AGREEMENT AND PLAN OF MERGER
BY AND AMONG
HARVARD BIOSCIENCE, INC.
"HBIO"
UNION BIOMETRICA, INC.
THE "COMPANY"
UNION BIOMETRICA, INC.
"NEWCO"
AND
THE STOCKHOLDERS OF THE COMPANY IDENTIFIED HEREIN
DATED AS OF MAY 31, 2001
AGREEMENT AND PLAN OF MERGER
INDEX
PAGE
SECTION 1. PLAN OF MERGER................................................................................2
1.1 The Merger......................................................................................2
1.2 Exchange Procedures.............................................................................5
1.3 Fractional Shares...............................................................................6
1.4 Escrow of Shares; Escrow Agreement..............................................................6
1.5 Effect of Stockholder Approval; Representative..................................................7
1.6 Tax-Free Reorganization.........................................................................8
1.7 Purchaser's Representative......................................................................8
SECTION 2. CLOSING.......................................................................................8
2.1 Closing.........................................................................................8
2.2 Termination of Stockholder Agreements...........................................................8
2.3 Further Assurances..............................................................................9
SECTION 3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY PARTIES WITH RESPECT TO THE COMPANY.............9
3.1 Making of Representations and Warranties........................................................9
3.2 Organization and Qualification of the Company...................................................9
3.3 Capitalization; Beneficial Ownership...........................................................10
3.4 Subsidiaries...................................................................................10
3.5 Authority of the Company.......................................................................11
3.6 Real and Personal Property.....................................................................11
3.7 Financial Statements...........................................................................12
3.8 Taxes..........................................................................................13
3.9 Accounts Receivable; Accounts Payable; Inventories.............................................15
3.10 Absence of Certain Changes.....................................................................16
3.11 Ordinary Course................................................................................17
3.12 Banking Relations..............................................................................17
3.13 Intellectual Property..........................................................................18
3.14 Contracts......................................................................................21
3.15 Litigation.....................................................................................23
3.16 Compliance with Laws...........................................................................23
3.17 Insurance......................................................................................23
3.18 Powers of Attorney.............................................................................23
3.19 Finder's Fee...................................................................................24
3.20 Corporate Records; Copies of Documents.........................................................24
3.21 Transactions with Interested Persons...........................................................24
3.22 Employee Benefit Programs......................................................................24
(i)
3.23 List of Directors, Officers and Employees......................................................26
3.24 [Reserved].....................................................................................27
3.25 Transfer of Shares.............................................................................27
3.26 Stock Repurchase...............................................................................27
3.27 Environmental Matters..........................................................................27
3.28 Customers, Distributors and Partners...........................................................28
3.29 Suppliers......................................................................................28
3.30 Warranty and Related Matters...................................................................28
3.31 Backlog........................................................................................29
3.32 Disclosure.....................................................................................29
SECTION 4. SEVERAL REPRESENTATIONS AND WARRANTIES OF THE STOCKHOLDERS...................................29
4.1 Company Shares.................................................................................29
4.2 Authority......................................................................................29
4.3 Finder's Fee...................................................................................30
4.4 Agreements.....................................................................................30
4.5 Investment Representation......................................................................30
4.6 Non-Foreign Status.............................................................................31
SECTION 5. COVENANTS OF THE COMPANY PARTIES.............................................................31
5.1 Making of Covenants and Agreements.............................................................31
5.2 Confidential Information and Unfair Competition................................................31
5.3 Authorizations.................................................................................33
5.4 Authorization from Others......................................................................33
5.5 Conduct of Business............................................................................33
5.6 Financial Statements...........................................................................34
5.7 Preservation of Business and Assets............................................................35
5.8 Tax Returns....................................................................................35
5.9 Notice of Default..............................................................................35
5.10 Consummation of Agreement......................................................................35
5.11 Cooperation of the Company and Company Parties.................................................35
5.12 [Reserved].....................................................................................35
5.13 Confidentiality................................................................................35
5.14 Audited Financial Information..................................................................36
SECTION 6. REPRESENTATIONS AND WARRANTIES OF HBIO.......................................................36
6.1 Making of Representations and Warranties.......................................................36
6.2 Organization of HBIO and Newco.................................................................36
6.3 Authority of HBIO and Newco....................................................................37
6.4 Litigation.....................................................................................38
6.5 Finder's Fee...................................................................................38
6.6 SEC Reports....................................................................................38
6.7 Shares.........................................................................................38
(ii)
SECTION 7. COVENANTS OF HBIO............................................................................38
7.1 Making of Covenants and Agreement..............................................................38
7.2 Confidentiality................................................................................38
7.3 Cooperation of HBIO............................................................................39
7.4 Notice of Default..............................................................................39
7.5 Immigration....................................................................................39
SECTION 8. CONDITIONS TO THE OBLIGATIONS OF HBIO........................................................39
8.1 Litigation; No Opposition......................................................................39
8.2 Representations, Warranties and Covenants......................................................40
8.3 [Reserved].....................................................................................40
8.4 Approvals......................................................................................40
8.5 Employment/Non-Competition Agreements..........................................................40
8.6 Stockholders' Equity and Cash..................................................................40
8.7 Delivery.......................................................................................40
8.8 Escrow Agreement...............................................................................41
8.9 Release........................................................................................41
8.10 Option Matters.................................................................................41
8.11 HSR Act........................................................................................42
8.12 Material Adverse Change........................................................................42
8.13 Mass Business Mezzanine Fund I, LLC Bridge Loan................................................42
8.14 Gateway Financial Group, Inc. Finder's Fee.....................................................42
8.15 Bank Signatures................................................................................42
SECTION 9. CONDITIONS TO OBLIGATIONS OF THE COMPANY PARTIES.............................................42
