vii) All expenses incurred in connection with any Registration
Statement filed or prepared for filing pursuant (S) 7(e)(iv) hereof
and in connection with all related state securities or blue sky
applications or other instruments, including without limitation all
registration, filing and qualification fees, printing expenses, fees
and disbursements of counsel for Parent and fees and expenses of
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accountants incidental to such Registration Statement, and fees and
disbursements for one counsel to the Holders incidental to such
Registration Statement shall be borne by Parent. Notwithstanding any
other provision of this (S) 7(e)(vii), each Holder shall bear the
entire amount of any discount or commission allowed or paid to any
underwriter in connection with any sale of Parent Shares by or for the
account of such Holder.
(viii) In connection with any Registration Statement filed
pursuant to this (S) 7(e), Parent shall indemnify and hold harmless
each Holder whose Parent Shares are included in the Registration
Statement, each underwriter who may purchase from or sell any Parent
Shares for any such Holder and each person who controls any such
Holder or any such underwriter, within the meaning of the Securities
Act, from and against any and all losses, claims, damages and
liabilities caused by any untrue statements or alleged untrue
statement of a material fact contained in the Registration Statement
or any related state securities or blue sky applications or other
instruments or caused by any omission or alleged omission to state in
the Registration Statement or any related state securities or blue sky
applications or other instruments any material fact required to be
stated or necessary to make the statements which are made, in light of
the circumstances in which they are made, not misleading, except
insofar as such losses, claims, damages or liabilities are caused by
any untrue statement or alleged untrue statement or omission or
alleged omission based upon written information furnished to Parent by
such Holder, underwriter or controlling person expressly for use in
the Registration Statement or any related state securities or blue sky
applications or other instruments. Each Holder whose Parent Shares
are included in any Registration Statement filed pursuant to this (S)
7(e) shall indemnify Parent, its directors, each officer signing the
Registration Statement, each other person (including each other
Holder) whose securities are included in the Registration Statement,
each underwriter who may purchase from or sell any securities for
Parent or any other person pursuant to the Registration Statement and
each person, if any, who controls Parent, any such other person or any
such underwriter, within the meaning of the Securities Act, from and
against any and all losses, claims, damages and liabilities caused by
any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement or any related state
securities or blue sky applications or other instruments or caused by
any omission or alleged omission to state in the Registration
Statement or any related state securities or blue sky applications or
other instruments any material fact required to be stated or necessary
to make the statements which are made, in light of the circumstances
in which they are made, not misleading, insofar as such losses,
claims, damages or liabilities are caused by any untrue statement or
alleged untrue statement or omission or alleged omission based upon
written information furnished by the Holder from whom indemnification
is sought expressly for use in the Registration Statement or any
related state securities or
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blue sky application or other instruments; provided, that the
obligations of such Holders hereunder shall be limited to any amount
equal to the proceeds to each such Holder of securities sold as
contemplated herein; provided, further, that the foregoing indemnity
agreement shall not inure to the benefit of the Parent or any
underwriter, or any director or officer of, or person controlling, the
Parent or such Holder, other shareholder or underwriter, in respect of
any person's asserted loss, claim, damage or liability resulting from
the purchase of securities from the Parent or such Holder, other
shareholder or underwriter if a copy of the prospectus, offering
circular or other document (as then amended or supplemented) was not
sent or given to such person at or prior to the written confirmation
of the sale of securities to such person, and such prospectus,
offering circular or other document would have cured the defect giving
rise to such loss, claim, damage or liability. Each party entitled to
indemnification under this (S) 7(e)(viii) (the "securities indemnified
party") shall give written notice to the party required to provide
indemnification (the "securities indemnifying party") promptly after
such securities indemnified party has actual knowledge of any claim as
to which indemnity may be sought, and shall permit the securities
indemnifying party to assume the defense of any such claim or any
litigation resulting therefrom; provided, that counsel for the
securities indemnifying party, who shall conduct the defense of such
claim or any litigation resulting therefrom, shall be approved by the
securities indemnified party (whose approval shall not be unreasonably
withheld), and the securities indemnified party may participate in
such defense at such party's expense; and provided, further, that the
failure of any securities indemnified party to give notice as provided
herein shall not relieve the securities indemnifying party of its
obligations under this (S) 7(e)(viii) unless and to the extent such
failure shall have prejudiced the securities indemnified party. No
securities indemnifying party, in the defense of any such claim or
litigation, shall, except with the consent of each securities
indemnified party, consent to entry of any judgment or enter into any
settlement which does not include as an unconditional term thereof the
giving by the claimant or plaintiff to such securities indemnified
party of a release from all liability in respect to such claim or
litigation. No securities indemnifying party shall be subject to any
liability for any settlement made by the securities indemnified party
without the securities indemnifying party's consent (which consent
shall not be unreasonably withheld). Each securities indemnified
party shall furnish such information regarding itself or the claim in
question as an securities indemnifying party may reasonably request in
writing and as shall be reasonably required in connection with defense
of such claim and litigation resulting therefrom. To the extent the
provisions contained in this (S) 7(e) are in conflict with any
indemnification provisions that are included in any underwriting
agreement entered into by Parent and one or more Holders with one or
more underwriters in connection with any underwritten public offering
registered under any registration statement filed pursuant to this (S)
7(e), the provisions of the underwriting agreement shall govern.
