EXHIBIT 2.2
AGREEMENT FOR PURCHASE AND SALE
This Agreement for Purchase and Sale (the "Agreement") is made as of the
5th day of July, 1996, by and between Xxxxxx-Xxxxxx Corporation, a Delaware
corporation ("Purchaser" or "WJ"), with principal executive offices at 000 Xxxx
Xxxxxx Xxxxxx, Xxx Xxxxxxx, Xxxxxxxx 00000; and Xxxxxxxxxx plc, a company
registered under the laws of England and Wales ("Seller" or "Pilkington"), with
principal executive offices at Xxxxxxx Xxxx, Xx. Xxxxxx, Xxxxxxxxxx, Xxxxxxx
XX00 0XX.
WITNESSETH:
WHEREAS, Seller desires to sell, or cause to be sold, to Purchaser and
certain of its affiliates, which affiliates are identified as follows and are
referred to herein individually as a "Purchaser Affiliate" and collectively as
the "Purchaser Affiliates":
Xxxxxx-Xxxxxx Limited, a company registered under the laws of England,
whose address is 000 Xxxx Xxxxxx, Xxxxxxxxxxxxx, Xxxxx, Xxxxxxx XX0 1AM;
Xxxxxx-Xxxxxx S.A.R.L., a company registered under the laws of France,
whose address is 0, xxx Xxxx Xxxxxx, 00000 Xxxxxxxx, Xxxxxx;
Xxxxxx-Xxxxxx S.p.A., a company registered under the laws of Italy, whose
address is Xxx Xxxxx, 00, Xxxx, Xxxxx; and
Xxxxxx-Xxxxxx GmbH, a company registered under the laws of Germany ("WJ
GmbH"), whose address is x/x Xxxxxxxxx & Xxxxxx, Xxxxxxxxxxxxxxxx 00, 00000
Xxxxxxx, Xxxxxxx;
and Purchaser desires to purchase or cause to be purchased, from Seller and
certain of its affiliates, which affiliates are identified as follows and are
referred to herein individually as a "Seller Affiliate" and collectively as the
"Seller Affiliates":
Xxxxxxxxxx Brothers Limited, a company registered under the laws of England
and Wales, whose address is Xxxxxxx Xxxx, Xx. Xxxxxx, Xxxxxxxxxx, Xxxxxxx
XX00 0XX;
Pilkington Xxxxxx-Xxxx Holdings Limited, a company registered under the
laws of England and Wales, whose address is Xxxxxxx Xxxx, Xx. Xxxxxx,
Xxxxxxxxxx, Xxxxxxx XX00 0XX;
Xxxxxxxxxx Holdings, Inc., a company registered under the laws of the State
of Delaware, whose address is 000 Xxxxxxx Xxxxxx, Xxxxxx, Xxxx 00000;
Xxxxxxxxxx International Holdings B.V., a company registers under the laws
of the Netherlands, whose address is Xxxxxxxxxxxx Xxxxxxxxxxx 00, 0000 XX
Xxxxxxxxxx, Xxxxxxxxxxx;
Pilkington Xxxxxx-Xxxx Optics Limited, a company registered under the laws
of England and Wales, whose address is Permalens House, 0 Xxxxxx Xxxx,
Xxxxx Xxx, Xxxxxxxxxxx X00 0XX, Xxxxxxx;
Xxxxxxxxxx Brothers (South Wales) Limited, a company registered under the
laws of England and Wales, whose address is Xxxxxxx Xxxx, Xx. Xxxxxx,
Xxxxxxxxxx, Xxxxxxx XX00 0XX;
Pilkington Nederland (No. 1) B.V., a company registered under the laws of
The Netherlands, whose address is Burgemeester Xxxxxxxxxxx 00, 0000 XX
Xxxxxxxxxx, Xxxxxxxxxxx; and
Pilkington Nederland (No. 2) B.V., a company registered under the laws of
The Netherlands, whose address is Burgemeester Xxxxxxxxxxx 00, 0000 XX
Xxxxxxxxxx, Xxxxxxxxxxx;
(i) all of the issued and outstanding shares of capital stock of the following
entities (the "Acquired Stock"):
Xxxxxxxxxx Xxxxxx Hind International, Inc. a company registered under the
laws of the State of Delaware ("PBH International"), whose address is 000
Xxxxxxx Xxxxxx, Xxxxxx, Xxxx 00000;
Xxxxxx-Xxxx International Inc., a company registered under the laws of
Delaware ("Xxxxxx-Xxxx International"), whose address is 000 Xxxxxxx
Xxxxxx, Xxxxxx, Xxxx 00000;
Pilkington Xxxxxx Hind (Services) Limited, a company registered under the
laws of England and Wales ("PBH Services"), whose address is Permalens
House, 0 Xxxxxx Xxxx, Xxxxx Xxx, Xxxxxxxxxxx X00 0XX, Xxxxxxx;
Pilkington Xxxxxx Hind N.V., a company registered under the laws of Belgium
("PBH NV"), whose address is Xxxxxxxxxxx 00, 0000 Xxxxxxxx, Xxxxxxx;
Pilkington Xxxxxx Hind SA, a company registered under the laws of France
("PBH France"), whose address is 0 xxx Xxxx Xxxx, 00000 Xxxxx-Xxxx Xxxxx,
Xxxxxx;
Pilkington Xxxxxx Hind S.A., a company registered under the laws of Spain
("PBH Spain"), whose address is Xxxxx xx xx Xxxxxx, 000, 00000 Xxxxxx,
Xxxxx;
Pilkington Xxxxxx-Xxxx Pty Ltd., a company registered under the laws of
Australia ("PBH Australia"), whose registered office is 0 Xxxxxxx Xxxx,
Xxxx #0, Xxxxx-Xxxx, Xxx Xxxxx Xxxxx 0000, Xxxxxxxxx;
Pilkington Xxxxxx Hind Japan KK, a company registered under the laws of
Japan ("PBH Japan"), whose registered office is Kashikichi Ningyo-cho
Bldg., 3rd Floor, 3-10-1 Xxxxxxxxxx Xxxxxx-xxx, Xxxx-Xx, Xxxxx 000, Xxxxx;
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Xxxxxxxxxx Xxxxxx Hind Nederland B.V., a company registered under the laws
of the Netherlands ("PBH BV"), whose address is Xxxxxxxxxxxxxx 0X, 0000 XX
Xxxxxxxx, Xxxxxxxxxxx;
Pilkington Xxxxxx Hind SpA, a company registered under the laws of Italy
("PBH SpA"), whose address is Via X. Xxxxx (ang. Xxx X. Xxxxxxxx), 00000
Xxxxxxx Xxxxxxxxx (XX), Xxxxx;
Xxxxxxxxxx Xxxxxx-Xxxx Limited, a company registered under the laws of
England and Wales ("PBH Ltd."), whose registered office is Permalens House,
0 Xxxxxx Xxxx, Xxxxx Xxx, Xxxxxxxxxxx X00 0XX, Xxxxxxx;
Pilkington Diffractive Lenses Limited, a company registered under the laws
of England and Wales ("Diffractive"), whose registered office is Permalens
House, Xxxxxx Xxxx, Xxxxx Xxx, Xxxxxxxxxxx X00 0XX, Xxxxxxx; and
Pilkington Xxxxxx Hind, Inc., a Delaware corporation ("PBH"), whose address
is 000 Xxxxx Xxxx, Xxxxxxxxx, Xxxxxxxxxx 00000;
(referred to herein collectively as the "Acquired Subsidiaries" and each
individually as an "Acquired Subsidiary") all on the terms and subject to the
conditions set forth herein, and (ii) the assets of Xxxxxxxxxx Deutschland GmbH,
a company registered under the laws of Germany ("PD"), whose address is 4650
Gelsenkirchen, Germany, exclusively relating to the research, development,
manufacture, distribution, and sale of contact lenses (the worldwide business
conducted by the Acquired Subsidiaries referred to in (i) and the worldwide
business conducted by PD referred to in (ii) are collectively referred to herein
as the "Contact Lens Products Business").
NOW, THEREFORE, in consideration of the covenants and mutual agreements set
forth herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and in reliance upon the
representations and warranties contained herein, the parties do hereby agree as
follows:
ARTICLE 1
PURCHASE AND SALE OF STOCK AND ASSETS
1.1 Purchase and Sale of Acquired Stock. Upon the terms and subject to the
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conditions set forth herein, Seller agrees to sell, transfer, assign, and
deliver or cause to be sold, transferred, assigned, and delivered to
Purchaser or the Purchaser Affiliates, at the Closing (as hereinafter
defined in Section 9.1 hereof) and Purchaser agrees to purchase, or cause
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to be purchased, all of Seller's and its affiliates' right, title, and
interest in and to the Acquired Stock, free and clear of any liens, claims,
options, charges, encumbrances or rights of any nature, as follows:
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Class of Number
Name of Acquired Subsidiary Stock of Shares
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Xxxxxxxxxx Xxxxxx-Xxxx International, Inc. Common 1
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Xxxxxx-Xxxx International Inc. Common 1,000
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Pilkington Xxxxxx Hind (Services) Limited Ordinary 2
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Pilkington Xxxxxx Hind N.V. Ordinary 6,777
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Pilkington Xxxxxx Hind SA Ordinary 45,004
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Pilkington Xxxxxx Hind S.A. Ordinary 555
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Pilkington Xxxxxx-Xxxx Pty Ltd. Ordinary 1,340,000
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Pilkington Xxxxxx Hind Japan KK Common 400
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Pilkington Xxxxxx Hind Nederland B.V. Ordinary 71
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Pilkington Xxxxxx Hind SpA Ordinary 80,000
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Xxxxxxxxxx Xxxxxx-Xxxx Limited Ordinary 850,000
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Pilkington Diffractive Lenses Limited Ordinary 1,000,000
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Pilkington Xxxxxx Hind, Inc. Common 1
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1.2 Purchase and Sale of the Assets. Subject to the terms and conditions
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of this Agreement, excluding only the Excluded Assets (as defined in
Section 1.3 below), Seller agrees to cause PD to sell, transfer,
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assign, and deliver to Purchaser or the Purchaser Affiliates, and
Purchaser agrees to purchase, or cause to be purchased, from PD, all
of PD's right, title, and interest in and to those assets, rights, and
properties of PD of every kind, character, and description, whether
tangible, intangible, real, personal, or mixed, and wherever located,
relating exclusively to or used directly and exclusively in the
Contact Lens Products Business as conducted by PD, as specified below,
if any (the "Acquired Assets"):
(a) The furniture, machinery, equipment, supplies, tools for
maintenance and repair or otherwise, office equipment, other goods and all
other tangible personal property located in Germany or otherwise relating
exclusively to or used directly and exclusively in the operation of the
Contact Lens Products Business as conducted by PD,
(b) The inventory, including but not limited to, finished products,
work in process, inventory in transit to PD, raw materials, spare parts,
packing materials, shipping
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containers, and all other office and maintenance supplies and other similar
items or materials relating exclusively to or used directly and exclusively in
the operation of the Contact Lens Products Business as conducted by PD;
(c) The motor vehicles, including automobiles, trucks and other
rolling stock, used directly and exclusively in the operation of the Contact
Lens Products Business as conducted by PD;
(d) All of PD's title, claims, and rights under all contracts,
agreements, and purchase and sale orders relating exclusively to the Contact
Lens Products Business as conducted by PD;
(e) All existing correspondence, files, invoices, customer lists and
information, supplier lists and information, employee files (except for those
employees who do not become employees of WJ or the Purchaser Affiliates),
operating manuals, catalogs, technical, accounting, manufacturing, and
procedural manuals or information sheets, pricing sheets, advertising and
display materials, and brochures, and any confidential information and any other
materials and data associated exclusively with or used or employed by PD
directly and exclusively in the operation of the Contact Lens Products Business
as conducted by PD;
(f) All Intellectual Property (as defined in Section 2.16 hereof) and
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government approvals and permits issued to, or owned or used by, PD, and any
other rights to use such assets relating exclusively to or used directly and
exclusively in the operation of the Contact Lens Products Business as conducted
by PD including the right to xxx for past infringement;
(g) Except as provided in Section 6.9 hereof, all royalty rights,
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security deposits, and rights and claims to refunds and adjustments of any kind
relating exclusively to or arising exclusively out of the operation by PD of the
Contact Lens Products Business, other than any thereof included in the Excluded
Assets;
(h) All government licenses, franchises, certificates, orders,
approvals, registrations, and permits used exclusively in the operation of the
Contact Lens Products Business as conducted by PD to the extent transfer is
permitted by applicable law;
(i) All rights of PD under express or implied warranties relating
exclusively to the Contact Lens Products Business as conducted by PD;
(j) All accounts and notes receivable that relate exclusively or
directly to the Contact Lens Products Business as conducted by PD;
(k) All prepayments and prepaid expenses to the extent WJ or the
Purchaser Affiliates receive a benefit after Closing; and
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(l) Any additional items of tangible or intangible property used or
owned by PD which are not included above and which relate exclusively to or
are used directly and exclusively in the operation of the Contact Lens
Products Business as conducted by PD.
1.3 Assets Not Being Transferred. Anything contained in Section 1.2 or
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elsewhere herein to the contrary notwithstanding, there are expressly
excluded from the assets, properties, interests in properties and
rights to be sold, transferred, assigned, and delivered to Purchaser
or the Purchaser Affiliates at the Closing the following:
(a) All of the Seller's, Seller Affiliates' and PD's right, title, and
interest under or related to this Agreement, including, without limitation,
the consideration delivered to the Seller, Seller Affiliates and PD
pursuant to this Agreement;
(b) The capital stock of PD;
(c) All cash and bank accounts of PD;
(d) Except as provided in Section 5.2 hereof, any rights to the name
"Pilkington," or any other name using the word "Pilkington," or the
Pilkington logo; and
(e) All of PD's right, title, and interest relating to any assets,
rights, and properties of PD, wherever located, whether tangible or
intangible, not exclusively or directly related to the Contact Lens
Products Business as conducted by PD.
For convenience of reference, the assets, properties, interests in properties
and rights of PD described in this Section 1.3 which are not to be sold,
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transferred, conveyed, and assigned to the Purchaser or the Purchaser Affiliates
at the Closing are collectively referred to herein as the "Excluded Assets."
1.4 Assumed Liabilities. Neither Purchaser nor the Purchaser Affiliates
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shall assume any liabilities or obligations of PD to the extent that
they arise out of or relate to the ownership, use or operation of the
Acquired Assets on or prior to the Closing Date, whether fixed or
contingent, known or unknown, matured or unmatured, executory or non-
executory except for (a) accounts payable and accrued expenses to the
extent set forth on the statement of Closing Net Current Assets (as
hereinafter defined) provided in accordance with Section 1.7(f) below,
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and (b) the PD Foreign Employee (as hereinafter defined) liability to
the extent provided in Section 6.12 hereof. For convenience of
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references the foregoing liabilities and obligations of PD being
assumed by the Purchaser and the Purchaser Affiliates are collectively
referred to herein as the "Assumed Liabilities." The Purchaser and the
Purchaser Affiliates shall assume and discharge all (i) Assumed
Liabilities and (ii) liabilities or obligations of the Acquired
Subsidiaries to the extent that they arise out of or relate to the
ownership, use, or operation of the Acquired Assets after the Closing
Date.
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1.5 Liabilities Not Being Assumed. Except as expressly set forth in
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Section 1.4, neither the Purchaser, the Purchaser Affiliates, nor the
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Acquired Subsidiaries are assuming any liabilities or obligations,
whether fixed or contingent, known or unknown, matured or unmatured,
executory or non-executory, of Seller, the Seller Affiliates, or PD to
the extent they arise out of or relate to ownership, use or operation
of the Acquired Assets on or prior to the Closing Date, including but
not limited to:
(a) all short-term and long-term indebtedness for borrowed money and
all long-term liabilities, each as determined in accordance with U.K. GAAP
(as hereinafter defined), of PD incurred or arising on or prior to the
Closing Date;
(b) all liabilities and obligations of Seller, the Seller Affiliates,
or PD under this Agreement or with respect to or arising out of the
consummation of the transactions contemplated by this Agreement; and
(c) all liabilities and obligations of Seller, the Seller Affiliates,
or PD for fees and expenses and taxes incurred in connection with, relating
to, or arising out of the consummation of the transactions contemplated by
this Agreement.
For convenience of reference, the foregoing liabilities and obligations of the
Seller, the Seller Affiliates, and PD not being assumed by the Purchaser or the
Purchaser Affiliates are collectively referred to herein as the "Excluded
Liabilities." The Seller, the Seller Affiliates, and PD shall retain and
discharge all Excluded Liabilities.
1.6 Purchase Price. The aggregate purchase price to be paid by Purchaser
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to Seller for the Acquired Stock and the Acquired Assets (the
"Purchase Price") is (i) Seventy-Eight Million Eight Hundred
Seventy-Five Thousand and No/ 100 Dollars ($78,875,000), to be
adjusted in accordance with Sections 1.7 and 1.8 hereof, and (ii) the
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Assumed Liabilities, and will be paid as provided below:
(a) At the Closing, Purchaser shall pay the amount of Seventy-Three
Million Eight Hundred Seventy-Five Thousand and No/100 Dollars
($73,875,000), to be adjusted in accordance with Sections 1.7 and 1.8
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hereof, by wire transfer in immediately available funds to one or more bank
account(s) designated by Seller; and
(b) At the Closing, Purchaser shall deliver the executed promissory
note of Xxxxxx-Xxxxxx Holding, Inc., a Delaware corporation ("WJ Holding")
in the form of Exhibit A hereto (the "Note"), in favor of Xxxxxxxxxx
Holdings, Inc. in the amount of Five Million and No/100 Dollars
($5,000,000).
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1.7 Purchase Price Adjustment.
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(a) For purposes of this Agreement, "Net Current Assets" means the
excess of the consolidated current assets (excluding cash that Purchaser has not
requested Seller in writing to leave in the Acquired Subsidiaries and inventory)
of the Acquired Subsidiaries and, with respect to PD, the consolidated current
assets (excluding cash and inventory) to be transferred pursuant to this
Agreement over the consolidated current liabilities of the Acquired Subsidiaries
----
which are not required to be paid by Seller or the Seller Affiliates pursuant to
this Agreement, and, with respect to PD, the consolidated current liabilities
which are not required to be paid by Seller or the Seller Affiliates pursuant to
this Agreement (excluding, for the purposes of each of the foregoing
calculations, any liabilities, costs or obligations relating to the Contact Lens
Products Business' restructuring activities in Europe as described on Schedule
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1.7(a) hereto) (which schedule shall be updated by Seller as soon as practicable
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after the date hereof with Seller's list, with estimated redundancy costs
totaling not less than $3.2 million, of all employees which have been or are to
be made redundant as a result of such restructuring activities (the "European
Redundant Employees")) ("European Restructuring Activities"), up to but not
exceeding $7,319,000 less any amounts expended on such restructuring activities
on or prior to the Closing Date, short-term indebtedness for borrowed money and
any accrued interest related thereto and, without duplication, any liabilities
which are required to be paid by Seller or the Seller Affiliates pursuant to
this Agreement), each as determined in accordance with U.K. Generally Accepted
Accounting Principles ("U.K. GAAP") (subject to the absence of footnotes),
applied in a manner consistent with the accounting policies and procedures
attached as Schedule 1.7(b) hereto, to the extent in accordance with U.K. GAAP.
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(b) For purposes of this Agreement, "Capital Expenditures" means all
capital expenditures incurred solely in respect of the Contact Lens Products
Business (net of the proceeds related to the disposal or other sale of fixed
assets), all as determined in accordance with U.K. GAAP,
(c) At least ten (10) business days prior to the Closing, Pilkington
shall prepare and deliver to WJ (i) an unaudited estimated consolidated balance
sheet of the Contact Lens Products Business as of the Closing Date (the
"Estimated Closing Balance Sheet") prepared in accordance with U.K. GAAP
(subject to the absence of footnotes), applied in a manner consistent with the
accounting policies and procedures set forth on Schedule 1.7(b) attached hereto,
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to the extent in accordance with U.K. GAAP, which Estimated Closing Balance
Sheet shall reflect the estimated consolidated Net Current Assets of the Contact
Lens Products Business as of the close of business on the Closing Date (the
"Estimated Closing Net Current Assets") and the items reflected in Section 1.8,
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and (ii) an estimate of the Capital Expenditures of the Contact Lens Products
Business for the period commencing April 1, 1996 through and including the
Closing Date (the "Estimated CAPEX"); provided that if Pilkington and WJ cannot
agree upon the amounts to be included in the Estimated Closing Balance Sheet,
the Estimated Closing Net Current Assets, or Estimated CAPEX, such
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amounts shall be based upon the balances as of March 31, 1996 for Net Current
Assets or Target CAPEX, as defined in subsection (e) below.
(d) If Estimated Closing Net Current Assets are less than $15.1
million (the "Peg Number"), the cash portion of Lie Purchase Price shall be
decreased by the amount of such shortfall. If Estimated Closing Net Current
Assets are greater than the Peg Number, the cash portion of the Purchase Price
shall be increased by the amount of such excess. To the extent that the Peg
Number includes any amounts (i) for Taxes measured by or imposed on income, (ii)
which are required to be paid by Seller or its affiliates pursuant to this
Agreement, (iii) for management bonuses in excess of $1.0 million, or (iv) for
Japanese retirement allowances in excess of the calculation thereof on voluntary
basis, then the Peg Number will be increased dollar for dollar by such amounts.
(e) If Estimated CAPEX (determined on a daily basis) is less than (i)
$35,069 per day for the period from April 1, 1996 through and including any
Closing Date which occurs on or prior to June 30, 1996 and (ii) $17,534 per day
for the period from July 1, 1996 through and including any Closing Date which
occurs after June 30, 1996 (the amount derived from calculating (i) and (ii)
above for the period from April 1, 1996 through and including any Closing Date
shall be collectively referred to as the "Target CAPEX"), the cash portion of
the Purchase Price shall be decreased by the cumulative amount of such
shortfall.
For example, assume that Estimated CAPEX was comprised of $1 million spent
during each of April, May and June of 1996 and $100,000 spent through and
including an assumed closing date of July 15, 1996. In that case, Estimated
CAPEX would total $3.1 million. The required daily rates of $35,069 and
$17,534, respectively, would imply a Capital Expenditures requirement in that
period of $3,454,289, or $354,289 greater than Estimated CAPEX. Accordingly,
the cash portion of the Purchase Price would be reduced by $354,289.
(f) As promptly as practicable, but in no event later than one hundred
twenty (120) days after the Closing, WJ will deliver to Pilkington (i) an
audited consolidated balance sheet of the Contact Lens Products Business as of
the close of business on the Closing Date (the "Closing Balance Sheet") prepared
by a "Big Six" public accounting firm in accordance with U.K. GAAP, which shall
reflect the Net Current Assets of the Contact Lens Products Business as of the
close of business on the Closing Date (the "Closing Net Current Assets"), and
(ii) a statement of the Capital Expenditures of the Contact Lens Products
Business for the period commencing April 1, 1996 through and including the
Closing Date ("Actual CAPEX").
(g) If Pilkington disagrees with WJ's determination of Closing Net
Current Assets and/or Actual CAPEX, Pilkington shall notify WJ in writing of
such disagreement (such notice setting forth the basis for such disagreement in
reasonable detail) and WJ and Pilkington thereafter shall negotiate in good
faith to resolve any such disagreements. If WJ
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and Pilkington are unable to resolve any such disagreements within thirty (30)
days after WJ delivers the Closing Balance Sheet to Xxxxxxxxxx, XX and
Xxxxxxxxxx shall submit the dispute to a "Big Six" public accounting firm
jointly selected by WJ and Pilkington for resolution. If WJ and Pilkington are
unable to agree upon a "Big Six" public accounting firm, an accounting firm
shall be selected by lot from a list of up to four "Big Six" accounting firms
(excluding Price Waterhouse, Coopers & Xxxxxxx, or any other "Big Six" public
accounting firms retained pursuant to Section 1.7(c) or (f) above). The
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accounting firm ultimately selected pursuant to this paragraph is hereinafter
referred to as the "Independent Auditor."
(h) WJ and Pilkington shall use their reasonable best efforts to cause
the Independent Auditor to resolve all disagreements over the Closing Net
Current Assets and/or Actual CAPEX as soon as practicable, but in any event
within 60 days after submission of the disputes to the Independent Auditor. The
resolution of such disagreements and the determination of Closing Net Current
Asset and/or Actual CAPEX by the Independent Auditor shall be final and binding
on WJ and Pilkington and their respective affiliates. The costs and expenses of
the Independent Auditor shall be paid equally by WJ and Pilkington.
