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EXHIBIT 10.25
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (the "Agreement") is made and entered
into as of October 13, 1998 ("Closing Date"), by and between Genomic Solutions
Inc. ("Purchaser"), a Delaware corporation with offices at 0000 Xxxxxxx Xxxxx,
Xxx Xxxxx, Xxxxxxxx 00000 and ESA, Inc. ("Seller") a Massachusetts corporation
with offices at 00 Xxxxx Xxxx, Xxxxxxxxxx, Xxxxxxxxxxxxx 00000.
RECITALS
A. Among other businesses, Seller is engaged in the business of
designing, developing, manufacturing, marketing and selling equipment and
products used in electrophoresis, a technique for separating proteins and DNA
(the "Business"). Equipment and products include, but are not limited to
instruments, gels, and reagents described in the ESA, Inc. Electrophoresis
Products and Tools for Proteomic Analysis Catalog (Part No.
70-3713) which is attached hereto.
B. Seller desires to sell, and Purchaser desires to purchase, certain
assets of Seller used in connection with the operation of the Business, and
certain other intangible assets associated with the Business, for the
consideration and upon the terms and conditions set forth below.
NOW, THEREFORE, for and in consideration of the foregoing Recitals, the
mutual covenants and agreements contained herein and other good and valuable
consideration, the receipt and adequacy of which are hereby mutually
acknowledged, the parties agree as follows:
ARTICLE I
PURCHASE AND SALE OF ASSETS; ASSUMPTION OF LIABILITIES
1.1 PURCHASE AND SALE OF ASSETS. Subject to all of the terms and
conditions contained in this Agreement, and except as provided below, on the
Closing Date, Seller shall sell, transfer, assign and deliver to Purchaser, and
Purchaser shall purchase from Seller, the following assets, owned by Seller or
in which Seller has any right or interest, that are used in connection with the
Business (all such assets and properties being referred to in this Agreement as
the "Assets"):
(a) Inventories. All inventories listed in Schedule 1.1(a)
("Inventories");
(b) Equipment and Other Personal Property. All equipment,
machinery, furniture and fixtures, office machines, maintenance and
office supplies, signs, and other tangible personal property ("Personal
Property") listed on the attached Schedule 1.1(b);
(c) Business Records. Access to and the right to make copies
of all databases, sales and business records, inventory records,
product specifications, correspondence, maintenance, operating and
production records (or portions thereof if the entire record or
document was not used for the Business), personnel records of Seller's
employees who are associated with the Business as listed on the
attached Schedule 3.15 (the "Business Employees"), credit records (or
copies thereof) of customers and vendors of the Business, customer and
vendor lists to the extent related to the Business, marketing or other
studies relating to the
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Business, cost and pricing information, and originals or copies of all
books, records and other documents (or portions thereof) applicable to
the Business or the Assets ("Records");
(d) Licenses. To the extent permitted under applicable law or
regulation, all governmental licenses and permits used or usable only
in connection with the Business;
(e) Intangibles. Subject to the rights of Protein Databases,
Inc., or its successors ("PDI"), pursuant to that Agreement between
Millipore Corporation and PDI, dated September 15, 0000 (xxx "XXX
Agreement"), and the Royalty Agreement dated July 31, 1996 ("Royalty
Agreement") between Millipore Corporation and Seller which is assigned
to Purchaser hereunder, all right, title and interest in any intangible
property, rights or claims applicable only to the Business or to the
Assets to be transferred, including, without limitation, the U.S.
Patents No. 4,966,667; No. 5,149,417; No. 5, 2288,970; and No.
5,281,322 (and corresponding Japanese Patents), all right, title and
interest in the names "Duracryl" "Investigator" and "Signal" (and all
goodwill with respect thereto), and all variations of those names,
patents and pending applications for patents, and copyrights (including
registrations);
(f) Business Contracts, Leases and Agreements. All agreements,
leases and service contracts related only to the Business to which
Seller is a party or to which the Assets are subject as of the Closing
Date and which are listed on the attached Schedule 1.1(f) (the "Assumed
Business Contracts");
(g) Warranty Rights. All third party warranties to Seller to
the extent relating only to the Business or the Assets, whether express
or implied, and claims arising under warranties, representations and
guaranties made to Seller only in connection with the Business; and
(h) Litigation Claims. All claims and rights concerning any
litigation in which, in connection with or with respect to the
Business, Seller is a claimant.
1.2 EXCLUDED ASSETS. Notwithstanding anything to the contrary contained
in Section 1.1 above, the following assets (collectively, the "Excluded Assets")
are not being sold by Seller to Purchaser and shall not be included as part of
the Assets:
(a) Assets Not Related to the Business. Any and all assets not
owned by Seller, in which Seller does not have an interest or not used
in connection with the Business;
(b) Corporate Records. The minute books, stock books,
corporate seal and other corporate records of Seller relating to its
organization and existence;
(c) Excluded Contracts. Any and all oral or written contracts,
leases or agreements other than the Assumed Contracts (the "Excluded
Business Contracts");
(d) Employee Benefit Plans. Those employee benefit plans
listed on the attached Schedule 1.2(d).
(e) Other Excluded Assets. Those items listed on the attached
Schedule 1.2(e).
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(f) Tax Returns. All tax returns of Seller and all tax refunds
due Seller from any governmental agency; and
1.3 ASSUMPTION OF LIABILITIES. Purchaser shall not assume, or purchase
the Assets subject to, and Purchaser shall not be liable for, any liabilities of
Seller, regardless of nature, type or kind, whether matured or contingent,
except for: (a) those contained in Assumed Business Contracts, including the
obligation to pay royalties under the Royalty Agreement which accrue after the
Closing Date, (b) sales tax, if any, assessed on the transaction, (c) any
amounts owed for Business equipment parts and inventory received by Purchaser
after the Closing Date, as evidenced by purchase orders provided to Purchaser at
Closing, and (d) any warranty liabilities associated with the sale of Business
equipment or other Business products. Seller shall perform, pay and discharge
when due all of its obligations and liabilities other than those which Purchaser
has specifically agreed to assume pursuant to this Section 1.3, as well as any
other known, contingent or unknown liabilities of Seller.
ARTICLE II
CONSIDERATION
2.1 CASH CONSIDERATION. For and in consideration of the Assets,
Purchaser shall pay to Seller the sum of One Million Seven Hundred Fifty
Thousand Dollars ($1,750,000.00) (the "Purchase Price"), by certified check or
wire transfer of immediately available federal funds at the Closing.
2.2 PURCHASE PRICE ALLOCATION. The Purchase Price shall be allocated
among the Assets in the manner as the parties shall agree within one hundred
twenty (120)ninety (90) days after the Closing Date and which shall be
consistent with their negotiations and agreement. Seller and Purchaser shall
each act in a manner consistent with such allocation in filing Internal Revenue
Form 8594, captioned "Asset Acquisition under Section 1060; and (ii) paying
sales and other transfer taxes and making any and all other tax filings in
connection with the purchase and sale of the Assets pursuant to this Agreement.
2.3 STOCK WARRANT. At the Closing, Purchaser shall grant Seller a
warrant (the "Warrant"), in the form attached hereto as Document 2.3
representing the right to purchase One Hundred Twenty Five Thousand (125,000)
shares of Genomic Solutions Inc. common stock at a price of Six Dollars ($6.00)
per share. The Warrant will have a term of ten (10) years.
2.4 SUBLEASE. At the Closing, Purchaser and Seller shall enter into a
sublease of a portion of Seller's facility in Chelmsford Massachusetts, whereby
Purchaser shall occupy such space for a period of at least six months but no
more than two years.
2.5 MANUFACTURING AGREEMENT. At the Closing, Purchaser and Seller shall
enter into an agreement whereby Seller shall manufacture reagent and consumable
products associated with the Business for Purchaser for a period of at least six
months but no more than two years.
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ARTICLE III
REPRESENTATIONS, WARRANTIES AND COVENANTS
Seller understands that each of the following representations,
warranties and covenants are material and have been and will be relied on by
Purchaser in connection with the consummation of the transactions contemplated
in this Agreement. Seller warrants and covenants to Purchaser that the
statements contained in this Article III are true, correct and complete in all
respects as of the Closing Date:
3.1 ORGANIZATION. Seller is a corporation duly organized, validly
existing and in good standing under the laws of the Commonwealth of
Massachusetts. Seller has full corporate power and authority, and all
franchises, licenses and permits, necessary to own, lease and operate its
respective properties and assets and to carry on its businesses as presently
conducted.