9.1 No Litigation; No Opposition...................................................................42
9.2 Representations, Warranties and Covenants......................................................42
9.3 Delivery.......................................................................................43
9.4 Escrow Agreement...............................................................................44
9.5 HSR Act........................................................................................44
SECTION 10. [RESERVED.]..................................................................................44
SECTION 11. RIGHTS AND OBLIGATIONS SUBSEQUENT TO CLOSING.................................................44
11.1 Survival of Representations, Warranties and Covenants..........................................44
11.2 Regulatory Filings.............................................................................44
SECTION 12. INDEMNIFICATION..............................................................................44
12.1 Indemnification by the Stockholders............................................................44
12.2 Limitations on Indemnification by the Company Parties..........................................45
12.3 Indemnification by HBIO........................................................................46
12.4 Limitation on Indemnification by HBIO..........................................................47
12.5 Notice; Defense of Claims......................................................................47
12.6 Escrow Shares..................................................................................48
(iii)
SECTION 13. DEFINITIONS..................................................................................48
13.1 Definitions....................................................................................48
SECTION 14. MISCELLANEOUS................................................................................52
14.1 Fees and Expenses..............................................................................52
14.2 Dispute Resolution.............................................................................52
14.3 Waivers........................................................................................53
14.4 Governing Law..................................................................................53
14.5 Notices........................................................................................53
14.6 Entire Agreement...............................................................................54
14.7 Assignability; Binding Effect..................................................................54
14.8 Captions and Gender............................................................................54
14.9 Execution in Counterparts......................................................................54
14.10 Amendments.....................................................................................54
14.11 Publicity and Disclosures......................................................................55
14.12 Consent to Jurisdiction........................................................................55
14.13 Company Preferred Stock Allocation for Tax Purposes Only.......................................55
(iv)
EXHIBITS
Exhibit 1.1(g)(iii) -- Form of HBIO Option
Exhibit 1.2 -- Letter of Transmittal
Exhibit 1.4 -- Form of Escrow Agreement
Exhibit 8.5 -- Form of Employment/Non-Competition Agreement
Exhibit 8.7(g) -- Transferor's Certificate of Non-Foreign Status
Exhibit 8.9 -- Form of Release
Exhibit 8.10 -- Form of Option Cancellation and Exchange Agreement
SCHEDULES
Schedule 1.1(g)(iii) -- Company Options
Schedule 3.3(a) -- Options; Rights to Purchase
Schedule 3.3(b) -- Company Capitalization; Voting Agreements
Schedule 3.4 -- Subsidiaries
Schedule 3.5 -- Approvals; Waivers
Schedule 3.6(a) -- Real Property
Schedule 3.6(b) -- Personal Property
Schedule 3.7 -- Financial Statements
Schedule 3.8 -- Taxes
Schedule 3.9 -- Accounts Receivable; Accounts Payable
Schedule 3.10 -- Adverse Changes
Schedule 3.12 -- Banking Relations
Schedule 3.13 -- Intellectual Property
Schedule 3.14 -- Contracts; Commitments
Schedule 3.16 -- Compliance with Laws
Schedule 3.17 -- Insurance
Schedule 3.21 -- Transactions with Interested Persons
Schedule 3.22 -- Employee Benefit Programs
Schedule 3.23(a) -- Directors and Officers; Certain Employees
Schedule 3.23(b) -- Employment Agreements
Schedule 3.25 -- Share Transfers
Schedule 3.26 -- Repurchases
Schedule 3.28 -- Customers, Distributors and Partners
Schedule 3.29 -- Suppliers
Schedule 3.30 -- Warranties
Schedule 3.31 -- Backlog
Schedule 4.1 -- Share Restrictions
Schedule 5.1 -- List of Company Parties
Schedule 5.5 -- Conduct of Business; Exceptions
Schedule 8.10 -- List of Option Holders Who Executed Cancellation and Exchange
Agreements
(v)
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (the "Agreement") is entered into as
of May 31, 2001, by and among Harvard Bioscience, Inc., a Delaware corporation
("HBIO"), Union Biometrica, Inc., a Massachusetts corporation (the "Company"),
Union Biometrica, Inc., a Delaware corporation ("Newco"), and the stockholders
of the Company listed on the signature pages hereto or who otherwise becomes a
party to this Agreement (collectively, the "Stockholders", and each
individually, a "Stockholder"). The Company and the Stockholders shall
collectively be known as the "Company Parties," and each individually, as a
"Company Party." All capitalized terms used herein and not otherwise defined
shall have the meanings ascribed to them in Section 13.1 hereof.
W I T N E S S E T H
WHEREAS, the Company is engaged in the business of developing, making
and selling instruments, assays and biological systems for the automated
handling of model organisms;
WHEREAS, the Stockholders own of record and beneficially all of the
issued and outstanding capital stock of the Company, consisting of FOUR HUNDRED
TWENTY-NINE THOUSAND NINE HUNDRED FORTY-FIVE (429,945) shares of the Company's
Common Stock, no par value (the "Company Common Stock"), and NINETY FOUR
THOUSAND EIGHT HUNDRED FIFTY-SIX (94,856) shares of the Company's Series A
Convertible Preferred Stock, par value $.01 per share (the "Company Preferred
Stock");
WHEREAS, HBIO and the Company desire to effect a combination of their
respective businesses through a merger of the Company with and into Newco, a
subsidiary of HBIO, in accordance with applicable laws;
WHEREAS, the Boards of Directors of HBIO, Newco and the Company each
have determined that it is in the best interests of their respective
stockholders for the Company to merge with and into Newco upon the terms in and
subject to the conditions of this Agreement (the "Merger");
WHEREAS, Newco and the Company intend that the Merger will be treated
as a tax-free reorganization within the meaning of Section 368(a) of the
Internal Revenue Code of 1986, as amended (the "Code"), that this Agreement
shall constitute a plan of reorganization for the purposes of Section 368 of the
Code; and
WHEREAS, in order to induce HBIO and Newco to enter into this
Agreement, and in order to receive the benefits that will accrue to them upon
consummation of the Merger, the Company Parties have agreed to make certain
representations, warranties and covenants as set forth herein.
NOW, THEREFORE, in consideration of the mutual agreements set forth
herein and other valuable consideration, the receipt and adequacy whereof are
hereby acknowledged, the parties hereto agree as follows:
SECTION 1. PLAN OF MERGER.
1.1 THE MERGER.
(a) THE MERGER. On the terms and subject to the conditions set forth in
this Agreement, at the Effective Time (as defined in Section 1.1(c) hereof), in
accordance with this Agreement, the Delaware General Corporation Law (the
"Delaware Law") and the Massachusetts Business Corporation Law (the
"Massachusetts Law"), the Company shall merge with and into Newco, the separate
existence of the Company shall cease and Newco shall continue, as the surviving
corporation under the corporate name Union Biometrica, Inc. Newco, in its
capacity as the corporation surviving the Merger, is sometimes referred to
herein as the "Surviving Corporation," and Newco and the Company are sometimes
referred to collectively herein as the "Constituent Corporations."
(b) EFFECT OF THE MERGER. At and after the Effective Time, the Merger
shall have the effects set forth in Sections 259 and 261 of the Delaware Law,
Section 80 of the Massachusetts Law and all other applicable laws.
(c) CONSUMMATION OF THE MERGER. On the Closing Date (as defined in
Section 2.1 hereof), the parties hereto shall cause (i) a Certificate of Merger
to be filed with the Secretary of State of Delaware, in such form as required
by, and executed in accordance with, Section 252 of the Delaware Law and (ii)
Articles of Merger to be filed with the Secretary of State of Massachusetts, in
such form as required by, and executed in accordance with, Section 79 of the
Massachusetts Law. The Merger shall be effective as of the date of filing of the
Certificate of Merger (the "Effective Time").
(d) CERTIFICATE OF INCORPORATION. From and after the Effective Time,
the Certificate of Incorporation of Newco, as in effect immediately prior to the
Effective Time, shall be and become the Certificate of Incorporation of the
Surviving Corporation, and shall thereafter continue in effect until amended as
provided therein and in accordance with the Delaware Law.
(e) BY-LAWS. The By-Laws of Newco, as in effect immediately prior to
the Effective Time, shall be the By-Laws of the Surviving Corporation, and shall
thereafter continue in effect until amended as provided therein and in
accordance with the Delaware Law.
(f) DIRECTORS AND OFFICERS. The directors and officers of Newco holding
office immediately prior to the Effective Time shall, from and after the
Effective Time, be the directors and officers of the Surviving Corporation,
until their respective successors shall have been duly elected or appointed and
qualified or until their earlier death, resignation or removal in accordance
with the Surviving Corporation's Certificate of Incorporation and By-Laws.