(i) If Closing Net Current Assets (as finally determined pursuant to
this Section 1.7) is greater than Estimated Closing Net Current Assets, WJ
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shall, within three (3) business days after Closing Net Current Assets are
finally determined pursuant to this Section 1.7, pay to Pilkington, in
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immediately available funds, such excess. If Closing Net Current Assets are less
than Estimated Closing Net Current Assets, Pilkington shall, within three (3)
business days after Closing Net Current Assets are finally determined pursuant
to this Section l.7, pay to WJ, in immediately available funds, such shortfall.
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(j) If Actual CAPEX is less than the lesser of (i) the Estimated CAPEX
or the Target CAPEX, Pilkington shall, within three (3) business days after
Actual CAPEX is finally determined pursuant to this Section 1.7, pay to WJ, in
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immediately available funds, such shortfall.
(k) Without duplication, all amounts owed pursuant to this Section 1.7
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shall include interest, from and excluding the Closing Date to and including the
date of payment, at the prime rate announced by Bankers Trust Company from time
to time, calculated on the basis of a 365-day year.
1.8 Other Purchase Price Ad
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(a) The cash portion of the Purchase Price shall also be decreased
dollar-for-dollar to the extent necessary to satisfy in full all of the Contact
Lens Products Business' liabilities, costs or obligations (except to the extent
reserved on the statement of Closing Net Current Assets or to the extent such
liabilities, costs, or obligations are required to be paid by Seller or the
Seller Affiliates pursuant to this Agreement) (i) relating to or arising from
its European Restructuring Activities up to, but not exceeding, $7,319,000 less
any amounts
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expended on such restructuring activities on or prior to the Closing Date
("European Restructuring Costs"), (ii) except as included in European
Restructuring Activities, relating to or arising from any employee terminations
effected or initiated on or prior to the Closing and any employment separation
agreements entered into on or prior to the Closing, (iii) for short-term and
long-term indebtedness for borrowed money and all other long-term liabilities,
including any accrued interest related thereto and all prepayment premiums and
penalties incurred in connection with any prepayment thereof in connection with
the transactions contemplated by this Agreement, and (iv) for the amount then
outstanding at the Closing Date under the intercompany loan described in Section
4.10 hereof (the reduction required by this subclause (iv) shall be calculated
at the exchange rate in effect on the Closing Date as published in The Wall
Street Journal, Eastern edition). In the event the liabilities, costs and
obligations referred to in the preceding sentence are not satisfied in cash on
or prior to the Closing Date, the amount necessary (as of the close of business
on the Closing Date) to satisfy in full such liabilities, costs and obligations
shall be deemed to be equal to the aggregate amount of accruals and reserves
recorded in the Estimated Closing Balance Sheet. Except with respect to the
European Restructuring Costs, if the aggregate amount of such liabilities, costs
and obligations is later determined to be greater than the deemed amount
described in the preceding sentence, then Xxxxxxxxxx shall, within three (3)
business days after such actual amount is determined, pay to WJ, in immediately
available funds, the amount of such excess (which amount shall be treated by the
parties as a reduction to the Purchase Price). Without duplication, all amounts
owed pursuant to the preceding sentence shall include interest, from and
excluding the Closing Date to and including the date of payment, at the prime
rate announced by Bankers Trust Company from time to time, calculated on the
basis of a 365-day year.
(b) The calculation of any adjustment required pursuant to this
Section 1.8, as well as any disputes which may arise in connection therewith,
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shall be governed by the procedural mechanisms and dispute resolution mechanisms
set forth in Section 1.7 (e.g., any dispute shall be submitted to the
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Independent Auditor) of this Agreement (including but not limited to the
procedural estimate mechanisms contemplated in Section 1.7(c)).
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1.9 Allocation of Purchase Price. The Purchase Price to be paid by Purchaser
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for the Acquired Assets and the Acquired Stock shall be allocated as
provided on Schedule 1.9, and that allocation shall be reported by both
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Purchaser and the Purchaser Affiliates, and Seller and the Seller
Affiliates to all applicable taxing authorities.
1.10 Foreign Agreements. Subject to the provisions of Section 6.10, Xxxxxxxxxx
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and WJ shall pursuant to, and in accordance with, the terms of this
Agreement enter into, or cause the Seller Affiliates or the Purchaser
Affiliates, as the case may be, to enter into, on or prior to the Closing
Date, separate agreements (the "Foreign Agreements") for the purchase and
sale of (i) the assets and liabilities of PD, as more particularly
described in this Article 1, and (ii) the Acquired Stock of PBH Services,
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PBH NV,
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PBH France, PBH BV, PBH SpA, PBH Ltd., and Diffractive (the "Non-U.S.
Subsidiaries"). The Foreign Agreements shall be in substantially the
form attached hereto as Exhibits B-1, B-2, or C, as appropriate, with
such modifications as are necessary and appropriate as a result of
differences in local law, in order to maintain the same legal
meaning, effect and risk allocation as provided for in this
Agreement.
ARTICLE 2
REPRESENTATIONS AND WARRANTEES OF SELLER
As of the date hereof and as of the Closing Date, Seller hereby represents
and warrants to Purchaser the following:
2.1 Organization and Standing. Each of the Acquired Subsidiaries and PD
-------------------------
is a corporation duly organized, validly existing, and in good
standing under the laws of its jurisdiction of incorporation as
described on Schedule 2.1. hereto (to the extent such concept is
------------
relevant in such jurisdiction). Each of the Acquired Subsidiaries has
all necessary corporate power and authority to own its property and to
engage in the Contact Lens Products Business throughout the world in
which it is presently engaged. PD has all necessary corporate power
and authority to own and operate all of the Acquired Assets and to
engage in the Contact Lens Products Business as currently conducted by
PD. Each of the Acquired Subsidiaries and PD is qualified to do
business as a foreign corporation in all jurisdictions where the
nature of its business requires such qualification.
2.2 Authority of Seller. Seller has full right, power and authority to
-------------------
enter into this Agreement, and Seller and each Seller Affiliate has or
will have full right, power and authority to enter into each
agreement, document and instrument to be executed and delivered by it
pursuant to or as contemplated by this Agreement and to carry out the
transactions contemplated hereby and thereby on its part to be
performed. The execution, delivery, and performance by Seller of this
Agreement and by Seller and the Seller Affiliates of each such other
agreement, document and instrument has been or will be duly authorized
by all necessary corporate action of Seller or such Seller Affiliate
and no other corporate action on the part of Seller or such Seller
Affiliate is required in connection therewith. This Agreement and each
agreement, document and instrument to be executed and delivered by
Seller or any of the Seller Affiliates pursuant to or as contemplated
by this Agreement constitute, or will when executed and delivered
constitute, valid and binding obligations of Seller or such Seller
Affiliate, enforceable in accordance with their respective terms,
subject to the application by a court of general principles of equity
and to the effect of any applicable bankruptcy, insolvency,
reorganization, moratorium, or similar laws. Except as disclosed on
any schedule to this Agreement, the execution, delivery and
performance by Seller of this Agreement and by Seller and the Seller
Affiliates of
-12-
each such other agreement, document and instrument: (i) do not and
will not violate any provision of the charter or by-laws of Seller,
the Seller Affiliates, or the Acquired Subsidiaries; (ii) do not and
will not violate any currently effective laws, rules, or regulations
of the United States or any state or other jurisdiction, applicable to
Seller, the Seller Affiliates, the Acquired Subsidiaries or PD or
require Seller, the Seller Affiliates or the Acquired Subsidiaries or
PD to obtain any approval, consent or waiver of, or make any filing
with, any person or entity (governmental or otherwise) that has not
been obtained or made and (iii) do not and will not (A) conflict with
or result in the breach of any of the provisions of, (B) constitute a
default under, (C) result in the violation of, (D) give any third
party the right to terminate or accelerate (including after the giving
of notice or lapse of time or both) any obligation under, or (E)
result in the creation of any mortgage, pledge, security interest,
conditional sale or other title retention agreement, encumbrance,
lien, easement, option, debt, charge, claim or restriction of any kind
or nature (collectively, "Liens") upon the Acquired Stock or the
-----
Acquired Assets under any indenture, mortgage, lease, loan agreement
or instrument by which Seller, the Seller Affiliates, PD or any of the
Acquired Subsidiaries are currently bound or affected.
2.3 Ownership of Capital Stock: Related Rights.
------------------------------------------
(a) The authorized and issued capital stock of each Acquired
Subsidiary, (collectively constituting the Acquired Stock) is set forth on
Schedule 2.3 hereto. All of the Acquired Stock is owned by Seller, the Seller
Affiliates, or one of Seller's nominees as disclosed on Schedule 2.3 hereto and
------------
has been duly authorized, validly issued and is fully paid and nonassessable.
Upon delivery to Purchaser or the Purchaser Affiliates at the Closing of the
certificates representing the Acquired Stock duly endorsed in blank for transfer
or with stock powers attached duly executed in blank, or upon the execution of
such other documents as are required for the transfer of shares in the
respective jurisdiction of incorporation, against delivery of the consideration
therefor described in Article 1 hereof, good and valid title to the Acquired
Stock shall be transferred to Purchaser or the Purchaser Affiliates, free and
clear of any Liens.
(b) Except as set forth on Schedule 2.3 hereto, there are no
------------
outstanding subscriptions, options, warrants, obligations, agreements,
arrangements or commitments of any kind for or relating to the issuance, or sale
of, or outstanding securities convertible into or exchangeable for, any shares
of capital stock of any class or other equity interest of the Acquired
Subsidiaries. There are no preemptive rights, rights of first refusal or similar
rights to acquire the Acquired Stock in connection with the transactions
contemplated by this Agreement or otherwise. Except as provided in Schedule 2.3
------------
hereto, there are no restrictions on the transfer of the Acquired Stock by
Seller or the Seller Affiliates, other than those imposed by relevant state,
federal, national, or foreign securities laws. The Acquired Subsidiaries have
no obligation to purchase, redeem or otherwise acquire any of the Acquired
Stock, and there are no voting trusts or proxies binding upon Seller or the
Seller
-13-
Affiliates relating to any of the Acquired Stock. There are no outstanding or
authorized stock appreciation, phantom stock or similar rights with respect to
any of the Acquired Subsidiaries.
2.4 Subsidiaries. Except as disclosed on Schedule 2.4 hereto, none of the
------------ ------------
Acquired Subsidiaries owns or controls, directly or indirectly, any
capital stock or other securities or any other interest or investment
(whether equity or debt) in any entity.
2.5 Financial Statements. Seller has delivered or will deliver to
--------------------
Purchaser: (i) the audited consolidated balance sheet for the Contact
Lens Products Business as of March 31, 1996, and the related audited
consolidated statements of operations and cash flows for the fiscal
year then ended (collectively, the "U.S. Statements"), which U.S.
Statements have been or will be prepared in accordance with United
States generally accepted accounting principles ("United States
GAAP"), consistently applied; and (ii) the consolidated balance sheet
for the Contact Lens Products Business as of March 31, 1996 (the
"Latest Balance Sheet") and the related consolidated statements of
operations for the fiscal year then ended (collectively, the " U. K.
Statements "), which U.K. Statements have been prepared in accordance
with U.K. GAAP, consistently applied. The U.K. Statements are attached
hereto as Schedule 2.5. The U.K. Statements and the U.S. Statements
------------
shall collectively be referred to herein as the "Financial
Statements." The Financial Statements present or will present fairly
and accurately, in all material respects, as of their respective times
and periods, the financial condition and results of operations and
cash flows of the Contact Lens Products Business, for such times and
periods, and are or will be correct and complete in all material
respects, and are or will be consistent with the books and records of
the Acquired Subsidiaries and PD.
2.6 Labor and Employment Matters. Except as disclosed on Schedule 2.6
---------------------------- ------------
hereto, none of the Acquired Subsidiaries or, with respect to the
Contact Lens Products Business, PD, is a party to any collective
bargaining agreement with any labor union or association; there are no
discussions, negotiations, demands, or proposals that are pending or
that have been conducted or made with or by any labor union or
association; and there are no pending or, to the Seller's or the
Seller Affiliates' knowledge, threatened labor disputes, strikes, or
work stoppages. Except as disclosed on Schedule 2.6 hereto, each of
------------
the Acquired Subsidiaries and, with respect to the Contact Lens
Products Business, PD, is in Material (as defined in Section 11. 22
----------
hereof) compliance with all foreign, federal, state, and local laws
respecting employment and employment practices, terms and conditions
of employment, and wages and hours, that in anyway relate to the
Employees (as defined in Section 2.18 below).
-14-
2.7 Title and Condition of Acquired Assets.
--------------------------------------
(a) Except as otherwise disclosed on Schedule 2.7 hereto and excluding
------------
the Excluded Assets, (i) each Acquired Subsidiary has good and marketable title
to its respective tangible property used in the Contact Lens Products Business
and (ii) PD has good and marketable title to the Acquired Assets, in each case
free and clear of any and all Liens; provided that the foregoing representation
and warranty shall not include any representation or warranty regarding Real
Property or Intellectual Property, which are covered by Sections 2.9 and 2.16,
------------ ----
respectively. For purposes of this Agreement, "Acquired Subsidiaries' Assets"
shall mean all tangible and intangible property used in the Contact Lens
Products Business. All of the Acquired Subsidiaries' Assets and the Acquired
Assets are in good operating condition and repair, normal wear and tear
excepted.
(b) The Acquired Subsidiaries' Assets and the Acquired Assets include
all assets used by the Acquired Subsidiaries and PD in the operation of the
Contact Lens Products Business. Seller represents and warrants that (i) the
level and category of transitional services to be provided to the Contact Lens
Products Business pursuant to the Transition Services Agreement (as hereinafter
defined) are sufficient to operate the Contact Lens Products Business as it is
currently conducted, and (ii) the price or cost of each transitional service to
be provided to the Contact Lens Products Business in the Transition Services
Agreement is based on the direct actual historical price or cost of such service
and is reflected in the Financial Statements.
2.8 No Material Change. Except as disclosed on Schedule 2.8 hereto, there
------------------ ------------
have not been any:
(a) Transactions by any Acquired Subsidiary or PD affecting the
Contact Lens Products Business since December 31, 1995, except in the ordinary
course of business;
(b) A material and adverse effect upon the business, assets, financial
condition, or operating results of the Contact Lens Products Business since
March 31, 1996 (a "Material Adverse Change");
(c) Labor disputes materially and adversely affecting the Contact Lens
Products Business since December 31, 1995;
(d) Amendment or termination of any contract, agreement, or license
material to the Contact Lens Products Business or to which the Contact Lens
Products Business, the Acquired Subsidiaries' Assets or Acquired Assets are
subject since March 31, 1996, except in the ordinary course of business as
conducted on that date;
-15-
(e) Citations received for any violations of the Federal Occupational
Safety and Health Act of 1970 or any rules or regulations promulgated thereunder
with respect to the Contact Lens Products Business since December 31, 1995;
(f) Waiver or release of any right or claim of any Acquired Subsidiary
or, with respect to the Contact Lens Products Business, of PD, since December
31, 1995, except in the ordinary course of business;
(g) Sales, transfers, or disposals of, or agreements to sell,
transfer, or otherwise dispose of any of the Acquired Subsidiaries' Assets or
the Acquired Assets, since December 31, 1995, except in the ordinary course of
business;
(h) Agreements entered into granting any rights to purchase any of the
Acquired Subsidiaries' Assets or the Acquired Assets (including management and
control thereof), or requiring the consent of any party to the transfer and
assignment of the Acquired Subsidiaries' Assets or the Acquired Assets
(including management and control thereof) since December 31, 1995, except in
the ordinary course of business;
(i) Grants of any bonuses or any wage or salary increase to any
employee, officer or director of the Contact Lens Products Business, or any
other material change in employment terms for any such employee, officer or
director since December 31, 1995, other than grants or increases in the ordinary
course of business;
(j) Grants of any increases in, or amendments to or terminations of
any existing employee benefit plan, program, policy or arrangement or adoption
of any new employee benefit plan or arrangement of the Acquired Subs,.diaries
or, with respect to the Contact Lens Products Business, of PD, since March 31,
1996;
(k) Changes to any advertising or promotional programs of the Acquired
Subsidiaries or, with respect to the Contact Lens Products Business, of PD,
since December 31, 1995, other than in the ordinary course of business;
(l) Changes in any sales practices or credit terms of the Acquired
Subsidiaries or, with respect to the Contact Lens Products Business, of PD,
since December 31, 1995, except in the ordinary course of business; or
(m) Agreement or understanding whether in writing or otherwise, for
any of the Acquired Subsidiaries or, with respect to the Contact Lens Products
Business for PD to take any of the actions to do any of the things described in
the preceding clauses (a) through (1) since December 31, 1995.
-16-
2.9 Real Property.
-------------
(a) Schedule 2.9 hereto correctly identifies all real property leased
------------
or subleased (as lessee or lessor) by any of the Acquired Subsidiaries or, with
respect to PD, exclusively in connection with the Contact Lens Products Business
(the "Leased Property"), and Seller has delivered, or caused to be delivered, to
Purchaser all binding leases, agreements, and subleases, and any amendments
thereto with respect to such Leased Property (the "Leases"). The Leases are in
full force and effect, and there are no existing defaults or any events that
with the passage of time or the giving of notice, or both, would constitute an
event of default by any of the Acquired Subsidiaries or PD under any Lease or,
to Seller's and the Seller Affiliates' knowledge, by any other party to any
Lease. Except as described on Schedule 2.9, no consent, waiver, approval or
------------
authorization is required from the landlord or lessee under any Lease as a
result of the execution of this Agreement or the consummation of the
transactions contemplated hereby.
(b) Schedule 2.9 hereto contains a complete and accurate legal
------------
description of each parcel of real property owned by the Acquired Subsidiaries
or, with respect to PD, exclusively in connection with the Contact Lens Products
Business (the "Owned Property"; the Leased Property and the Owned Property are
collectively referred to as the "Real Property").
(c) The owner or lessee identified in Schedule 2.9 hereto has good and
------------
marketable title to the Owned Property or a good and valid leasehold interest in
the Leased Property, in each case free and clear of any Lien except for
installments of real property taxes not yet due and payable, special assessments
not yet delinquent, and recorded easements, covenants, and other restrictions
that do not adversely affect the conduct of the Contact Lens Products Business
and that have not been violated (the "Permitted Encumbrances"). There are no
pending or, to Seller's and the Seller Affiliates' knowledge, threatened
condemnation proceedings, lawsuits, or administrative actions relating to the
Real Property. Except as set forth on Schedule 2.9, other than PD and the
------------
Acquired Subsidiaries, there are no parties in possession or parties having any
rights to occupy any of the Real Property.
(d) (i) All improvements made by the Acquired Subsidiaries on the Real
Property have received all approvals of governmental authorities (including
licenses and permits) required in connection with the ownership or operation
thereof, and (ii) all such improvements have been operated and maintained in
Material compliance with applicable laws, rules, and regulations.
(e) There are no outstanding options or rights of first refusal to
purchase the Owned Property, or any portion thereof or interest therein.
2.10 Litigation. Except as set forth on Schedule 2.10 hereto, there are
---------- -------------
no suits, claims, actions, arbitrations, investigations, or
proceedings, now pending, or, to the Seller's
-17-
and the Seller Affiliates' knowledge, threatened against any of
the Acquired Subsidiaries, the Acquired Assets or the Acquired
Stock or, with respect to PD, Seller, or the Seller Affiliates,
relating to the Contact Lens Products Business, before any court,
arbitration, administrative or regulatory body, or any
governmental or quasi-governmental agency. Except as set forth on
Schedule 2.10 hereto, none of the Acquired Subsidiaries, PD, the
-------------
Acquired Assets, the Acquired Stock, Seller, nor the Seller
Affiliates (in the case of Seller, the Seller Affiliates, and PD,
with respect to the Contact Lens Products Business) is subject to
any continuing court or administrative order, writ, injunction, or
decree and none of the Seller, the Seller Affiliates, PD (in the
case of Seller, the Seller Affiliates, and PD, with respect to the
Contact Lens Products Business), or the Acquired Subsidiaries is
in default with respect to any order, writ, injunction, or decree
of any court or federal, state, municipal, or other governmental
department, commission, board, agency, or instrumentality.
2.11 Consents. Except as otherwise disclosed on Schedules 2.9 and 2.11
-------- ----------------------
hereto, none of Seller, the Seller Affiliates, the Acquired
Subsidiaries, or PD is required to make any filing with, or obtain
any permit, authorization, consents or other approvals of any
court, arbitrational tribunal, or regulatory authority or
governmental agency, bureau, or authority, or other person,
including any licensor, lender, vendor, or lessor in order to
effect the transaction contemplated hereby, other than any filing,
permit, authorization, consent, or approval that if not obtained
or made would not have a Material adverse effect on the Contact
Lens Products Business or the Acquired Assets or the Acquired
Stock or on the ability of the Seller or the Seller' Affiliates to
consummate the transactions contemplated by this Agreement.
2.12 Taxes. All tax reports and returns to be filed in respect of any
-----
of Acquired Subsidiaries or, with respect to the Contact Lens
Products Business, PD, or the Acquired Assets or the Acquired
Stock have been filed and all taxes shown to be due on such tax
returns or reports or claimed to be due from any of the Acquired
Subsidiaries or, with respect to the Contact Lens Products
Business, PD, or the Acquired Assets or the Acquired Stock by
foreign, federal, state, or local taxing authorities (including,
without limitation, those due in respect of properties, income,
franchise, licenses, sales, and payrolls, as well as any interest
or penalties thereon) (the "Taxes") have been paid. Neither of the
Seller nor the Seller Affiliates has any knowledge of any state of
facts which would constitute grounds for the assessment of any
Material tax liability against any of the Acquired Subsidiaries
or, with respect to the Contact Lens Products Business, PD, with
respect to any tax reports and returns filed. None of the Acquired
Subsidiaries or PD has caused or permitted a change in any method
of accounting for tax purposes during or applicable to its current
tax year which would render inaccurate, misleading, or incomplete
the information concerning taxes set forth in or referred to in
this Section 2.12, or which would have an adverse effect on the
------------
Contact Lens Products Business or the Acquired
-18-
Assets or the Acquired Stock for any period ending on or before
the Closing Date. Except as otherwise disclosed on Schedule 2.12
-------------
hereto, (i) no claim has been made during the past three (3)
fiscal years by a taxing authority in a jurisdiction where an
Acquired Subsidiary does not file tax returns or reports that such
entity is or may be subject to Taxes assessed by such
jurisdiction; (ii) the Acquired Subsidiaries have not made any
payments, or are or shall become obligated (under any contract
entered into on or before the Closing Date) to make any payments,
that shall be nondeductible under Section 280G of the Internal
Revenue Code of 1986, as amended (the "Code") (or any
corresponding provision of state, local or foreign income Tax
law); and (iii) the Acquired Subsidiaries will not be required as
a result of (A) a change in method of accounting for a taxable
year ending on or prior to the Closing Date, (B) any "closing
agreement," as described in Section 7121 of the Code (or any
corresponding provision of state, local or foreign income Tax
law), or (C) any deferred intercompany gain described in Treasury
Regulation (S) 1. 150213 or any excess loss account described in
Treasury Regulation (S) 1. 1502-19 (or any corresponding or
similar provision or administrative rule of federal, state, local
or foreign income tax law) to include any item of income or
adjustment in taxable income or exclude any item of deduction from
taxable income for any taxable year or portion thereof beginning
after the Closing Date. PBH International has regular United
States federal income Tax net operating loss carryforwards equal
to at least $10 million as of March 31, 1996. There are not, and
since April 1, 1993 have not been, any written agreements that
memorialize any purchasing arrangements between or among any of
the Acquired Subsidiaries or between or among any of the Acquired
Subsidiaries and, with respect to the Contact Lens Products
Business, PD, that would be inconsistent with and would adversely
impact the conversion of any Acquired Subsidiary to a
commissionaire or agent.
2.13 Licenses and Permits. Except as provided on Schedule 2.13, each of
-------------------- -------------
the Acquired Subsidiaries and PD has, in fall force and effect,
all of the foreign, federal, state, or local governmental
licenses, franchises, certificates, orders, approvals,
registrations, and permits (collectively, the "Permits") that are
necessary to the operation of the Contact Lens Products Business
by the Acquired Subsidiaries and PD. Schedule 2.13 contains a
-------------
listing of all Material Permits. Each of the Acquired Subsidiaries
and PD is in compliance with the terms and conditions of the
Permits on Schedule 2.13 and has received no notices that it is in
-------------
violation of any of the terms or conditions of such Permits.