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The indemnities provided for in this (S) 7(e)(viii) shall be
independent of and in addition to any other indemnity provision of
this Agreement.
(ix) Each Holder whose Parent Shares are included in any
Registration Statement filed pursuant to this (S) 7(e) shall furnish
to Parent such information regarding such Holder and the sale proposed
by such Holder as may be reasonably required for inclusion in the
Registration Statement or any related state securities or blue sky
applications or other instruments, as may be reasonably necessary to
provide supplemental information to the Commission, the National
Association of Securities Dealers, Inc. or any administrator of any
state securities or blue sky law, or as Parent or any underwriter may
reasonably request.
(x) From and after the date of this Agreement, the Parent will
not enter into an agreement with any holder or prospective holder of
any securities of the Parent giving such holder or prospective holder
the right to require the Parent to initiate or effect any registration
of any securities of the Parent on terms more favorable than granted
to the Holders herein. Any right given by the Parent or to any holder
or prospective holder of the Parent's securities in connection with
the registration of securities will be conditioned such that it will
be consistent with the provisions of this (S) 7(e) and with the rights
of the Holders provided in this Agreement.
(xi) With a view to making available the benefits of certain
rules and regulations of the Commission that may permit the sale of
the Parent Shares to the public without registration, the Parent
agrees that it will
(A) at all times file with the Commission in a timely manner
all reports and other documents required to be filed by the
Parent under the Securities Act, if any, and the Exchange Act,
and to comply with all other requirements, if any, of Rule 144(c)
(1) or any successor provision thereto until two (2) years and
ninety (90) days following the Closing Date.
(B) so long as any Holder owns any Parent Shares, furnish to
the Holder promptly upon request a written statement by the
Parent as to its compliance with the reporting requirements of
Rule 144 and of the Securities Act and the Exchange Act, a copy
of the most recent annual or quarterly report of the Parent, and
such other reports and documents filed with the Commission as any
Holder may reasonably request in availing itself of any rule or
regulation of the Commission allowing a Holder to sell any such
securities without registration.
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(xii) In the case of each registration effected by the Parent
pursuant to this (S) 7(e), the Parent will keep each Holder advised in
writing as to the initiation of each registration and as to the
completion thereof. At its expense, the Parent will
(A) keep such registration effective for a period of 120
days or until the Holder or Holders have completed the
distribution described in the registration statement relating
thereto, whichever first occurs; provided, that in the case of
any registration on Form S-3 of Parent Shares that are intended
to be offered on a continuous or delayed basis, such 120-day
period shall be extended, if necessary, to keep the registration
statement effective until all such Parent Shares are sold if Rule
415, or any successor rule under the Securities Act, permits an
offering on a continuous or delayed basis and applicable rules
under the Securities Act governing the obligation to file a post-
effective amendment permit, in lieu of filing a post-effective
amendment that (i) includes any prospectus required by (S)
10(a)(3) of the Securities Act or (ii) reflects facts or events
representing a material or fundamental change in the information
set forth in the registration statement, the incorporation by
reference of information required to be included in (i) and (ii)
above to be contained in periodic reports filed pursuant to (S)
13 or 15(d) of the Exchange Act in the registration statement,
and
(B) furnish such number of prospectuses and other documents
incident thereto as a Holder from time to time reasonably
requests.