2
(g) MERGER CONSIDERATION. The manner of converting or canceling shares
of the Company in the Merger shall be as follows:
(i) COMPANY COMMON STOCK. At the Effective Time, each share of
Company Common Stock that is issued and outstanding immediately prior to the
Effective Time (other than any Dissenting Shares as provided in Section
1.1(g)(iv)) will, by virtue of the Merger, and without the need for any
further action on the part of the holder thereof, be exchanged for the
Common Stock Per Share Merger Consideration (as defined in Section
1.1(g)(vii)), subject to the provisions of Section 1.3 regarding the
elimination of fractional shares.
(ii) COMPANY PREFERRED STOCK. At the Effective Time, each share of
Company Preferred Stock that is issued and outstanding immediately prior to
the Effective Time (other than any Dissenting Shares as provided in Section
1.1(g)(iv)) will, by virtue of the Merger, and without the need for any
further action on the part of the holder thereof, be exchanged for the
Preferred Stock Per Share Merger Consideration (as defined in Section
1.1(g)(vii)), subject to the provisions of Section 1.3 regarding the
elimination of fractional shares.
(iii) COMPANY OPTIONS. At the Effective Time, each option to
purchase shares of Company Common Stock (each, an "Option") that is
outstanding immediately prior to the Effective Time (not to exceed options
to purchase 123,060 shares of Company Common Stock in the aggregate) (all
of which such Options are set forth on SCHEDULE 1.1(g)(iii)) will, by virtue
of the Merger and at the Effective Time and without the need for any further
action on the part of any holder thereof, be cancelled and in substitution
thereof HBIO will issue options (a "HBIO Option") to purchase a whole number
of shares of HBIO Common Stock as provided in this Section 1.1(g) (iii).
None of the Options that are unvested as of the Effective Time shall, except
as required by their terms or as otherwise agreed upon by HBIO and the
Company (which such Options that by their terms or otherwise accelerate are
indicated on SCHEDULE 1.1(g)(iii)) become vested as a result of the
execution and delivery of this Agreement, the consummation of the Merger or
the issuance of substitute HBIO Options thereunder. The status as an
"incentive stock option" under Section 422 of the Code (if applicable) or as
a non-qualified stock option, will to the extent permitted by law, be
unchanged and continue in effect after the Effective Time. This Section
1.1(g)(iii) is intended to meet the requirements of Section 424(a) of the
Code and shall be interpreted consistent with such intent. For each
outstanding Option, an HBIO Option in the form of EXHIBIT 1.1(g)(iii), shall
be issued. The number of HBIO Options to be issued in substitution for each
outstanding Option, the exercise price thereof, and the remaining vesting
schedule (if any) are as set forth on SCHEDULE 1.1(g)(iii).
(iv) COMPANY DISSENTING SHARES. Holders of shares of Company
Common Stock or Company Preferred Stock who have complied with all
requirements for perfecting shareholder appraisal rights, as set forth in
Section 89 of the Massachusetts Law shall be entitled to their rights under
the Massachusetts Law with respect to such
3
shares ("Dissenting Shares"), and Dissenting Shares will not be converted
into the Merger Consideration (as defined in Section 1.2(a) hereof) in the
Merger. Shares of Company Common Stock or Company Preferred Stock that are
outstanding immediately prior to the Effective Time and with respect to
which dissenting stockholders' rights to dissent under the Massachusetts Law
have either (a) not been properly exercised and perfected or (b) with the
consent of the Company and HBIO, been withdrawn, will, when such dissenting
stockholders' rights can no longer be legally exercised under the
Massachusetts Law, be converted into the Merger Consideration as provided in
Section 1.1(g)(i) or 1.1(g)(ii) hereof, respectively.
(v) ADJUSTMENTS FOR CAPITAL CHANGES. Notwithstanding the
provisions of Section 1.1(g)(i), 1.1(g)(ii) or 1.1(g)(iii), if at any time
after the date this Agreement is duly executed by all parties and prior to
the Effective Time, HBIO recapitalizes, either through a subdivision (or
stock split) of any of its outstanding shares of HBIO Common Stock into a
greater number of such shares, or a combination (or reverse stock split) of
any of its outstanding shares of HBIO Common Stock into a lesser number of
such shares, or reorganizes, reclassifies or otherwise changes its
outstanding shares of HBIO Common Stock into the same or a different number
of shares of other classes (other than through a subdivision or combination
of shares provided for in the preceding clause), or declares a dividend on
its outstanding shares payable in shares of HBIO Common Stock, in shares or
securities convertible into shares of HBIO Common Stock or in cash or other
property (each, a "Capital Change"), then the HBIO Average Price Per Share
(as defined in Section 1.1(g)(vii)) will be proportionally and equitably
adjusted.
(vi) [Reserved]
(vii) DEFINITIONS. For purposes of this Section 1.1(g) and this
Agreement generally the following definitions apply:
"CASH PER SHARE CONVERSION AMOUNT" means the quotient obtained by
dividing (a) the Cash Merger Value (as defined below) by (b) the number of
outstanding fully-diluted shares of Company Common Stock as of the Closing Date
(which shall represent all outstanding equity and rights to receive equity in
the Company and shall include, without limitation, the shares of Company Common
Stock outstanding on the date hereof and the shares of Company Common Stock
issuable upon conversion of the shares of Company Preferred Stock outstanding on
the date hereof, but shall not include the shares of Company Common Stock
issuable upon exercise of the Options outstanding on the date hereof), which
quotient shall be rounded up to the nearest one hundred thousandth of a dollar
(seven (7) decimal places).
"CASH MERGER VALUE" shall be equal to $7,150,000 less the sum of (i)
the Preferred Stock Liquidation Preference (as defined below) and (ii) the
Preferred Stock Dividends (as defined below).
4
"COMMON STOCK PER SHARE MERGER CONSIDERATION" shall consist of (a) cash
equal to the Cash Per Share Conversion Amount, and (b) a number of shares of
HBIO Common Stock equal to the Stock Conversion Number (as defined below).
"HBIO AVERAGE PRICE PER SHARE" shall be equal to the weighted average
closing price per a share of HBIO Common Stock over the ten (10) calendar days
prior to, but not including, the Closing Date; provided, however, that (i) the
"HBIO Average Price Per Share" shall be equal to $7.00 in the event the
foregoing calculation yields a price per a share of HBIO Common Stock less than
$7.00 and (ii) the "HBIO Average Price Per Share" shall be equal to $12.00 in
the event the foregoing calculation yields a price per share of HBIO Common
Stock greater than $12.00.
"HBIO MERGER STOCK" means the quotient obtained by dividing (a)
$7,146,675.96 by (b) the HBIO Average Price Per Share, which quotient shall be
rounded up to the nearest one hundred thousandth of a cent (seven (7) decimal
places).
"PREFERRED STOCK DIVIDENDS" shall equal $118,439 as of May 31, 2001.
"PREFERRED STOCK LIQUIDATION PREFERENCE" shall be equal to $2,010,000.
"PREFERRED STOCK PER SHARE LIQUIDATION PREFERENCE" means the quotient
obtained by dividing (a) the sum of the Preferred Stock Liquidation Preference
and Preferred Stock Dividends by (b) the number of outstanding shares of Company
Preferred Stock as of the Closing Date (which quotient shall be rounded up to
the nearest one hundred thousandth of a dollar (seven (7) decimal places).