3.2 POWER AND AUTHORITY. Seller has all requisite power and authority
to enter into, carry out and perform its obligations under this Agreement and
all other instruments and agreements contemplated in this Agreement. The
execution of this Agreement and the consummation of the transactions
contemplated herein have been duly authorized and approved by Seller's Board of
Directors and does not require approval of ESA shareholders. This Agreement
constitutes, and all agreements and instruments contemplated hereby when
executed and delivered in accordance with the terms of this Agreement will
constitute, valid and binding obligations of Seller, enforceable in accordance
with their respective terms, except to the extent limited by bankruptcy,
insolvency, and other laws of general application relating to or affecting the
enforcement of creditors' rights and general equity principles.
3.3 ABSENCE OF VIOLATIONS. Neither the execution, delivery, performance
or compliance of or with this Agreement or any other agreements contemplated
herein, nor the consummation of the transactions herein contemplated by Seller,
will (i) violate, conflict with, or constitute a default or breach of Seller's
Articles of Organization or bylaws, or other constituent documents; (ii)
constitute a violation by Seller of any law, rule, regulation, ordinance, order,
writ, injunction, decree or judgment applicable to Seller or affecting the
Assets or Business; (iii) result, or with the passage of time will result, in
any breach or violation of, or be in conflict with or constitute a default
under, or give to others any rights of termination or cancellation of, or
accelerate the performance required by or maturity of, any document or
instrument binding on or affecting Seller, the Assets or the Business, subject
to obtaining the consents to the other parties to the Assumed Business Contracts
to the extent required therein or as required by law; or (iv) result in the
creation of any lien, charge or encumbrance on any of the Assets.
3.4 FINANCIAL STATEMENTS. The attached Schedule 3.4 consists of
Seller's compiled balance sheets and the related statements of operations,
retained earnings and cash flows for each of the fiscal years ended December 31,
1995 through December 31, 1997, issued by Seller's auditors (the "Annual
Financial Statements"). The attached Schedule 3.4(a) consists of schedules of
activity and assets for the Business product line for periods ended December 31,
1996, December 31, 1997 and August 31, 1998 (the "Business Schedules"). The
schedules have been prepared in accordance with generally accepted accounting
principles and allocations of costs and expenses as stated in the comments on
the Business Schedules.
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3.5 NO UNDISCLOSED LIABILITIES OR CHANGES. Except as disclosed on the
attached Schedule 3.5 or reflected in the Statements, and except for current
liabilities incurred by Seller in the ordinary course of the Business since
August 31, 1998, Seller has not incurred any debts, liabilities or obligations
of any nature or kind, whether absolute, accrued, contingent or otherwise that
may affect or attach to the Business, and whether due or to become due,
including without limitation, any debts, liabilities (and tax liabilities due or
to become due) or obligations relating to or arising out of any act,
transaction, circumstance or state of facts which occurred or existed on or
before the date as of which this representation is made. Seller is not aware of
any existing, proposed or threatened change which could result in a material
adverse change to the Business or the future prospects of the Business.
3.6 TAX MATTERS. Seller has duly filed all tax returns and reports
required to be filed by it, including, where applicable, all federal, foreign,
state, county and local income, gross receipts, excise, import, property,
franchise, ad valorem, license, sales, use, and withholding tax reports and
returns. Seller has filed all reports required by law or regulation to be filed
and has duly paid, or accrued on its books of account and will pay when due, all
duties and charges due or assessed against it, the Business or the Assets. There
are not now, nor on the Closing Date will there be, any assessments, charges,
paybacks or obligations requiring payment of any nature or description against
any of the Assets which remain unpaid, except for current taxes not yet due or
payable and except for the liabilities to be assumed by Purchaser pursuant to
Section 1.3. Seller represents and warrants that under the laws of the
Commonwealth of Massachusetts, no state tax waiver filing/request is necessary
for the completion of this transaction.
3.7 TANGIBLE PROPERTY. Seller has good and marketable title to and owns
each item of tangible Personal Property included in the Assets, free and clear
of all title defects and objections, security interests, liens, charges and
encumbrances of any nature whatsoever ("Liens"). Seller will convey to Purchaser
all tangible Personal Property listed on Schedule 1.1(b) which is attached
hereto, free and clear of all Liens.
3.8 REAL PROPERTY OWNED. Seller does not own, and has never owned, in
whole or in part, any real property which is or was used, in any way, in
connection with the Business.
3.9 REAL PROPERTY LEASED. The attached Schedule 3.9 lists and briefly
describes all real properties leased or subleased to Seller and used in
connection with the operation of the Business (the "Leased Real Property"). No
property insurer or similar body has made any recommendations with respect to
any parcel of Leased Real Property which have not been complied with, and except
for leased property located in the United Kingdom and Billerica, as listed on
Schedule 3.9, all structures on the Leased Real Property meet all qualifications
for "highly protected risk" classification for fire insurance purposes. Seller
has delivered to Purchaser true, correct and complete copies of the leases and
subleases listed on the attached Schedule 3.9. All of the Assets are located at
the Leased Real Property. Each such lease or sublease is
(a) legal, valid, binding, enforceable and in full force and
effect;
(b) will continue to be legal, valid, binding, enforceable and
in full force and effect on identical terms following the Closing;
(c) neither Seller nor any other party to the lease or
sublease is in breach or default, and no event has occurred which, with
notice or lapse of time,
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could constitute such a breach or default or permit termination,
modification or acceleration under the lease or sublease;
(d) no party to the lease or sublease has repudiated any of
its provisions;
(e) there are no disputes, oral agreements or forbearance
programs in effect as to the lease or sublease;
(f) Seller has not assigned, transferred, conveyed, mortgaged,
deeded in trust or encumbered all or any portion of its interest in the
leasehold or subleasehold;
(g) all facilities leased or subleased under the lease or
sublease have been operated and maintained in accordance with
applicable laws, rules and regulations;
(h) all facilities leased or subleased under the lease or
sublease are supplied with utilities and other services necessary for
the operation of such facilities; and
(i) all facilities leased or subleased under the lease or
sublease are in good operating condition, and would not, with ordinary
wear and tear, require major repair or replacement during the remainder
of the lease term.
3.10 INTELLECTUAL PROPERTY. The attached Schedule 3.10 sets forth a
complete and accurate list of all patents and pending applications for patents,
copyrights (including registrations) and applications for registered copyrights,
trademarks and applications for trademarks, service marks and applications for
service marks, logos and other commercial symbols, trade names and the like, and
interests thereunder, used solely with the Business, and any other item in which
Seller has any rights or licenses used solely with the Business, including,
without limitation, the property described in Section 1.1(e) above. Except as
disclosed on Schedule 3.10, Seller's use of the Intangibles is not governed by
or pursuant to a license or similar agreement from any third party. Seller owns
or has the right to use all of the Intangibles. Seller has taken all reasonable
security measures to protect the secrecy, confidentiality, and value of its
Intangibles. Except as disclosed on Schedule 3.10, with respect to each
Intangible:
(a) Seller owns and possesses all right, title and interest in
and to the Intangible;
(b) As of the Closing date, no charge, complaint, action,
suit, proceeding, hearing, investigation, claim or demand has been
instituted, is pending or, to Seller's knowledge, is threatened, which
challenges the legality, validity, enforceability, use or ownership of
the Intangible;
(c) to Seller's knowledge, Seller's use of such Intangible
does not interfere with, infringe upon, misappropriate or otherwise
conflict with the rights of others, and such item is not being
interfered with, infringed upon, misappropriated or violated by others
and is not subject to any outstanding judgment, order, decree,
stipulation, injunction or charge;
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(d) Seller has never received any charge, complaint, claim or
notice of interference, infringement, misappropriation or violation
with respect to the Intangible; and
(e) no license, agreement or permission pertaining to the
Intangible has been granted by Seller.
3.11 INVENTORY. Seller's inventory is, and Seller's work-in-process,
when completed will be, merchantable and fit for the purpose for which it was
procured or manufactured, and except for those listed on Schedule 1.1(a)the
applicable Statement without present value, are useable and salable in the
ordinary course of the Business, and carried on the Statements at an amount not
in excess of the lower of cost or net realizable value.