(xiii) Notwithstanding the foregoing provisions of this (S)
7(e), Parent shall not be obligated to file a Registration Statement
hereunder if at the time of filing the Holders requesting to
participate in the offering are entitled to sell the Parent Shares for
which registration has been requested immediately under Rule 144 (or
any successor rule or regulation) during any 90 day period, or to
include in any Registration Statement Parent Shares which could have
been included in any prior Registration Statement of Parent under this
(S) 7(e), but which were not so included for reason other than a
limitation on the number of Parent Shares included in such prior
Registration Statement pursuant to (S) 7(e)(v).
The registration rights granted in this (S) 7(e) are not assignable, in
whole or in part, without the prior written consent of Parent, except such
rights shall transfer with the ownership of the Parent Shares.
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As a condition to having Parent Shares included in any Registration
Statement filed pursuant to this (S) 7(e), each Holder shall agree that in
selling the Parent Shares the Holder will comply with all applicable laws and
regulations, including, but not limited to, Rules 10b-6 and 10b-7 promulgated
under the Securities Exchange Act.
(g) Employee Matters.
(i) On the Closing Date, Buyer shall offer employment in a
similar position to each employee of PII who on the Closing Date is
actively at work or absent from work due to short-term disability,
maternity leave, jury duty, military service, vacation, layoff with
recall rights, or other short-term leave (the "Employees") at a rate
of base compensation equal to not less than 100% of their base
compensation immediately prior to the Closing Date. Buyer shall also
offer to Employees participation in benefit programs for which the
basic terms of such programs are substantially similar or more
beneficial to such employees as those set forth in the Employee
Benefit Programs. Notwithstanding the foregoing, Buyer is not
assuming any liability or obligation under any Employee Benefit Plans
of PII.
(ii) Notwithstanding the foregoing, the terms and conditions of
the employment of the Stockholder and Xxxx Xxxx shall be governed by
the terms and conditions of their respective consultant or employment
contracts to be executed at closing.
(iii) The Buyer shall be responsible for all severance and other
Liabilities incurred in respect of any Employee terminated by the
Buyer following their employment by Buyer, for any reason, after the
Closing Date.
(iv) Any former employee of PII (or their dependents) who become
eligible for health continuation coverage under PII's major medical
plan by virtue of his or her failure to accept Buyer's offer of
employment being tantamount to a qualifying event, for the entitlement
to such coverage, shall have available health continuation coverage
satisfying the requirements of Section 4870 B of the Code and Section
601 through 608 of ERISA after the Closing through health benefit
plans maintained by Buyer or its affiliates.
(h) Tax Matters. Each party agrees to comply with the allocation
provided for in this Agreement. Buyer and PII will cooperate with and
provide each other with such information and access to books and records as
either of them may reasonably require of the other in connection with the
filing of any Tax Return, including Tax Returns relating to the application
of the successor employer rules for payroll Tax purposes contained in Code
(S)(S) 3121(a)(1) and 3306(b)(1), the determination of a liability for
Taxes or a right to a refund for Taxes, or the preparation for litigation
or
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investigation of any claim for Taxes or a right to a refund for Taxes, or
the preparation for cooperation and information shall include all relevant
Tax Returns, and other documents and records, or portions thereof relating
to or necessary in connection with the preparation of records, or portions
thereof relating to or necessary in connection with the preparation of such
Tax Returns or other determination of Tax liability. Each Party shall
retain all Tax Returns, schedules, workpapers, and all other materials,
records or documents until the expiration of the statute of limitations for
the taxable years to which such Tax Returns and other documents relate.
After expiration of the statute of limitations, such party shall notify the
other party in writing that it desires to dispose of or destroy the Tax
Returns and other documents and shall provide such other party with the
right for thirty (30) days after the tendering of such notice to copy or
take possession of such Tax Returns and other documents. Any information
obtained under this provision shall be kept confidential by the parties,
except as may be necessary in connection with the filing of such Tax
Returns.
8. REMEDIES UNDER THIS AGREEMENT.
(a) Survival of Representations and Warranties. All of the
representations and warranties of PII and the Stockholder contained in (S)
3(c)(iii) and (S) 3(g)-(ab) of this Agreement and of Buyer contained in (S)
4(d)-(g) of this Agreement shall survive the Closing and continue in full
force and effect for a period of one (1) year thereafter; all of the other
representations, warranties, covenants, indemnities, and other agreements
of the Buyer, PII, and the Stockholder contained in this Agreement
(including the representations and warranties of PII contained in (S) 3(a)-
(f) (other than 3(c)(iii)) hereof and of Buyer and Parent contained in (S)
4(a)-(c) hereof shall survive the Closing and continue in full force and
effect forever thereafter, subject to any applicable statutes of
limitations. No action, claim, or proceeding may be brought by any Party
hereto against any other Party resulting from, arising out of, or caused by
a breach of a representation or warranty contained herein, or the failure
to perform any covenant or other obligations hereunder, after the time such
representation, warranty or covenant ceases to survive pursuant to the
preceding sentence, unless written notice of such claim setting forth with
specificity the basis for such claim is delivered to the applicable Party
prior to such time.