2.14 Compliance with Laws. Except as provided on Schedule 2.14:
-------------------- -------------
(a) None of the Acquired Subsidiaries or PD is in default under or in
violation of any applicable statute, law, ordinance, decree, order, rule,
regulation, franchise, permit, premarket approvals or license of any
governmental body, which default or violation has or may have a Material adverse
effect upon the Acquired Assets or the Acquired Stock, or
-19-
which would prohibit or impair the Seller's performance of this Agreement or the
transactions contemplated hereby;
(b) Since April 1, 1993, neither the Acquired Subsidiaries nor PD has
received any notice of, or is subject to, any adverse inspection, finding of
deficiency, finding of non-compliance, compelled or voluntary recall,
investigation, penalty, fine, sanction, assessment, request for corrective or
remedial action or other compliance or enforcement action, in each case relating
to any products or goods designed, manufactured, merchandised, distributed,
serviced or sold (or proposed to be designed, manufactured, merchandised,
distributed, serviced or sold) by the Contact Lens Products Business on or prior
to the Closing Date (the "Products") or to the facilities in which the Products
--------
are designed, manufactured, merchandised, serviced, distributed, sold, delivered
or handled by any of the Acquired Subsidiaries or PD, by the Food and Drug
Administration (the "FDA"), or by any other federal, state, local or foreign
---
authority having or asserting responsibility for the regulation of the Products
("Other Authorities");
-----------------
(c) Each of the Acquired Subsidiaries and PD has obtained all
necessary approvals, registrations and authorizations from, has made all
necessary and appropriate applications and other submissions to, and has
prepared and maintained all records, studies and other documentation needed to
satisfy and demonstrate compliance with the requirements of the FDA and Other
Authorities for its current business activities relating to the Products;
(d) Each Acquired Subsidiary and PD is in compliance in all Material
respects with all applicable regulations and requirements of the FDA and Other
Authorities relating to the Products, including without limitation any good
manufacturing or handling practices, requirements for demonstrating and
maintaining the safety and efficacy of the Products, export requirements,
certificates of export, requirements for investigating customer complaints and
inquiries, labeling requirements and protocols, shipping requirements,
monitoring requirements, packaging or repackaging requirements, laboratory
controls, sterility requirements, inventory controls and storage and warehousing
procedures;
(e) All Products included in the inventory of the Acquired
Subsidiaries and PD being conveyed to Purchaser or the Purchaser Affiliates at
Closing comply in all respects with current applicable FDA requirements and were
handled by each Acquired Subsidiary and PD in conformity with current applicable
FDA requirements and
(f) No Acquired Subsidiary nor PD has received any written
notification, which remains Unresolved as of the .ate hereof, from the FDA, FDA
personnel or Other Authorities indicating that any Product is unsafe or
ineffective for its intended use.
-20-
2.15 Contracts.
---------
(a) Except for contracts, commitments, plans, agreements and
licenses described in Schedule 2.15 hereto (true and complete copies of
-------------
which have been delivered to the Purchaser), none of the Acquired
Subsidiaries nor, with respect to the Contact Lens Products Business, PD,
is a party to or subject to:
(i) any plan or contract or agreement providing for bonuses,
pensions, options, stock purchases, deferred compensation, retirement
payments, profit sharing, collective bargaining or the like, or any
contract or agreement with any labor union;
(ii) any employment contract or independent contractor
agreement which requires the payment of more than $30,000 annually or
which is not terminable within 30 days by such Acquired Subsidiary or
PD without liability for any penalty or severance payment;
(iii) any contract or agreement for the purchase of any
commodity, material or equipment, except purchase orders in the
ordinary course for less than $10,000 (as disclosed up to and
including June 17, 1996);
(iv) any other contracts or agreements creating any
obligations of such Acquired Subsidiary or PD of $50,000 or more
annually with respect to any such contract or agreement not
specifically disclosed elsewhere under this Agreement;
(v) any contract or agreement providing for the purchase of
all or substantially all of its requirements of a particular product
from a supplier;
(vi) any contract or agreement for the sale, lease or license
of Acquired Subsidiary Assets or Acquired Assets not made in the
ordinary course of business;
(vii) any contract with any sales agent, supplier, or
distributor of products of such Acquired Subsidiary or PD that is not
terminable without penalty within ninety (90) days;
(viii) any indenture, mortgage, promissory note, loan agreement,
guaranty or other agreement or commitment for the borrowing of money;
(ix) any contract or agreement with Seller, any of the Seller
Affiliates, or any officer, employee, director or stockholder of
Seller, any of the Seller Affiliates, any Acquired Subsidiary or PD
or with any persons or organizations controlled by or affiliated with
it;
-21-
(x) any license, sublicense or royalty agreement which
requires the payment of more than $50,000 annually or is otherwise
material to the Contact Lens Products Business;
(xi) any consulting, promotional or advertising agreement
(including, without limitation, any agreement that obligates any
Acquired Subsidiary or PD to endorse or promote the products of any
unaffiliated party) that requires the payment of more than $30,000
annually or that is not terminable within 30 days by such Acquired
Subsidiary or PD without liability for any penalty or severance
payment; or
(xii) any contract or agreement which prohibits it from freely
engaging in business anywhere in the world.
(b) No condition or event or fact exists which, with notice, lapse
of time or both would constitute a default under any Contract (as
hereinafter defined) on the part of the Acquired Subsidiaries or PD or, to
the knowledge of Seller or the Seller Affiliates, any other party thereto.
Except as disclosed on Schedule 2.15: (i) none of the other parties to such
-------------
Contracts has given notice to PD or any Acquired Subsidiary that it intends
to terminate or materially alter the provisions of such Contracts; and (ii)
neither PD nor any Acquired Subsidiary has given notice to any other party
that it intends to terminate or materially alter the provisions of such
Contracts.
All contracts, agreements, commitments, and arrangements required to be
disclosed on Schedule 2.15 are referred to herein as "Contracts".
-------------
2.16 Intellectual Property.
---------------------
(a) PD and the Acquired Subsidiaries own all right, title and
interest in and to, or have an effective written license to use, all of the
Intellectual Property (as defined below) necessary for or otherwise used in
the operation of the Contact Lens Products Business as presently conducted
and as presently proposed to be conducted by PD and the Acquired
Subsidiaries; and each item of Intellectual Property owned or used by PD
and the Acquired Subsidiaries in the operation of the Contact Lens Products
Business immediately prior to the Closing hereunder will be owned or
available for use by the Purchaser or the Purchaser Affiliates on identical
terms and conditions immediately subsequent to the Closing hereunder.
(b) Patents and Patent Applications. Schedule 2.16 hereto sets
forth all patents and patent applications owned by the Acquired
Subsidiaries, PD, Seller or the Seller Affiliates and used in the operation
of the Contact Lens Products Business. With respect to all such patents and
patent applications, except as specifically set forth in Schedule 2.16
hereto:
-22-
(1) The entity listed in Schedule 2.16 hereto as the owner of any
-------------
patent or patent application is the sole and exclusive owner of the entire
right, title and interest in and to such patent or patent application and
any and all related know-how, and has the right to assign or will arrange
on or prior to Closing or as soon as practicable thereafter, at no
additional cost to Purchaser, the Purchaser Affiliates or the Acquired
Subsidiaries, for the assignment and transfer of the same to one of the
Acquired Subsidiaries or WJ GmbH, as the case may be;
(2) Such patents and patent applications and related know-how are
free of any encumbrances, including, without ',imitation, Liens, licenses,
judgments and security interests, and all such patents and patent
applications are in full force and effect; and
(3) To Seller's knowledge, none of such patents or patent
applications are the current subject of any interference, opposition,
reissue or reexamination proceeding.
(c) Intellectual Property Licenses: Schedule 2.16 hereto sets forth
------------------------------ -------------
all license agreements (other than computer software license agreements which
are described in the succeeding sentence) owned or used by the Acquired
Subsidiaries or, with respect to Seller, PD, or the Seller Affiliates, used in
the operation of the Contact Lens Products Business and all license agreements
granted by PD or the Acquired Subsidiaries. Schedule 2.16 also sets forth all
-------------
Material computer software owned, licensed or used on the SAP system by the
Acquired Subsidiaries or, with respect to PD, used in the operation of the
Contact Lens Products Business. With respect to all such license agreements that
relate to the Intellectual Property used by the Acquired Subsidiaries or, with
respect to PD, used in the operation of the Contact Lens Products Business,
except as specifically set forth in Schedule 2.16 hereto, all of such license
-------------
agreements have been fully executed and are in full force and effect as of the
date hereof, and, to Seller's and the Seller Affiliates' knowledge, no party to
any such license agreement is in material breach thereof.
(d) Consulting Agreements: Except as set forth on Schedule 2.16
---------------------
hereto, there are no consulting agreements in effect which are binding upon any
Acquired Subsidiary, or with respect to the Contact Lens Products Business, PD.
(e) Research and Development Projects: Schedule 2.16 hereto sets forth
--------------------------------- -------------
all current research and development (R&D) projects relating primarily to the
Contact Lens Products Business. With respect to all such R&D projects,
Schedule 2.16 sets forth a brief description of the objective of the R&D project
-------------
and a summary of the work conducted.
(f) Trademarks, Copyrights, Etc.: Schedule 2.16 hereto sets forth all
---------------------------- -------------
copyright and trademark registrations and applications relating to the Contact
Lens Products Business (the "Trademarks"). With respect to the Trademarks,
except as stated in Schedule 2.16
-------------
-23-
hereof, the Acquired Subsidiaries or PD are the sole and exclusive owners of the
entire right, title and interest in and to the Trademarks, and have the right to
assign and transfer the same to Purchaser or the Purchaser Affiliates under this
Agreement. In this regard, Seller represents and warrants that the Trademarks
are free of any encumbrances, including, without limitation, liens, licenses,
judgments, restrictions and/or security interests and that, to Seller's
knowledge, no Trademark is the current subject of any interference or opposition
proceeding before any court or any administrative agency.
(g) Except as set forth on Schedule 2.16 hereto, neither PD nor Seller
-------------
nor the Seller Affiliates nor any of the Acquired Subsidiaries is aware of any
infringement or misappropriation by any third party with respect to the
Intellectual Property owned or used by the Acquired Subsidiaries or, with
respect to PD, used in the operation of the Contact Lens Products Business; none
of the Acquired Subsidiaries nor, with respect to the Contact Lens Products
Business, PD, has received any claim from any third party that it has infringed,
misappropriated or otherwise conflicted with any Intellectual Property rights of
any third party relating to the Contact Lens Products Business, including,
without limitation, any demand or request that PD or any of the Acquired
Subsidiaries license any such rights from any third party; and neither PD nor
any of the Acquired Subsidiaries has made any claim against any third party that
such third party has infringed, misappropriated or otherwise conflicted with any
Intellectual Property rights of any Acquired Subsidiary or, with respect to the
Contact Lens Products Business, PD.
(h) As used herein, "Intellectual Property" shall mean: all patents;
all trademarks, service marks, trade dress and trade names and all the goodwill
associated therewith; all copyrights; all registrations, applications and
renewals for any of the foregoing; all inventions and invention disclosures; all
trade secrets, confidential information and know-how; and all other proprietary
rights, including, without limitation, computer software, data, data bases and
related documentation.
2.17 Environmental Matters. Except as disclosed on Schedule 2.17 hereto:
--------------------- -------------
(a) The Acquired Subsidiaries and, with respect to the Contact Lens
Products Business, PD, as well as all property, facilities, machinery, or
equipment owned, operated or used by any of the Acquired Subsidiaries or, with
respect to the Contact Lens Products Business, PD, and all of the Acquired
Subsidiaries' Assets and the Acquired Assets have complied and are in compliance
with all applicable Environmental, Health, and Safety Laws (defined below),
including but not limited to laws relating to the generation, use, sale,
storage, handling, transfer, recycling, or disposal of any Hazardous Substance
(defined below).
(b) Neither Seller nor any Seller Affiliate nor PD (each with respect to
the Contact Lens Products Business) nor any of the Acquired Subsidiaries has
received any notice alleging violation of or liability under any Environmental,
Health, and Safety Laws
-24-
from any governmental authority or third party; and no claim, action, or
lawsuit by any public or private entity has been received or filed against
any of the Acquired Subsidiaries or, with respect to the Contact Lens
Products Business, PD, relating directly or indirectly to any violation of
or liability under any of the Environmental, Health, and Safety Laws, and,
to Seller's and the Seller Affiliates' knowledge, no such claim, action, or
lawsuit is threatened.
(c) The Acquired Subsidiaries or PD have obtained all permits
required under Environmental, Health and Safety Laws for ownership or
operation of the Acquired Assets or the Acquired Subsidiaries' Assets; such
permits have been maintained and are in full force and effect; the Acquired
Subsidiaries or PD are in Material compliance with such permits; and (i) as
to the Acquired Assets, such permits will be transferred to Purchaser or
the Purchaser Affiliates at the Closing, except as disclosed on Schedule
--------
2.17 hereto, and (ii) as to the Acquired Subsidiaries, such permits may be
----
relied upon for continued lawful operation of the Contact Lens Products
Business after Closing without transfer, reissuance or other governmental
action for the remainder of the term of such permits, except as disclosed
on Schedule 2.17 hereto.
-------------
(d) None of the Acquired Subsidiaries or PD is in violation of any
decree, order, permit, license, statute, or regulation relating to health,
safety or the environment.
(e) There are no Hazardous Substances at any of the Owned Property,
and at no time prior to the Closing has any spill, release, discharge, or
disposal of Hazardous Substances occurred at, on, under, or from the Owned
Property.
(f) Neither the Acquired Subsidiaries nor PD treats, recycles,
stores or disposes of any Hazardous Substance on-site such as to require
issuance of any governmental permit.
(g) No liens arising under any Environmental, Health, and Safety
Laws have attached to any of the Acquired Assets or the Acquired
Subsidiaries' Assets or the property, facilities, machinery, or equipment
owned, operated or used by any of the Acquired Subsidiaries.
(h) Neither the Acquired Subsidiaries nor, with respect to the
Contact Lens Products Business, PD, has treated, stored, disposed of,
arranged for or permitted the disposal of, or transported, handled, or
released any substance, including without limitation any Hazardous
Substance (or owned or operated any property or facility that has been
contaminated by such substance), in a manner that has given or would give
rise to liabilities, including any liability for response costs, corrective
action costs, personal injury, property damage, natural resources damages
or attorney fees, or any investigative, corrective or remedial obligations,
pursuant to the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended ("CERCLA") or the Solid Waste Disposal
------
Act, as amended ("SWDA") or any other Environmental, Health and Safety
----
Laws.
25
(i) Neither this Agreement nor the consummation of the transactions
contemplated hereby will result in any obligations for site investigation
or cleanup, or notification to or consent of government agencies or third
parties, pursuant to any of the so-called "transaction-triggered " or
"responsible property transfer" Environmental, Health and Safety Laws.
(j) For purposes of this Section 2.17,
------------
(i) "Environmental. Health, and Safety Laws means the
Comprehensive Environmental Response, Compensation and Liability Act
of 1980, the Resource Conservation and Recovery Act of 1976, the
Occupational Safety and Health Act of 1970, and Part IIA of the
Environmental Protection Xxx 0000, each as amended prior to the
Closing, together with all other applicable laws (including rules,
regulations, codes, plans, injunctions, judgments, orders, decrees,
rulings, and charges thereunder) of federal, state, local, and
foreign governments (and all agencies thereof) and all applicable
common law concerning pollution or protection of human health and the
environment, or employee health and safety, including but not limited
to laws relating to emissions, discharges, releases, or threatened
releases of pollutants, contaminants, or chemical, industrial,
hazardous, or toxic materials or wastes into ambient air, surface
water, ground water, or lands, or to internal or external noise
levels, or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport, or
handling of pollutants, contaminants, or chemical, industrial,
hazardous, or toxic materials or wastes; and
(ii) "Hazardous Substance" means, collectively, any petroleum or
petroleum product or byproduct, and any waste, substance, material,
or pollutant referred to or designated as hazardous, toxic, extremely
hazardous, special (pursuant to U.K. law only), flammable, explosive,
radioactive, or words of similar meaning or regulatory effect under
any Environmental, Health, and Safety Laws.
2.18 Employees. Attached hereto as Schedule 2.18 hereto is a list, as of
--------- -------------
June 1, 1996, of names, location, then current annual rates of
salary, and length of service of all the employees of the Acquired
Subsidiaries or, in the case of PD, of all employees whose work
relates exclusively to the Contact Lens Products Business (the
"Employees"). Seller shall, on or prior to the Closing Date, provide
Purchaser with an updated schedule that reflects, as of July 15,
1996, all employees of the Acquired Subsidiaries and all employees of
PD whose work relates exclusively to the Contact Lens Products
Business (all such employees shall be refer-red to as "Continued
Employees").
2.19 Stay Agreements. Attached hereto as Schedule 2.19 is a list of all
--------------- -------------
employment retention, "stay" or similar bonus or incentive stay
agreements, pursuant to which any Acquired Subsidiary or P.") has
agreed to pay stay bonuses and/or special incentive
26
payments as consideration for the agreement of those Employees to
remain continuously employed with such Acquired Subsidiary or PD
through the closing of a sale of the Contact Lens Products Business.
For purposes of this Agreement, the employment retention, "stay" or
similar bonus or incentive stay agreements required to be disclosed
on Schedule 2.19 hereto are hereinafter referred to as "Stay
-------------
Agreements."
2.20 Employee Benefit Plans.
----------------------
(a) Except as set forth on Schedule 2.20 hereto, neither any
-------------
Acquired Subsidiary, PD, nor any ERISA Affiliate (as defined below)
maintains, or is required to contribute, on behalf of any Employee to any
(i) employee pension benefit plan (as defined in Section 3(2) of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA")),
(ii) employee welfare benefit plan (as defined in ERISA Section 3(l)), or
(iii) other deferred compensation, stock purchase, stock option, incentive,
bonus, or other plan, program or arrangement that provides compensation or
benefits in connection with employment that are not treated as either an
employee pension benefit plan or an employee welfare benefit plan (all such
plans, arrangements, and programs described in (i) through (iii) are
referred to herein as the "Plans"). For purposes of this Section 2.20, the
------------
term ERISA Affiliate means any Acquired Subsidiary and any trade or
business that is a member of a group of organizations within the meaning of
Section 414(b), (c), (m), or (o) of the Code. All Plans set forth on
Schedule 2.20 hereto, and their related trusts, if any, comply in form and
-------------
have been administered in all Material respects in accordance with the
applicable requirements of ERISA, and all other applicable laws, miles, and
regulations, and any necessary governmental approvals of the Plans have
been obtained. All of the Plans that are maintained outside of the United
States have been maintained and administered in all Material respects in
accordance with all applicable laws and regulations of the countries in
which such plans are maintained.
(b) Neither any Acquired Subsidiary, PD, nor any ERISA Affiliate
has incurred any liability to the Pension Benefit Guaranty Corporation
("PBGC"), the Internal Revenue Service, any multiemployer plan or otherwise
with respect to any Plan currently or previously maintained that has not
been satisfied in full, and no condition exists that presents a Material
risk to the Acquired Subsidiaries, PD or any ERISA Affiliate of incurring
such a liability (other than liability for premiums due the PBGC) that
could reasonably be expected to have any Material adverse effect on
Purchaser or the Purchaser Affiliates on or after the Closing. Neither any
Acquired Subsidiary, PD, nor any ERISA Affiliate has ceased operation at
any facility or withdrawn from any Plan that is subject to Title IV of
ERISA in a manner that could subject them to liability under Section 4062,
4063, or 4064 of ERISA, and to Seller's and the Seller Affiliates'
knowledge, no events have occurred which will give rise to any liability of
either any Acquired Subsidiary, PD, or any ERISA Affiliate to the PBGC
under Title IV of ERISA or which could reasonably be anticipated to result
in any claims being made against the Purchaser or the Purchaser Affiliates
by the PBGC. Neither
27
any Acquired Subsidiary, PD, nor any ERISA Affiliate has incurred any withdrawal
liability within the meaning of Section 4201 and 4204 of ERISA to any Plan that
is a "multiemployer plan" as such term is defined in Section 3(37) of ERISA.
2.21 Inventory. The inventory relating to the Contact Lens Products
---------
Business is being and has been maintained at levels consistent with
past practices of the Contact Lens Products Business and is adequate
for the continuation of the Contact Lens Products Business as
presently conducted.
2.22 Warranties. Except as set forth on Schedule 2.22 hereto, none of the
---------- -------------
Acquired Subsidiaries or PD has given or made any express warranties
or indemnities to third parties with respect to any products sold or
services performed by such entities relating, to the Contact Lens
Products Business. There is no basis for any present claim against
any of the Acquired Subsidiaries or PD for liability due to any
express or implied warranty or indemnity relating to the Contact Lens
Products Business. All products designed, manufactured, merchandised,
serviced, distributed, sold or delivered by the Contact Lens Products
Business at any time prior to the Closing Date have been in
conformity with all applicable contractual commitments and all
express or implied warranties. Except as set forth in the Closing
Balance Sheet, no liability exists for replacement thereof or other
damages in connection with such sales or deliveries at any time prior
to the Closing Date.
2.23 Brokers and Finders. None of the Seller, the Seller Affiliates, the
-------------------
Acquired Subsidiaries or PD has dealt with any broker, finder, or
other person entitled to any broker's or finder's fee, commission, or
other similar compensation in connection with the transaction
contemplated hereby.
2.24 Insurance. Each of the Acquired Subsidiaries and, with respect to
---------
the Contact Lens Products Business, PD, maintains third party
insurance coverage with respect to its properties and business of
such a nature, with such terms, and covering such risks as a prudent
person would maintain with respect to similar properties and
business. All of such insurance policies are legal, valid, binding
and enforceable and in full force and effect and no Acquired
Subsidiary nor, with respect to the Contact Lens Products Business,
PD, is in breach or default with respect to its obligations under any
insurance policies.
2.25 Officers and Directors: Bank Accounts. Schedule 2.25 attached hereto
------------------------------------- -------------
lists all officers and directors of each Acquired Subsidiary and all
bank accounts of each Acquired Subsidiary (designating each
authorized signatory and the level of each signatory's
authorization).
2.26 Absence of Undisclosed Liabilities. None of the Acquired
----------------------------------
Subsidiaries nor, with respect to the Contact Lens Products Business,
PD, has any debts, liabilities or
28
obligations of any nature (whether accrued, absolute, contingent, direct,
indirect, perfected, inchoate, unliquidated or otherwise, whether due or to
become due) arising out of transactions entered into at or prior to the
Closing, or any transaction, series of transactions, action or inaction at
or prior to the Closing, any state of facts or condition existing at or
prior to the Closing, or that are not related to the Contact Lens Products
Business (regardless of when any such liability or obligation is asserted),
except (a) liabilities and obligations described on any Schedule to this
Agreement (to the extent that the relevance of such liability or obligation
is reasonably apparent in the Schedule in which such liability or
obligation is disclosed), (b) liabilities and obligations to the extent
specifically reflected and reserved on the Latest Balance Sheet, and (c)
liabilities and obligations which have arisen after March 31, 1996, in the
ordinary course of business or otherwise in accordance with the terms of
this Agreement (none of which relates to any breach of contract, breach of
warranty, tort, infringement, or violation of law or arose out of any
charge, complaint, action, suit, proceeding, hearing, investigation, claim
or demand).
2.27 Investment Representation of Xxxxxxxxxx. In connection with the
---------------------------------------
issuance of the Note to Xxxxxxxxxx Holdings, Inc. hereunder,
Xxxxxxxxxx hereby represents and warrants to WJ that:
(a) Xxxxxxxxxx has had an opportunity to ask questions and receive
answers concerning the terms and conditions of the offering of the Note and
has had full access to such information concerning WJ Holding as Xxxxxxxxxx
has requested;
(b) Xxxxxxxxxx Holdings, Inc. is able to bear the economic risk of
the investment in the Note for an indefinite period of time;
(c) Xxxxxxxxxx Holdings, Inc. is acquiring the Note hereunder for
its own account with the present intention of holding such securities for
investment purposes and has no intention of selling such security in a
public distribution in violation of federal or state securities laws.
2.28 Disclosure. Neither this Article 2 nor any certificate delivered by
----------
Seller or the Seller Affiliates to Purchaser or the Purchaser
Affiliates contains or will contain any untrue statement of a
material fact or omits a material fact necessary to make the
statements contained herein or therein, in light of the circumstances
in which they were made, not misleading.