3.12 CONTRACTS. The attached Schedule 3.12 is a true, complete and
accurate list of all material agreements, leases and contracts concerning the
manufacture and sale of the Business products and to which Seller is a party or
to which the Assets are subject, whether oral or written (the "Business
Contracts"). Except for the Business Contracts, Seller is not a party to any
material written or oral agreement, lease or contract affecting or relating
solely to the Assets or the Business in any way. The Business Contracts
constitute all material agreements, documents and leases necessary for the
manufacture and sale of operation of the Business products as presently
conducted. Seller has delivered to Purchaser true and correct copies of all such
written Business Contracts and a comprehensive summary of all such Business
Contracts which are oral. As listed on Schedule 1.1(f), all of the Assumed
Business Contracts are valid, in full force and effect, and enforceable in
accordance with their terms, and all of the Assumed Business Contracts are
assignable to Purchaser in accordance with their terms. None of the Assumed
Business Contracts have been terminated or canceled by Seller or the other
parties thereto with respect to the current year or future years. Further, to
Seller's knowledge, no party to an Assumed Business Contract has limited its
business relationship with Seller in any material respect. No party to any
Assumed Business Contract is in material default, nor has any notice of default
been received by Seller, and, there exists no event, condition or occurrence
which, after notice or lapse of time, or both, could constitute a material
default under any Assumed Business Contract. Seller and every other party to the
Assumed Business Contracts have in all material respects performed or are
performing all obligations required to be performed by them. This Agreement and
the consummation of the transactions contemplated herein will not violate or
cause a default under any of the Assumed Business Contracts.
3.13 COMPLIANCE WITH LAWS; PERMITS AND LICENSES. Seller is in material
compliance with all laws, rules, regulations and orders applicable to its
operation of the Business, or the Assets, and no violation exists which would
hinder or prevent Seller's performance of its obligations under this Agreement.
To Seller's knowledge, neither Seller's use of the Assets nor the operation of
the Business violate any laws, rules, regulations or orders. The attached
Schedule 3.13 lists all federal, state, local and foreign governmental
franchises, permits, licenses or other authorizations held by Seller in
connection with its ownership or use of the Assets or operation of the Business
(the "Licenses"), true and correct copies of all of which have been delivered to
Purchaser. All of the Licenses are in full force and effect, and except as set
forth in Schedule 3.13 are assignable or transferable to Purchaser in connection
with the consummation of the transactions contemplated in this Agreement. Seller
has obtained all permits, licenses, franchises and other authorizations
necessary or desirable with respect to, and has complied with all laws
applicable to, the operation of the Business, the ownership of the Assets or the
lease of the Leased Real Property, and Seller has not engaged in any activity
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which would cause revocation or suspension of any such permits, licenses,
franchises or authorizations. Except as set forth on the Schedule 3.13, to
Seller's knowledge, no action or proceeding looking to or contemplating the
revocation or suspension of any such permits, licenses, franchises or
authorizations is pending or threatened.
3.14 INSURANCE. Except as set forth on the attached Schedule 3.14,
Seller has maintained and now maintains insurance with respect to the Assets,
the Leased Real Property and the Business, covering property damage by fire or
other casualty, and against such liabilities, claims and risks, including,
without limitation, product liability and workers compensation, and in such
amounts as is customary or appropriate in the industry. Schedule 3.14 contains a
true and correct summary of all such insurance policies now maintained by Seller
setting forth the names of the insured and the insurer, policy numbers, the
types of coverage, premium payments or basis of payment, deductible amounts and
limits of coverage. Except as set forth on Schedule 3.14, no such policy of
insurance is subject to any deductible, self-insured retention, retrospective
rating agreement, indemnification agreement or any other method or device by
which the insured person is subject to all or any part of the liability for any
or all claims. in respect of the Business. True, correct and complete copies of
all insurance policies listed on Schedule 3.14 have been delivered to Purchaser.
All current insurance policies will be in full force and effect through the
Closing Date. Those policies scheduled to expire before the Closing Date will be
renewed or replaced with comparable coverage. Except as set forth in Schedule
3.14, no event has occurred forming the basis of any present property, casualty,
fidelity, liability or workers compensation claim against Seller which has not
been reported to the appropriate carrier, is not fully covered by insurance or
which may reasonably be expected to exceed the available limits of liability of
the applicable insurance policy or policies. There has been no material breach
of any of Seller's obligations under any of the insurance policies referred to
in Schedule 3.14. All policies listed in Schedule 3.14 are carried in amounts
and with carriers sufficient to fulfill the requirements of the Business
Contracts and all laws or ordinances in effect in jurisdictions or locations
where the Seller conducts business and which require Seller to maintain such
coverage. During the past five years Seller has not been denied insurance
coverage or had insurance coverage revoked or rescinded by a carrier. There are
no outstanding requirements or recommendations by any insurance company that
issued any policy of insurance to Seller or by any board of fire underwriters or
other similar body or by any governmental authority exercising similar functions
which require or recommend any changes in the conduct of Seller's business or
any repairs or other work to be done with respect to any of its assets or
properties. The attached Schedule 3.14 contains loss runs for the last five (5)
years setting forth all property, general and products liability and workers
compensation claim activity against the Business, including the date and place
of the occurrence, the claimant's name, reserves, amounts paid, a brief
description of the incident and whether the claim is open or closed. Except as
set forth on Schedule 3.14, Seller does not know of any occurrence,
circumstance, or event which could reasonably be expected to result in any such
claim.
3.15 EMPLOYEES. The attached Schedule 3.15 contains a complete and
accurate list of: (i) each such Business Employee's salary or hourly rate
currently in effect, annual bonus (last paid or payable), if any; (ii) all
fringe benefits or incentive paid or payable to each Business Employee and the
total value of such other fringe benefits and incentives; and (iii) any bonus or
other payment earned but not yet paid such Business Employee. There are no
written or oral collective bargaining or other employment agreements or
understandings with or affecting any employee of Seller. All accrued vacation,
sick days and personal days due Seller's Business Employees terminate at the end
of each calendar year. Except as set forth on the attached Schedule 3.16, all
Business Employees are actually at work, and no Business Employees are currently
on leave of absence, layoff,
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military leave, suspension, sick leave, worker's compensation, salary
continuance or short or long term disability or otherwise not actively
performing his or her work during all normally scheduled business hours. To
Seller's knowledge, there are no charges with respect to or relating to the
Business pending before the Equal Employment Opportunity Commission or any
agency relating to unlawful employment practices.
3.16 EMPLOYEE BENEFITS. Except for the employee benefit plans listed on
Schedule 3.16 (collectively, the "Employee Benefit Plans"), Seller is not a
party to or bound by any profit sharing, stock option, pension, severance,
retirement, stock purchase, hospitalization, group or individual life,
disability or health insurance, or employee welfare benefit or similar plan or
agreement providing benefits to the current or former employees, directors,
officers, agents or shareholders of Seller. Seller represents and warrants that
the Employee Benefit Plans will have no impact on the transaction contemplated
by this Agreement. Seller shall timely pay all amounts due under or with respect
to the Employee Benefit Plans, and Seller does not, nor will it prior to the
Closing Date, participate in, contribute to, nor employ any persons covered by a
multi-employer plan, as defined in Section 3(37) of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"), and has not, and will not,
prior to the Closing Date, incur any withdrawal liability within the meaning of
Title IV of ERISA. Seller has materially complied with, and will through and
after the Closing Date, continue to materially comply with the Employee Benefit
Plans and all requirements of law relating thereto and Purchaser shall have no
liability or responsibility whatsoever with respect to the Employee Benefit
Plans.