"PREFERRED STOCK PER SHARE MERGER CONSIDERATION" shall consist of (a)
cash equal to the sum of (i) the Preferred Stock Per Share Liquidation
Preference and (ii) the Cash Per Share Conversion Amount, and (b) a number of
shares of HBIO Common Stock equal to the Stock Conversion Number.
"STOCK CONVERSION NUMBER" means the quotient obtained by dividing (a)
the HBIO Merger Stock by (b) the number of outstanding fully-diluted shares of
Company Common Stock as of the Closing Date (which shall represent all
outstanding equity and rights to receive equity in the Company and shall
include, without limitation, the shares of Company Common Stock outstanding on
the date hereof and the shares of Company Common Stock issuable upon conversion
of the shares of Company Preferred Stock outstanding on the date hereof, but
shall not include the shares of Company Common Stock issuable upon exercise of
the Options outstanding on the date hereof), which quotient shall be rounded up
to the nearest one hundred thousandth of a share (seven (7) decimal places).
1.2 EXCHANGE PROCEDURES.
(a) At or as soon as practicable after the Effective Time, HBIO shall
make available, and each Stockholder of the Company will be entitled to receive,
upon surrender to HBIO of one or more certificates ("Company Certificates")
representing shares of Company Common Stock or Company Preferred Stock for
cancellation with a letter of transmittal in the
5
form attached hereto as EXHIBIT 1.2, cash and certificates ("HBIO Certificates")
representing the number of shares of HBIO Common Stock ("HBIO Common Shares")
that such Stockholder is entitled to receive pursuant to Section 1.1(g) hereof;
PROVIDED, HOWEVER, that the HBIO Certificates representing the Escrow Shares (as
defined in Section 1.4 hereof) shall be held in escrow in accordance with
Section 1.4 of this Agreement. The cash and the HBIO Common Shares (the "Merger
Consideration") that each Stockholder shall be entitled to receive pursuant to
the Merger shall be deemed to have been issued at the Effective Time. No
interest shall accrue on the Merger Consideration. If the Merger Consideration
(or any portion thereof) is to be delivered to any Person other than the Person
in whose name the Company Certificate(s) surrendered in exchange therefor is
registered, it shall be a condition to such exchange that the Person requesting
such exchange shall pay to HBIO any transfer or other taxes required by reason
of the payment of the Merger Consideration to a Person other than the registered
holder of the Company Certificate(s) so surrendered, or shall establish to the
satisfaction of HBIO that such tax has been paid or is not applicable.
Notwithstanding the foregoing, neither HBIO nor any other party hereto shall be
liable to a holder of Company Shares (as defined in Section 4.1 hereof) for any
Merger Consideration delivered to a public official pursuant to applicable
abandoned property, escheat and similar laws. Any holder of Company Shares whose
Company Certificate(s) have been lost or stolen shall comply with the
instructions set forth in the letter of transmittal (attached hereto as EXHIBIT
1.2) in order to receive the Merger Consideration.
(b) After the Effective Time, there shall be no transfers of any
Company Shares on the stock transfer books of the Surviving Corporation. If,
after the Effective Time, Company Certificates are presented to HBIO, they shall
be canceled and exchanged in accordance with Sections 1.1(g) and 1.2 hereof,
subject to Section 1.1(g)(iv) with respect to Dissenting Shares and Section 1.4
with respect to Escrow Shares.
1.3 FRACTIONAL SHARES. No fractional HBIO Common Shares shall be issued in
connection with the Merger, but in lieu thereof, the holder of any Company
Shares who would otherwise be entitled to receive a fraction of a HBIO Common
Share (after aggregating all HBIO Common Shares being issued to such holder in
the Merger at such time) shall receive from HBIO promptly after the Effective
Time, an amount of cash equal to such fraction multiplied by the HBIO Average
Price Per Share in the case of shares issued as Common Stock Per Share Merger
Consideration or Preferred Stock Per Share Merger Consideration.
1.4 ESCROW OF SHARES; ESCROW AGREEMENT. At the Effective Time, HBIO (A) will
withhold from the shares of HBIO Common Stock to be issued to Stockholders in
the Merger on conversion of their outstanding shares of Company Common Stock
pursuant to Section 1.1(g)(i) above or Company Preferred Stock pursuant to
Section 1.1(g)(ii) above an aggregate number of such shares of HBIO Common Stock
that is equal to 484,312 shares of HBIO Common Stock to which the outstanding
shares of Company Common Stock and Company Preferred Stock have been converted
pursuant to Sections 1.1(g)(i) and (ii) (such withheld shares of HBIO Common
Stock being hereinafter referred to as the "Escrow Shares") with such Escrow
Shares to be rounded down to the nearest whole number of shares to be issued to
each Stockholder as provided below, and (B) will deliver certificates
representing such Escrow Shares to Boston Safe Deposit and Trust Company or a
similar institution, as escrow agent (the "Escrow Agent"),
6
together with related stock transfer powers duly executed in blank by each
Stockholder, to be held by the Escrow Agent as security for the Stockholders'
indemnification obligations under Section 12 and pursuant to the provisions of
an escrow agreement in substantially the form of EXHIBIT 1.4 attached hereto
(the "Escrow Agreement") to be entered into on or prior to the Closing by HBIO,
the Escrow Agent and the Representatives (as defined in Section 1.5). The Escrow
Shares to be withheld from each Stockholder shall equal the product of (x) the
Escrow Shares and (y) the quotient of the total number of shares of HBIO Common
Stock issuable to such Stockholder under Sections 1.1(g)(i) and 1.1(g)(ii)
divided by the total number of shares of HBIO Common Stock issued to all
Stockholders under Sections 1.1(g)(i) and 1.1(g)(ii)(in the case of each
Stockholder, rounded down to the nearest whole number of Shares), will be
represented by a certificate or certificates issued in the names of each of the
Stockholders in proportion to their respective interests therein and will be
held by the Escrow Agent pursuant to and in accordance with the terms of the
Escrow Agreement.