29
ARTICLE 3
REPRESENTATIONS AND WARRANTEES OF PURCHASER
As of the date hereof and as of the Closing Date, Purchaser hereby
represents and warrants to Seller the following:
3.1 Organization and Standing. Purchaser and each of the Purchaser
-------------------------
Affiliates is a duly organized and validly existing corporation
in good standing under the laws of the jurisdiction of its
incorporation as described in Schedule 3. 1 hereto (to the extent
such concept is relevant in such jurisdiction). Purchaser and
each of the Purchaser Affiliates has all the requisite corporate
power and authority to engage in the business in which it is
presently engaged. Each of the Purchaser and the Purchaser
Affiliates is qualified to do business as a foreign corporation
in all jurisdictions where the nature of its business requires
such qualification.
3.2 Authority and Restrictions. Purchaser has full right, power and
--------------------------
authority to enter into this Agreement, and Purchaser and each
Purchaser Affiliate has or will have full right, power and
authority to enter into each agreement, document and instrument
to be executed and delivered by it pursuant to or as contemplated
by this Agreement and to carry out the transactions contemplated
hereby and thereby on its part to be performed. The execution and
delivery and performance by Purchaser of this Agreement and by
Purchaser and the Purchaser Affiliates of each such other
agreement, document and instrument has been or will be duly
authorized by all necessary corporate action of Purchaser or such
Purchaser Affiliate and no other corporate action on the part of
Purchaser or such Purchaser Affiliate is required in connection
therewith. This Agreement and each agreement, document and
instrument to be executed and delivered by Purchaser or any of
the Purchaser Affiliates pursuant to, or as contemplated by this
Agreement constitute, or will when executed and delivered
constitute, valid and binding obligations of Purchaser or such
Purchaser Affiliate, enforceable in accordance with their
respective terms, subject to the application by a court of
general principles of equity and to the effect of any applicable
bankruptcy, insolvency, reorganization, moratorium, or similar
laws. Except as disclosed on Schedule 3.2 or any other schedule
to this Agreement, the execution, delivery and performance by
Purchaser of this Agreement and by Purchaser and the Purchaser
Affiliates of each such other agreement, document and instrument:
(i) do not and will not violate an,, provision of the charter or
by-laws of Purchaser or the Purchaser Affiliates, (ii) do not and
will not violate any currently effective laws, rules, or
regulations of the United States or any state or other
jurisdiction, applicable to Purchaser or Purchaser Affiliates, or
require Purchaser or the Purchaser Affiliates to obtain any
approval, consent or waiver of, or make any filing with, any
person or entity (governmental or otherwise) that has not been
obtained or made and (iii) do not and will not (A) conflict with
or result in the breach
30
of any of the provisions of, (B) constitute a default under, (C)
result in the violation of, (D) give any third party the right to
terminate or accelerate (including after the giving of notice or
lapse of time or both) any obligation under, or (E) result in the
creation of any Liens upon any of the material properties or
assets of Purchaser or any of the Purchaser Affiliates under any
indenture, mortgage, lease, loan agreement or instrument by which
Purchaser or Purchaser Affiliates are currently bound or
affected.
3.3 Brokers and Finders. Neither Purchaser nor the Purchaser
-------------------
Affiliates have dealt with any broker, finder, or other person
entitled to any broker's or finder's fee, commission, or other
similar compensation in connection with the transaction
contemplated hereby.
3.4 Litigation. There is no suit, claim, arbitration, investigation,
----------
action, or proceeding entered against, now pending, or, to
Purchaser's or the Purchaser Affiliates' knowledge, threatened
against Purchaser or the Purchaser Affiliates before any court,
arbitration, administrative, or regulatory body or any
governmental agency which could reasonably be expected to
materially impair the ability of Purchaser or the Purchaser
Affiliates to fulfill and perform its obligations under this
Agreement.
3.5 Investment Representations of Purchaser. In connection with the
---------------------------------------
purchase of the Acquired Stock hereunder, Purchaser, on behalf of
itself and the Purchaser Affiliates, hereby represents and
warrants to Seller that:
(a) Purchaser has had an opportunity to ask questions and
receive answers concerning the terms and conditions of the offering of
the Acquired Stock, has had full access to such other information
concerning the Acquired Subsidiaries as Purchaser has requested and
possesses substantial information about, and familiarity with, the
Acquired Subsidiaries as a result of the information provided to
Purchaser;
(b) Purchaser or the Purchaser Affiliates are able to bear the
economic risk of the investment in the Acquired Stock for an
indefinite period of time; and
(c) Purchaser or the Purchaser Affiliates are acquiring the
Acquired Stock hereunder for their own account with the present
intention of holding such securities for investment purposes and has
no intention of selling such security in a public distribution in
violation of federal or state securities laws.
3.6 Consents. Except as otherwise disclosed on Schedule 3.6 hereto,
-------- ------------
neither Purchaser nor the Purchaser Affiliates nor Xxxx Capital,
Inc. is required to make any filing with, or obtain any permit,
authorization, consents or other approvals of any court,
arbitrational tribunal, or regulatory authority or governmental
agency, bureau, or authority, or other person, including any
lender, vendor, or lessor in order to effect
31
the transaction contemplated hereby, other than any filing,
permit, authorization, consent, or approval that if not obtained
or made would not have a Material adverse effect on the ability
of Purchaser or the Purchaser Affiliates to consummate the
transactions contemplated by this Agreement.
3.7 Knowledge of Claims. Neither the Purchaser nor any Purchaser
-------------------
Affiliate has any Knowledge (as hereinafter defined) of any
breach of any representation or warranty under this Agreement by
Seller or the Seller Affiliates. For purposes of this Section
-------
3.7, "Knowledge" means the actual knowledge, without any
---
imputation thereof, of Xxxxxx Xxxxxxxx, Xxxx Xxxxxx or Xxxx Xxxx.
3.8 Noncontravention. The execution, delivery and performance of
----------------
this Agreement and all agreements, documents, and instruments
contemplated thereby by Purchaser or the Purchaser Affiliates,
and the consummation by any of them of the transactions
contemplated hereby and thereby, will not:
(a) Require the consent, waiver, approval, license or
authorization of, or any filing by Purchaser or the Purchaser
Affiliates with, any person, entity or public authority, except for:
(i) approval pursuant to, or the termination or expiration of the
applicable waiting period (and any extension thereof) under, the Xxxx-
Xxxxx-Xxxxxx Act; and (11) the government approvals listed in
Schedule 3.6; or
------------
(b) Violate, or result in a breach of or the termination or
acceleration of, any obligation under, or constitute a default under,
any provision of any charter or bylaw, or any indenture, mortgage,
lien, lease, agreement, contract. instrument, law, regulation or
ordinance, or any administrative, judicial or arbitral order,
judgment, decree or award, to which Purchaser or any of such Purchaser
Affiliates is a party or is subject.
3.9 Disclosure. Neither this Article 3 nor any certificate delivered
---------- ---------
by Purchaser or the Purchaser Affiliates to Seller or the Seller
Affiliates contains or will contain any untrue statement of a
material fact or omits a material fact necessary to make the
statements contained herein or therein, in light of the
circumstances in which they were made, not misleading.
3.10 Financial Information. Schedule 3.10 attached hereto sets forth
--------------------- -------------
the summary income statement of Xxxxxx-Xxxxxx Corporation and
its subsidiaries for the six month period ended December 31,
1995. The aforementioned summary income statement presents
fairly and accurately, in all material respects, the results of
operations for Xxxxxx-Xxxxxx Corporation and its subsidiaries
for the six-month period ended December 31, 1995, in accordance
with United States GAAP, exclusive of the effects of purchase
accounting adjustments and subject to the lack of footnotes, and
is complete and correct in all material respects. Schedule 3.10
-------------
also contains certain pro-forma, forecasted and estimated (for
the six-month period ended June 28, 1995, prior to WJ's
acquisition of its worldwide contact lens business) financial
information. Purchaser
-32-
makes no representations or warranties regarding any such pro-
forma, forecasted or estimated financial information or any
expectancy as to future financial performance.
ARTICLE 4
COVENANTS OF SELLER
Seller hereby covenants and agrees that from the date of this
Agreement until the Closing Date, unless another time period is specified:
4.1 Access to Information. Purchaser has examined the books,
---------------------
records, and physical property of the Acquired Subsidiaries and
PD relating to the Contact Lens Products Business and the
Acquired Assets and the Acquired Stock and examined such other
matters relating to the Contact Lens Products Business and the
Acquired Assets and the Acquired Stock as Seller and the
Purchaser may have deemed appropriate. Purchaser and its counsel,
accountants, other representatives and lenders have had, and will
continue to have, reasonable access during normal business hours
to all properties, books, accounts, records, contracts,
documents, key senior management personnel, independent
accountants and legal counsel of Acquired Subsidiaries and, with
respect to the Contact Lens Products Business, of PD, or the
Acquired Assets or the Acquired Stock so that Purchaser ,.nay
have full opportunity to make such investigation as they shall
desire to make of the Contact Lens Products Business and the
Acquired Assets and the Acquired Stock. Purchaser and the
Purchaser Affiliates acknowledge that they have not relied on any
representations or warranties of any kind made by the Seller
relating to the Acquired Assets that are not specifically set
forth in this Agreement. Seller or the Seller Affiliates shall
furnish or cause to be furnished to Purchaser and its
representatives all data and information concerning the Contact
Lens Products Business and the Acquired Assets and the Acquired
Stock that may reasonably be requested by Purchaser.
4.2 Capital Expenditures. Without the prior written consent of WJ,
--------------------
Seller will not, and will cause the Acquired Subsidiaries and PD
(exclusively with respect to the Contact Lens Products Business)
not to, incur or commit to incur any Material capital
expenditures; provided that Seller shall not be obligated to
cause the Acquired Subsidiaries or PD to reduce or eliminate any
capital expenditures which had been authorized by Xxxxxxxxxx or
PBH as of the date hereof; provided further that nothing in this
Section 4.2 shall reduce or otherwise eliminate Seller's
-----------
obligations with respect to the Purchase Price adjustments
described in Section 1.7 of this Agreement.
-----------
4.3 Conduct of Contact Lens Products Business. Except as
-----------------------------------------
specifically contemplated in this Agreement, from March 31, 1996
to the Closing Date, the Contact Lens Products Business has been
and will be operated only in the ordinary course of business,
consistent with past practice, and, in particular, Seller, the
Seller Affiliates, the
-33-
Acquired Subsidiaries, and PD, without the prior written consent
of Purchaser, have not and will not:
(a) Cancel or permit to lapse or terminate any insurance
relating to the Acquired Subsidiaries or, with respect to PD, relating to
the Contact Lens Products Business or the Acquired Assets, unless renewed
or replaced by like coverage;
(b) Be in material default under any Contract;
(c) Violate or fail to comply in any material respect with any
laws, statutes, regulations, rules, judgments, orders, decrees or other
restrictions applicable to the Acquired Subsidiaries or, with respect to
PD, relating to the Contact Lens Products Business or the Acquired Assets
or the Products;
(d) Grant any increase in salaries payable, or to become payable
by it, to any Employee of the Contact Lens Products Business, except in the
ordinary course of business;
(e) Increase benefits payable to any Employee under any bonus or
pension plan or other contract or commitment, except in the ordinary course
of business;
(f) Enter into any contract, commitment, or other transaction
relating to the Acquired Subsidiaries or, with respect to PD, relating to
the Contact Lens Products Business or the Acquired Assets, not in the
ordinary course of business;
(g) Sell or dispose of any assets relating to the Contact Lens
Products Business, except in the ordinary course of business;
(h) Waive or compromise any right or claim relating to the
Acquired Subsidiaries or, with respect to PD, relating to the Contact Lens
Products Business, except in the ordinary course of business;
(i) Modify, amend, cancel, or terminate any of its Contracts,
except in the ordinary course of business;
(j) Except as disclosed on Schedule 2.8 hereto, take any action
which, or omit to take any action the omission of which, would require
disclosure under Section 2.8 hereof; or
(k) Agree to do any of the actions described in the preceding
clauses (a) through (j).
4.4 Exclusivity. Until the consummation of the transactions
-----------
contemplated hereby or termination of this Agreement in accordance with the
terms hereof, Seller agrees that neither it nor any of its representatives,
directors, officers or affiliates nor any of their
34
respective representatives, directors, officers or affiliates
will (a) discuss or pursue a possible sale or other disposition
of the Contact Lens Products Business, any capital stock or
substantial portion of the assets of the Contact Lens Products
Business or any interest therein with any other party or provide
any information to any other party in connection therewith or (b)
disclose to any other party the contents of this Agreement. Each
Seller represents and warrants that it has terminated all
discussions with third parties regarding a possible sale or other
disposition of the Contact Lens Products Business, any capital
stock or substantial portion of the assets of the Contact Lens
Products Business or any interest therein.
4.5 Books and Records. Seller will make available to Purchaser, at
-----------------
Purchaser's request and expense, from time to time, all books and
records of the Acquired Subsidiaries and, with respect to PD,
relating to the Contact Lens Products Business which are
reasonably necessary with respect to Purchaser's or the Purchaser
Affiliates' ongoing operations for inspection or copying by
Purchaser or the Purchaser Affiliates at any reasonable time for
a seven (7) year period after the Closing Date.
4.6 Satisfaction of Certain Obligations. Seller will pay, satisfy
-----------------------------------
and discharge or cause the Seller Affiliates to pay, satisfy and
discharge, all of the Seller's, the Seller Affiliates', the
Acquired Subsidiaries', and PD's liabilities and obligations
under the Stay Agreements in accordance with their terms, (ii)
except for European Redundant Employees which are dealt with
under (iv) below, arising under or pursuant to any separation
agreement entered into on or prior to the Closing Date with
respect to any current or former employee of the Acquired
Subsidiaries or PD, (iii) except for European Redundant Employees
which are dealt with under (iv) below, arising under or pursuant
to any severance policy or arrangement with respect to any
employee terminations effected on or prior to the Closing or
initiated on or prior to the Closing to the extent completed in
accordance with the terms thereof and (iv) arising out of or
related to the termination of any of the European Redundant
Employees, whether on, prior to, or after the Closing Date,
provided that in no event shall Seller be responsible under this
subclause (iv) for liabilities, costs or obligations relating to
or arising from its European Restructuring Activities, including
with respect to the termination of the European Redundant
Employees, in excess of $7,319,000.
4.7 Compensation of Terminated Employees. Seller shall be
------------------------------------
responsible to pay or cause the Seller Affiliates to pay the
following with respect to up to ten (10) of the Employees to be
selected by WJ (including selection of such Employee's scheduled
termination date to cease providing services, which shall be no
later than three months from the Closing Date) and listed on
Schedule 4.7 hereto no later than ten days prior to the Closing
------------
Date, who will be given notice of termination of employment by
Seller or the Seller Affiliates no later than the Closing Date
(the "Terminated Employees"): (a) all compensation and benefits
to which each of the Terminated Employees is entitled as a result
of service on or prior to the Closing
35
Date; and (b) all compensation, severance, and benefit payments
to which each of the Terminated Employees is entitled on account
of their termination, including, without limitation, any such
amounts accrued or payable with respect to any notice period
during which the Terminated Employee is classified as an employee
but is not actively at work with the Acquired Subsidiaries, PD,
or WJ GmbH, as the case may be. Purchaser shall be responsible
for the compensation and benefits (other than as provided in the
preceding sentence) to which each of the Terminated Employees is
entitled for the period commencing with the Closing Date and
ending on the later of (i) the date the Terminated Employee
ceases providing services to the Acquired Subsidiaries, PD, or WJ
GmbH, as the case may be, and (ii) the date on which such
Terminated Employee is scheduled to cease providing services as
specified in Schedule 4.7.
------------
4.8 Closing. Seller shall use its reasonable best efforts to cause
-------
the conditions specified in Article 7 hereof to be satisfied at
---------
or prior to the Closing Date hereof.
4.9 Financial Information. Seller shall furnish or shall cause
---------------------
Seller's independent accountants to furnish to WJ, at Seller's
cost, audited financial statements for the Contact Lens Products
Business for the fiscal years ended March 31, 1996 and 1995
prepared in accordance with United States GAAP and in a form
meeting the requirements of Regulation S-X of the Securities Act
of 1933, as amended (and the consent of Seller's independent
accountants to the use of their reports thereon). Seller shall
provide (or cause its independent accountants to provide), at
Seller's cost, such audited financial statements for the Contact
Lens Products Business for the fiscal year ended March 31, 1996
on or prior to July 31, 1996; provided that Seller shall use
reasonable best efforts to promptly cause the delivery of such
audited financial statements as soon as practicable after the
execution of this Agreement. Seller shall provide (or cause its
independent accountants to provide) such audited financial
statements for the fiscal year ended March 31, 1995 on or prior
to July 31, 1996; provided that Seller shall use reasonable best
efforts to promptly cause the delivery of such audited financial
statements as soon as practicable after the execution of this
Agreement. Seller shall cooperate with WJ and shall use
reasonable efforts to cause Seller's independent accountants to
furnish to WJ, at WJ's cost, unaudited interim financial
statements for the Contact Lens Products Business for the three
month periods ended June 30, 1996 and 1995 prepared in accordance
with United States GAAP and in a form meeting the requirements of
Regulation S-X of the Securities Act of 1933, as amended, on or
prior to December 31, 1996; provided, that Seller shall use
reasonable efforts to cause the delivery of such unaudited
financial statements as soon as practicable after the execution
of the Agreement. The parties hereto acknowledge and agree that
time is of the essence in the performance of the provisions of
this Section 4.9.
------------
36
4.10 Intercompany Accounts. Effective as of the Closing, all
---------------------
intercompany receivables, payables, loans and investments then
existing between Seller or any affiliate thereof that is not an
Acquired Subsidiary, on the one hand, and any Acquired
Subsidiary, on the other hand, shall be settled, canceled or
otherwise terminated without payment. Seller shall indemnify and
hold harmless Purchaser and any affiliates thereof, and their
respective directors, shareholders, partners, officers,
employees, agents, consultants, representatives, successors,
transferees and assigns, from and against any and all Taxes
actually incurred or payable thereby solely as a result of the
consummation of any intercompany transfer in accordance with
this Section 4.10. Notwithstanding anything to the contrary in
------------
this Section 4. 10, Purchaser agrees that the intercompany loan
outstanding in an amount up to (Pounds)3.5 million from
Xxxxxxxxxx Finance Limited to PBH Ltd. shall remain outstanding.
4.11 Insurance. To the extent that (i) there are third-party
---------
insurance policies maintained by the Seller or its affiliates
("Seller's Policies") covering any Actual Loss (as defined in
Section 10.2 or 10.3 hereof) relating to the Acquired
Subsidiaries or the assets, liabilities, products, operations or
employees of the Contact Lens Products Business (all such Actual
Losses are referred to in this Section 4.11 as the "Insured
Liabilities") and relating to or arising out of occurrences
prior to the Closing, and (ii) Seller's Policies by their terms
continue after Closing to permit claims with respect to such
Insured Liabilities ("Insured Claims") to be made relating to
occurrences prior to the Closing, each of the parties hereto
agrees to cooperate, and to cause their respective affiliates to
cooperate, with the other party and its affiliates and use
reasonable efforts in submitting Insured Claims on behalf of the
party ultimately bearing any such Actual Loss with respect to
such Insured Liabilities.
4.12 Title to Property. On or prior to the Closing Date or as soon
-----------------
as practicable thereafter, (i) Seller shall deliver to
Purchaser, at Seller's cost and expense, in a form reasonably
acceptable to Purchaser, copies of all assignments and other
instruments of transfer and conveyance as Purchaser may
reasonably request effective to vest in WJ GmbH or an Acquired
Subsidiary all right, title, and interest in and to all
Intellectual Property, all tangible personal property used
exclusively in the Contact Lens Products Business aid all Real
Property (excluding Intellectual Property licensed from a third
party); and (ii) title to all such Intellectual Property and all
such tangible personal property and all Owned Property shall
have been recorded or updated, at Seller's cost and expense,
with the appropriate government office or entity, including, but
not limited to, the United States Patent and Trademark Office
and the United States Copyright Office, or all documents
necessary to update such title shall have been recorded with the
appropriate government office or entity.
4.13 Commuter Service Deliveries. Seller shall deliver to Purchaser,
---------------------------
at Seller's cost and expense, in a form reasonably acceptable to
Purchaser, on or prior to the Closing Date, (i) agreements
between SAP (UK) Limited and/or its affiliates and such of the
37
Acquired Subsidiaries and WJ GmbH as is necessary to ensure that
the installation and usage of the SAP systems currently licensed
under an agreement between SAP (UK) Limited and Xxxxxxxxxx dated
January 4, 1995 can proceed for and with respect to the Contact
Lens Products Business as intended as at the date of this
Agreement, (ii) agreements terminating any contract or agreement
between any Acquired Subsidiary and Seller or any of its
affiliates that is not an Acquired Subsidiary, with respect to
the SAP systems, (iii) evidence that SAP (UK) Limited and/or its
affiliates have consented to the use, by Electronic Data Systems
Limited ("EDS") (for the purposes of, and with respect to, any
services to be provided by EDS pursuant to an agreement between
EDS and PBH last executed on September 4, 1995 (the "EDS
Agreement")), of systems licensed by SAP (UK) Limited and/or its
affiliates to any one or more of the Acquired Subsidiaries or WJ
GmbH under agreements obtained pursuant to clause (i) above, and
(iv) evidence that EDS has agreed to provide services to all
sites listed in Annex A to Service Agreement 1.2 to the EDS
Agreement, notwithstanding that sites listed therein are or
include sites of Acquired Subsidiaries other than PBH.
4.14 Inactive Subsidiaries. Seller shall, on or prior to the Closing
---------------------
Date, cause the Acquired Subsidiaries to contribute or
distribute, without payment, to Seller or any of Seller's
affiliates other than the Acquired Subsidiaries, all of the
issued and outstanding capital stock of each of those entities
identified on Schedule 2.4 attached hereto. Seller shall
------------
indemnify and hold harmless Purchaser and its affiliates, and
their respective directors, shareholders, partners, officers,
employees, agents, consultants, representatives, successors,
transferees and assigns, from and against any and all Taxes
actually incurred or payable thereby solely as a result of the
consummation of any transaction in accordance with this Section
-------
4.14.
----
4.15 Maintenance of Inventory. Seller agrees that if the number of
------------------------
stock keeping units of inventory for the Contact Lens Products
Business on the Closing Date is less than ninety-five percent
(95%) of the number of stock keeping units of inventory for the
Contact Lens Products Business as of March 31, 1996 (the amount
by which the number of stock keeping units of inventory on the
Closing Date is less than ninety-five percent (95%) of the
number of stock keeping units of inventory as of March 31, 1996
being herein referred to as the "Inventory Shortfall"), then
Seller will pay Purchaser an amount equal to two dollars per
stock keeping unit for each stock keeping unit of the Inventory
Shortfall.
4.16 Contribution of PBH International Stock. At Purchaser's request
---------------------------------------
in writing, Seller shall, on or prior to the Closing Date, cause
Xxxxxxxxxx Holding, Inc. to contribute, without payment, to PBH,
all of the issued and outstanding capital stock of PBH
International; provided, however, that Purchaser agrees to
indemnify Seller and its affiliates for any Tax liabilities
resulting from any such contribution.
-38-
ARTICLE 5
COVENANTS OF PURCHASER
Purchaser hereby covenants and agrees that from the date of this
Agreement until the Closing Date unless another time period is specified:
5.1 Closing. Purchaser will use its reasonable best efforts to cause
-------
the conditions specified in Article 8 hereof to be satisfied at
---------
or as soon as practicable prior to the Closing Date.
5.2 Xxxxxxxxxx Name. From and after the Closing, as soon as
---------------
reasonably practicable, but no later than sixty (60) days after
the Closing, Purchaser shall amend the Articles of Incorporation
or Certificate or Incorporation of any Acquired Subsidiary to
remove the name "Xxxxxxxxxx" therefrom, and shall remove, or
shall cause to be removed, from the exterior of the Acquired
Subsidiaries' premises the "Xxxxxxxxxx" name and Xxxxxxxxxx logo.
After Closing, Purchaser and the Purchaser Affiliates shall have
quantities of inventory, preprinted stationery, packaging
material and other supplies which bear the "Xxxxxxxxxx" name and
logo. With respect to (i) such preprinted stationery, packaging
material and other supplies, for a period of up to six months
from the Closing Date, and (ii) inventory, for such period of
time as such inventory is sold or otherwise consumed, Seller
hereby grants to Purchaser and the Purchaser Affiliates a paidup
license to use the "Xxxxxxxxxx" name or logo and any trademarks,
trade names or trade dress associated therewith; provided, that
such license shall cease immediately upon the disparaging use of
the name "Xxxxxxxxxx" and in any event upon the expiration of
such period. Purchaser and the Purchaser Affiliates shall not be
entitled to use the "Xxxxxxxxxx" name and/or logo except as
provided in this Section 5.2.