(b) Indemnification Provisions for Benefit of Parent and the Buyer.
(i) In the event PII or the Stockholder breaches (or in the event
any third party alleges facts that, if true, would mean PII or the
Stockholder has breached) any of its representations, warranties, and
covenants contained in this Agreement, and, if there is an applicable
survival period pursuant to (S) 8(a) above, provided that the Buyer
makes a written claim for indemnification setting forth the basis for
such claim against PII or the Stockholder pursuant to (S) 8(g) below
within such survival period, then each of PII and the Stockholder
jointly
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and severally agrees to indemnify Parent and Buyer, subject to the
limitations set forth herein, from and against the entirety of any
Losses the Parent and the Buyer may suffer through and after the date
of the claim for indemnification (including any Losses the Parent and
the Buyer may suffer after the end of any applicable survival period)
resulting from, arising out of, or caused by the breach (or the
alleged breach); provided, however, that
(x) PII and the Stockholder shall not have any obligation to
indemnify, and shall have no Liability to, Parent or the Buyer
from and against any Losses resulting from, arising out of, or
caused by the breach (or alleged breach) of any representation,
warranty, or covenant of PII or the Stockholder contained in (S)
3(a)-(f) (other than (S) 3(c)(iii)) hereof which exceed the
Purchase Price;
(y) PII and the Stockholder shall not have any obligation to
indemnify, and shall have no Liability to, Parent or the Buyer
from and against any Losses resulting from, arising out of, or
caused by the breach (or alleged breach) of any representation,
warranty or covenant of PII or the Stockholder contained in (S)
3(c)(iii) or (S) 3(g)-(ab) hereof which exceed in the aggregate
the value of the Parent Shares placed into escrow pursuant to the
terms of the Escrow Agreement, and the sole recourse of Parent
and Buyer for such Losses shall be limited to the Parent Shares
which are subject to the Escrow Agreement;
(z) PII and the Stockholder shall have no such
indemnification obligation with respect to such (S)(S) 3(c)(i)
and 3(c)(iii) and 3(e)-(ab) breaches (or alleged breaches) until
the Buyer has suffered Losses by reason thereof in excess of One
Hundred Thousand Dollars ($100,000) and then only to the extent
of the excess.
(aa) The indemnity for breach of the representation and
warranty with respect to collectability of the accounts
receivable set forth in Section 3(q), the amount recoverable
shall be limited to 75% of the amount which otherwise would be
recoverable under this Section 8.
(ii) Notwithstanding anything to the contrary herein contained,
PII and the Stockholder will indemnify, defend and hold harmless
Parent and the Buyer from and against any Losses as a result of claims
based on or arising from any liabilities or obligations of the
Acquired Companies or the Stockholder which are not Assumed
Liabilities; provided, however, that any indemnification obligations
under this paragraph (ii) shall not exceed the Purchase Price.
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(iii) As security for their indemnification obligations of PII
and the Stockholder, PII agrees to deposit that number of Parent
Shares (rounded up to the next whole share) which results from
dividing the Agreed Value into Two Million Dollars ($2,000,000) in
escrow for a period of one (1) year following the Closing Date,
pursuant to the terms of the Escrow Agreement, the terms of which are
set forth on Exhibit 8(b)(iii).
(iv) Notwithstanding any provision in this Agreement to the
contrary, in the event any inaccuracy or breach of any representation
or warranty or covenant of PII or the Stockholder are known to the
Buyer or Parent at or prior to the Closing, (A) the Buyer shall
disclose to PII and the Stockholder any such inaccuracy or breach, and
(B) PII and the Stockholder shall have no liability to the Buyer for
any liabilities incurred by the Buyer or Parent with respect to such
inaccuracies or breaches so disclosed.
(c) Indemnification Provisions for Benefit of PII and the Stockholder.