1.5 EFFECT OF STOCKHOLDER APPROVAL; REPRESENTATIVE. Upon the approval of the
Merger, each of the Stockholders shall be conclusively deemed to have consented
to, approved and agreed to be personally bound by: (i) the Escrow Agreement;
(ii) the appointment of Xxxxx Xxxxxxxxx and Xxxxxx Xxxxx as the representatives
of Stockholders (the "Representatives") under the Escrow Agreement and as the
attorneys-in-fact and agents for and on behalf of each Stockholder as provided
in the Escrow Agreement (ii); and (iii) the taking by the Representatives of any
and all actions and the making of any decisions required or permitted to be
taken by the Representatives under the Escrow Agreement, including, without
limitation, the exercise of the power to: (a) authorize delivery to HBIO of
Escrow Shares in satisfaction of indemnity claims by a HBIO Indemnified Party
with respect to claims for indemnification pursuant to Section 12 hereof and/or
the Escrow Agreement; (b) agree to, negotiate, enter into settlements and
compromises of, demand arbitration of, and comply with orders of courts and
awards of arbitrators with respect to, such claims; (c) arbitrate, resolve,
settle or compromise any claim for indemnification by a HBIO Indemnified Party
made pursuant to Section 12 hereof; and (d) take all actions necessary in the
judgment of the Representatives for the accomplishment of the foregoing. The
Representatives shall have authority and power to act on behalf of each
Stockholder with respect to the Escrow Agreement and the disposition, settlement
or other handling of all claims for indemnification by a HBIO Indemnified Party
under Section 12 hereof or governed by the Escrow Agreement, and all rights or
obligations arising under the Escrow Agreement so long as all Stockholders are
treated in the same manner. The Stockholders will be bound by all actions taken
and documents executed by a Representative in connection with the Escrow
Agreement and HBIO shall be entitled to rely on any action or decision of a
Representative. In performing the functions specified in this Agreement and the
Escrow Agreement, the Representatives shall not be liable to any Stockholder in
the absence of gross negligence or willful misconduct on the part of the
Representatives. Any out-of-pocket costs and expenses reasonably incurred by the
Representatives in connection with actions taken pursuant to the terms of the
Escrow Agreement will be paid by the Stockholders to the Representatives out of
the Escrow Shares pro rata in proportion to their respective percentage
interests in the Escrow Shares, to the extent that any Escrow Shares continue to
be owned by Stockholders following expiration of the Escrow Agreement and
satisfaction of all claims made or asserted by a HBIO Indemnified Party under
the Escrow Agreement and in cash pro rata in proportion to their
7
respective percentage interests in the Escrow Shares to the extent that any such
costs and expenses exceed the available Escrow Shares. This Agreement shall not
make any Representative liable for any amounts owed by any of the Stockholders
under, or other obligations undertaken by any of the Stockholders in, this
Agreement or any other agreement entered into by the Stockholders in connection
with the transactions contemplated hereby (all such amounts and obligations
being referred to collectively as the "Stockholders' Obligations"), it being
expressly agreed and understood by HBIO that the Stockholders' Obligations are
the full and complete obligations of the Stockholders. Any action taken or
determination made by any Representative in his capacity as such is taken or
made on behalf of and for the account of the Stockholders, and not in any
individual or other capacity.
1.6 TAX-FREE REORGANIZATION. The parties intend that the Merger qualify as a
reorganization described in Code Section 368(a)(1)(A) by virtue of Code Section
368(a)(2)(D). Each of HBIO, Newco and the Company Parties shall treat the Merger
as such a reorganization and report consistently therewith for federal, state,
local and foreign income tax purposes. None of the parties will knowingly take
any action that would cause the Merger to fail to qualify as a reorganization
within the meaning of Code Section 368(a).
1.7 PURCHASER'S REPRESENTATIVE. Each of the Stockholders hereby acknowledges
that Xxxxxx Xxxxx is such Stockholder's "purchaser's representative" as defined
in Rule 501(h) of the Securities Act in connection with evaluating the merits
and risks of such Stockholder's prospective investment in HBIO Common Stock, and
Xxxxxx Xxxxx hereby represents that he has knowledge and experience in financial
and business matters and is capable of evaluating the merits and risks of the
prospective investment in HBIO Common Stock.
SECTION 2. CLOSING.
2.1 CLOSING. The closing of the transactions provided for in this Agreement
(herein called the "Closing") shall be held at the offices of Xxxxxxx Procter
LLP at Exchange Place, Boston, Massachusetts at 10:00 a.m. local time on the
closing date, which shall be on the day of the fulfillment or waiver of each of
the conditions set forth in Sections 8 (other than Section 8.7) and 9 (other
than Section 9.3) hereof or at such other place, or an earlier or later date or
time as may be mutually agreed upon by HBIO and the Company (the "Closing
Date").
2.2 TERMINATION OF STOCKHOLDER AGREEMENTS. Each of the Company Parties
hereby agrees that (i) the Registration Rights Agreement dated as of May 19,
2000, as amended from time to time, by and among the Company and certain
stockholders of the Company named therein, (ii) the Series A Stock Purchase
Agreement dated as of May 19, 2000, as amended from time to time, by and among
the Company and certain stockholders of the Company named therein, (iii) the
Common Stock Purchase Warrant dated as of July 27, 2000 issued to Venture
Partners Capital, LLC by the Company and assigned to certain stockholders of the
Company, and (iv) all other agreements containing preemptive rights,
registration rights, co-sale rights, voting rights or rights of first refusal
between the Company and any stockholder of the Company shall terminate on the
Closing Date and be of no further force and effect after the Closing.
8
2.3 FURTHER ASSURANCES. The Stockholders shall from time to time after the
Closing, at the request of HBIO and without further consideration, execute and
deliver further instruments of transfer and assignment and take such other
action as HBIO may reasonably require to more effectively transfer and assign
to, and vest in, Newco the business and assets currently held by the Company and
all rights thereto, and to fully implement the provisions of this Agreement.
SECTION 3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY PARTIES WITH RESPECT
TO THE COMPANY.
3.1 MAKING OF REPRESENTATIONS AND WARRANTIES. As a material inducement to
HBIO to enter into this Agreement and consummate the transactions contemplated
hereby, the Company and, to her best knowledge, Xxxxx Xxxxxxxxx, jointly and
severally hereby make to HBIO the representations and warranties contained in
this Section 3; PROVIDED, HOWEVER, that the Company jointly with each of the
Stockholders, but each of the Stockholders severally and not jointly, makes the
representations set forth in Sections 3.3(b), 3.18 (to the extent such
representation relates to such Stockholder), 3.24 and 3.25 hereof.
Notwithstanding anything contained herein to the contrary, unless the context
otherwise clearly requires, all references to Company shall be deemed to include
the Company and its Subsidiary (as defined in Section 3.4).
3.2 ORGANIZATION AND QUALIFICATION OF THE COMPANY.
(a) The Company is a corporation duly organized, validly existing and
in good standing under the laws of the Commonwealth of Massachusetts, with full
corporate power and authority to own or lease its properties and to conduct its
business in the manner and in the places where such properties are owned or
leased or such business is currently conducted. The copies of the Company's
Articles of Organization, as amended and restated to date (the "Articles of
Organization"), certified by the Secretary of State of the Commonwealth of
Massachusetts, and of the Company's By-Laws, as amended to date, certified by
the Company's Clerk, and heretofore delivered to HBIO's counsel, are complete
and correct, and no amendments thereto are pending. The Company is not in
violation of any term of its Articles of Organization or By-Laws. The Company is
duly qualified to do business as a foreign corporation under the laws of each
jurisdiction in which the nature of its business or the ownership or leasing of
its properties requires such qualification except where the failure to be so
licensed or qualified could not reasonably be expected to have a Material
Adverse Effect on the Company.
(b) The Subsidiary (as defined in Section 3.4) is a corporation duly
organized, validly existing and in good standing under the laws of Germany, with
full corporate power and authority to own or lease its properties and to conduct
its business in the manner and in the places where such properties are owned or
leased or such business is currently conducted. A certified copy of the
inscription of the Subsidiary in the Commercial Register with the register
number B 771 at the municipal court (Amtsgericht) Jever, a non-certified copy of
the list of shareholders at such Commercial Register and the corporate documents
of the Subsidiary as filed with such Commercial Register, including a notarized
copy of the articles of incorporation, certified by the Subsidiary's managing
director, and heretofore delivered to HBIO's counsel, are complete and correct,
and no amendments thereto are pending. The Subsidiary is not in violation
9
of any term of its charter documents or by-laws. The Subsidiary is duly
qualified to do business under the laws of each jurisdiction in which the nature
of its business or the ownership or leasing of its properties requires such
qualification except where the failure to be so licensed or qualified could not
reasonably be expected to have a Material Adverse Effect on the Subsidiary.