5.3 FTC Matters. WJ shall use its reasonable best efforts to cause
-----------
the Federal Trade Commission (the "FTC") to terminate the waiting
period under the Xxxx-Xxxxx-Xxxxxx Antitrust Improvement Act of
1976, as amended (the "HSR Act"), by entering into a patent
license agreement with another current manufacturer of soft
contact lenses (respectively, the "Replacement License" and the
"Replacement Licensee"), with the following terms: (i) the
patents licensed under the Replacement License shall include all
of those United States patents owned by WJ and currently licensed
under that certain agreement dated and effective as of August 1,
1994 for use by the Seller's Contact Lens Products Business in
connection with the manufacture and sale of opaque contact lenses
(the "WJ-PBH License"); (ii) the scope of licensed product in the
Replacement License shall include conventional lenses made from
Replacement Licensee's materials; and (iii) other commercially
reasonable terms. Notwithstanding any provision in this Agreement
to the contrary, WJ shall not be required to offer terms more
favorable than the commercial terms (i.e., those terms
-39-
not related to the termination of litigation) contained in the
WJ-PBH License. Seller and Purchaser shall use their reasonable
best efforts to satisfy the FTC that the Replacement License is
sufficient to address any FTC antitrust concerns and that the
waiting period under the HSR Act should be terminated promptly.
Seller may terminate this Agreement and abandon the transactions
contemplated herein at any time after July 12, 1996 by delivering
written notice to WJ, unless WJ has delivered the executed
Replacement License to Seller prior to Seller's termination of
this Agreement pursuant to this sentence.
ARTICLE 6
MUTUAL COVENANTS OF PURCHASER AND SELLER
6.1 Confidentiality. Except as required by law or regulation, each
---------------
of the Purchaser and the Seller and their officers, directors,
and other representatives, including counsel, accountants,
lenders and environmental consultants, will, and will cause the
Purchaser Affiliates or the Seller Affiliates, as the case may
be, to, hold in strict confidence, and will not, and will cause
the Purchaser Affiliates or the Seller Affiliates, as the case
may be, not to, divulge, communicate, use to the detriment of the
other or for the benefit of any other person or persons, or
misuse in any way, any financial information or other data
obtained in connection with this Agreement, including, without
limitation, any confidential information or trade secrets, this
Agreement and the existence of this Agreement and the
transactions contemplated hereby, personnel information,
processes, systems, improvements, discoveries, developments,
designs, inventions, techniques, new products, pricing policies,
projections, forecasts, strategies, budgets, know-how, customer
lists, formulas, or other data relating to the business of the
parties or its customers ("Evaluation Material"). If the
transactions contemplated by this Agreement are not consummated,
(i) each of the Purchaser and the Seller will return, or cause
the respective Purchaser Affiliates or Seller Affiliates, as the
case may be, to return, to the other all such Evaluation Material
and all copies made and information as the other party may
reasonably request, including, without limitation, work sheets,
test reports, manuals, lists, memoranda, and other documents
prepared by or made available to the other party in connection
with this transaction, and (ii) each of the Purchaser and the
Seller will not, nor will it permit any of its employees, agents
or representatives to retain any copies or use or disclose to any
third parties (except to the extent publicly available,
obtainable from independent sources (not in violation of any
confidentiality agreement) or as required by law or regulation)
any Evaluation Material.
6.2 Books and Records. Seller and Purchaser hereby covenant and
-----------------
agree that as soon as is reasonably practicable after the Closing
Date, Seller's representatives and Purchaser's representatives
will review the books and records of Seller relating to the
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Contact Lens Products Business. Any books and records relating to
the Contact Lens Products Business not desired by Purchaser and
desired by Seller will be given to Seller for removal at Seller's
expense. Any books and records relating to the Contact Lens
Products Business desired by both parties will be given to
Purchaser, but shall be made available to Seller for as long as
Seller reasonably deems necessary (not to exceed seven (7) years
from the Closing Date). Each of the parties will keep any such
books or records for inspection or copying by the other party (at
the requesting party's expense) at any reasonable time for a
period of seven (7) years after the Closing Date.
6.3 Cooperation. With respect to all matters other than Taxes and
-----------
any claims for indemnification pursuant to Article 10 below, in
the event and for so long as any of Purchaser or the Purchaser
Affiliates or Seller or the Seller Affiliates, on the one hand,
actively is contesting or defending against any charge,
complaint, action, suit, proceeding, audit, hearing,
investigation, claim, or demand in connection with the Acquired
Subsidiaries or the Contact Lens Products Business or with any
transaction contemplated under this Agreement, or 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 the
Acquired Subsidiaries or the Contact Lens Products Business as
carried on by Seller, then Seller or the Seller Affiliates or
Purchaser or the Purchaser Affiliates, as the case may be, will
cooperate with the contesting or defending party and its counsel
in the contest or defense, make available its personnel, and
provide such testimony and access to its books and records as
shall be reasonably necessary in connection with the contest or
defense, all at the sole cost and expense of the contesting or
defending party.
6.4 Public Announcements. Except as required by law or regulation,
--------------------
no press releases or other public announcements relating to the
transactions described herein will be issued or otherwise
released by any party without the prior written consent of the
other parties. If Seller or Purchaser or any of the respective
Seller Affiliates or Purchaser Affiliates is required by law or
regulation to make any public announcements relating to the
transactions contemplated herein, such party will submit its
proposed announcement in advance to the other party and will give
it a reasonable opportunity in the circumstances to comment
thereon in advance of release.
6.5 Consents. Each of the Seller and Purchaser will use its
--------
reasonable best efforts to obtain as promptly as practicable such
consents, approvals, or authorizations of third parties to
agreements that would otherwise be violated by any provisions
hereof and all consents, approvals, or authorizations as are
required to be obtained under any foreign, federal, state, or
local law or regulation and to make such filings with all such
third parties and governmental authorities necessary to
consummate the transactions contemplated by this Agreement.
-41-
6.6 Reasonable Best Efforts. Seller and Purchaser each agrees to use
-----------------------
its reasonable best efforts to take, or cause to be taken, all
actions, and to do, or cause to be done as promptly as
practicable, all things necessary, proper, or advisable under
applicable laws and regulations to consummate and make effective
the transactions contemplated by this Agreement. If at any time
after the Closing Date any further action is necessary or
desirable to carry out the purposes of this Agreement, the proper
officers and directors of each party to this Agreement shall take
all such necessary action.
6.7 Certain Notifications. At all times from the date hereof and
---------------------
prior to the Closing Date, each party shall promptly notify the
other party in writing of the occurrence of any event known to
such party which will or is likely to result in the failure to
satisfy any of the conditions specified in Articles 7 and 8
---------- -
hereof.
6.8 Termination of Employees. Except as otherwise provided in this
------------------------
Agreement, from and after the Closing Date, Purchaser will be
responsible for all severance and other termination payments
which arise on account of any termination of an employee of the
Contact Lens Products Business initiated after the Closing Date.
Purchaser shall fully indemnify Seller and its affiliates with
respect to all such payments.
6.9 Tax Matters.
-----------
(a) Taxable Periods Ending on or Before the Closing Date.
----------------------------------------------------
Purchaser shall prepare, or cause to be prepared and file or cause to
be filed, all Tax Returns (as defined below) for the Acquired
Subsidiaries for all taxable periods ending on or prior to the Closing
Date which are filed after the Closing Date (other than income and
franchise Tax Returns with respect to periods for which the operations
of such Acquired Subsidiaries are included in the consolidated,
unitary or combined income Tax Returns of Seller or the Seller
Affiliates). Purchaser shall permit Seller to review and comment on
each such Tax Return described in the preceding sentence prior to
filing. Seller shall reimburse Purchaser for Taxes of the Acquired
Subsidiaries with respect to taxable periods ending on or before the
Closing Date within fifteen (15) days of payment by Purchaser, the
Purchaser Affiliates, or the Acquired Subsidiaries of such Taxes to
the extent such Taxes have not been paid on or before the Closing
Date. Seller shall be entitled to all Tax refunds for the Acquired
Subsidiaries for all taxable periods ending on or prior to the Closing
Date, and Purchaser, Purchaser Affiliates, and the Acquired
Subsidiaries shall, at Seller's request, file for such refunds and
fully cooperate to obtain the same. Purchaser shall pay Seller any
such refund amounts within fifteen (15) days of Purchaser's, Purchaser
Affiliates', or Acquired Subsidiaries' receipt of the same.
(b) Taxable Periods Beginning Before and Ending, After the
------------------------------------------------------
Closing Date. Purchaser shall prepare and file, or cause to be
------------
prepared and filed, any Tax Returns of the Acquired Subsidiaries for
taxable periods which begin before the closing Date and end after
-42-
the Closing Date. Seller shall pay to Purchaser or the Purchaser
Affiliates within fifteen (15) days of the date on which Taxes are
paid with respect to such periods an amount equal to the portion of
such Taxes which relates to the portion of such taxable period ending
on the Closing Date to the extent such Taxes have not been paid on or
before the Closing Date. For purposes of this Section, in the case of
any Taxes that are imposed on a periodic basis and are payable for a
taxable period that includes (but does not end on) the Closing Date,
the portion of such Tax which relates to the portion of such Taxable
period ending on the Closing Date shall (x) in the case of any Taxes
other than Taxes based upon or related to income, be deemed to be the
amount of such Tax for the entire taxable period multiplied by a
fraction the numerator of which is the number of days from the
beginning of the taxable period and ending on the Closing Date and the
denominator of which is the number of days in the entire taxable
period, and (y) in the case of any Tax based upon or related to income
be deemed equal to the amount which would be payable if the relevant
taxable period ended on the Closing Date. Any Tax refunds for taxable
periods which begin before the Closing Date and end after the Closing
Date shall be apportioned as described in this subsection (b).
Purchaser, Purchaser Affiliates, and the Acquired Subsidiaries and
Seller and Seller Affiliates shall file for such refunds and fully
cooperate to obtain the same. Purchaser shall pay Seller any refund
amount due Seller under this subsection (b) within fifteen (15) days
of Purchaser's, Purchaser Affiliates', or Acquired Subsidiaries'
receipt of the same.
(c) Additional Tax Indemnification. In addition to the Taxes
------------------------------
allocated to Seller under Section 6.9(a) and 6.9(b) above, Seller
-------------- ------
shall be liable for, and shall indemnify and hold Purchaser, the
Purchaser Affiliates, and the Acquired Subsidiaries harmless against,
without duplication, (i) all liability (whether as a result of
Treasury Regulation (S)1.1502-6, or any similar provision of state,
local, or foreign law, as a transferee, by contract, or otherwise) for
Taxes of any Person (other than the Acquired Subsidiaries) based on an
affiliation, contractual relationship or other relationship existing
at any time prior to the Closing, (ii) all Taxes due by reason of the
elections to be made under Section 338(g) or 338(h)(10) of the Code
(or any other election under any similar state or local statute) with
respect to the purchase and sale of the Acquired Stock contemplated by
this Agreement, and (iii) all Taxes arising in connection with the
conversion or initiation of the conversion (only to the extent so
initiated) of the operations of any of the Acquired Subsidiaries to
commissionaires before the Closing, including any Taxes on a deemed
disposition of goodwill as a result of such conversion.
(d) Cooperation on Tax Matters. Purchaser, the Purchaser
--------------------------
Affiliates, the Acquired Subsidiaries and Seller and the Seller
Affiliates shall cooperate fully, as and to the extent reasonably
requested by the other party, in connection with the filing of Tax
Returns pursuant to this Section, or any amended return, claim for
refund, determining a liability for Taxes or a right to refund of
Taxes, or any audit, litigation or other proceeding with respect to
Taxes. Such cooperation shall include the retention and (upon the
other party's request) the provision of records and information which
are reasonably relevant to any such return, analysis, audit,
litigation or other proceeding and making employees available on a
mutually
-43-
convenient basis to provide additional information and explanation of
any material provided hereunder. The Acquired Subsidiaries and Seller
and the Seller Affiliates agree (A) to retain all books and records
with respect to Tax matters pertinent to the Acquired Subsidiaries
relating to any taxable period beginning before the Closing Date until
the expiration of the statute of limitations (and, to the extent
notified by Purchaser or Seller, any extensions thereof) of the
respective taxable periods, and to abide by all record retention
agreements entered into with any taxing authority, and (B) to give the
other party reasonable written notice prior to transferring,
destroying or discarding any such books and records and, if the other
party so requests, the Acquired Subsidiaries or Seller and the Seller
Affiliates, as the case may be, shall allow the other party to take
possession of such books and records.
(e) Section 338(h)(10) Election. Seller agrees, if so requested
---------------------------
by Purchaser, to join Purchaser in making an election under Section
338(h)(10) of the Code with respect to the sale and purchase of the
shares of capital stock of PBH and to join Purchaser in making any
analogous elections under applicable state law (including elections
corresponding to Section 338(g) of the Code) with respect to such sale
and purchase. Seller agrees to execute Form 8023-A and such other
documents or forms as may be required to make the foregoing elections.
Purchaser and Seller agree to allocate the Modified Aggregate Deemed
Sale Price (as defined in the Treasury Regulations) as provided on
Schedule 1.9, and that such allocation shall be reported by both
------------
Purchaser and Seller to all applicable taxing authorities'.
(f) Transfer Taxes. Seller and Purchaser each agree to pay,
--------------
or cause the respective Seller Affiliates or Purchaser Affiliates to
pay, fifty percent (50%) of the transfer, excise, or similar taxes
arising from or relating to the transactions contemplated by this
Agreement.
(g) For purposes of this Agreement, "Tax Return" shall mean any
return, report, information return, declaration, claim for refund or
other document (including any related or supporting information) filed
or required to be filed with any taxing authority with respect to
Taxes.
6.10 Transition Countries. If by the Closing Date, Purchaser and
--------------------
Seller or the respective Purchaser Affiliates or Seller
Affiliates have not received regulatory clearance in one or more
countries (excluding the United States and the United Kingdom)
to close the transactions contemplated hereby (excluding the
United States and the United Kingdom) (a "Transition Country"),
it is agreed that Seller shall, directly or through the Seller
Affiliates, the Acquired Subsidiaries (to the extent not
transferred), or PD, on and after the Closing Date, and during
the period from the Closing Date until receipt of regulatory
clearance in the country (the "Transition Period"), carry on
that part of the Contact Lens Products Business as agent and
trustee and for the account of Purchaser and the Purchaser
Affiliates, if permitted by applicable law, in accordance with
the following provisions:
-44-
(a) Seller shall within thirty (30) days after the end of each
calendar month of the Transition Period, and also within thirty (30) days after
the end of the Transition Period, prepare, or cause to be prepared, an account
for the Contact Lens Products Business in each Transition Country, showing for
each such calendar month or other period:
(i) All receipts received by Seller, PD, the Seller Affiliates,
and the Acquired Subsidiaries (to the extent not transferred); and
(ii) All payments made and expenses incurred or recognized by
Seller, PD, the Seller Affiliates, and the Acquired Subsidiaries (to
the extent not transferred) directly relating to the Contact Lens
Products Business (but not including any payments or expenses
allocated to the Contact Lens Products Business).
The account shall show the net difference between (i) and (ii), and shall be
accompanied by payment of the difference to Purchaser if (i) is greater than
(ii), or an invoice to Purchaser for the difference if (ii) is greater than (i),
which invoice Purchaser shall pay within ten (10) days after receipt.
(b) Any comments or objections which Purchaser may have with respect
to the accounts rendered for that Transition Country under Section 6.10(a) above
---------------
shall be discussed promptly between Purchaser and Seller. If such comments or
objections result in the matter under discussion being resolved, then any
appropriate amendment shall be made to such account and Purchaser and Seller
shall account to each other accordingly. If they do not result in such
resolution, then the matter in dispute shall be dealt with in the manner
outlined in Section 10.5 below.
------------
(c) If any claim which is covered by insurance of Seller or any of its
affiliates shall arise during the Transition Period in respect of any of the
Acquired Subsidiaries' Assets or Acquired Assets relating to a part of the
Contact Lens Products Business carried on in a Transition Country, Seller shall
promptly submit, or cause to be submitted, all relevant documents to the
insurers to substantiate such claim in trust for Purchaser and turn over the
proceeds to Purchaser. Seller shall promptly inform Purchaser of the
circumstances giving rise to such insurance claim.
(d) Purchaser shall have sole liability and responsibility for and in
respect of all employees, if any, in each Transition Country (the "Transition
Employees") on and after the Closing, and Purchaser shall indemnify or, cause
the Purchaser Affiliates to indemnify, Seller, the Seller Affiliates, and keep
them indemnified in respect thereof. To facilitate an orderly transition of the
relevant part of the Contact Lens Products Business in each Transition Country,
during the Transition Period, Seller or the Seller Affiliates shall continue to
employ the Transition Employees and, in consideration thereof except as
otherwise provided in this Agreement, Purchaser or the Purchaser Affiliates
shall fully reimburse Seller and the Seller Affiliates the cost of the salary,
benefits, and other payments payable to or in
-45-
respect of the relevant Transition Employees incurred with respect to the
Transition Period. All such sums so payable shall be regarded as payment of
expenses in respect of the Contact Lens Products Business within the meaning of
Section 6.10(a)(ii) above, and shall be reflected in the account(s) rendered for
-------------------
the relevant Transition Country. Except as otherwise provided in this
Agreement, no liabilities shall attach to Seller or the Seller Affiliates in
respect of any of such Transition Employees, who shall be the sole
responsibility of Purchaser and the Purchaser Affiliates, and over whom
Purchaser and the Purchaser Affiliates shall have full management and
supervisory responsibility from and after the Closing; provided, however, that
nothing herein shall remove any liability or obligation with respect to any
Transition Employee which arose or existed on or prior to the Transition Period
and Seller shall fully indemnify Purchaser and its affiliates and the Acquired
Subsidiaries with respect to all such liabilities and obligations.
6.11 Non-Competition; Non-Solicitation. As a condition precedent to Purchaser's
---------------------------------
obligation to enter into and perform its obligations under this Agreement,
Seller, on behalf of itself and its affiliates, agrees that:
(a) For a period of five (5) years after the Closing Date (the "Non-
---
Competition Period"), except for ownership of the Note and except with respect
------------------
to technology developed by Seller or any of its affiliates in conjunction with
other lines of business, neither Seller nor its affiliates shall, directly or
indirectly, either for itself or for any other person, "participate" anywhere in
the world in the Contact Lens Products Business or any extension thereof. For
purposes of this Agreement, the term "participate" includes any direct or
indirect interest in any enterprise, whether as an officer, director, employee,
partner, sole proprietor, agent, representative, independent contractor,
consultant, franchisor, franchisee, creditor, owner or otherwise; provided, that
the term "participate" shall not include ownership of less than 2% of the stock
of a publicly-held corporation whose stock is traded on a national securities
exchange or in the over-the-counter market. Notwithstanding the above, nothing
herein shall prohibit, prevent, or restrict any of Seller or its affiliates from
acquiring any company or business the acquisition of which would (but for the
provisions of this sentence) be prohibited under the provisions of this Section
-------
6.11(a) (prohibited activities of any such acquired company or business being
-------
referred to as the "contact lens business activities"), where the turnover of
such contact lens business activities constitutes less than fifty percent (50%)
of the aggregate turnover of the company, business, or group of companies or
businesses acquired (as the case may be) as part of the same transaction or
series of related transactions. In the event that Seller or any of its
affiliates should acquire any such company or business during the Non-
Competition Period pursuant to the immediately preceding sentence, Seller agrees
to dispose or cause such affiliate to dispose of the contact lens business
activities of such company or business within twelve (12) months from the date
of consummation of such transaction and to provide Purchaser with a right of
first offer to purchase such contact lens business activities. Seller will
notify Purchaser in writing of the acquisition of any such contact lens business
activities (the "Purchase Notice") within thirty (30) days after the date of
such acquisition, and if Purchaser gives written notice of its
-46-
interest in acquiring such contact lens business activities (the "Interest
Notice") within thirty (30) days of the receipt of the Purchase Notice, Seller
agrees to negotiate in good faith with Purchaser for the purchase by Purchaser
of such business. If, after sixty (60) days from the date of Seller's receipt
of the Interest Notice, Seller and Purchaser have been unable to agree on terms
for the purchase by Purchaser of the contact lens business activities, or if,
prior to such date, Purchaser shall have advised Seller that Purchaser has
determined not to further pursue the acquisition of such business, then Seller
may sell such contact lens business activities to any other person or entity on
terms not less favorable to Seller or its affiliates than those offered in
writing by Purchaser during negotiations contemplated herein.
(b) During the Non-Competition Period, Seller will not, and will not
permit its affiliates to, divulge or appropriate for their own use, or for the
use of any third party, any secret or confidential information or knowledge
obtained by Seller or any of its affiliates concerning the Contact Lens Products
Business. This obligation of secrecy shall not apply to information which (i)
is or becomes part of the public domain other than through breach of this
Agreement or through the fault of Seller or any of its affiliates, (ii) is or
becomes available to Seller or its affiliates from an unaffiliated source, which
source has no obligation of secrecy to Purchaser or its affiliates, (iii) is
required to be disclosed by law or government order (but only to the extent so
required), or (iv) is used by Seller or any of its affiliates in any other lines
of business, provided that the exception in this subclause (iv) shall not apply
to information that is divulged by Seller or its affiliates to any third party
specifically for its use in the Business Field (as defined in Section 6.11(f)
---------------
below).
(c) During the two-year period following the Closing Date, neither
Seller nor its affiliates will solicit the employment (in any capacity of, or,
to the extent not otherwise prohibited by law, hire any Employee without the
prior written consent of Purchaser.
(d) If, at the time of enforcement of this Section 6.11, a court holds
------------
that the duration, scope, geographic area or other restrictions stated herein
are unreasonable under circumstances then existing, the parties agree that the
maximum duration, scope, geographic area or other restrictions deemed reasonable
under such circumstances by such court shall be substituted for the stated
duration, scope, geographic area or other restrictions.
(e) Seller, on behalf of itself and its affiliates, recognizes and
affirms that in the event of breach of any of the provisions of this Section
-------
6.11, money damages would be inadequate and Purchaser and its affiliates would
----
have no adequate remedy at law. Accordingly, Seller, on behalf of itself and its
affiliates, agrees that Purchaser and its affiliates shall have the right, in
addition to any other rights and remedies existing in their favor, to enforce
their rights and Seller's obligations under this Section 6.11 not only by an
------------
action or actions for damages, but also by an action or actions for specific
performance, injunctive and/or other equitable relief in order to enforce or
prevent any violations (whether anticipatory, continuing or future) of the
provisions of this Section 6.11 (including, without limitation, the extension of
------------
the Non-Competition Period by a period equal to (i) the length
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of the violation of this Section 6.11 plus (ii) the length of any court
------------
proceedings necessary to stop such violation). In the event of a breach or
violation by Seller of any of the provisions of this Section 6.11, the running
------------
of the Non-Competition Period (but not of Seller's obligations under this
Section 6.11) shall be tolled with respect to Seller during the continuance of
------------
any actual breach or violation.
(f) During the two-year period following the Closing Date, Seller will,
and will cause its affiliates to, use reasonable best efforts to notify
Purchaser in writing of any proposed licensing of IP Rights by Seller or any of
its affiliates to any other person or entity engaged in the Business Field, for
use of the same in the Business Field. In such event, Seller will negotiate in
good faith with Purchaser for the non-exclusive licensing of such IP Rights on
terms mutually agreeable to Purchaser and Seller. As used in this Section
-------
6.11(f), "IP Rights" means all invention registrations, patents, patent
-------
registrations and patent applications and all rights therein provided by law and
all technical information, including without limitation (i) inventions, whether
or not patentable, whether or not reduced to practice, and whether or not yet
made the subject of a pending patent application or applications, (ii) ideas and
conceptions of potentially patentable subject matter, including without
limitation, any patent disclosures, whether or not reduced to practice and
whether or not yet made the subject of a patent application, (iii) trade secrets
and confidential, technical information (including without limitation, ideas,
formulae, compositions, inventions, and conceptions of inventions whether
patentable or unpatentable and whether or not yet reduced to practice), and (iv)
technology, manufacturing and production processes and techniques, research and
development information, drawings, specifications, designs, plans, proposals,
technical data, whether secret or confidential or not. "Business Field" means
the worldwide research, development, manufacture, distribution and sale of
contact lenses.
6.12 Foreign Employee Issues.
-----------------------
(a) Purchaser shall offer (or shall cause one of the Purchaser Affiliates
to offer) to employ each PD Foreign Employee (as defined below). The "PD Foreign
Employees" shall include all individuals who, immediately prior to the Closing
Date, are employees and are actively employed and assigned to the Contact Lens
Products Business at PD as of the Closing Date and such other employees who
Purchaser will be required to offer employment to under applicable German laws.