(i) In the event Parent or Buyer breaches (or in the event any
third party alleges facts that, if true, would mean Parent or Buyer
has breached) any of their representations, warranties, and covenants
contained in this Agreement, and, if there is an applicable survival
period pursuant to (S) 8(a) above, provided that PII makes a written
claim for indemnification setting forth with specificity the basis for
such claim against Parent or Buyer pursuant to (S) 8(d) below within
such survival period, then Parent and Buyer jointly and severally
agree to indemnify PII and the Stockholder from and against the
entirety of any Losses (up to but not in excess of the Purchase Price)
PII and the Stockholder may suffer through and after the date of the
claim for indemnification (including any Losses PII or the
Stockholders may suffer after the end of any applicable survival
period) resulting from, arising out of, or caused by the breach (or
the alleged breach).
(ii) Notwithstanding anything to the contrary herein contained,
(i) Parent and Buyer jointly and severally will indemnify, defend and
hold harmless PII and the Stockholder from and against any Losses as a
result of claims based on or arising from any Assumed Liabilities or
the operation of the Acquired Assets after the Closing Date and (ii)
such indemnification shall not be limited in time or amount or subject
to any deductible or cap.
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(d) Method of Asserting Claims.
(i) With respect to any third-party claim:
(A) If any third party shall notify any Party (the
"Indemnified Party") with respect to any matter ("Third Party
Claim") which may give rise to a claim for indemnification
against any other Party (the "Indemnifying Party") under (S) 8(b)
or (c), then the Indemnified Party shall promptly notify each
Indemnifying Party thereof in writing; provided, however, that
(subject to the applicable survival period set forth in (S) 8(a)
above) no delay on the part of the Indemnified Party in notifying
any Indemnifying Party shall relieve the Indemnifying Party from
any obligation hereunder unless (and then solely to the extent)
the Indemnifying Party thereby is prejudiced.
(B) The Indemnifying Party shall have fifteen (15) days
after receipt of notice from the Indemnified Party of a Third
Party Claim ("Notice Period") to notify the Indemnified Party in
writing (1) whether or not the Indemnifying Party disputes such
Third Party Claim specifying in reasonable detail the basis for
such dispute, and (2) notwithstanding any such dispute, whether
or not it desires, at its sole cost and expense, to defend the
Indemnified Party against such Third Party Claim in accordance
with the provisions hereof.
(C) If the Indemnifying Party disputes the Third Party Claim
or the amount thereof (whether or not the Indemnifying Party
elects to defend the Indemnified Party against such
Indemnification Claim), such dispute shall be resolved by
arbitration in accordance with (S) 8(e) hereof. Pending the
resolution of any such dispute, the Third Party Claim shall not
be settled without the prior written consent of the Indemnified
Party, such consent not to be unreasonably withheld.
(D) If the Indemnifying Party notified the Indemnified Party
within the Notice Period that the Indemnifying Party will defend
the Indemnified Party against the Third Party Claim, then except
as hereinafter provided, the Indemnifying Party will have the
right to defend the Indemnified Party against the Third Party
Claim with counsel of its choice reasonably satisfactory to the
Indemnified Party so long as the Indemnifying Party (1)
diligently conducts the defense of such Third Party Claim, and
(2) shall not enter into a settlement, or entry of a final
judgment or final award with respect to, any such Third Party
Claim without the consent of the Indemnified Party unless such
settlement, judgment or award requires no more than a monetary
payment for which
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the Indemnified Party is fully indemnified and does not involve
any other matters binding upon the Indemnified Party.
(E) So long as the Indemnifying Party is conducting the
defense of the Third Party Claim in accordance with (S)
8(d)(i)(D) above, (1) the Indemnified Party may retain separate
co-counsel at its sole cost and expense and participate in the
defense of the Third Party Claim, unless the named parties of any
proceeding relating to such Third Party Claim (including any
impleaded parties) include both the Indemnifying Party and the
Indemnified Party and representation of both parties by the same
counsel would be inappropriate due to actual or potential
differing interests between them, in which event the Indemnifying
Party shall not be entitled to direct the defense of such action
and the fees and expenses of the Indemnified Party shall be at
the expense of the Indemnifying Party, and (2) the Indemnified
Party will not consent to the entry of any judgment or enter into
any settlement with respect to the Third Party Claim without the
prior written consent of the Indemnifying Party (not to be
withheld unreasonably).