3.17 EMPLOYEE RELATIONS. There are no written or oral collective
bargaining or other employment agreements or understandings with or affecting
any Business Employee. Except as set forth on the attached Schedule 3.17, hours
worked by, and payments made by Seller to, all Business Employees have been in
compliance with the Fair Labor Standards Act and other applicable federal, state
or local laws. Except as set forth on the attached Schedule 3.17, all payments
determined to be due from Seller on account of any Business Employee's work,
health or welfare insurance, under any agreement, whether oral or written, will
have been paid as of the Closing Date. Any amounts due to or with respect to all
Business Employees, including health and welfare or workers compensation
benefits, incurred prior to the Closing Date, which cannot be determined on or
before the Closing Date, shall be paid by Seller immediately on determination,
and Purchaser shall not, in any way, be deemed to be liable for any such
amounts. Except as set forth on the attached Schedule 3.17, there are no
vacation monies which have been earned by any Business Employee under any
agreement, whether oral or written, that have not been paid, nor are there any
severance payments which could become payable by Purchaser under the terms of
any oral or written agreement or commitment. Except as disclosed pursuant to
Section 3.16 above, Seller has no pension, profit sharing, retirement or similar
plan, or other employee benefit plan, in effect. Except as set forth on the
attached Schedule 3.17, (i)there is no unfair labor practice charge or complaint
concerning the Business or any Business Employee pending before any governmental
agency in any jurisdiction in which Seller conducts business; (ii)there is no
labor strike or material slowdown, work stoppage, lockout or other collective
labor action actually pending or threatened against or affecting the Business,
and Seller has not experienced any strike or material slowdown, work stoppage,
lockout or other collective labor action in connection with the Business by or
with respect to any Business Employees; (iii)there is no representation claim or
petition concerning the Business or any Business Employee pending before any
governmental agency in any jurisdiction in which Seller conducts business, and
no question concerning representation exists relating to the Business Employees;
(iv)there are no charges with respect to or relating to the Business pending
before the Equal Employment Opportunity Commission or any agency
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in any jurisdiction in which Seller conducts business responsible for the
prevention of unlawful employment practices; (v) Seller has not received formal
notice from any governmental agency responsible for the enforcement of labor or
employment laws of an intention to conduct an investigation of the Business and
no such investigation is currently in progress; and (vi)to Seller's knowledge,
no key Business Employee or group of Business Employees has any plans to
terminate employment with Seller prior to Closing or to refuse employment with
Purchaser after Closing.
3.18 ENVIRONMENTAL, HEALTH AND SAFETY MATTERS. Seller has complied in
all material respects with all laws (including rules and regulations thereunder)
of all applicable federal, state, local and foreign governments, and their
respective agencies, concerning the environment, public health and safety and
employee health and safety, and no charge, complaint, action, suit, proceeding,
hearing, investigation, claim, demand or notice has been filed or commenced
against any of them alleging any failure to comply with any such law or
regulation, including, limiting, without limitation, the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, the Federal
Water Pollution Control Act of 1972, the Clean Air Act of 1970, the Safe
Drinking Water Act of 1974, the Toxic Substances Control Act of 1976, the Refuse
Act of 1989, the Emergency Planning and Community Right-to-Know Act of 1986, the
Federal Resource Conservation and Recovery Act, the Michigan Environmental
Response Act, the Michigan Water Pollution Control Act, the Michigan Hazardous
Waste Management Act, each as amended, or any other law of any government or
agency concerning the storage, treatment, handling, transport, disposal, or the
release or threatened release of hazardous substances or hazardous materials,
public health and safety or pollution or protection of the environment
(collectively, the "Environmental Statutes").
3.19 LITIGATION. Except as set forth on the attached Schedule 3.19,
there are no actions, suits, investigations or proceedings pending or, to
Seller's knowledge, threatened against Seller, the Business, the Assets or the
Leased Real Property, at law or in equity, before any federal, state, municipal
or other governmental department, commission, board, agency, court or
instrumentality which could affect, in any way, the Business, the Assets or the
Leased Property. Except as set forth on Schedule 3.19, Seller is not in default
with respect to nor is in violation of any order, writ, injunction or decree of
any court or other governmental department, commission, board, agency or
instrumentality which relates or could relate to, or the default with respect to
which or the violation of which could affect, the Business, the Assets or the
Leased Real Property in any way.
3.20 WARRANTIES. Schedule 3.20 contains of list of all product
liability claims made against Seller (or which Seller has received notice of)
during the year ending on August 31, 1998 with respect to all products
manufactured by Seller as part of the Business. Seller has never been a
defendant in any product liability litigation relating to such products. Except
to the extent otherwise provided above, to the best of Seller's knowledge, all
products manufactured by the Company are in conformity, in all material
respects, with all applicable contractual commitments and all express and
implied warranties, and to the best of Seller's knowledge, Seller has no
liability (and there is no basis for any present or future charge, complaint,
action, suit, proceeding, hearing, investigation, claim or demand against Seller
giving rise to any liability) for replacement of any such products or other
damages in connection therewith.
3.21 CONSENTS. Except as set forth on the attached Schedule 3.21, no
consent, approval or authorization of, or designation, declaration or filing
with, any governmental authority or agency is required on the part of Seller in
connection with the valid execution
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and delivery of this Agreement or the consummation of the transactions herein
contemplated.
3.22 BROKERS' FEE. Seller will not be liable for any business broker's
fee or similar fees or expenses in connection with the transaction contemplated
in this Agreement.
3.23 ASSETS; TITLE. Except as otherwise set forth in Schedule 3.10,
upon consummation of the transactions contemplated in this Agreement, Purchaser
will acquire title to all of the Assets, free and clear of all Liens, and no
officer, director, employee, shareholder or affiliate of Seller owns or has an
interest in any of the Assets described in Section 1.1 or Schedules pertaining
to Section 1.1.
3.24 DISCLOSURE AND DISCLAIMER. The representations and warranties of
the Seller contained in this Agreement and the statements contained in the
certificates furnished pursuant hereto, taken as a whole, do not contain any
untrue statement of a material fact and do not omit to state a material fact
necessary in order to make any of the representations, warranties or statements
made not misleading. EXCEPT TO THE EXTENT SPECIFICALLY PROVIDED IN THIS
AGREEMENT, SELLER MAKES NO OTHER WARRANTIES OR REPRESENTATIONS, EXPRESS OR
IMPLIED, WITH RESPECT TO THE ASSETS, INCLUDING ANY WARRANTY OF MERCHANTABILITY
OR FITNESS FOR A PARTICULAR PURPOSE.
3.25 INVESTMENT REPRESENTATIONS.
(a) Seller is acquiring the Warrants, and if the Warrants are
exercised, the Warrant Shares, for investment solely for its own
account and not with a view to, or for resale in connection with, the
distribution or other disposition thereof. Seller agrees and
acknowledges that it will not, directly or indirectly, offer, transfer
or sell the Warrants or any Warrant Shares, or solicit any offers to
purchase or acquire the Warrants or any Warrant Shares, unless the
transfer or sale is (i) pursuant to an effective registration statement
under the Securities Act of 1933, as amended, and the rules and
regulations thereunder (the "Securities Act") and has been registered
under any applicable state securities or "blue sky" laws ;or (ii)
pursuant to an exemption from registration under the Securities Act and
applicable state securities or "blue sky" laws.
(b) Seller acknowledges that the Warrants and each Warrant
Share will each contain a legend substantially to the following effect:
THE WARRANT AND THE WARRANT SHARES HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES
LAWS OF ANY STATE AND MAY NOT BE PLEDGED, HYPOTHECATED, SOLD, TRANSFERRED OR
OTHERWISE DISPOSED OF WITHOUT REGISTRATION UNDER THE SECURITIES ACT OR STATE
SECURITIES LAWS OR AN OPINION OF COUNSEL, SATISFACTORY TO THE COMPANY THAT SUCH
REGISTRATION IS NOT REQUIRED.
(c) Seller is an "accredited investor" as such term is defined in Rule
501 promulgated under the Securities Act and has completed truthfully the
Confidential Statement of Investor Suitability attached as Exhibit 3.25 (the
"Investor Statement").
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ARTICLE IV
REPRESENTATIONS, WARRANTIES AND COVENANTS OF PURCHASER
Purchaser understands that each of the following representations,
warranties and covenants are material and have been and will be relied on by
Seller in connection with the consummation of the transactions contemplated in
this Agreement. Purchaser represents, warrants and covenants to Seller that the
statements contained in this Article IV are true, correct in all respects and
complete as of the date of this Agreement and will be true, correct and complete
in all respects as of the Closing Date, as though made on the Closing Date:
4.1 POWER AND AUTHORITY. The Purchaser has all requisite power and
authority to enter into this Agreement and all other instruments and agreements
contemplated hereby, and to carry out and perform its obligations under this
Agreement. The execution of this Agreement and the consummation of the
transactions contemplated in this Agreement have been duly authorized and
approved by Purchaser's Board of Directors. This Agreement constitutes, and all
agreements and instruments contemplated herein when executed and delivered in
accordance with the terms of this Agreement will constitute, valid and binding
obligations of Purchaser, enforceable in accordance with their respective terms,
except to the extent limited by bankruptcy, insolvency, and other laws of
general application relating to or affecting the enforcement of creditors'
rights and general equity principles.