Each PD Foreign Employee who accepts the offer of employment (without any
rejection thereof as permitted under law) or, in case local law provides for a
transfer of employment, each PD Foreign Employee whose employment is so
transferred, shall be a "Foreign Transferred Employee," Neither Purchaser nor
any affiliate thereof shall have any obligation under this Agreement to provide
employment to any PD Foreign Employee who properly objects to becoming a Foreign
Transferred Employee. If a PD Foreign Employee objects, or refuses to assent, to
the consummation of the transactions contemplated by this Agreement, Purchaser
and its affiliates shall have no liability or obligation to such PE Foreign
Employee and Seller or the Seller Affiliates shall be fully
-48-
responsible for any liability or obligation with respect to such PD Foreign
Employee. Seller shall indemnify and save harmless Purchaser and its affiliates
from any and all claims, actions, obligation, liabilities, and damages of any
kind, in law or in equity, and including legal fees, arising out of, relating to
or based in any way upon the employment relationship of the PD Foreign Employees
with PD prior to the Closing Date or with Purchaser or its affiliates on and
after the Closing Date, including reimbursement of all compensation and benefit
costs related to such persons, provided that (i) such person received a notice
of termination on or prior to the Closing Date, (ii) PD terminated or attempted
to terminate such person on or prior to the Closing Date but such termination or
attempted termination is invalid for any reason, or (iii) such person is
classified as a PD Foreign Employee by operation of law or otherwise but such
person is not listed on Schedule 6.12(a) or is listed on Schedule 6.12(a) with a
---------------- ----------------
date of termination listed next to his or her name.
(b) Foreign Transferred Employees shall not accrue benefits under any
employee benefit policy, plan, arrangement, program or agreement of Seller (or
the Seller Affiliates) after the Closing Date. Notwithstanding the foregoing,
Seller (or the Seller Affiliates) shall be responsible for all benefits accrued,
claims incurred or obligations arising with respect to the Foreign Transferred
Employees' service with Seller (or the its affiliates) on or prior to the
Closing Date (except as provided in Section 6.12(c) as it pertains to the
---------------
transfer of pension obligations), and Seller shall satisfy, or cause the Seller
Affiliates to satisfy, such responsibility by paying to Purchaser the amount of
any such pre-Closing Date obligations which are assumed by Purchaser (or its
affiliates), by operation of law or by express assumption.
(c) With respect to the non-insured pension plan maintained by PD,
Purchaser (or one of the Purchaser Affiliates) shall assume the pension
obligations accrued as of the Closing Date under the PD pension plan with
respect to the Foreign Transferred Employees of PD. In return, Seller shall
cause an amount of cash to be transferred to Purchaser (or one of the Purchaser
Affiliates) as of the Closing Date in an amount equal to the liabilities for
such pension obligations assumed at Closing determined pursuant to Section 6a of
the German Income Tax Act, regardless of whether this amount was accrued as a
reserve by PD upon the Closing Date. Thereafter, neither Seller nor any of its
affiliates shall have any liability or obligations with respect to such pension
obligations assumed by Purchaser or one of the Purchaser Affiliates and if it is
determined that Seller or any of its affiliates shall have a liability or
obligation with respect to such pension obligations assumed by Purchaser or one
of the Purchaser Affiliates, Purchaser shall indemnify Seller or any of its
affiliates for the amount of such liability or obligation. With respect to the
pension contracts maintained by PD, Purchaser (or one of the Purchaser
Affiliates) shall assume such pension contracts as of the Closing Date with
respect to the Foreign Transferred Employees of PD; provided, that if as of the
Closing Date the premiums payable under such insured pension contracts are in
arrears, Seller will pay to Purchaser (or one of the Purchaser Affiliates) an
amount equal to such shortfall.
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(d) UK Pension Schemes.
------------------
(i) PBH Ltd. Retirement and Benefit Schemes. Seller agrees to
----------------------------------------
indemnify and keep indemnified the Purchaser, its affiliates, and Required
Subsidiaries against, and to pay to WJ (in WJ's capacity as trustee and agent
for (i) itself, (ii) the administrators of the Xxxxxxxxxx Xxxxxx Hind Ltd.
Retirement and Benefit Scheme ("PBH UK Scheme"), and (iii) any of the Acquired
Subsidiaries) the Funding Shortfall. The Funding Shortfall for this purpose
means the amount, if any, by which the accrued actuarial liabilities of the PBH
UK Scheme as of the Closing Date exceeds the assets of the PBH UK Scheme
calculated in accordance with the Projected Accrued Benefit Method as of the
Closing Date, together with interest at the valuation rate from the Closing Date
to the date of payment. The Funding Shortfall shall be determined in accordance
with the actuarial method and assumptions set out in Schedule 6.12(d)(i).
-------------------
(ii) Xxxxxxxxxx Superannuation Scheme. Purchaser and Seller agree to
--------------------------------
cause the Foreign Agreement conveying the Acquired Stock of PBH Ltd. (the "UK
Purchase Agreement") to provide that employees of the Acquired Subsidiaries who
are members (the "PSS Members") of the Xxxxxxxxxx Superannuation Scheme
("Xxxxxxxxxx Scheme") shall continue to participate in the Xxxxxxxxxx Scheme
until December 31, 1996 (the "post-closing period"). WJ agrees that, during the
post-closing period, it (i) shall not increase the salaries with respect to the
PSS Members in excess of the salary scale projection under the Xxxxxxxxxx
Scheme, (ii) shall pay to Xxxxxxxxxx monthly the amount of contributions due to
the Xxxxxxxxxx Scheme on behalf of the PSS Members for such post-closing period
plus any amount of additional benefits to which a PSS Member shall be entitled
as a result of any salary increase by Purchaser during the post-closing period,
and (iii) shall pay administrative expenses related to the PSS Members during
post-closing participation in accordance with the UK Purchase Agreement. The UK
Purchase Agreement shall provide that those PSS Members who at the conclusion of
the post-closing period become members of any UK approved pension scheme
operated by any Acquired Subsidiary shall have the opportunity to direct that a
transfer payment be made from the Xxxxxxxxxx Scheme to such other scheme in
respect of such member's participation therein. Seller will ensure that the UK
Purchase Agreement (i) provides for the transfer value in such a situation to be
calculated on a past service reserve basis in accordance with the actuarial
method and assumptions set out in Schedule 6.12(d)(ii), (ii) contains a
--------------------
shortfall provision requiring Seller to make good any shortfall between the
amount, if any, actually transferred and the transfer value so calculated, and
(iii) contains a refund provision requiring Purchaser (or one of the Purchaser
Affiliates) to refund an amount by which the amounts actually transferred
exceeds the transfer value in the event there is any error in calculating or
transferring the amount of the transfer value.
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6.13 Employee Benefit Plans.
----------------------
(a) Continuation of Plans. Schedule 2.20 lists the Plans (as such term is
--------------------- -------------
defined in Section 2.20) which the employees of the Contact Lens Product
Business participate in as of the Closing Date. Seller has identified on
Schedule 2.20 those Plans in which the Employees participate as of the Closing
-------------
Date which (i) are not maintained by an Acquired Subsidiary but which will be
assumed by or transferred to the Purchaser (or an Acquired Subsidiary) as of the
Closing Date and (ii) are maintained by an Acquired Subsidiary but which will be
assumed or transferred to the Seller (or an affiliate) as of the Closing Date.
(b) Benefit Liabilities. Seller shall be responsible for and shall pay
-------------------
all liabilities (other than those liabilities to the extent accrued on the
Closing Net Current Assets statement) arising in connection with claims incurred
on or prior to the Closing Date with respect to the Employees under each
employee welfare benefit plan in which such Employees participate, including,
but not limited to all incurred but not reported claims. Except as otherwise
provided in this Agreement, Purchaser shall be responsible for and shall pay all
liabilities arising in connection with claims incurred after the Closing Date by
the Employees under each employee welfare benefit plan in which such Employees
participate after the Closing Date. For purposes of this Section, a claim shall
be considered incurred on the date treatment is rendered or a service performed.
Worker's compensation claims (other than those claims to the extent accrued on
the Closing Net Current Assets statement) of any Employee shall be the
responsibility and liability of Seller if the event giving rise to such claim
occurred on or prior to the Closing Date and shall be the responsibility and
liability of Purchaser if the event giving rise to the claim occurs after the
Closing Date. Except as otherwise provided herein, if any payment or benefit is
due to be paid or provided to any of the Employees (including, but not limited
to, the Foreign Transferred Employees) on or after the Closing Date, only with
respect to 13 month payments, Christmas bonuses or bonuses or commissions of any
kind or holiday pay, but excluding any payment or benefit under any employee
pension benefit plan, Seller shall pay to Purchaser within 10 days after
Purchaser's written demand to Seller such proportion of the payment or the cost
of the benefit as the period of pre-Closing employment with the Acquired
Subsidiaries or PD bears to the period of time which has elapsed since the
applicable payment or benefit was last paid or provided to the relevant
Employees (including, but not limited to, the Foreign Transferred Employees);
provided that nothing herein shall apply to salary or any other payments or
benefits that accrue wholly in respect of such Employee's service with
Purchaser, the Purchaser Affiliates or the Acquired Subsidiaries after the
Closing Date or to the extent that (i) Purchaser has increased any such payment
or benefit after the Closing Date or (ii) any such payment or benefit is
included as a liability in the statement of Closing Net Current Assets.
(c) COBRA. Acquired Subsidiaries shall be responsible for satisfying the
-----
requirements of Section 4980B of the Code to provide continuation coverage under
any
-51-
group health plan maintained by Acquired Subsidiaries (for which such
requirement with respect to any such plan is applicable).
(d) Xxxxxxxxxx Visioncare Pension Plan.
----------------------------------
(i) On or prior to the Closing Date, Seller shall cause the
Xxxxxxxxxx Visioncare Pension Plan (the "PBH Plan") to be transferred to
and assumed by PBH. After the Closing Date and within the time frame set
forth below, Purchaser shall cause assets and liabilities in the amount
determined herein to be transferred from the PBH Plan to a plan maintained
by one of the Seller or the Seller Affiliates (the "Successor Plan"). The
Successor Plan shall be tax qualified under Section 401 (a) of the Code
and shall preserve all optional forms of benefits and other rights within
the scope of Section 411(d)(6) of the Code. The transfer shall occur as
soon as practicable following the Closing, Date or such later date as
required by law (the "Transfer Date"), provided that, prior to the
Transfer Date, Xxxxxxxxxx shall either provide Purchaser with an opinion
of counsel or shall obtain a ruling from the Internal Revenue Service that
the transfer of assets from the PBH Plan to the Successor Plan shall not
adversely affect the qualified status of the Successor Plan and its
related trust under Sections 401 (a) and 501 (a) of the Code. Purchaser
and Seller shall cooperate in making all appropriate filings and taking
all appropriate actions required to implement the provisions of this
Section 6.13.
-------------
(ii) The PBH Plan shall retain all benefit obligations and
liabilities which relate to participants who, as of the Closing Date, are
employed by the Acquired Subsidiaries (whether actively employed or deemed
employed pursuant to a severance agreement or otherwise) and are accruing
benefits under the PBH Plan (the "Active Participants"). As of the
Transfer Date, the PBH Plan shall transfer and the Successor Plan shall
assume all benefit obligations and liabilities under the PBH Plan which
relate to all participants in the PBH Plan other than the Active
Participants, which shall include, but shall not be limited to retirees,
deferred vested participants, and beneficiaries (the "Inactive
Participants").
(iii) As of the Transfer Date, assets equal to the Xxxxxxxxxx Asset
Amount (as defined herein) shall be transferred to the Successor Plan. The
Xxxxxxxxxx Asset Amount shall be equal to the excess of the market value
of the PBH Plan assets as of the Closing Date (such amount to be adjusted
to reflect accrued benefit payments, expenses, and other activity of the
plan (including but not limited to interest or investment income) which is
directly attributable to the pre-closing period but which is not properly
reflected in the reported asset value on the Closing Date) over the PBH
Asset Amount, such amount adjusted for earnings as specified in clause
(iv) below. The PBH Asset Amount shall be determined as of the Closing
Date and shall be equal to the sum of (A) and (B) below:
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(A) With respect to each Active Participant who has not received a
notice of termination as of the Closing Date (the "Continued Active
Employees"), the Projected Benefit Obligation, as determined in accordance
with Financial Accounting Standard Number 87 ("FAS 87"), using the
actuarial assumptions set forth on Schedule 6.13(a):
----------------
(B) With respect to each Active Participant who is not a Continued
Active Employee as of the Closing Date but who is continuing to accrue
benefits under the PBH Plan (the "Non-Continued Active Participants"), the
present value determined using the actuarial assumptions set forth on
Schedule 6.13(b), of the benefits payable under the PBH Plan, to the Non-
----------------
Continued Active Participant, including for such purpose all benefits
which the participant is expected to accrue under the PBH Plan on and
after the Closing Date.
The transfer contemplated herein shall comply with all requirements of
Sections 414(l) and 401(a)(12) of the Code and in no event shall the Xxxxxxxxxx
Asset Amount or the PBH Asset Amount be less than the amount determined pursuant
to Section 414(l) of the Code. Provided that the Pension Benefit Guaranty
Corporation does not successfully challenge the assumptions used by the PBH Plan
for purposes of the transfer, such amount shall be determined using the
assumptions specified in Section 412 of the Code for determining Current
Liability. For purposes of calculating this minimum asset amount only, the
interest rate will be the value at the lower end of the permissible range as
defined in Section 412(b)(5)(B)(ii) of the Code.
The calculations of the PBH Asset amount shall be performed by the
Enrolled Actuary of the PBH Plan. Both Purchaser and Seller reserve the right to
have such calculations reviewed by an Enrolled Actuary of their choice. If a
dispute arises regarding the application of actuarial principles under this
Section, a third Enrolled Actuary shall be selected by mutual agreement to
determine the appropriate transfer value.
(iv) The amount of assets transferred to the Successor Plan as of the
Transfer Date shall be equal to the Xxxxxxxxxx Asset Amount adjusted to reflect,
on a pro rata basis, the actual asset performance of the PBH Plan from the
Closing Date to the first day of the month prior to the Transfer Date and
credited with interest from that date until the Transfer Date at the rate of
7.5% per annum, and adjusted to reflect benefit payments and expenses paid after
the Closing Date by the PBH Plan which are related to the obligations being
transferred to the Successor Plan.
(v) Upon such transfer, none of the Acquired Subsidiaries, the Purchaser,
any affiliate of Purchaser, nor the PBH Plan shall have any liability or
obligation to the Inactive Participants for benefits accrued under the PBH Plan
or any further obligations in respect to such Inactive Participants.
Additionally, upon such transfer,
-53-
neither the Seller, any affiliate of Seller, nor the Successor Plan shall
have any liability or obligation to the Active Participants for benefits
accrued under the PBH Plan or any further obligations in respect of such
Active Participants.
(vi) Within thirty (30) days following the end of the "Salary
Continuance Period," Purchaser shall cause the PBH Plan to transfer, and
the Seller shall cause the Successor Plan to assume, all benefit
obligations and liabilities under the PBH Plan which relate to the Non-
Continued Active Participants (the date of the transfer shall be referred
to herein as the "Second Transfer Date"). For this purpose, the Salary
Continuance Period shall mean the date upon which none of the Non-
Continued Active Participants is accruing benefit service under the PBH
Plan, but in no event later than eighteen (18) months after the Closing
Date. As of the Second Transfer Date, Purchaser shall cause assets equal
to the Second Transfer Amount to be transferred to the Successor Plan. The
Second Transfer Amount shall be equal to the amount determined under
Section (iii)(B) above, adjusted on the same basis as set forth in Section
(iv) above with respect to the period beginning on the Closing Date and
ending on the Second Transfer Date.
(vii) Purchaser agrees that for the one-year period following the
Closing Date, the benefits provided under the PBH Plan with respect to the
Continued Active Employees shall be substantially similar to those
provided immediately prior to the Closing Date.
(viii) Purchaser and Seller shall share equally the costs incurred by
the PBH Plan's Enrolled Actuary in connection with the transfer of assets
from the PBH Plan to the Successor Plan. Purchaser and Seller shall be
solely responsible for their own expenses incurred in connection with any
independent review of the calculations performed by the PBH Plan's
Enrolled Actuary as set forth in (iii) and (vi) above.
(e) Revlon Litigation. Seller and/or the portion of the PBH Plan
-----------------
transferred to Seller (or one of the Seller Affiliates) shall have the right to
receive from Revlon, Inc. ("Revlon"), Executive Life Insurance Company
("Executive Life"), Aurora National Life Assurance Company ("Aurora"), and
National Organization of Life and Health Guaranty Associations ("NOLHGA"), and
their successors in interest, any and all payments that Revlon, Executive Life,
Aurora, and NOLHGA, and their successors in interest, or any of them, may make
in resolution or settlement of claims or reimbursement of advances, shortfall
payments, and/or other payments made to PBH employees who participated in the
Revlon Pension Plan prior to Seller's acquisition of the PBH business from
Revlon ("PBH Employees"), their beneficiaries and successors, together with any
interest thereon, with respect to obligations of Revlon, Executive Life, Aurora,
and/or NOLHGA to such PBH Employees, their beneficiaries, and successors under
Xxxxxxxxxx PLC et al. v. Xxxxxx 0. Xxxxxxxx, et al., Case No. 91-5195 WMB filed
---------------------------------------------------
in the United States District Court for the Central District of California (the
"Revlon Litigation"), the Modified Plan of Rehabilitation
-54-
for Executive Life Insurance Company ("ELIC Rehabilitation Plan"), the annuity
contracts such PBH Employees received from Aurora pursuant to the ELIC
Rehabilitation Plan ("Aurora Annuities"), group annuity contract number CQ00123
("CQ00123"), or otherwise. The rights of Seller and the portion of the PBH Plan
transferred to Seller (or one of the Seller Affiliates) under this provision
shall include, but shall not be limited to, the right to receive reimbursement
of (i) shortfall amounts advanced by Seller, PBH, and/or the PBH Plan, or any of
them, during the conservatorship of Executive Life, which may be reimbursed by
payments from Revlon, by guaranty payments from NOLHGA and/or by payments of
"Account Value Increments" (as such term is defined in the ELIC Rehabilitation
Plan) from the various enhancement trusts established under the ELIC
Rehabilitation Plan, and (ii) amounts advanced by Seller, PBH, and/or the PBH
Plan, or any of them, prior to Executive Life's conservatorship with respect to
benefits then payable under CQ00123, but for which pay status did not commence
in a timely fashion due to administrative delays. Neither Purchaser, Purchaser
Affiliates (including PBH), nor Acquired Subsidiaries shall have any right to
receive from Revlon, Executive Life, Aurora, or NOLHGA, or any of their
successors in interest, any payment or reimbursement with respect to any such
obligations. In the event that Purchaser and/or PBH shall receive any such
payment or reimbursement, Purchaser immediately shall notify Seller of such
event and shall, within three (3) days from receipt, pay the amount so received
to Seller or such other person as Seller shall specify in writing to Purchaser
and/or PBH. Furthermore, Purchaser and/or PBH shall have no right of
reimbursement or contribution from Seller or the portion of the PBH Plan
transferred to Seller, or their successors, or any of them, with respect to any
amounts that Seller or the portion of the PBH Plan transferred to Seller, or
their successors, or any of them, or PBH Employees, their beneficiaries and
successors, or any of them, may receive with respect to any such obligation.
Notwithstanding the above, Seller shall be fully responsible for any and all
costs and expenses (including legal fees) of PBH, PBH Plan, Purchaser or any of
its affiliates, which are incurred or arise with respect to the matters
discussed herein, whether such amounts are incurred or arise before, on or after
the Closing Date, including all costs and expenses associated with the Revlon
Litigation, and Seller shall fully indemnify and save PBH, the PBH Plan,
Purchaser and its affiliates harmless against all such amounts. In the event a
settlement agreement is reached with Revlon or others which provides future
protection or benefits to the PBH Employees or the PBH Plan, Seller shall cause
such settlement protection and benefits to equally apply to the PBH Employees
that remain in the PBH Plan after the Closing Date and to the PBH Plan and
nothing herein shall limit the rights of such PBH Employees or the PBH Plan from
enforcing such rights. Nothing herein shall limit the right of the PBH Plan,
Purchaser or its affiliates from pursuing any cause of action that exists
against any party, including Revlon, Executive Life, Aurora or NOLHGA.
-55-
ARTICLE 7
CONDITIONS PRECEDENT TO PURCHASER'S PERFORMANCE
7.1 Conditions. All obligations of Purchaser to proceed with the Closing and
----------
to consummate the transactions contemplated hereby are subject to
fulfillment and satisfaction by Seller on or before the Closing Date of
each of the conditions precedent set forth in this Article 7. Purchaser may
---------
waive any or all of these conditions in whole or in part in a writing
executed by Purchaser; provided, however, that no waiver of a condition
-------- -------
shall constitute a waiver by Purchaser of any of its other rights or
remedies, at law or in equity, if Seller shall be in default of any of its
representations, warranties, or covenants under this Agreement.
7.2 Accuracy of Representations and Warranties. The representations and
------------------------------------------
warranties of Seller contained herein and in any certificate or other
writing delivered pursuant hereto or in connection herewith shall be true
and correct in all material respects on and as of the Closing Date as
though made at that time.
7.3 Performance of Seller. Seller shall have duly performed or complied with
---------------------
all of the covenants, acts, and obligations to be performed or complied
with by Seller hereunder at or prior to the Closing Date, including those
set forth in Article 9 hereof.
7.4 No Material Changes. During the period from April 30, 1996, to
-------------------
the Closing Date, there shall not have been any Material Adverse Change,
and the Acquired Assets or the Acquired Subsidiaries' Assets shall not have
sustained any uninsured material casualty or other loss, damage, or
destruction.
7.5 Absence of Litigation. No action, suit, or proceeding before any
---------------------
court or any governmental body or authority, pertaining to the transaction
contemplated by this Agreement or to its consummation, shall have been
instituted or threatened on or before the Closing Date.
7.6 Consents. Seller shall have obtained and delivered copies to
--------
Purchaser of all necessary agreements and consents of any third parties to
the consummation of the transactions contemplated by this Agreement by
Seller, the Seller Affiliates and PD, solely in respect of agreements and
consents attributable to the Acquired Subsidiaries' and PD's businesses as
conducted prior to the Closing. All consents and approvals by governmental
agencies in the United States and the U.K. that are required for the
consummation by Purchaser of the transactions contemplated hereby to the
Closing Date will have been obtained.
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7.7 Approval of Documents. The form and substance of all certificates,
---------------------
instruments, opinions, Schedules, and other documents delivered to
Purchaser under this Agreement shall be satisfactory in all respects to
Purchaser and its counsel.
7.8 Board Resolution. Seller shall have delivered to Purchaser a certified
----------------
copy of the resolution of the Boards of Directors of Seller and each of the
Seller Affiliates, or such other comparable document as may be required or
allowed in the applicable jurisdiction, authorizing, as applicable, the
execution of this Agreement by Seller and the consummation of the
transactions contemplated herein by Seller and each of the Seller
Affiliates.
7.9 Opinion of Counsel. Seller shall have delivered to Purchaser an opinion
------------------
of counsel to Seller, dated as of the Closing Date, in a form reasonably
acceptable to Purchaser.
7.10 Indebtedness for Borrowed Money; Guarantees. Purchaser will have received
-------------------------------------------
(a) payoff letters with respect to all of the Acquired Subsidiaries'
indebtedness for borrowed money (including any accrued interest related
thereto and a.1 prepayment premiums and penalties incurred in connection
with any prepayment thereof in connection with the transactions
contemplated by this Agreement) to be repaid as contemplated in Section 1.8
-----------
hereof and (b) satisfactory evidence of the termination of all guarantees
granted by any Acquired Subsidiary with respect to indebtedness for
borrowed money (including, without limitation, any such guarantee in favor
of National Westminster Bank), and with respect to each of the foregoing
clauses (a) and (b), releases of any and all Liens held by third parties
related thereto.
7.11 Real Property. Purchaser shall be able to obtain, at its expense and in
-------------
forms satisfactory to Purchaser's lending sources (the "Lenders"), title
insurance policies insuring Lenders' mortgage lien position in the Owned
Property, free and clear of all Liens, defects, claims, leases, rights of
possession or other encumbrances (other than the Permitted Encumbrances)
including such endorsements and affirmative coverages as Lenders may
reasonably request. Seller will provide, or will cause the Seller
Affiliates to provide, all affidavits and indemnities reasonably required
by the title insurers to issue such policies.