(F) If the Indemnifying Party elects not to defend the
Indemnified Party against the Third Party Claim, whether by
giving the Indemnified Party timely notice as provided above or
otherwise, then the amount of any such Third Party Claim, or if
the same is defended by the Indemnifying Party or the Indemnified
Party, then that portion thereof as to which such defense is
unsuccessful or the amount of such settlement, final judgment or
final award described in (S) 8(d)(i)(D), in each case, shall be
conclusively deemed to be a liability of the Indemnifying Party
hereunder, unless the Indemnifying Party shall have disputed its
liability to the Indemnified Party as provided in (S) 8(d)(i)(B),
in which event such dispute shall be resolved as provided in (S)
8(e) hereof.
(ii) If the Indemnification Claim involves a matter other than a
Third Party Claim, the Indemnified Party shall promptly send a notice
of the Indemnification Claim to the Indemnifying Party. Indemnifying
Party shall have fifteen (15) days after receipt from the Indemnified
Party of notice of the Indemnification Claim to dispute the
Indemnification Claim in writing specifying in reasonable detail the
basis for such objection. Failure to timely so dispute the
Indemnification Claim shall constitute acceptance of the claim for
indemnification by the Indemnifying Party. If notice of the dispute
is timely made by the Indemnifying Party and the dispute is not
resolved within twenty (20) days from the date the Indemnifying Party
received notice of the dispute, such dispute shall be resolved in
accordance with (S) 8(e). Claims accepted by an Indemnifying Party,
resolved by arbitration or resolved by mutual agreement shall be paid
as
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and when due, subject to the limitations set forth in this Section 8,
and, with respect to claims under the Escrow Agreement, in accordance
with the procedures set forth therein.
(e) Arbitration.
(i) Except as set forth below in (S) 8(e)(ii), all disputes under
this Article 8 shall be settled by arbitration in a location in
Washington, D.C. mutually acceptable to the Parties before a single
arbitrator pursuant to the rules of the American Arbitration
Association. Arbitration may be commenced at any time by any of the
PII Parties on the one hand or the Buyer on the other by giving
written notice to each other than such dispute has been referred to
arbitration under this (S) 8(e). The arbitrator shall be selected by
the joint agreement of the PII Parties and the Buyer, but if they do
not so agree within twenty (20) days after the date of receipt of the
notice referred to above, the selection shall be made pursuant to the
rules from the panels of arbitrators maintained by such Association.
The arbitrator shall enforce this Agreement and the intentions of the
Parties as evidenced by this Agreement. Any award rendered by the
arbitrator shall be conclusive and binding upon the parties hereto;
provided, however, that any such award shall be accompanied by a
written opinion of the arbitrator giving the reason for the award.
This provision for arbitration shall be specifically enforceable by
the parties and the decision of the arbitrator in accordance herewith
shall be final and binding and there shall be no right of appeal
therefrom. The arbitrator shall assess, as part of his award to the
prevailing party, all or such part as the arbitrator deems proper of
the arbitration expenses of the prevailing party (including reasonable
attorneys' fees) and of the arbitrator against the party that is
unsuccessful in such claim, defense or objection.
(ii) Nothing contained in this (S) 8(e) shall prevent the Parties
from settling any dispute by mutual agreement at any time.
(f) Determination of Losses. The Parties shall take into account the
time cost of money (using the Applicable Rate as the interest rate) in
determining Losses for purposes of this (S)8. All payments under this (S)
8 shall be deemed adjustments to the Purchase Price.
9. MISCELLANEOUS.
(a) Press Releases and Public Announcements. Neither Parent, Buyer,
PII nor the Stockholder shall issue any press release or make any public
announcement relating to the subject matter of this Agreement without the
prior written approval of the other parties hereto. Buyer, upon prior
notice to PII, may make any public disclosure it
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believes in good faith is required or permitted by applicable law or any
listing or trading agreement concerning its publicly-traded securities.
(b) Name of PII. PII agrees that, following the Closing, Buyer and
Parent may use the name "Princeton Instruments, Inc." in connection with
the Business.
(c) No Third-Party Beneficiaries. This Agreement shall not confer any
rights or remedies upon any Person other than the Parties and their
respective successors and permitted assigns.
(d) Entire Agreement. This Agreement (including the documents
referred to herein) constitutes the entire agreement between the Parties
and supersedes any prior understandings, agreements, or representations by
or between the Parties, written or oral, to the extent they related in any
way to the subject matter hereof.