4.2 CAPITALIZATION. The authorized capital stock of the Purchaser on
the date hereof consists of 40,000,000 shares of Common Stock, par value $.001
per share and 10,000,000 shares of Preferred Stock, par value $.001 per share
(the "Preferred Stock"). On the date hereof, 2,897,112 shares of Common Stock
are outstanding. Of the authorized Preferred Stock, 1,100,000 shares have been
designated Series D Preferred Stock, 4,070,339 shares have been designated
Series C Preferred Stock, 1,680,880 shares have been designated Series B
Preferred Stock and 50,000 have been designated Series M Preferred Stock. On the
date hereof, 1,100,000 shares of Series D Preferred Stock are outstanding,
4,070,339 shares of Series C Preferred Stock are outstanding, 1,680,880 shares
of Series B Preferred stock are outstanding and 50,000 shares of Series M
Preferred Stock are outstanding. The rights, preferences and privileges of the
Preferred Stock are set forth in the Certificate of Incorporation. Purchaser has
reserved 1,100,000 shares of Common Stock for issuance upon conversion of the
Series D Preferred Stock, 4,070,339 shares of Common Stock for issuance upon
conversion of the Series C Preferred Stock, 5,093,576 shares of Common Stock for
issuance upon conversion of the Series B Preferred Stock, and 270,027 shares of
Common Stock for issuance upon conversion of the Series M Preferred Stock. As a
result of Purchaser's merger with B.I. Systems Corporation, a Delaware
corporation ("BISC"), Purchaser assumed the 1994 Omnibus Equity Incentive Plan
of BISC (the "BISSC Plan"). The BISC Plan was adopted by the Board of Directors
and shareholders of BISC in July 1994 and amended in April 1997. On January 15,
1998, Purchaser's Board of Directors adopted the Genomic Solutions Inc.
Non-Employee Stock Option Plan (the "Non-Employee Plan") and the 1998 Genomic
Solutions Inc. Stock Option Plan (the "Employee Plan"). On the date of the
Closing, options to acquire 907,100 shares of Common Stock are outstanding
pursuant to the BISC Plan, options to acquire 1,081,750 shares of Common Stock
are outstanding pursuant to the Employee Plan and options to acquire 170,000
shares of Common Stock are outstanding pursuant to the Non-Employee Plan.
Purchaser has reserved 2,158,850 shares of Common Stock for issuance upon
exercise of these options. Purchaser has reserved 125,000 shares of Common Stock
for issuance upon exercise of the Warrant. Except as set forth herein and in
Schedule 4.2, there are no outstanding rights, options, warrants, preemptive
rights, conversion rights or agreements for the
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purchase, acquisition or receipt from Purchaser of any shares of capital stock
or any other securities of Purchaser. Purchaser is not a party to any existing
agreement with any person or entity which requires Purchaser to purchase from
such person or entity any of its capital stock, any securities convertible into
or exchangeable or exercisable for any of its capital stock, or any right,
options or warrants for its capital stock. All outstanding securities of
Purchaser, including the Warrant to be issued at Closing, have been issued in
accordance with all applicable state and Federal securities laws.
4.3 ABSENCE OF VIOLATIONS. Neither the execution, delivery or
performance of or compliance with this Agreement and all other agreements
contemplated herein, nor the consummation of the transactions herein
contemplated, will (i)violate, conflict with, or constitute a default or breach
of Purchaser's Certificate of Incorporation, bylaws or other constituent
documents, (ii)constitute a violation by Purchaser of any law, rule, regulation,
ordinance, order, writ, injunction, decree or judgment applicable to Purchaser,
or (iii) result in any breach or violation of, or be in conflict with or
constitute a default under, any mortgage, indenture, contract, agreement, lease,
or instrument in any way binding on Purchaser.
4.4 BROKERS' FEE. Purchaser is not liable for any business broker's
fee, or similar fee or expense, in connection with the transaction contemplated
in this Agreement.
4.5 VALIDITY OF WARRANT. The Warrant, when issued, sold and delivered
in accordance with the terms of this Agreement and the Warrant Shares, as
defined in the Warrant, issued upon exercise of the Warrant will, when issued,
be duly and validly issued, fully paid and non-assessable (assuming in the case
of the Warrant Shares, payment of the exercise price is made in accordance with
the terms of the Warrant); provided, however, that the Warrant Shares may be
subject to restrictions on transfer under state and federal securities laws and
the Shareholders Agreement dated as of December 24, 1997 (the "Shareholders
Agreement"), among the Purchaser (a/k/a Corporation) and the Shareholders (as
defined therein).
4.6 CONSENTS. No consent, approval or authorization of, or designation,
declaration or filing with, any governmental authority or agency is required on
the part of Purchaser in connection with the valid execution and delivery of
this Agreement or the consummation of the transactions herein contemplated.
4.7 FINANCIAL STATEMENTS. The attached Schedule 4.7 consists of
Purchaser's compiled balance sheets and the related statements of operations,
retained earnings and cash flows for each of the fiscal years ended December 31,
1995 through December 31, 1997, issued by Purchaser's auditors (the "Annual
Financial Statements"). Schedule 4.7(a) consists of Purchaser's consolidated
balance sheets and the related statement of operations ("Interim Financial
Statements) for the six months ended June 30, 1998. The Interim Financial
Statements are unaudited but have been prepared in accordance with generally
accepted accounting principles.
4.8 DISCLOSURE AND DISCLAIMER. The representations and warranties of
the Purchaser contained in this Agreement and the statements contained in the
certificates furnished pursuant hereto, taken as a whole, do not contain any
untrue statement of a material fact and do not omit to state a material fact
necessary in order to make any of the representations, warranties or statements
made not misleading.
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ARTICLE V
CONDITIONS PRECEDENT TO PURCHASER'S OBLIGATION AT CLOSING
The obligation of Purchaser to consummate the transactions contemplated
by this Agreement at the Closing is subject to the satisfaction of all of the
following conditions, any of which may be waived in writing by Purchaser:
5.1 ACCURACY OF REPRESENTATIONS. All representations and warranties
made by Seller in this Agreement shall have been true and correct in all
material respects on the Closing Date.
5.2 PERFORMANCE OF AGREEMENT. Seller shall have performed and complied
with all of its obligations under this Agreement which are to have been
performed or complied with on or prior to the Closing Date, and Seller shall
have executed and delivered all of the documents contemplated in this Agreement,
all of which shall be satisfactory to Purchaser.
5.3 CONSENTS AND WAIVERS. Seller shall have obtained all consents,
authorizations, approvals and waivers that are required hereunder which are
necessary for the consummation of the transaction contemplated in this
Agreement.
5.4 BOARD APPROVAL. The transactions herein contemplated shall have
been approved by the Board of Directors of Purchaser.
5.5 SHAREHOLDERS AGREEMENT. Seller shall have executed and delivered a
joinder agreement (the "Joinder Agreement") in a form acceptable to Purchaser
pursuant to which Seller shall agree to be bound by the terms of the
Shareholders Agreement.
5.6 LITIGATION. There shall not be any litigation, action, suit, claim,
proceeding, order, investigation or inquiry pending or threatened before any
court or quasi-judicial or administrative agency to, or pursuant to which a
judgment, order, decree, stipulation, injunction or charge could be entered
which would: (i)enjoin or prevent the consummation of the transactions
contemplated in this Agreement, (ii) cause any of the transactions contemplated
in this Agreement to be rescinded following consummation, (iii)adversely affect
the right of Purchaser to own, operate or control the Business, the Assets or
the Leased Real Property, or (iv) otherwise have a material adverse effect on
the operations or financial condition of the Business, the Assets or the Leased
Real Property.
5.7 TAX LETTER REQUEST. Seller represents and warrants that under the
laws of the Commonwealth of Massachusetts, no state tax waiver filing/request is
necessary for the completion of this transaction.
5.8 ANCILLARY AGREEMENTS. Seller and Purchaser have negotiated
definitive agreements for execution as described in Sections 2.4 and 2.5 above.