7.12 Financing. WJ shall have obtained financing on terms satisfactory to WJ in
---------
an amount sufficient to consummate the transactions contemplated by this
Agreement and to fund the continuing operations of the Contact Lens
Products Business.
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ARTICLE 8
CONDITIONS PRECEDENT TO SELLER'S PERFORMANCE
8.1 Conditions. All obligations of Seller to proceed with Closing are subject
----------
to fulfillment and the satisfaction on or before the Closing Date of each
of the conditions precedent set forth in this Article 8, unless otherwise
---------
waived, in writing, by Seller:
8.2 Accuracy of Representations and Warranties. The representations and
------------------------------------------
warranties of Purchaser contained herein and in any certificate or other
writing delivered pursuant hereto or in connection herewith shall be true
and correct in all material respects on and as of the Closing Date as
though made at that time.
8.3 Performance of Purchaser. Purchaser shall have duly performed or complied
------------------------
with all of the covenants, acts, and obligations to be performed or
complied with by Purchaser hereunder at or prior to the Closing Date.
8.4 Consents. Purchaser shall have obtained and delivered copies to Seller of
--------
all necessary agreements and consents of any third parties to the
consummation of the transactions contemplated by this Agreement by
Purchaser and the Purchaser Affiliates, solely in respect of agreements and
consents attributable to the Purchaser's and the Purchaser Affiliates'
businesses as conducted prior to the Closing. All consents and approvals by
governmental agencies in the United States and U.K. that are required in
order to prevent any illegal consummation by Seller of the transactions
contemplated hereby to the Closing Date (each, a "Required Approval") will
have been obtained; provided, however, that if Seller is required hereby to
consummate the transactions contemplate by this Agreement without obtaining
any governmental consent or approval that is required for such consummation
but that is not a Required Approval, Purchaser shall indemnify Seller and
its affiliates for any costs, expenses, losses, damages, fines, penalties,
or liabilities that result therefrom.
8.5 Approval of Documents. The form and substance of all certificates,
---------------------
instruments, opinions, Schedules, and other documents delivered to Seller
under this Agreement shall be satisfactory in all material respects to
Seller and its counsel.
8.6 Board Resolution. Purchaser shall have delivered to Seller a certified copy
----------------
of the resolution of the Boards of Directors of Purchaser and each of the
Purchaser Affiliates, or such other comparable document as may be required
or allowed in the applicable jurisdiction, authorizing, as applicable, the
execution of this Agreement by Purchaser and the consummation of the
transactions contemplated herein by Purchaser and each of the Purchaser
Affiliates.
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8.7 Opinion of Counsel. Purchaser shall have delivered to Seller an opinion of
------------------
counsel to Purchaser, dated as of the Closing Date, in a form reasonably
acceptable to Seller.
ARTICLE 9
THE CLOSING
9.1 Closing. The closing with respect to the transactions contemplated by this
-------
Agreement (the "Closing") shall take place at 10 a.m. on a business day
within five business days following the date as to which the conditions to
each party's obligations have been satisfied, but no later than seventy-
five (75) days after the date hereof, or at such other time as may be
agreed to by Seller and Purchaser, at the offices of WJ's financing
sources. For purposes of this Agreement, the "Closing Date" shall be deemed
to be the date that the Closing actually takes place. Seller and Purchaser
agree to use their reasonable best efforts to consummate the Closing within
forty-five (45) days after the date hereof.
9.2 Seller's Obligations. In addition to any other documents required to be
--------------------
delivered by Seller at Closing, Seller shall deliver, or cause the Seller
Affiliates to deliver, to Purchaser at Closing the following documents:
(a) Executed bills of sale and other instruments of transfer, dated as
of the Closing Date, conveying to WJ or one of the Purchaser Affiliates all of
PD's right, title, and interest in and to the Acquired Assets, all in form and
substance satisfactory to Purchaser;
(b) Executed assignments of all assignable governmental licenses,
regulatory approvals and permits and of all Intellectual Property of PD to be
conveyed pursuant to Section 1.2(f) hereof in a form suitable for recording
-----------
with the appropriate governmental entity;
(c) Stock certificates representing the Acquired Stock duly endorsed for
transfer to Purchaser or its designated affiliate or other instruments of
transfer;
(d) All books, records, and other data relating to the Contact Lens
Products Business, the Acquired Stock, and the Acquired Assets (other than
corporate records) of PD;
(e) Properly executed and acknowledged titles and other instruments of
transfer to all motor vehicles owned by PD and used exclusively in connection
with the Contact Lens Products Business;
(f) The consents as provided in Section 7.6 hereof;
-----------
(g) Certified resolutions of the Boards of Directors of Seller and each of
the Seller Affiliates, as provided for in Section 7.8 hereof;
-----------
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(h) The opinion of counsel as provided in Section 7.9 hereof;
-----------
(i) A certificate signed by an officer of Xxxxxxxxxx Holdings, Inc.
certifying that no withholding is required under Section 1445 of the Code in
connection with the transfer of any United States real property interest under
Section 897 of the Code as a result of the transactions contemplated by this
Agreement;
(j) A Transition Services Agreement between Purchaser and Seller, in the
form of Exhibit D attached hereto (the "Transition Services Agreement");
(k) The resignations of all directors and officers of each of the Acquired
Subsidiaries; and
(l) A certificate from an officer of the Seller, dated the Closing Date,
stating that the conditions set forth in Article 7 hereof have been satisfied.
---------
Seller, at any time before or after the Closing, will execute, acknowledge,
and deliver, or will cause to be executed, acknowledged, and delivered, any
further deeds, assignments, conveyances, and other assurances, documents, and
instruments of transfer, reasonably requested by Purchaser or the Purchaser
Affiliates, and will take, or cause to be taken, any other action consistent
with the terms of this Agreement that may reasonably be requested by Purchaser
or the Purchaser Affiliates, for the purpose of assigning, transferring,
granting, conveying, and confirming to Purchaser or the Purchaser Affiliates, or
reducing to possession, any or all property to be conveyed and transferred by
this Agreement.
9.3 Purchaser's Obligations. Purchaser shall deliver to Seller, at Closing,
-----------------------
the following:
(a) Wire transfer for the cash portion of the Purchase Price, as set
forth in Article 1 hereof;
---------
(b) The executed Note as provided for in Section 1.6;
-----------
(c) The consents as provided in Section 8.4;
-----------
(d) Certified resolutions of the Boards of Directors of Purchaser and
each of the Purchase, Affiliates, as provided for in Section 8.6 hereof; and
-----------
(e) The opinion of counsel as provided for in Section 8.7 hereof; and
-----------
(f) A certificate from an officer of the Purchaser, dated the Closing
Date, stating that the conditions in Article 8 hereof have been satisfied.
---------
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ARTICLE 10
POST-CLOSING
10.1 Survival of Representations and Warranties. Regardless of any
------------------------------------------
investigation at any time made by or on behalf of any party hereto, or of
any information any party may have in respect thereof, all representations
and warranties made hereunder or pursuant hereto or in connection with the
transactions contemplated hereby shall, except as otherwise set forth in
(ii) through (iv) or elsewhere in this Section 10.1, survive the Closing
------------
for a period of or until (i) Xxxxx 00, 0000, (xx) the fifth anniversary of
the Closing Date, in the case of any breach of any representation or
warranty contained in Section 2.17, (iii) 30 days after the expiration of
------------
the relevant statute of limitations, in the case of any breach of any
representation or warranty contained in Section 2.12, and (iv) in the case
------------
of a breach of the representations and warranties contained in Section 2.28
------------
(Disclosure) and the Closing Date bring-down contained in the introductory
paragraph of Article 2 where the subject matter of such breach is addressed
---------
by one of the representations and warranties referred in clauses (i), (ii),
or (iii) above, the time limitation set forth in the relevant item of
clauses (i) through (iii) shall control when written notice of such breach
must be given (each of the foregoing clauses (i), (ii), (iii), and (iv)
collectively referred to as the "Indemnification Deadline"); provided, that
------------------------
so long as such written notice of an Actual Loss (as hereinafter defined)
is given on or prior to the Indemnification Deadline, such representations
and warranties shall continue to survive until such matter is resolved.
Notwithstanding the foregoing, any breaches of the representations and
warranties contained in Section 2.3 hereof will not be subject to any time
-----------
limitations. If any Actual Loss arising from a breach of representation or
warranty in Article 2 also constitutes an Actual Loss arising out of or
---------
related to the subject matter of Seller's indemnity (other than pursuant to
Section 10.2(a) of this Agreement), such Actual Loss will be deemed to be
---------------
the subject matter of Seller's indemnity (other than pursuant to Section
-------
10.2(a), and thus, not subject to the limitations set forth in this Section
------- -------
10.1 and Section 10.2. If any Actual Loss arising from a breach of
---- ------------
representation or warranty in Article 3 also constitutes an Actual Loss
---------
arising out of or related to the subject matter of Purchaser's indemnity
(other than pursuant to Section 10.3(a) of this Agreement), such Actual
---------------
Loss will be deemed to be the subject matter of Purchaser's indemnity
(other than pursuant to Section 10.3(a)), and thus, not subject to the
---------------
limitations set forth in this Section 10.1 and Section 10.3. Purchaser
------------ ------------
expressly acknowledges that it has not relied on any warranties, promises,
understandings, or representations, express or implied, of Seller, the
Seller Affiliates or any' agent of Seller or the Seller Affiliates relating
to the Acquired Assets or the Acquired Subsidiaries' Assets and operations
of the Acquired Subsidiaries that are not contained in this Agreement or in
any certificate or schedule delivered by Seller to Purchaser.
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10.2 Indemnification of Purchaser by Seller. Seller (for purposes of this
--------------------------------------
Section 10.2 only, "Indemnifying Party") shall indemnify, defend, and
------------
hold harmless Purchaser, its affiliates, the Acquired Subsidiaries, and
their respective officers, directors, and shareholders, successors and
assigns, from and against any and all costs, expenses, losses, damages,
fines, penalties, or liabilities (including, without limitation, interest
which may be imposed in connection therewith, court costs, litigation
expenses, reasonable attorneys' fees, and accounting fees) ("Actual
Losses") actually incurred by Purchaser, its affiliates, or the Acquired
Subsidiaries with respect to, in connection with, arising from, or
alleged to result from, arise out of, or be in connection with:
(a) A breach by the Indemnifying Party of any representation or warranty
made by the Indemnifying Party and contained in this Agreement or in any
certificate or other document delivered by said party to Purchaser or the
Purchaser Affiliates hereunder or thereunder;
(b) A breach by the Indemnifying Party of any covenant, restriction,
or agreement made by or applicable to the Indemnifying Party (including,
without limitation, any failure to pay or discharge any Excluded Liability)
and contained in this Agreement or in any certificate or other document
delivered by said party to Purchaser or the Purchaser Affiliates hereunder or
thereunder;
(c) Except for any Assumed Liabilities and except for any liability
imposed on the Purchaser pursuant to the Fair Trading Act of 1973, as in
effect in the U.K., any other claim, debt, suit, cause of action,
investigation, or proceeding of any kind whatsoever, whether instituted or
commenced prior to, on or after the Closing Date and which relates to or
arises from the Contact Lens Products Business, Acquired Stock, Acquired
Assets, or Acquired Subsidiaries' Assets or operations of the Acquired
Subsidiaries or PD on or before the Closing Date (including, without
limitation, any product liability claim or action arising from or relating to
any facts or circumstances occurring on or prior to the Closing Date), whether
or not disclosed on any schedule hereto;
(d) Any claims of any brokers or finders, claiming by, through or
under the Seller, its affiliates, the Acquired Subsidiaries or PD, for any
amount in connection with the transactions contemplated by this Agreement;
(e) All loss, expense, or damage suffered as the direct result of the
Indemnifying Party's failure to pay or perform those liabilities expressly
assumed or undertaken under this Agreement;
(f) Any liability or investigatory, corrective or remedial obligation
under any Environmental, Health and Safety Laws relating to or arising from
the past or current facilities, properties or operations of the Contact Lens
Product Business (including without
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limitation the Acquired Subsidiaries, the Acquired Assets and the Acquired
Subsidiaries' Assets), whether or not disclosed on any schedule hereto,
including without limitation, any matters disclosed on Schedule 2.17 hereto
-------------
(including without limitation any such liability or obligation relating to the
offsite treatment, storage, or disposal of hazardous materials, substances or
wastes), except to the extent the factual basis for any such liability or
obligation is caused or created by, or exacerbated through the negligence or
willful misconduct of, Purchaser, in connection with the operation of the
Acquired Subsidiaries, the Acquired Assets or the Acquired Subsidiaries'
Assets after the Closing Date. With respect to matters for which Seller is
obligated to indemnify Purchaser and its affiliates pursuant to this
subparagraph, Purchaser agrees to use reasonable efforts, where it is within
Purchaser's or the applicable Purchaser Affiliates' authority to do so and
while complying with all legal requirements and reasonably mitigating risks to
human health and the environment, to address such matters in a commercially
reasonable and cost-effective manner;
(g) Any liability or obligation arising from or relating to the past,
current, or future ownership, use or operation of any assets, properties,
facilities or operations of the Acquired Subsidiaries that were not owned,
operated, used or conducted by the Contact Lens Product Business as of the
Closing Date (including, without limitation, any liability or obligation
arising from or relating to the ownership, use, operation or disposition of
such businesses effected pursuant to (i) the Agreement of Purchase and Sale of
Assets between Xxxxxxxxxx plc and certain of its affiliates and Allergan, Inc.
(U.S.A.) and certain of its affiliates, dated November 27, 1995, (ii) the
Agreement for the Purchase and Sale of Assets by and among Xxxxxxxxxx
Holdings, Inc., Paragon Optical Company, Paragon Acquisition Corporation, and
certain other parties, dated as of October 17, 1995, (iii) the Purchase
Agreement between Xxxxxxxxxx plc and certain of its subsidiaries and Sola
Holdings, Inc., dated as of September 1, 1993, (iv) the Agreement for the Sale
and Purchase of the Whole of the Issued Share Capital of Combined Optical
Laboratories Ltd. dated May 4, 1990, by and among Xxxxxxxxxx plc, Workgood
Limited, and Xxxxxxxx and Whalley Securities Limited, and (v) the Purchase
Agreement dated as of January 30, 1992 by and among Xxxxxxxxxx Visioncare Inc.
and Xxxxxxxxxx Visioncare Canada Inc., and Xxxxxx Acquisition Corp.
(h) Any liability or obligation arising under Title IV of ERISA with
respect to any employee pension benefit plan (as defined in Section 3(2) of
ERISA) maintained by Seller or any member of Seller's controlled group (as
defined in Section 414 of the Code) other than any plan maintained by the
Contact Lens Product Business, and
(i) Except any liabilities arising pursuant to or under this Agreement,
effective upon the Closing, Seller, on behalf of itself and its affiliates,
hereby irrevocably waives, releases and discharges forever the Acquired
Subsidiaries from any and all liabilities and obligations to Seller or its
affiliates, of any kind or nature whatsoever, whether in its, their or his
capacity as Seller hereunder, as a stockholder, officer or director of any
Acquired Subsidiary or otherwise, including, without limitation, in respect of
rights of contribution or indemnification, in each case whether absolute or
contingent, liquidated or unliquidated, and
-63-
whether arising hereunder or under any other agreement or understanding or
otherwise at law or equity, and Seller hereby covenants and agrees that it
will indemnify and hold harmless Purchaser, its affiliates, and the Acquired
Subsidiaries from and against all such liabilities or obligations, including,
without limitation, all such liabilities or obligations incurred with respect
to any person who was an officer or director of any Acquired Subsidiary on or
prior to the Closing Date.
The Indemnifying Party shall not be required to indemnify Purchaser and its
affiliates pursuant to Section 10.2(a) unless and until the aggregate of
---------------
all Actual Losses pursuant to Section 10.2(a) exceeds One Million Five Hundred
---------------
Thousand and No/100 Dollars ($1,500,000) (the "Section 10.2(a) Basket") and in
such case (i) the Purchaser's and its affiliates' right to recover for Section
-------
10.2(a)" claims shall apply only to the excess of the Section 10.2(a) Basket;
-------
(ii) Purchaser's and its affiliates' right to recover for Section 10.2(a) claims
---------------
shall not apply to individual Actual Losses in the amount of Twenty-Five
Thousand and No/100 Dollars ($25,000) or less (the "Minimum Basket"); provided
that an individual claim for Actual Losses shall include any claims which arise
out of or relate to any related facts, events or circumstances; and (iii) in no
event shall the aggregate amount of indemnification in excess of the Section
10.2(a) Basket under Section 10.2(a) and 10.2(f) by the Indemnifying Party
--------------- -------
exceed fifty percent (50%) of the Purchase Price (the "Cap Amount"); provided,
--------
however, that the Section 10.2(a) Basket, the Minimum Basket, and the Cap Amount
-------
shall not apply to any Actual Losses relating to Section 2.12 (Taxes), and that
------------
the Section 10.2(a) Basket and Minimum Basket shall not apply to Actual Losses
relating to Section 2.17 (Environmental Matters) and Actual Losses paid under
------------
Section 2.12 will not count against the Section 10.2(a) Basket or the Cap Amount
------------
and Actual Losses paid under Section 2.17 will not count against the Section
------------
10.2(a) Basket. Notwithstanding anything to the contrary set forth in this
Section 10.2, the Indemnifying Party shall not be required to indemnify
------------
Purchaser and its affiliates for a breach of Section 4.3 of this Agreement
-----------
unless and until the aggregate of all Actual Losses for all breaches of Section
A.3 exceeds One Million Dollars (the "Section 4.3 Basket"), at which point the
Indemnifying Party will be obligated to indemnify Purchaser and its affiliates
against all such Actual Losses relating back to the first dollar; provided that
(i) Purchaser's and its affiliates' right to recover for breaches of Section 4.3
claims shall not apply to individual Actual Losses in the amount of Twenty-Five
Thousand and No/100 Dollars ($25,000) or less; (ii) an individual claim for
Actual Losses shall include any claims which arise out of or relate to any
related facts, events or circumstances; (iii) Actual Losses that are counted
against the Section 4.3 Basket shall not also be counted against the Section
10.2(a) Basket; and (iv) Actual Losses counted against the Section 10.2(a)
Basket shall not also be counted against the Section 4.3 Basket.
10.3 Indemnification of Seller by Purchaser. Purchaser (for purposes
--------------------------------------
of this Section 10.3 only, "Indemnifying Party") shall indemnify, defend,
------------
and hold harmless Seller, its affiliates and their respective officers,
directors, and shareholders, successors and assigns, from and against any
and all costs, expenses, losses, damages, fines, penalties, or
liabilities (including, without limitation, interest that may be imposed
in connection therewith, court costs, litigation expenses, reasonable
attorneys' fees, and accounting fees) ("Actual Losses") actually incurred
by Seller, its affiliates, or
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such officers, directors, shareholders, successors, or assigns with respect
to, in connection with, arising from, or alleged to result from, arise out
of, or be in connection with:
(a) A breach by the Indemnifying Party of any representation or
warranty made by the Indemnifying Party and contained in this Agreement or in
any certificate or other document delivered by said party to Seller hereunder
or thereunder;
(b) A breach by the Indemnifying Party of any covenant, restriction,
or agreement made by or applicable to the Indemnifying Party and contained in
this Agreement or in any certificate or other document delivered by the
Indemnifying Party to Seller hereunder or thereunder;
(c) Any claims of any brokers or finders, claiming by, through, or
under the Purchaser or its affiliates for any amount in connection with the
transactions contemplated by this Agreement;
(d) All loss, expense, or damage suffered as the direct result of the
Indemnifying Party's failure to pay or perform those liabilities expressly
assumed or undertaken under this Agreement; and
(e) Except for any Excluded Liabilities, any other claim, debt, suit,
cause of action, investigation, or proceeding of any kind whatsoever
instituted or commenced after the Closing Date which relates to or arises from
the Indemnifying Party's or its affiliates' operation of the Contact Lens
Products Business or its or any of their ownership or operation of the
Acquired Assets or the Acquired Subsidiaries' Assets or the Acquired
Subsidiaries after the Closing Date.
The Indemnifying Party shall not be required to indemnify Seller and its
affiliates unless and until the aggregate of all Actual Losses pursuant to
Section 10.3(a) exceeds One Million Five Hundred Thousand and No/100 Dollars
---------------
($1,500,000) (the "Basket") and in such case (i) Seller's and its affiliates'
right to recover for Section 10.3(a) claims shall apply only to the excess of
---------------
the Basket; (ii) Seller's and its affiliates' right to recover for Section
-------
10.3(a) claims shall not apply to individual Actual Losses in the amount of
-------
Twenty-Five Thousand and No/100 Dollars ($25,000) or less (the "Minimum
Basket"); provided that an individual claim for Actual Losses shall include any
claims which arise out of or relate to any related facts, events, or
circumstances, and (iii) in no event shall the aggregate amount of
indemnification in excess of the Basket under Section 10.3(a) by the
---------------
Indemnifying Party exceed fifty percent (50%) of the Purchase Price (the "Cap
Amount").
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10.4 Procedure for Indemnification.
-----------------------------
(a) The party which is entitled to be indemnified hereunder (the
"Indemnified Party") shall promptly give written notice hereunder to the party
required to indemnify (the "Indemnifying Party") after obtaining notice of any
claim as to which recover), may be sought against the Indemnifying Party
because of the indemnity in Section 10.2 and Section 10.3 hereof and, if such
------------ ------------
indemnity shall arise from the claim of a third party, shall permit the
Indemnifying Party to assume the defense of any such claim and any litigation
resulting from such claim. Notwithstanding the foregoing, the right to
indemnification hereunder shall not be affected by any failure of an
Indemnified Party to give such notice, or delay by an Indemnified Party in
giving such notice unless, and then only to the extent that, the rights and
remedies of the Indemnifying Party shall have been prejudiced as a result of
the failure to give, or delay in giving, such notice. Failure by an
Indemnifying Party to notify an Indemnified Party of its election to defend
any such claim or action by a third party within thirty (30) days after notice
thereof shall have been given to the Indemnifying Party shall be deemed a
waiver by the Indemnifying Party of its right to defend such claim or action.
(b) Subject to Section 10.2 or Section 10.3, as applicable, if the
------------ ------------
Indemnifying Party assumes the defense of such claim or litigation resulting
therefrom, the obligations of the Indemnifying Party hereunder as to such
claim shall include taking all steps necessary in the defense or settlement of
such claim or litigation (including, without limitation, using reasonable
efforts to substitute itself as the real party-in-interest in any such claim
or litigation to the extent a procedure for such substitution is available)
and holding the Indemnified Party harmless from and against any and all
damages caused by or arising out of any settlement approved by the
Indemnifying Party or any judgment in connection with such claim or
litigation. The Indemnifying Party shall not, in the defense of such claim or
any litigation resulting therefrom, consent to entry of any judgment (other
than a judgment of dismissal on the merits without costs) except with the
written consent of the Indemnified Party, or enter into any settlement (except
with the written consent of the Indemnified Party) which does not include as
an unconditional term thereof the giving by claimant or plaintiff to the
Indemnified Party of a release from all liability in respect of such claim or
litigation. Anything in this Section 10.4 to the contrary notwithstanding, the
------------
Indemnified Party may, with counsel of its choice and at its expense,
participate in the defense of any such claim or litigation. In all cases, the
Indemnified Party shall cooperate with the Indemnifying Party in the defense
of claims or litigation, including by making employees, information, and
documentation reasonably available.
(c) If the Indemnifying Party shall not assume the defense of any such
claim by a third party or litigation resulting therefrom after receipt of
notice from such Indemnified Party, the Indemnified Party may defend against
such claim or litigation in such manner as it deems appropriate, and unless
the Indemnifying Party shall deposit with the Indemnified Party a sum
equivalent to the total amount demanded in such claim or litigation plus the
-66-
Indemnified Party's estimate of the costs of defending the same, the
Indemnified Party may settle such claim or litigation on such terms as it may
deem appropriate and, subject to Section 10.2 or Section 10.3, as applicable,
------------ ------------
the Indemnifying Party shall promptly reimburse the Indemnified Party for the
amount of such settlement and for all damages incurred by the Indemnified
Party in connection with the defense against or settlement of such claim or
litigation.
(d) Subject to Section 10.2 or Section 10.3, as applicable, the
------------ ------------
Indemnifying Party shall promptly reimburse the Indemnified Party for the
amount of any judgment rendered with respect to an), claim by a third party in
such litigation and for all damage incurred by the Indemnified Party in
connection with the defense against such claim or litigation, whether or not
resulting from, arising out of, or incurred with respect to, the act of a
third party.