(e) Succession and Assignment. This Agreement shall be binding upon
and inure to the benefit of the Parties named herein and their respective
successors and permitted assigns. No Party may assign either this
Agreement or any of its rights, interests, or obligations hereunder without
the prior written approval of the other Parties; provided, however, that
the Buyer may (i) assign any or all of its rights and interests hereunder
to one or more of its affiliates and (ii) designate one or more of its
affiliates to perform its obligations hereunder (in any or all of which
cases the Buyer nonetheless shall remain responsible for the performance of
all of its obligations hereunder).
(f) Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together will constitute one and the same instrument.
(g) Headings. The section headings contained in this Agreement are
inserted for convenience only and shall not affect in any way the meaning
or interpretation of this Agreement.
(h) Notices. All notices, requests, demands, claims, and other
communications hereunder will be in writing. Any notice, request, demand,
claim, or other communication hereunder shall be deemed duly given if (and
then two business days after) it is sent by registered or certified mail,
return receipt requested, postage prepaid, and addressed to the intended
recipient as set forth below:
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If to PII and the Stockholder:
Xx. Xxxx Xxxxx Copy to: Lane & Xxxxxxxxxx LLP
00 Xxxxxxx Xxxxx 000 Xxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxx 00000 Xxx Xxxx, XX 00000-0000
Attention: Xxxxxx Xxxxxxxxxxxxx,
Esq.
If to Buyer:
Xxxxxxx X. Key Copy to: Xxxxxxx X. Xxxxx, Esq.
Xxxxx Industries, Inc. Xxxxx Industries, Inc.
000 Xxx Xxxxxx Xxxx 000 Xxx Xxxxxx Xxxx
Xxxxxx, Xxxxxxx 00000 Xxxxxx, Xxxxxxx 00000
Any Party may send any notice, request, demand, claim, or other
communication hereunder to the intended recipient at the address set forth
above using any other means (including personal delivery, expedited
courier, messenger service, telecopy, telex, ordinary mail, or electronic
mail), but no such notice, request, demand, claim, or other communication
shall be deemed to have been duly given unless and until it actually is
received by the intended recipient. Any Party may change the address to
which notices, requests, demands, claims, and other communications
hereunder are to be delivered by giving the other Party notice in the
manner herein set forth.
(i) Governing Law. This Agreement shall be governed by and construed
in accordance with the domestic laws of the State of New Jersey without
giving effect to any choice or conflict of law provision or rule (whether
of the State of New Jersey or any other jurisdiction) that would cause the
application of the laws of any jurisdiction other than the State of New
Jersey.
(j) Amendments and Waivers. No amendment of any provision of this
Agreement shall be valid unless the same shall be in writing and signed by
each of the Parent, Buyer, PII and the Stockholder. No waiver by any Party
of any default, misrepresentation, or breach of warranty or covenant
hereunder, whether intentional or not, shall be deemed to extend to any
prior or subsequent default, misrepresentation, or breach of warranty or
covenant hereunder or affect in any way any rights arising by virtue of any
prior or subsequent such occurrence.
(k) Severability. Any term or provision of this Agreement that is
invalid or unenforceable in any situation in any jurisdiction shall not
affect the validity or enforceability of the remaining terms and provisions
hereof or the validity or enforceability of the offending term or provision
in any other situation or in any other jurisdiction.
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(l) Expenses. Buyer, PII and each Stockholder will bear its (his) own
costs and expenses (including legal fees and expenses) incurred in
connection with this Agreement and the transactions contemplated hereby.
The Stockholder shall bear all such expenses incurred by the Affiliates.
(m) Construction. Any reference to any federal, state, local, or
foreign statute or law shall be deemed also to refer to all rules and
regulations promulgated thereunder, unless the context requires otherwise.
The word "including" shall mean including without limitation. The Parties
intend that with respect to each representation, warranty, and covenant
contained herein in any respect, the fact that there exists another
representation, warranty or covenant relating to the same subject matter
(regardless of the relative levels of specificity) which the Party has not
breached shall not detract from or mitigate the fact that the Party is in
breach of the first representation, warranty, or covenant.
(n) Incorporation of Exhibits and Schedules. The Exhibits and
Schedules identified in this Agreement are incorporated herein by reference
and made a part hereof.
(o) Specific Performance. Each of the Parties acknowledges and agrees
that the other Party would be damaged irreparably in the event any of the
provisions of this Agreement are not performed in accordance with their
specific terms or otherwise are breached. Accordingly, each of the Parties
agrees that the other Party shall be entitled to an injunction or
injunctions to prevent breaches of the provisions of this Agreement and to
enforce specifically this Agreement and the terms and provisions hereof in
any action instituted in any court of the United States or any state
thereof having, in accordance with the terms of this Agreement,
jurisdiction over the Parties and the matter, in addition to any other
remedy to which it may be entitled, at law or in equity.