3.3 CAPITALIZATION; BENEFICIAL OWNERSHIP.
(a) The authorized capital stock of the Company consists only of EIGHT
HUNDRED NINETY THOUSAND (890,000) shares of Common Stock, no par value, of which
FOUR HUNDRED TWENTY-NINE THOUSAND NINE HUNDRED FORTY-FIVE (429,945) shares are
duly and validly authorized, issued, outstanding, fully paid and non-assessable
and of which FOUR HUNDRED SIXTY THOUSAND FIFTY-FIVE (460,055) shares are
authorized but unissued, and ONE HUNDRED TEN THOUSAND (110,000) shares of Series
A Convertible Preferred Stock, par value $.01 per share, of which NINETY FOUR
THOUSAND EIGHT HUNDRED FIFTY-SIX (94,856) shares are duly and validly
authorized, issued, outstanding, fully paid and non-assessable and of which
FIFTEEN THOUSAND ONE HUNDRED FORTY-FOUR (15,144) shares are authorized but
unissued. Except as set forth on SCHEDULE 3.3(a), there are no outstanding
options, warrants, rights, commitments, preemptive rights or agreements of any
kind for the issuance or sale of, or outstanding securities convertible into,
any additional shares of capital stock of any class of the Company. Except as
explicitly noted on SCHEDULE 3.3(a), no option to purchase shares of capital
stock of any class of the Company is subject to accelerated vesting or has been
modified in connection with or in contemplation of the transactions contemplated
by this Agreement. None of the Company's capital stock has been issued in
violation of any federal or state law. The Company has not repurchased any
shares of its capital stock from any holder thereof since its inception.
(b) Each of the Stockholders owns of record the shares of the Company's
capital stock set forth opposite such Stockholder's name on SCHEDULE 3.3(b)
hereto, free and clear of any Claims. The Stockholders are the only beneficial
or record holders of the Company's capital stock, and the capital stock shown on
SCHEDULE 3.3(b) are the only shares of capital stock of the Company held by each
Stockholder or with respect to which such Stockholder has any rights. Except as
set forth in SCHEDULE 3.3(b) attached hereto, there are no voting trusts, voting
agreements, proxies or other agreements, instruments or undertakings with
respect to the voting of the Company's capital stock to which the Company or any
of the Stockholders is a party.
3.4 SUBSIDIARIES. Except as disclosed on SCHEDULE 3.4 hereto, the
Company has no, nor has it ever had any, subsidiaries or investments in any
other Person. Except as disclosed on SCHEDULE 3.4 hereto, each of the
subsidiaries identified on SCHEDULE 3.4 hereto (the "Subsidiary") is
wholly-owned by the Company and there are no outstanding options, warrants,
rights, commitments, preemptive rights or agreements of any kind for the
issuance or sale of, or outstanding securities convertible into, any additional
shares of capital stock of any class of the Subsidiary.
10
3.5 AUTHORITY OF THE COMPANY. The Company has full right, authority and
power to enter into this Agreement and each agreement, document and instrument
to be executed and delivered by the Company pursuant to, or as contemplated by,
this Agreement and to carry out the transactions contemplated hereby and
thereby. The execution, delivery and performance by the Company of this
Agreement and each such other agreement, document and instrument contemplated by
this Agreement have been duly authorized by all necessary action of the Company
and the Stockholders, and no other action on the part of the Company or the
Stockholders is required in connection therewith.
This Agreement and each agreement, document and instrument executed and
delivered by the Company pursuant to, or as contemplated by, this Agreement
constitutes, or when executed and delivered will constitute, valid and binding
obligations of the Company enforceable in accordance with their terms. The
execution, delivery and performance by the Company of this Agreement and each
such other agreement, document and instrument:
(i) does not and will not violate any provision of the Articles of
Organization or By-laws of the Company, each as amended to date;
(ii) does not and will not violate any laws of the United States,
or any state or other jurisdiction (domestic or foreign) applicable to the
Company or require the Company 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, except as specifically identified on
SCHEDULE 3.5 hereto; and
(iii) does not and will not result in a breach of, constitute a
default under, accelerate any obligation under, require approval or consent
under or give rise to a right of termination of, any agreement, contract,
instrument, mortgage, lien, lease, permit, authorization, order, writ,
judgment, injunction, decree, determination or arbitration award to which
the Company is a party or by which the property of the Company is bound or
affected, or result in the creation or imposition of any mortgage, pledge,
lien, security interest or other charge or encumbrance on any of the
Company's assets or any Person's interest in the Company, except as
specifically identified on SCHEDULE 3.5 hereto.
3.6 REAL AND PERSONAL PROPERTY.
(a) REAL PROPERTY. All of the real property owned or leased by the
Company is identified on SCHEDULE 3.6(a) (herein referred to as the "Owned Real
Property" or the "Leased Real Property," as the case may be, or collectively as
the "Real Property").
(i) OWNED REAL PROPERTY. The Company does not own any real
property.
(ii) LEASED REAL PROPERTY. All leases of Leased Real Property by
the Company are identified on SCHEDULE 3.6(a), and true and complete copies
thereof have been delivered to HBIO. Each of said leases has been duly
authorized and executed by
11
the parties thereto and is in full force and effect. The Company is not in
material default under any of said leases, nor has any event occurred which,
with notice or the passage of time, or both, would give rise to such a
material default. To the knowledge of the Company Parties, the other party
to each of said leases is not in material default under any of said leases
and there is no event which, with notice or the passage of time, or both,
would give rise to such a material default. After giving effect to the
Closing, each lease identified on SCHEDULE 3.6(a) will be valid and
effective in accordance with its terms, with Newco having succeeded to all
the rights and obligations of the Company thereunder.
(b) PERSONAL PROPERTY. Attached hereto as SCHEDULE 3.6(b) is a list of
all the tangible assets of the Company (excluding assets with a value of less
than $5,000) and including as part of such Schedule, the tax basis of each such
asset (excluding assets with a value of less than $5,000). Except as set forth
on SCHEDULE 3.6(b) hereto, as of the date hereof, the Company owns all its
assets free and clear of any Claims except for minor imperfections of title or
insignificant liens which do not, in the aggregate, detract from the value of
such assets, taken as a whole, or interfere with the present or proposed uses
thereof or the business of the Company or, after giving effect to the Closing,
Newco. After giving effect to the Merger, Newco will own all such assets free
and clear of any Claims except those set forth on SCHEDULE 3.6(b) hereto and
minor imperfections of title or insignificant liens which do not, in the
aggregate, detract from the value of such assets, taken as a whole, or interfere
with the present or proposed uses thereof, or the business of Newco. The assets
listed on SCHEDULE 3.6(b) hereto include all the material tangible assets used
in, and all the assets necessary or desirable for, the conduct of the business
of the Company as currently conducted.