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ARTICLE VI
CONDITIONS PRECEDENT TO SELLER'S OBLIGATION AT CLOSING
The obligation of Seller to consummate the transactions contemplated by
this Agreement at the Closing is subject to the satisfaction of all of the
following conditions, any of which may be waived in writing by Seller:
6.1 ACCURACY OF REPRESENTATIONS. All representations and warranties
made by Purchaser in this Agreement shall have been true and correct in all
material respects on the date of this Agreement and shall be true and correct on
the Closing Date with the same force and effect as if they had been made on and
as of said date.
6.2 PERFORMANCE OF AGREEMENT. Purchaser shall have performed and
complied with all of its obligations under this Agreement which are to have been
performed or complied with on or prior to the Closing Date, and Purchaser shall
have executed and delivered all of the documents contemplated in this Agreement,
all of which shall be satisfactory to Seller.
6.3 BOARD APPROVAL. Seller shall have obtained the requisite approval
of its Board of Directors to effect the transactions contemplated by this
Agreement.
6.4 ANCILLARY AGREEMENTS. Seller and Purchaser have negotiated
definitive agreement for execution as described in Sections 2.4 and 2.5 above.
ARTICLE VII
CLOSING
7.1 The closing (the "Closing") of the transactions contemplated in
this Agreement shall be held at a mutually agreeable location, as soon as
reasonably possible following the negotiation and preparation of this Agreement
and the Attendant Documents and after the conditions set forth in the documents
and in Article V and Article VI of this Agreement are satisfied.
7.2 At the Closing, Seller shall deliver or cause to be delivered to
Purchaser:
(a) A Warranty Xxxx of Sale and Assignment and Assumption
Agreement in the form attached hereto as Document 7.2(a) (the "Warranty
Xxxx of Sale, Assignment of Assumption Agreement").
(b) A Covenant not to Compete (the "Covenant"), the form of
which is attached to this Agreement as Document 7.2(b).
(c) An opinion of counsel of Seller, addressed to Purchaser,
the form of which is attached to this Agreement as Document 7.2(c).
(d) A Sublease (the "Sublease"), the form of which is attached
to this Agreement as Document 7.2(d).
(e) All of the Assets.
(f) The Investor Statement.
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(g) Termination statements discharging and releasing any and
all Liens and security interests, including but not limited to those
Liens listed on Schedule 3.7.
(h) A copy of Seller's Articles of Organization, certified by
the Massachusetts Secretary of State and a Certificate of Good Standing
for Seller issued by the Massachusetts Secretary of State. All such
documents shall be dated not earlier then ten (10) days prior to the
Closing Date.
(i) An Incumbency Certificate executed by the Secretary of
Seller. Attached to such certificate shall be a copy of Seller's bylaws
and a copy of the minutes or resolutions approving the transactions
contemplated in this Agreement, and the officer of Seller executing
such certificate shall certify that, as of the Closing Date, such
bylaws and minutes or resolutions are true, complete and correct, have
not been altered or repealed and are in full force and effect.
(j) The Joinder Agreement.
(k) Such other documents and instruments as may be reasonably
requested by counsel for Purchaser.
7.3 At the Closing, Purchaser shall deliver or caused to be delivered
to Seller:
(a) The Purchase Price.
(b) The Warranty Xxxx of Sale, Assignment and Assumption
Agreement.
(c) The Warrant.
(d) The Manufacturing Agreement, the form of which is attached
to the Agreement as document 7.3(d).
(e) A copy of Purchaser's Certificate of Incorporation, as
amended, certified by the Delaware Secretary of State and Certificates
of Good Standing for Purchaser issued by the Delaware Secretary of
State and the Michigan Department of Consumer and Industry Services
Corporation, Securities and land Development Bureau. All such documents
shall be dated not earlier then ten (10) days prior to the Closing
Date.
(f) An opinion of counsel to Purchaser, addressed to Seller,
the form of which is attached to this Agreement as Document 7.3(f).
(g) An Incumbency Certificate executed by the Secretary of
Purchaser. Attached to such certificate shall be a copy of Purchaser's
bylaws and a copy of the minutes or resolutions approving the
transactions contemplated in this Agreement, and the officer of
Purchaser executing such certificate shall certify that, as of the
Closing Date, such bylaws and minutes or resolutions are true, complete
and correct, have not been altered or repealed and are in full force
and effect.
(h) Such other documents and instruments as may be reasonably
requested by counsel for Seller.
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ARTICLE VIII
EMPLOYEE MATTERS
8.1 SALARIED AND HOURLY EMPLOYEES.
(a) Termination. As used in this Section 8.1, the term "Active
Employees" means those Business Employees who are actively employed as
of the Closing Date (i.e., who are not, as of the date immediately
preceding the Closing Date, on leave of absence, layoff, military
leave, suspension, sick leave, workers' compensation, salary
continuance or long-term or short-term disability or otherwise not
actively performing his or her work during all normally scheduled
business hours ("Inactive Employees")). Seller shall terminate all of
the Active Employees on or as of the Closing Date and shall pay all
such terminated employees any amounts due through the last regular pay
date prior to the Closing Date for accrued wages and benefits.
Purchaser shall assume Seller's payroll obligation and pay the Active
Employees beginning as of the last regular pay date prior to the
Closing Date, whichever is earlier. Purchaser shall not assume any
liability for, inherit or succeed to any employment relationship or any
pending labor or employee relations case, or any employment or
collective bargaining agreements.
(b) Obligation to Hire. Subject to Section 8.1(e) below,
effective as of the Closing Date, Purchaser shall offer employment to
all of the Active Employees identified on the attached Schedule 8.1(b)
at the same or higher salary rate paid by Seller as of the Closing
Date, but on other terms and conditions which are substantially similar
to those under which Purchaser employs persons of similar skill,
experience and training as the Active Employees. For the purposes of
this Section 8.1, the term "Continued Employees" means those Active
Employees accepting such offers of employment.
(c) Inactive Employees. Inactive Employees who, but for the
fact that they were not actively employed as of the Closing Date, would
have been Active Employees may apply for employment with Purchaser when
their leave ends or when they are fit for regular duties, and if, at
the time, Purchaser has need for an employee with the Inactive
Employee's skill, experience, and training, and subject to Section
8.1(d) below, Purchaser shall offer employment to that Inactive
Employee on terms and conditions which are substantially similar to
those under which Purchaser then employs persons of similar skill,
experience and training as such Inactive Employee. On accepting such
offer of employment, such Inactive Employee shall, for the purposes of
this Section 8.1, be considered a Continued Employee.
(d) No Right to Continued Employment. After the Closing,
Purchaser may evaluate its employment needs with respect to the
Business, and no provision of this Agreement is intended to or shall
confer on any Continued Employee any right to continued employment
after the Closing Date.
(e) Employee Benefit Plans for Continued Employees. Effective
as of their acceptance of employment with Purchaser, all Continued
Employees shall be entitled to the benefits afforded under, and subject
to the terms and conditions of, the employee benefit plans then
maintained by Purchaser, subject to the terms and
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conditions of such plans; provided, however, that such coverage shall
not apply to dependents of Continued Employees who, on the date the
Continued Employee becomes eligible for coverage, are confined to their
home or a hospital. Seller agrees to continue coverage to such
dependents until they are no longer restricted from their normal
activity or the employment of the Continued Employee with Purchaser
terminates. If a Continued Employee whose dependent is disabled at
Closing should terminate employment with Purchaser before such
dependent is able to resume normal activities, Seller shall provide
COBRA notice and, if benefits are elected, shall provide coverage to
such dependent for as long as the dependent is eligible for COBRA
coverage. Seller shall retain all liability to fully perform, pay and
discharge all incurred but unpaid claims under the insurance programs
provided to employees of the Business immediately preceding the Closing
Date.
(f) No Obligation Under Seller's Employee Benefit Plans.
Purchaser shall assume no liability or obligation arising under or
pursuant to Seller's Employee Benefit Plans. Seller shall indemnify and
hold Purchaser harmless from any obligation or liability incurred or
arising with respect to Seller's Employee Benefit Plans.
(g) Retiree Medical Plans. Seller shall retain all assets and
liabilities relating to its retiree medical plans and with respect to
its employees who retired before or on the Closing Date and all
expenses relating to such retiree medical plans.
(h) Workers' Compensation Claims. Seller is and shall be fully
responsible and liable for all workers' compensation benefits payable
to the Employees for any claim for such benefits arising as the result
of an injury or occupational disease sustained while employed by
Seller. Seller acknowledges that Purchaser shall have no greater
obligation with respect to hiring any Employees who, as of the Closing
Date, are on workers' compensation leave than it shall have to any
other Inactive Employee. However, on reasonable notice and during
normal business hours, Purchaser shall make its employees available to
Seller for the purposes of defending workers' compensation claims by
employees.