(p) Submission to Jurisdiction. Each of the Parties submits to the
jurisdiction of any state or federal court sitting in Washington, D.C. in
any action or proceeding arising out of or relating to this Agreement and
agrees that all claims in respect of the action or proceeding may be heard
and determined in any such court. Each Party also agrees not to bring any
action or proceeding arising out of or relating to this Agreement in any
other court. Each of the Parties waives any defense of inconvenient forum
to the maintenance of any action or proceeding so brought and waives any
bond, surety, or other security that might be required of any other Party
with respect thereto. Each Party appoints The Xxxxxxxx-Xxxx Corporation
System, Inc. (the "Process Agent") as his or its agent to receive on is or
its behalf service of copies of the summons and complaint and any other
process that might be served in the action or proceeding. Any Party may
make service on any other Party by sending or delivering a copy of the
process (i) to the Party to be served at the address and in the manner
provided for the giving of notices in (S) 9(h) above or (ii) to the Party
to be served in care of the Process Agent at the address and in the manner
provided for the giving of notices in (S) 8(g) above. Each Party agrees
that
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a final judgment in any action or proceeding so brought shall be conclusive
and may be enforced by suit on the judgment or in any other manner provided
by law or in equity.
(q) Bulk Sale and Other Tax Filings. The Buyer and PII agree to
waive compliance with applicable state sales tax, bulk sales notification
statutes and regulations and any applicable state tax statutes, in
connection with the sale of the Acquired Assets to the Buyer.
(r) Transfer Taxes; Sales Tax. The Parties agree that the Stockholder
shall pay any real property transfer Taxes, Buyer shall pay the sales tax
on the transfer of personal property and each of PII, Stockholder, Parent
or Buyer, as appropriate, shall be responsible for such other transfer
Taxes applicable to the transaction contemplated hereby (including the
transfer of Shares) as are customary in the jurisdiction in which the tax
is payable and each party so responsible shall indemnify, defend and hold
the others harmless with respect to such Taxes. Each Party shall file, or
cooperate with the other Parties in filing, all necessary documentation and
Tax Returns with respect to such Transfer Taxes.
(s) No Assignment Causing Breach. Notwithstanding anything in this
Agreement, neither this Agreement nor any document or instrument delivered
pursuant hereto shall constitute an assignment of any claim, contract,
agreement, license, lease, commitment, sales order or purchase order or any
claim or right or any benefit arising thereunder or resulting therefrom if
an attempted assignment thereof without the consent of any other Person
would constitute a breach thereof or in any way adversely affect the rights
to be assigned. Until such consent is obtained, or if an attempted
assignment thereunder would be ineffective or would affect the rights of
PII or any Affiliate thereunder so that the Buyer would not in fact receive
all such rights, PII and the Buyer will cooperate with each other to
provide for the Buyer the benefits of, and to permit the Buyer to assume
all liabilities under, any such claim, contract, agreement, license, lease,
commitment, sales order or purchase order, including enforcement at the
request and expense of the Buyer for the benefit of the Buyer of any and
all rights of PII or any Affiliate against a third party thereto arising
out of the breach or cancellation thereof by such third party; and any
transfer or assignment to the Buyer by PII or any Affiliate of any property
or property rights or any contract or agreement which shall require the
consent or approval of any third party shall be made subject to such
consent or approval being obtained. The Parties shall each use their best
efforts to obtain any required consent to assignment.
(t) Guaranty. Parent hereby unconditionally guarantees the full and
prompt payment and performance of the obligations of the Buyer under this
Agreement.
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IN WITNESS WHEREOF, the Parties hereto have executed this Agreement on the
date first above written.
PARENT
Xxxxx Industries, Inc.
By: /s/ N. Will Xxxxxxx
-------------------
N. Will Xxxxxxx
Vice President
BUYER
Xxxxx Acquisition, Inc.
By: /s/ N. Will Xxxxxxx
-------------------
N. Will Xxxxxxx
Vice President
PII
Princeton Instruments, Inc.
By: /s/ Xxxx Xxxxx
---------------
Xxxx Xxxxx
President
STOCKHOLDER
Xx. Xxxx Xxxxx
/s/ Xx. Xxxx Xxxxx
------------------
Xx. Xxxx Xxxxx
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