3.7 FINANCIAL STATEMENTS.
(a) The Company has delivered to HBIO the following financial
statements, copies of which are attached hereto as SCHEDULE 3.7:
(i) audited balance sheets of the Company at December 31, 1999 and
2000, and audited statements of income and stockholders' equity and cash
flows for each of the two (2) years then ended, in each case certified by
Xxxxxx Xxxxxxxx LLP. The audited balance sheet of the Company at December
31, 2000 (including the notes thereto) is referred to hereinafter as the
"Base Balance Sheet."
(ii) an unaudited balance sheet of the Company at April 30, 2001,
and statements of income and stockholders' equity and cash flows for the
four (4) month period then ended, in each case certified by the Company's
Controller.
Said audited financial statements have been prepared in accordance with
GAAP using the accrual method of accounting, applied consistently during the
periods covered thereby, Said audited and unaudited financial statements are
complete and correct in all material respects and present fairly the financial
condition of the Company at the dates of said statements and the results of its
operations for the periods covered thereby.
12
(b) As of the date of the Base Balance Sheet, the Company did not have
any liabilities of any nature, whether accrued, absolute, contingent or
otherwise, asserted or unasserted, known or unknown (including, without
limitation, liabilities as guarantor or otherwise with respect to obligations of
others, liabilities for Taxes due or then accrued or to become due, or
contingent or potential liabilities relating to activities of the Company or the
conduct of its businesses prior to the date of the Base Balance Sheet regardless
of whether claims in respect thereof had been asserted as of such date), except
liabilities stated or adequately reserved against on the Base Balance Sheet or
reflected in Schedules furnished to HBIO hereunder as of the date hereof.
(c) As of the date hereof, the Company does not have any liabilities of
any nature, whether accrued, absolute, contingent or otherwise, asserted or
unasserted, known or unknown (including, without limitation, liabilities as
guarantor or otherwise with respect to obligations of others, or liabilities for
Taxes due or then accrued or to become due or contingent or potential
liabilities relating to activities of the Company or the conduct of its business
prior to the date hereof or the Closing, as the case may be, regardless of
whether claims in respect thereof had been asserted as of such date), except:
(i) liabilities stated or adequately reserved against on the Base Balance Sheet
or the notes thereto, (ii) liabilities expressly reflected in Schedules
furnished to HBIO hereunder on the date hereof, (iii) immaterial liabilities
incurred after the date of the unaudited balance sheet of the Company at April
30, 2001 (a copy of which is attached hereto as part of SCHEDULE 3.7) in the
ordinary course of business of the Company consistent with the terms of this
Agreement, or (iv) liabilities for Taxes (as such term is defined in Section 3.8
hereof) incurred after the date of the unaudited balance sheet of the Company at
April 30, 2001 (a copy of which is attached hereto as part of SCHEDULE 3.7) in
the ordinary course of business of the Company.
3.8 TAXES.
(a) Each of the Company and its Subsidiary has, in accordance with
applicable law, filed all federal, state, local and foreign tax returns required
to be filed by it (the "Tax Returns"). A list of all Tax Returns filed with
respect to the Company or its Subsidiary for each taxable period thereof, is set
forth in SCHEDULE 3.8 attached hereto, and said Schedule indicates those returns
that have been audited or currently are the subject of an audit. For each
taxable period of the Company and its Subsidiary, the Company has delivered to
HBIO correct and complete copies of all federal, state, local and foreign income
tax returns of, examination reports relating to, and statements of deficiencies
assessed against or agreed to by, the Company or its Subsidiary. The Company had
an election in place pursuant to Section 1362 of the Code to be a Subchapter "S"
corporation prior to May 19, 2000, and has been taxed as a "C" corporation at
all times since.
(b) Each of the Company and its Subsidiary has paid or caused to be
paid all federal, state, local, foreign, and other taxes, including, without
limitation, income taxes, estimated taxes, alternative minimum taxes, franchise
taxes, capital stock taxes, employment and payroll-related taxes, withholding
taxes, and transfer taxes, whether or not measured in whole or in part by net
income, and all deficiencies, or other additions to tax, interest, fines and
penalties
13
owed by it (collectively, "Taxes"), whether disputed or not. As of the date of
this Agreement, there are no disputed Taxes. The unpaid Taxes of the Company and
its Subsidiary (i) did not, as of April 30, 2001 exceed the reserve for tax
liability (rather than the reserve for deferred Taxes established to reflect
timing differences between book and tax income) set forth in the unaudited
balance sheet of the Company at April 30, 2001 (rather than in any notes
thereto) and (ii) do not exceed that reserve as adjusted for the passage of time
through the date hereof and the date of the Closing in accordance with the past
custom and practice of the Company in filing its Tax Returns.
(c) Neither the IRS nor any other governmental authority is now
asserting or, to the knowledge of the Company Parties, threatening to assert
against the Company or its Subsidiary any deficiency or claim for additional
Taxes. No claim has ever been made by an authority in a jurisdiction where the
Company or its Subsidiary does not file reports and returns that the Company or
its Subsidiary, as applicable, is or may be subject to taxation by that
jurisdiction. There are no security interests on any of the assets of the
Company or its Subsidiary that arose in connection with any failure (or alleged
failure) to pay any Taxes. Neither the Company nor its Subsidiary has ever
entered into a closing agreement pursuant to Section 7121 of the Code.
(d) Except as set forth in SCHEDULE 3.8 attached hereto, there has not
been any audit of any Tax Returns filed by the Company or its Subsidiary, no
such audit is in progress, and neither the Company nor its Subsidiary has been
notified by any tax authority that any such audit is contemplated or pending.
Except as set forth in SCHEDULE 3.8, no extension of time with respect to any
date on which a Tax Return was or is to be filed by the Company or its
Subsidiary is in force, and no waiver or agreement by the Company or its
Subsidiary is in force for the extension of time for the assessment or payment
of any Taxes.
(e) Neither the Company nor its Subsidiary has ever been (or has ever
had any liability for unpaid Taxes because it once was) a partner of an
"affiliated group" (as defined in Section 1504(a) of the Code) or has any
liability for the Taxes of any Person (other than of the Company and its
Subsidiary) under Treasury Regulations Section 1.1502-6 (or any similar
provision of state, local or foreign law), as a transferee or successor, by
contract or otherwise. Except as set forth in SCHEDULE 3.8, neither the Company
nor its Subsidiary has ever filed, or has ever been required to file, a
consolidated, combined or unitary Tax Return with any other entity (other than
with the Company or its Subsidiary, as applicable). Except as set forth in
SCHEDULE 3.8 attached hereto, neither the Company nor its Subsidiary is a party
to any tax sharing agreement.
(f) None of the Company's payroll, property, or receipts, or other
factors used in a particular state's apportionment or allocation formula results
in an apportionment or allocation of business income to any state, commonwealth
or other jurisdiction other than the Commonwealth of Massachusetts, and the
Company does not have any non-business income that is allocated, apportioned or
otherwise sourced to any state, commonwealth or other jurisdiction than the
Commonwealth of Massachusetts.
14
(g) Neither the Company nor its Subsidiary has filed a consent under
Code Section 341(f).