ARTICLE IX
OTHER COVENANTS
9.1 PROCUREMENT OF REQUISITE AGREEMENTS AND ASSIGNMENTS. Seller and
Purchaser shall secure all necessary consents, approvals, authorizations,
exemptions and waivers from third parties as shall be required in order to
enable Seller and Purchaser to effect the transactions contemplated hereby, and
will otherwise use all reasonable efforts to cause the consummation of such
transactions in accordance with the terms and conditions hereof.
9.2 COVENANT TO ASSIST PURCHASER'S RETENTION OF SELLER'S EMPLOYEES. As
a necessary inducement to cause Purchaser to enter into this Agreement, Seller
covenants, warrants and agrees, that it shall use all reasonable efforts to
assure Purchaser's hiring, and assist with the retention, of Business Employees.
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ARTICLE X
INVESTIGATION, SURVIVAL AND INDEMNIFICATION
10.1 INVESTIGATION. The investigation by Purchaser and its employees,
agents and representatives, of the Assets, the Business and any other matters
concerning Seller prior to or subsequent to the Closing Date, shall not negate
or diminish the representations and warranties of Seller contained or provided
for herein except to the extent Seller can demonstrate that Purchaser had actual
knowledge of an inaccurate warranty or representation.
10.2 SURVIVAL. The representations and warranties set forth in Sections
3 and 4 of this Agreement shall survive for a period of two (2) years after the
Closing Date; except that the representations and warranties contained in
Sections 3.1, 3.2, 3.3, 3.7, 3.10, 3.21, 3.23, 4.1, and 4.3 shall survive
indefinitely. The representations and warranties set forth in Section 3.6 shall
survive the Closing Date for the applicable statue of limitations period; except
that such representations and warranties shall survive the Closing Date
indefinitely if they relate to a tax liability of the Business that is based on
misrepresentation or fraud.
10.3 INDEMNIFICATION OF PURCHASER. Seller hereby agrees to indemnify,
defend, and hold Purchaser, and its officers, directors, shareholders,
employees, successors and assigns, harmless from and against any and all
liability, loss, costs or expenses which Purchaser may suffer and become liable
for as a result of or in connection with:
(a) any inaccuracy or misrepresentation in, or breach of any
representation or warranty of Seller contained in this Agreement, any
of the documents or any certificate, schedule, list or other instrument
to be furnished by Seller to Purchaser pursuant to this Agreement;
(b) any breach or failure of Seller to perform any covenant or
agreement required to be performed by Seller pursuant to this Agreement
or any documents furnished by Seller;
(c) Seller's non-compliance with the provisions of any bulk
transfer law applicable to the transactions contemplated in this
Agreement;
(d) any claim, demand, suit, action or legal, administrative
or other proceeding by any person (other than a Party) or any federal,
state or local department, agency or other governmental body (a "Third
Party Claim") against the Purchaser resulting from, arising out of or
in any way related to (i) the failure of Seller to perform, pay or
discharge any Excluded Liability, or (ii) the operation of the Business
prior to the Closing (not including warranty claims, or (iii) any
actual or alleged defect in any product manufactured by Seller prior to
the Closing;
(e) any and all claims made against Purchaser by PDI, or any
successor of PDI, resulting from, arising out of or in any way related
to the PDI Agreement;
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(f) any and all actions, suits, proceedings, demands,
assessments, judgments, costs and expenses, including reasonable
attorneys' and consultants' fees (collectively, "Related Expenses"),
incident to any of the foregoing;
provided, however, that within sixty (60) days after learning of the assertion
of any Third Party Claim against which Purchaser claims indemnification under
this Section 10.3, Purchaser shall notify Seller and afford it the opportunity
to assume the defense or settlement thereof at Seller's own expense with counsel
of its choosing. Purchaser shall have the right to join Seller in the defense or
settlement of such Third Party Claims at its own expense with counsel of its
choosing, provided that Seller shall not settle any such claim without the prior
written consent of Purchaser. If Seller desires to participate in, but not
control, any such Third Party Claim, it may do so at its sole cost and expense.
If Seller fails to promptly undertake the defense of such Third Party Claim
after receiving written notice of such claim, Purchaser shall have the right to
control and conduct such Third Party Claim. Except in the event Seller fails to
assume or join in the defense of a Third Party Claim, no settlement of a Third
Party Claim involving the asserted liability of Seller under this Section shall
be made without the prior written consent of Seller, which consent shall not be
unreasonably withheld or delayed. Consent shall be presumed in the case of
settlement of $100,000 or less where Seller has not responded within five
business days of notice of a proposed settlement. If Seller assumes the control
of such a Third Party Claim, (a) no compromise or settlement thereof may be
effected by Seller without Purchaser's consent which consent shall not be
unreasonably withheld or delayed, unless, (i) there is no finding or admission
of any violation of law or any violation of the rights of any person and no
effect on any other claim that may be made against Purchaser, (ii) the sole
relief provided is monetary damages that are paid in full by Seller and (iii)
the compromise or settlement includes, as an unconditional term thereof, the
giving by the claimant or the plaintiff to Purchaser of a release, in form and
substance reasonably satisfactory to Purchaser, from all liability in respect of
such Third Party Claim, and (b) except to the extent otherwise provided in this
section or elsewhere in the Agreement, Purchaser shall have no liability with
respect to any compromise or settlement thereof effected without its consent.
10.4 INDEMNIFICATION OF SELLER. Purchaser hereby agrees to indemnify
and hold Seller, its shareholders, officers, directors, successors and assigns,
harmless from and against any and all liability, loss, cost or expense which
Seller may suffer or become liable for as a result of or in connection with:
(a) any inaccuracy or misrepresentation in, or breach of any
representation or warranty of Purchaser contained in, this Agreement,
any of the documents furnished pursuant to Section 4 attached hereto
(the "Attendant Documents") or any certificate, schedule, list or other
instrument to be furnished by Purchaser to Seller pursuant to this
Agreement or any of the Attendant Documents;
(b) any breach or failure of Purchaser to perform any covenant
or agreement required to be performed by Purchaser pursuant to this
Agreement or any of the Attendant Documents;
(c) any Third Party Claim against the Seller resulting from,
arising out of or in any way related to (i) the failure of Purchaser to
perform, pay or discharge any liability of Seller assumed by Purchaser,
(ii) the operation of the Business after the Closing, or (iii) any
actual or alleged defect in any product manufactured by Purchaser after
the Closing; and
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(d) any and all Related Expenses incident to any of the
foregoing;
provided, however, that within sixty (60) days after learning of the assertion
of any Third Party Claim against which Seller claims indemnification under this
Section 10.4, Seller shall notify Purchaser and afford it the opportunity to
assume the defense or settlement thereof at Purchaser's own expense with counsel
of its choosing, and Seller shall cooperate fully to make available to Purchaser
all pertinent information under its control or in its possession. Seller shall
have the right to join in the defense of any such Third Party Claim with counsel
of its own choosing and at its own expense.
10.5 COOPERATION. The parties hereto shall use reasonable efforts to
minimize the obligation of the others to indemnify hereunder, by, among other
reasonable things and without limiting the generality of the foregoing, taking
such reasonable remedial action as they believe may minimize such obligation and
seeking to the maximum extent possible reimbursement from insurance carriers
under applicable insurance policies covering any such liability.
10.6 ASSIGNMENT OF CLAIMS. The parties hereto agree that upon
satisfaction of the obligation to indemnify hereunder, and in consideration
thereof, to assign to the party making such payment or giving such credit, any
and all claims, causes of action and demands of whatever kind and nature which
such indemnified party may have against any person, firm or other entity giving
rise to such indemnified loss, and to reasonably cooperate in any efforts to
recover therefrom.
10.7 ARBITRATION.
(a) If a party hereto has any claim against any other party
hereto under this Agreement, the party seeking recovery shall set forth
the amount of the claim and the circumstance in a written demand to the
party from whom recovery is sought (the "Demand"). If the party from
whom recovery is sought gives the party seeking recovery a written
rejection of the Demand within thirty (30) days of its receipt of the
Demand, then the claim shall be submitted to arbitration under Section
10.7(b). If the party from whom recovery is sought does not give the
party seeking recovery a written rejection of the Demand within thirty
(30) days of its receipt of the Demand, then the validity and the
amount of the claim set forth in the Demand shall be conclusive and
shall be due and payable from the party from whom recovery is sought.