10.5 Informal Dispute Resolution.
---------------------------
(a) In an effort to resolve informally and amicably any claim,
controversy, or dispute arising out of or related to the interpretation,
performance, or reach of this Agreement (a "Dispute") without resorting to
litigation, each party shall notify the other in writing of any Dispute
hereunder that requires resolution. Such notice shall set forth the nature of
the Dispute, the amount involved, if any, and the remedy sought. Each party
shall designate an employee to investigate, discuss and seek to settle the
matter between them. If the parties are unable to settle the matter within
thirty (30) days after such notification, the matter shall be submitted to the
Chief Executive Officer of WJ and the Chief Executive Officer of Pilkington
for consideration. If settlement cannot be reached through their efforts
within an additional thirty (30) days (or such longer time period as they
shall agree upon in writing), then Purchaser and Seller may thereafter take
such actions as they deem appropriate. Purchaser and Seller agree that any
applicable statute of limitations shall be tolled during the pendency of such
informal dispute resolution process and that none of them shall raise or
assert any claim of laches or other legal or equitable principle of limitation
or repose of action based upon such process. Purchaser and Seller agree that
in no event shall any of them be subject to the awarding of any punitive or
exemplary damages in any legal action arising out of or related to this
Agreement.
(b) If a Dispute has not been resolved by negotiation as provided in
Section 10.5(a) above, then upon the written request of either party, such
---------------
Dispute shall be resolved by binding arbitration conducted in accordance with
the Rules of the Center for Public Resources Institute for Dispute Resolution
by a sole, arbitrator. To the extent not governed by such rules, such
arbitrator shall be instructed by the parties to set a schedule for
determination of such Dispute that is reasonable in the circumstances. The
arbitration will be conducted in New York City. The arbitration will be
governed by the United States Arbitration Act, 9 U.S.C. Sections 1-16 and the
Patent Arbitration Act, 35 U.S.C.
-67-
Section 294. Judgment upon the award rendered by the arbitrator may be entered
by any court having jurisdiction.
(c) In the event that the parties have not resolved a Dispute pursuant
to Section 10.5(a) above, the parties hereby acknowledge and agree that the
---------------
negotiation shall be deemed in the nature of settlement discussions and that
neither the fact that the negotiation took place nor any statement or conduct
of any participant in such negotiations shall be admissible into evidence in
any subsequent arbitration or other Dispute resolution involving the parties,
and any disclosure in any form, including oral, by any person participating in
such negotiations shall not operate as a waiver of any privilege.
(d) Nothing in this Section 10.5 shall be construed to impair the
------------
right of either party to seek injunctive or other equitable relief to prevent
a breach or alleged breach of this Agreement.
10.6 Use of Xxxxxx Hind Name. Not later than thirty (30) days after the
-----------------------
Closing, Seller shall remove, or cause to be removed, the name "Xxxxxx
Hind" and the Xxxxxx-Xxxx logo from the exterior of Seller's and its
affiliates' premises. On or as soon as reasonably practicable following the
Closing, but in no event more than ninety (90) days thereafter, Seller
shall destroy, or cause to be destroyed, all existing packaging, print
materials (including letterhead, stationery or business cards), promotional
materials, point of sale materials and advertising copy bearing the "Xxxxxx
Hind" name or logo, and Seller agrees to cease, and to cause its affiliates
to cease, using the "Xxxxxx Hind" name and logo or any variant thereof or
trademark or name similar thereto. All registrations of the trade name,
"PBH," "Pilkington Xxxxxx Hind," and all variants thereof and applications
for registration therefor, whether owned by any of Sellers or the Acquired
Subsidiaries, shall be canceled or all documents necessary to cancel such
registrations and applications shall have been filed with the applicable
government authority, prior to Closing or as soon as reasonably practicable
thereafter. Seller hereby agrees that from and after the date of Closing it
shall not use, any registered or unregistered trademark or service xxxx
relating to the Contact Lens Products Business.
ARTICLE 11
MISCELLANEOUS
11.1 Written Agreement to Govern. This Agreement, that certain
---------------------------
confidentiality agreement dated June 18, 1996 between Pilkington and WJ
Holding, and that certain confidentiality agreement between Pilkington and
Xxxx Capital, Inc. (except to the extent any provision of either of the
aforementioned confidentiality agreements is inconsistent with any
provision in this Agreement) set forth the entire understanding and
supersede all prior oral or written agreements among the parties hereto
relating
-68-
to the subject matter contained herein and therein, and merge all prior and
contemporaneous discussions among them. No party hereto shall be bound by
any definition, condition, representation, warranty, covenant, or provision
other than as expressly stated in this Agreement and each of the
aforementioned confidentiality agreements (to the extent described in the
preceding sentence) or as he,,-.after set forth in a written instrument
executed by such party or by a duly authorized representative of such
party.
11.2 Severability. The parties hereto expressly agree that it is not the
------------
intention of any party hereto to violate any public policy, statutory, or
common law rules, regulations, treaties, or decisions of any government or
agency thereof. If any provision of this Agreement is judicially or
administratively interpreted or construed as being in violation of any such
provision, such articles, sections, sentences, words, clauses, or
combinations thereof shall be inoperative, and the remainder of this
Agreement shall remain binding, upon the parties hereto.
11.3 Notices and Other Communications. Every notice or other
--------------------------------
communication required, contemplated, or permitted by this Agreement by any
party shall be in writing and shall be delivered either by personal
delivery, telegram, facsimile, private courier service, or by certified or
registered mail, postage prepaid, return receipt requested, addressed to
the party to whom intended at the following address:
(a) If to Purchaser:
XXXXXX-XXXXXX CORPORATION
000 X. Xxxxxx Xxxxxx
Xxx Xxxxxxx, Xxxxxxxx 00000-0000
Attention: Chief Executive Officer
Copy to:
XXXXXX-XXXXXX HOLDING, INC.
c/o Bain Capital, Inc.
Two Xxxxxx Place
Boston, Massachusetts 02116
Attention: Xxxxxxx X. Xxxxxxxx
Xxxx X. Xxxxxx
Xxxx X. Xxxx
and
-69-
XXXXXXXX & XXXXX
000 Xxxx Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxx
Xxxx X. Xxxxxxx
(b) If to Seller:
XXXXXXXXXX plc
Xxxxxxx Xxxx
Xx. Xxxxxx, Xxxxxxxxxx
Xxxxxxx, XX00 0XX
Attention: Company Secretary
Copy to:
XXXXX & XXXXXX L.L.P.
One Arizona Center
000 Xxxx Xxx Xxxxx, 00xx Xxxxx
Xxxxxxx, Xxxxxxx 00000-0000
Attention: Xxxxx Xxxxxx Roman
or at such other address as the intended recipient shall from time to time
designate by written notice delivered in accordance herewith. Notice by courier
or certified or registered mail shall be effective on the date it is sent. All
notices and communications required, contemplated, or permitted by this
Agreement to be delivered in person shall be deemed to have been delivered to
and received by the addressee, and shall be effective, on the date of personal
delivery. Any notice transmitted by telegram or facsimile shall be deemed to
have been delivered to and received by the addressee, and shall be effective, on
the date said notice is delivered to the telegram company or facsimile operator
for transmission.
11.4 Counterparts. This Agreement may be executed in any number of
------------
counterparts, and each counterpart shall constitute an original instrument,
but all such separate counterparts shall constitute one and the same
agreement.
11.5 Governing Law. The validity, construction, and enforceability of this
-------------
Agreement shall be governed in all respects by the laws of the State of
California, without regard to its conflict of laws rules. Each of Seller
and Purchaser hereby submits to the co-exclusive jurisdiction of the United
States courts in California, and the courts of the State of California,
over any lawsuit under this Agreement and waives any objection based on
venue or forum non conveniens with respect to any action instituted
therein. Each of the Seller and the Purchaser hereby waives the necessity
for personal service of any and all process upon it and consents that all
such service of process may be
-70-
made by registered or certified mail (return receipt requested), with a
copy also being sent by facsimile (with receipt confirmed), in each case
directed to Seller or Purchaser at its address set forth in, and with
copies sent as required by, Section 11.3, and service so made shall be
------------
deemed to be completed on the date of actual receipt. Each of the Seller
and the Purchaser hereby consents to service of process as aforesaid.
Nothing in this Section 11.5 will prohibit personal service in lieu of the
------------
service by mail contemplated herein.
11.6 Currency. All dollar amounts referred to in this Agreement are in
--------
United States Dollars, unless otherwise expressly stated.
11.7 Successors and Assigns. This Agreement shall be binding upon and
----------------------
shall inure to the benefit of the parties hereto and their respective
heirs, executors, administrators, personal representatives, successors,
and assigns; provided, however, that this Agreement may not be assigned
-------- -------
by any party hereto without the prior written consent of the other
parties, except that Purchaser may assign this Agreement or any of its
rights hereunder (i) to any of its affiliates or (ii) as collateral
security to any of Purchaser's financing sources; provided, further, that
Purchaser shall remain primary obligor under this Agreement
notwithstanding any such assignment.
11.8 Further Assurances. At any time on or after the date hereof, the
------------------
parties hereto shall each perform such acts, execute and deliver such
instruments, assignments, endorsements and other documents and do all such
other things consistent with the terms of this Agreement as may be
reasonably necessary to accomplish the transactions contemplated in this
Agreement or otherwise carry out the purpose of this Agreement.
11.9 Gender, Number and Headings. The masculine, feminine, or neuter
---------------------------
pronouns used herein shall be interpreted without regard to gender, and
the use of the singular or plural shall be deemed to include the other
whenever the context so requires.
11.10 Schedules and Exhibits. Schedules and Exhibits referred to herein
----------------------
and attached hereto are incorporated herein by such reference as if fully
set forth in the text hereof.
11.11 Waiver of Provisions. The terms, covenants, representations, warranties,
--------------------
and conditions of this Agreement may be waived only by a written
instrument executed by the party waiving compliance. The failure of any
party at any time to require performance of any provisions hereof shall in
no manner affect the right at a later date to enforce the same. No waiver
by any party of any condition, or breach of any provision, term, covenant,
representation, or warranty contained in this Agreement, whether by
conduct or otherwise, in any one or more instances, shall be deemed to be
or construed as a further or continuing waiver of any such condition or of
the
-71-
breach of any other provision, term, covenant, representation, or warranty
of this Agreement.
11.12 Specific Performance. Each party's obligations under this Agreement
--------------------
are unique. If any party should default in its obligations under this
Agreement, each party acknowledges that it would be extremely
impracticable to measure the resulting damages; accordingly, the non-
defaulting party, in addition to any other available rights or remedies,
may xxx in equity for specific performance, and each party expressly
waives the defense that a remedy in damages will be adequate.
Notwithstanding any breach or default by any of the parties of any of
their respective representations, warranties, covenants, or agreements
under this Agreement, if the purchase and sale contemplated by it shall be
consummated at the Closing, each of the parties waives any rights that it
may have to rescind this Agreement or the transaction consummated by it;
provided, however, this waiver shall not affect any other rights or
-------- -------
remedies available to the parties under this Agreement or under the law.
11.13 No Prejudice. This Agreement has been jointly prepared by the
------------
parties and the terms hereof shall not be construed in favor of or against
any party due to its participation in such preparation.
11.14 Costs. If any legal action or any arbitration or other proceeding is
-----
brought for the enforcement of this Agreement, or because of air alleged
dispute, breach, default, or misrepresentation in connection with any of
the provisions of this Agreement, the successful or prevailing party or
parties shall be entitled to recover reasonable attorneys' fees and other
costs incurred in that action or proceeding, in addition to any other
relief to which it or they may be, entitled.
11.15 Termination.
-----------
(a) Termination of Agreement. This Agreement may be terminated as follows:
------------------------
(i) Purchaser and Seller may terminate this Agreement by mutual
written consent at any time prior to the Closing.
(ii) Purchaser may terminate this Agreement by giving written notice
to Seller at any time prior to the Closing in the event Seller is in
breach, and Seller may terminate this Agreement by giving written notice
to Purchaser at any time prior to the Closing in the event Purchaser is in
breach, of any material representation, warranty, or covenant contained in
this Agreement in any material respect (by giving written notice of its
intention to terminate and stating in detail the grounds therefor). A
party receiving the notice shall have thirty (30) days from the receipt
thereof to cure the breach, at which time this Agreement shall terminate
if the breach has not
-72
been cured or reasonable commercial efforts are not being taken by the
breaching party to cure.
(iii) Seller may terminate this Agreement in accordance with
Section 5.3 above.
-----------
(iv) Purchaser or Seller may terminate this Agreement by giving
written notice to the other party if the Closing has not occurred seventy-
five (75) days after the date hereof.
(b) Effect of Termination. All obligations of the parties hereunder shall
---------------------
cease upon any termination pursuant to Section 11.15a ; provided, however, that
-------------- -------- -------
(i) the provisions of this Section 11.15 and of Sections 6.1, 10.5, 11.12 and
------------- ------------ ---- -----
11.18 shall survive any termination of this Agreement; and (ii) nothing herein
-----
shall relieve any party from any liability for a material breach in any of its
representations or warranties contained herein or a material failure to comply
with any of its covenants, conditions or agreements contained herein.
11.16 Section and Paragraph Headings. Article and Section headings in this
------------------------------
Agreement for reference purposes only and shall not affect in any way
the meaning or interpretation of this Agreement.
11.17 Amendment. This Agreement may be amended only by an instrument in
---------
writing executed by each of the parties hereto.
11.18 Expenses. Except as otherwise expressly provided herein, Seller, on
--------
the one hand, and Purchaser, on the other hand, shall bear its own
expenses incident to its obligations under and in respect of this
Agreement and the transactions contemplated hereby, including without
limitation, all fees of counsel, consultants, and accountants and all HSR
Act filing fees.
11.19 No Third Party Beneficiaries. Nothing herein expressed or implied
----------------------------
is intended or shall be construed to confer upon or give to any person,
fin-n or corporation, other than the parties hereto and their respective
permitted successors and assigns, any rights or remedies under or by
reason of this Agreement, such third parties specifically including,
without limitation, employees or creditors of the Acquired Subsidiaries
and PD.
11.20 Inconsistencies. if there is any inconsistency between this Agreement and
---------------
any Foreign Agreement, then the provisions of this Agreement will control.
11.21 RTPA Suspension Clause. To the extent that any provision of this
----------------------
Agreement or arrangement of which it forms part constitutes a restriction
or information provision within the meaning of the Restrictive Trade
Practices Act 1976 ("the Act") so as to
-73-
render the Agreement or arrangement as the case may be liable to
registration under the Act, no such provision shall take effect until the
day after particulars of the Agreement or arrangement have been furnished
to the Director General of Fair Trading in accordance with the Act.
11.22 Definition of Material. For purposes of this Agreement, the capitalized
----------------------
term "Material" will mean, having an economic consequence or effect, or
involving an amount in excess of, twenty-five thousand dollars ($25,000).
11.23 Definition of affiliate. For purposes of this Agreement, the
-----------------------
uncapitalized term "affiliate" shall mean any corporation or entity
controlling, controlled by, or under common control with Purchaser or
Seller, as the case may be.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date first written above.
"SELLER" XXXXXXXXXX plc
By: /s/ Xxxx X. Xxxxxx
---------------------------------
Name: Xxxx X. Xxxxxx
-------------------------------
Title: Corporate Financial Officer
------------------------------
"PURCHASER" XXXXXX-XXXXXX CORPORATION
By: /s/ Xxxx Xxxxxx
---------------------------------
Name: Xxxx Xxxxxx
-------------------------------
Title: Director
------------------------------
-74-
IN WITNESS WHEREOF, the parties hereto have caused this agreement to be
executed as of the date first written above.
"SELLER" XXXXXXXXXX plc
By: /s/ Xxxx X. Xxxxxx
--------------------------------
Name: Xxxx X. Xxxxxx
------------------------------
Title: Corporate Financial Officer
-----------------------------
"PURCHASER" XXXXXX-XXXXXX CORPORATION
By: /s/ Xxxx Xxxxxx
--------------------------------
Name: Xxxx Xxxxxx
------------------------------
Title: Director
-----------------------------
-75-
SCHEDULE INDEX
DEFINITIONS.........................................................1
SCHEDULE 1.7(a)
RESTRUCTURING ACTIVITIES.......................................1
SCHEDULE 1.7(b)
ACCOUNTING POLICIES AND PROCEDURES.............................2
SCHEDULE 1.9
PURCHASE PRICE ALLOCATION......................................3
SCHEDULE 2.1
ORGANIZATION AND STANDING......................................4
SCHEDULE 2.3
OWNERSHIP OF CAPITAL STOCK; RELATED RIGHTS.....................5
SCHEDULE 2.4
SUBSIDIARIES...................................................8
SCHEDULE 2.5
UK FINANCIAL STATEMENTS........................................9
SCHEDULE 2.6
LABOR AND EMPLOYMENT MATTERS..................................10
SCHEDULE 2.7
TITLE AND CONDITION OF ACQUIRED ASSETS........................13
SCHEDULE 2.8
MATERIAL CHANGES..............................................14
SCHEDULE 2.9
REAL PROPERTY.................................................15
SCHEDULE 2.10
LITIGATION....................................................27
SCHEDULE 2.11
CONSENTS......................................................30
76
SCHEDULE 2.12
FAX CLAIMS AND RELATED INFORMATION............................32
SCHEDULE 2.13
PERMITS.......................................................33
SCHEDULE 2.14
COMPLIANCE WITH LAWS..........................................39
SCHEDULE 2.15
CONTRACTS.....................................................40
SCHEDULE 2.16
PATENTS AND PATENT APPLICATIONS, INTELLECTUAL PROPERTY
LICENSES, CONSULTING AGREEMENTS, RESEARCH AND DEVELOPMENT
PROJECTS, TRADEMARKS COPYRIGHTS INFRINGEMENT,
MISAPPROPRIATION..............................................62
SCHEDULE 2.17
ENVIRONMENTAL MATTERS.........................................71
SCHEDULE 2.18
EMPLOYEES.....................................................85
SCHEDULE 2.19
STAY AGREEMENTS...............................................87
SCHEDULE 2.20
EMPLOYEE BENEFIT PLANS........................................88
SCHEDULE 2.22
WARRANTIES....................................................97
SCHEDULE 2.25
OFFICERS AND DIRECTORS, BANK ACCOUNTS........................100
SCHEDULE 3.1
ORGANIZATION AND STANDING....................................115
SCHEDULE 3.2
AUTHORITY AND RESTRICTIONS...................................116
77
SCHEDULE 3.6
CONSENTS.....................................................117
SCHEDULE 3.10
WJ FINANCIAL INFORMATION.....................................118
SCHEDULE 4.7
COMPENSATION OF TERMINATED EMPLOYEES.........................119
SCHEDULE 6.12(a)
PD FOREIGN EMPLOYEES.........................................120
SCHEDULE 6.12(d)(i) and (ii)
U.K. ACTUARIAL METHODS AND ASSUMPTIONS.......................121
SCHEDULE 6.13(a) and (b)
(a) ACTUARIAL ASSUMPTIONS FOR CONTINUED ACTIVE EMPLOYEES
(b) ACTUARIAL ASSUMPTIONS FOR NON-CONTINUED ACTIVE
PARTICIPANTS............................................122
78
EXECUTION COPY
--------------
AMENDMENT NO. 1 TO AGREEMENT FOR PURCHASE AND SALE
BY AND BETWEEN XXXXXX-XXXXXX CORPORATION
AND XXXXXXXXXX PLC
THIS AMENDMENT NO. 1 (this "Amendment") is made and entered into as of
---------
September 24, 1996, by and between Xxxxxx-Xxxxxx Corporation, a Delaware
corporation ("Purchaser"), and Xxxxxxxxxx plc, a company registered under the
---------
laws of England and Wales ("Seller"). This Amendment amends that certain
------
Agreement for Purchase and Sale dated as of July 5, 1996 (the "Purchase
--------
Agreement"), by and between Purchaser and Seller. Capitalized terms used and
---------
not defined herein shall have the meanings given to such terms in the Purchase
Agreement.
The parties hereto are entering into this Amendment to amend the Purchase
Agreement.
THEREFORE, the parties hereto hereby agree as follows:
Section 1. Amendments.
----------
1A. Purchase Price. Section 1.6 of the Purchase Agreement is
--------------
hereby amended and restated as follows:
1.6 Purchase Price. The aggregate purchase price to be paid by
---------------
Purchaser to Seller for the Acquired Stock and the Acquired
Assets (the "Purchase Price") is (i) Seventy-Three Million
Eight Hundred Seventy-Five Thousand and No/100 Dollars
($73,875,000), to be adjusted in accordance with
Sections 1.7 and 1.8 hereof; and (ii) the Assumed Liabilities,
------------ ---
and will be paid as provided below:
(a) At the Closing, Purchaser shall pay the amount of
Sixty-Eight Million Eight Hundred Seventy-Five Thousand and
No/100 Dollars ($68,875,000), to be adjusted in accordance with
Sections 1.7 and 1.8 hereof, by wire transfer in immediately
------------ ---
available funds to one or more bank account(s) designated by
Seller; and
(b) At the Closing, Purchaser shall deliver the executed
promissory note of Xxxxxx-Xxxxxx Holding, Inc., a Delaware
corporation ("WJ Holding") in the form of Exhibit A hereto (the
"Note"), in favor of Xxxxxxxxxx Holdings, Inc. in the amount of
Five Million and No/100 Dollars ($5,000,000)."
79
1B. FTC Matters. Section 5.3 of the Purchase Agreement is hereby
-----------
amended and restated as follows:
"5.3 FTC Matters. WJ shall use its reasonable best efforts to
-----------
cause the Federal Trade Commission (the "FTC") to terminate the
waiting period under the Xxxx-Xxxxx-Xxxxxx Antitrust Improvement
Act of 1976, as amended (the "HSR Act"), by entering into an
Agreement Containing Consent Order ("Consent Order") on terms no
more restrictive than the draft Consent Order attached hereto as
Exhibit E. Seller and Purchaser shall use their reasonable best
---------
efforts to satisfy the FTC that the Consent Order is sufficient
to address any FTC antitrust concerns and that the waiting period
under the HSR Act should be terminated promptly."
1C. Pilkington Visioncare Pension Plan. Sections 6.13(d)(iii) and
----------------------------------
(iv) of the Purchase Agreement are amended by (i) deleting the first sentence of
Section 6.13(d)(iii) of the Purchase Agreement and replacing it with the
sentence "As of the Transfer Date, assets equal to the Pilkington Asset Amount
(as defined herein) minus $2 million (the "Transfer Amount") shall be
----------
transferred to the Successor Plan.", (ii) deleting the words "Pilkington Asset
Amount" in Section 6.13(d)(iv) of the Purchase Agreement and replacing such
deletion with the words "Transfer Amount" and (iii) adding the following new
paragraph at the end of Section 6.13(d)(iii) of the Purchase Agreement:
"If, in determining the Transfer Amount, the Pilkington Asset
Amount, as adjusted to comply with the requirements of Section
414(l) of the Code or as otherwise required by the PBGC, cannot
be reduced by $2 million and still satisfy the requirements of
Section 414(l) of the Code, Seller shall promptly pay to
Purchaser, in cash, an amount equal to (i) $2 million minus (ii)
-----
the amount that the actual transfer amount is less than the
Pilkington Asset Amount (not less than $0 nor in excess of
$2 million)."
1D. Closing. Section 9.1 of the Purchase Agreement is hereby amended
-------
by deleting the language "seventy-five (75)" and replacing it with "ninety-one
(91)".
IE. Termination. Section 11.15(a)(iii) of the Purchase Agreement is
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hereby deleted and intentionally left blank. Section II.15(a)(iv) of the
Purchase Agreement is hereby amended by deleting the language "seventy-five
(75)" and replacing it with "ninety-one (91)".
IF. Schedule 1.9. Schedule 1.9 of the Purchase Agreement is amended
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and restated as set forth in Exhibit F attached hereto.
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Section 2. Effect. Except as amended by this Amendment, the Purchase
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Agreement will remain in full force and effect. All references to the
"Agreement" in the Purchase Agreement shall hereafter be deemed to refer to the
Purchase Agreement as amended hereby.
Section 3. Counterparts. This Amendment may be executed in one or more
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counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
Section 4. Governing Law. The validity, construction, and enforceability
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of this Amendment shall be governed in all respects by the laws of the State of
California, without regard to its conflict of laws rules.
* * * * *
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IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of
the date first above written.
XXXXXXXXXX PLC
By: /s/ A.M. Xxxx
----------------------------
Name: A.M Xxxx
--------------------------
Title: Director
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XXXXXX-XXXXXX CORPORATION
By: /s/ Xxxx Xxxxxx
----------------------------
Name: Xxxx Xxxxxx
--------------------------
Title: Director
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