(b) If the party from whom recovery is sought gives the party
seeking recovery a written rejection of the Demand, as set forth in
Section 10.7(a), then the parties shall submit the claim set forth in
the Demand to binding arbitration, in the Wilmington Delaware area
under the Commercial Arbitration Rules of the American Arbitration
Association ("AAA") then pertaining before a panel of three arbitrators
one of whom shall be selected by Purchaser, one of whom shall be
collectively selected by Seller and the third of whom shall be selected
by the other two. The award rendered by the arbitrators shall be final
and binding, and a judgment may be entered upon such award in a court
of competent jurisdiction. All of the parties to this Agreement hereby
consent to the jurisdiction of the courts of the State of Delaware for
purposes of entering judgment with respect to such award. Once any
award shall be made hereunder (and shall become final), the parties
shall promptly comply with the terms of such award and shall share
equally the cost of arbitration; provided, however, if the arbitrators
find 100% in favor of one party, then the losing party shall pay the
entire cost of arbitration and
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reimburse the prevailing party for all of its actual costs incurred
including attorney fees.
ARTICLE XI
LIMITATION ON LIABILITY
11.1 LIMITATION ON INDEMNIFICATION. Any provision of this Agreement to
the contrary notwithstanding, no claim for indemnification by either party
against the other party under this Agreement shall be valid and assertible
unless and until the aggregate amount of all claims by such party exceeds
Twenty-Five Thousand Dollars ($25,000) (the "Basket Amount"), and then such
party may only seek indemnification to the extent all claims exceed the Basket
Amount; and provided, further, that no party's aggregate indemnification
liability under this Agreement, together with any other damages, whether direct
or indirect, arising from or relating to the transfer of Assets from Seller to
Purchaser and the other transactions contemplated hereby to be completed at or
before the Closing, shall exceed One Million Dollars ($1,000,000) (the "Cap").
Notwithstanding any provision of this Agreement to the contrary, the Basket
Amount and the Cap shall not apply to: (i) a failure of Seller to perform, pay
or discharge any liability not assumed by Purchaser under this Agreement; (ii)
any party's failure to comply with its affirmative obligations under this
Agreement; (iii) a failure of Seller to remove any Liens on the Assets prior to
the Closing Date, except for such Liens listed on Schedule 3.10; (iv) any breach
of the representations and warranties set forth in Sections 3.7, 3.18 or 3.23;
(v) a breach of confidentiality; (vi) infringement of a patent, copyright,
trademark, trade secret, or other proprietary right (except any and all claims
made against Purchaser by PDI, or any successor of PDI, resulting from, arising
out of or in any way related to the PDI Agreement); (vii) fraud or intentional
misrepresentation of a material fact; or (viii) Seller's non-compliance with the
provisions of any bulk transfer law or the WARN Act.
ARTICLE XII
MISCELLANEOUS
12.1 Notices. All notices, elections, demands, requests, consents,
approvals, statements or other communications (collectively, "notices or
demands") upon any party hereto desired or required to be given under any of the
provisions hereof shall be given or made only by being in writing and:
(i)delivered personally to the party to whom it is directed; (ii) sent by
facsimile and first class mail; or (iii)sent by first class mail or overnight
express mail, postage and charges prepaid, addressed to the party to whom it is
directed, at the following addresses, or at such other address as the parties
may hereafter indicate by written notice as provided herein.
IF TO SELLER: WITH A REQUIRED COPY TO:
ESA, Inc. Xxxxx, Xxxx & Xxxxx XXX
00 Xxxxx Xxxx Xxx Xxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000 Xxxxxx, XX 00000
Attn: Xxxxxx XxXxxxxx Attn: Xxxxx X. Xxxxxxxxx
Fax: (000) 000-0000 Fax: (000) 000-0000
IF TO PURCHASER: WITH A REQUIRED COPY TO:
Genomic Solutions Inc. Jaffe, Raitt, Heuer & Xxxxx
0000 Xxxxxxx Xxxxx Xxx Xxxxxxxx Xxx. Xxxxx 0000
Xxx Xxxxx, Xxxxxxxx 00000 Xxxxxxx, Xxxxxxxx 00000
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Attn: Xxxx Xxxxxxxx Attn: Xxxxx Sugar
Fax: (000) 000-0000 Fax: (000) 000-0000
Except as otherwise provided in this Agreement, any such notice or demand
(x)given or made in the manner indicated in clauses (i) or (ii) of this Section
12.1 shall be deemed to be given or made on the day on which it was delivered;
and (y)given or made in the manner indicated in clause(iii) of this Section 12.1
shall be deemed to be given or made on the second business day after the day on
which it was deposited in a regularly maintained receptacle for the deposit of
the United States mail, or in the case of overnight express mail, on the
business day immediately following the day on which it was deposited in a
regularly maintained receptacle for the deposit of overnight express mail.
12.2 HEADINGS. The headings contained in this Agreement are for
reference purposes only and shall not in any way affect the meaning or
interpretation of this Agreement.
12.3 CONSTRUCTION. This Agreement has been executed in, and shall be
construed and enforced in accordance with the laws of the State of Delaware,
without regard to such state's conflicts of laws doctrine. Seller and Purchaser
acknowledge that each of them has equally participated in the final wording of
this Agreement. Accordingly, the parties agree that this Agreement shall be
construed equally against each party, and shall not be more harshly construed
against the party by reason of the fact that the particular party's counsel may
have prepared this, the final version of the Agreement between the parties
hereto.
12.4 BENEFIT. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective heirs, personal
representatives, successors and assigns.
12.5 ENTIRE AGREEMENT. This Agreement, including the Schedules,
Documents and Schedules attached or to be attached hereto, is and shall be
deemed to be the complete and final expression of the agreement between the
parties as to the matters herein contained and relative thereof, and supersedes
any previous agreements between the parties pertaining to such matters.
12.6 SEVERABILITY. If any part of this Agreement is held to be invalid
or unenforceable under the laws of any jurisdiction where this Agreement is to
be governed or sought to be enforced, the remaining provisions shall be
enforceable to the maximum extent permitted by law; provided, the remaining
provisions effectuate the intent of the parties as manifested herein.
12.7 WAIVER. The waiver by any party of any breach of any provision
hereof shall not operate or be construed as a waiver of any subsequent or
similar breach.
12.8 AMENDMENT. This Agreement may only be amended by written agreement
executed by the parties hereto.
12.9 NO ASSIGNMENT; BENEFIT. No Party may assign its rights and
obligations under this Agreement without the prior written consent of the other
Parties. This Agreement shall be binding on and inure to the benefit of the
Parties and their respective successors and assigns.
12.10 FURTHER ASSURANCES. From time to time after the Closing Date, at
Purchaser's request and without further consideration, Seller shall execute and
deliver or
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cause to be executed and delivered such further instruments of conveyance,
assignment and transfer and shall take such other action as Purchaser may
reasonably request in order more effectively to convey, transfer, reduce to
possession or record title to any of the Assets purchased pursuant hereto or to
carry out the purpose and intent of this Agreement. Upon the request of
Purchaser, and at Purchasers expense, Seller will cooperate and will use its
best efforts to have the officers, directors and other employees of Seller
cooperate with Purchaser on or after the Closing Date by furnishing information,
evidence, testimony and other assistance in connection with any actions,
proceedings, arrangements or disputes involving Purchaser and which are based
upon contracts, leases, arrangements or acts of Seller which were in effect or
occurred on or prior to the Closing Date.
12.11 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original and all of which
together shall be considered one and the same agreement. Photostatic or
facsimile reproductions of this Agreement may be made and relied upon to the
same extent as originals.
IN WITNESS WHEREOF, the parties hereto have caused this Asset Purchase
Agreement to be fully executed as of October 13, 1998.
SELLER:
ESA, INC., a Massachusetts corporation
By: /s/ Xxxxxx XxXxxxxx
----------------------------------------
Its: President
---------------------------------------
PURCHASER:
GENOMIC SOLUTIONS INC., a Delaware
corporation
By: /s/ Xxxx Xxxxxxxx
----------------------------------------
Xxxx Xxxxxxxx, President and Chief
Executive Officer
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