(h) Neither the Company nor its Subsidiary will be required to include
any item in, or exclude any item of deduction from, taxable income for any
taxable period (or portion thereof) ending after the Closing Date as a result of
any (A) change in method of accounting for a taxable period ending on or prior
to the Closing Date under Code Section 481(c) (or any corresponding or similar
provision of state, local or foreign law); (B) installment sale or open
transaction disposition made on or prior to the Closing Date; or (C) prepaid
amount received on or prior to the Closing Date.
(i) The Company operates at least one significant historic business
line, or owns at least a significant portion of its historic business assets, in
each case within the meaning of Treasury Regulations Section 1.368-1(d).
(j) Newco will acquire at least 90 percent of the fair market value of
the net assets and at least 70 percent of the fair market value of the gross
assets held by the Company immediately prior to the Merger. Amounts paid by the
Company to holders of Dissenting Shares, amounts paid by the Company to
shareholders who receive cash or other property, Company assets used to pay its
reorganization expenses, and all redemptions and distributions (except for
regular, normal dividends) made by the Company immediately preceding the Merger,
are included as assets of the Company held immediately prior to the Merger for
purposes of this representation.
3.9 ACCOUNTS RECEIVABLE; ACCOUNTS PAYABLE; INVENTORIES
(a) All of the accounts receivable of the Company as of the Closing are
set forth on SCHEDULE 3.9. Except as set forth ON SCHEDULE 3.9, all of the
accounts receivable of the Company are valid and enforceable claims, are subject
to no set-off or counterclaim, and are fully collectible in the normal course of
business, net of the amount of reserves for bad debt as set forth on the Base
Balance Sheet. Since the date of the Base Balance Sheet, the Company has
collected its accounts and intends to collect its accounts receivable in the
ordinary course of its business and in a manner which is consistent with past
practices and has not and does not intend to accelerate any such collections.
The Company does not have any accounts receivable or loans receivable from any
person which is affiliated with it or any of its directors, officers, employees
or stockholders.
(b) All accounts payable of the Company as of the Closing in the amount
of $10,000 or more are set forth on SCHEDULE 3.9. Except as set forth on
SCHEDULE 3.9, the terms of the Company's accounts payable are normal and
customary and in all cases contain terms requiring payment in full within 60
days. Except as set forth on SCHEDULE 3.9, none of such accounts payable has
been outstanding for more than 60 days and the Company has no agreements,
arrangements or understandings, whether oral or written, that alter the normal
and customary terms requiring payment for its accounts payable.
15
(c) Except as set forth on SCHEDULE 3.9, all of the Company's inventory
items are of a quality and quantity salable in the ordinary course of its
business. The values of the inventories stated in the Base Balance Sheet reflect
the normal inventory valuation policies of the Company and were determined in
accordance with GAAP applied consistently during the periods covered thereby.
Purchase commitments for raw materials and parts are not in excess of normal
requirements and none are at prices materially in excess of current market
prices. Since the date of the Base Balance Sheet, no inventory items have been
sold or disposed of except through sales in the ordinary course of business at
profit margins consistent with the Company's experience in prior years, and all
sales commitments made for the Company's products are at prices not less than
inventory values plus selling expenses and said profit margins.
3.10 ABSENCE OF CERTAIN CHANGES. Except as disclosed in SCHEDULE 3.10
attached hereto or as expressly provided for herein, since the date of the Base
Balance Sheet there has not been:
(a) Any change in the condition (financial or otherwise), properties,
assets, liabilities, business, operations or prospects of the Company, which
change by itself or in conjunction with all other such changes, whether or not
arising in the ordinary course of business, could reasonably be expected to have
a Material Adverse Effect on the Company;
(b) Any amendment or termination or, to the knowledge of the Company
Parties, proposed or threatened amendment or termination, whether written or
oral, of any agreement listed in SCHEDULE 3.14 hereto;
(c) Any obligation or liability of any nature, whether accrued,
absolute, contingent or otherwise, asserted or unasserted, known or unknown
(including, without limitation (i) liabilities for Taxes due or to become due,
or (ii) contingent or potential liabilities relating to services provided by the
Company or the conduct of the business of the Company since the date of the Base
Balance Sheet regardless of whether claims in respect thereof have been
asserted, or (iii) contingent liabilities incurred by the Company as guarantor
or otherwise with respect to the obligations of the Company or others), incurred
by the Company other than obligations and liabilities incurred in the ordinary
course of business consistent with the terms of this Agreement (it being
understood that liability claims in respect of services provided shall not be
deemed to be incurred in the ordinary course of business);
(d) Any mortgage, encumbrance, pledge or lien placed on any of the
properties or assets of the Company;
(e) Any cancellation of any material debt or claim owing to, or waiver
of any material right of, the Company;
(f) Any purchase, sale or other disposition, or any agreement or other
arrangement for the purchase, sale or other disposition, of any of the
properties or assets of the Company other than in the ordinary course of
business consistent with past practices;
16
(g) Any damage, destruction or loss, whether or not covered by
insurance, materially and adversely affecting the properties, assets or business
of the Company;
(h) Any declaration, setting aside or payment of any dividend or
distribution by the Company, or the making of any other distribution in respect
of the capital stock of the Company, or any direct or indirect redemption,
purchase or other acquisition by the Company of its own capital stock;
(i) Any change in the compensation payable or to become payable by the
Company to any of its officers, employees, agents or independent contractors
other than normal merit increases in accordance with the Company's usual
practices, or any bonus payment or arrangement made to or with any of such
officers, employees, agents or independent contractors;
(j) Any change in the identities, officers, duties or compensation of
the officers or management of the Company;
(k) Any payment or discharge of a material lien or liability of the
Company other than in the ordinary course of business consistent with the past
practices of the Company;
(l) Any obligation or liability incurred by the Company to any of its
officers, directors, stockholders, partners or employees, or any loans or
advances made by the Company to any of its officers, directors, stockholders,
partners or employees, except normal compensation and expense allowances payable
to officers or employees in the ordinary course of business consistent with past
practices;
(m) Any change in accounting methods or practices, or billing or
collection policies used by the Company; or
(n) Any agreement, commitment or understanding, whether in writing or
otherwise, for the Company to take any of the actions specified in paragraphs
(a) through (m) above, except as specifically contemplated hereby.
3.11 ORDINARY COURSE. Except as specifically contemplated by this Agreement,
since the date of the Base Balance Sheet, other than with respect to
transactions specifically contemplated herein, the Company has conducted its
business only in the ordinary course and consistently in all material respects
with its prior practices.
3.12 BANKING RELATIONS. All of the arrangements which the Company has with
any banking institution are, in all material aspects, completely and accurately
described in SCHEDULE 3.12 attached hereto, indicating with respect to each of
such arrangements the type of arrangement maintained (such as checking account,
borrowing arrangements, etc.) and the person or persons authorized in respect
thereof.
17
3.13 INTELLECTUAL PROPERTY.
(a) Except as set forth in SCHEDULE 3.13, the Company is the exclusive
owner of, and has good title to, or has an option to license (which option is
listed on SCHEDULE 3.13 hereto) to use, all of the Intellectual Property Assets
(as defined below) free and clear of all Claims, and has the right to use
without payment to a third party all of the Intellectual Property Assets used in
its business or otherwise necessary for the sale and distribution of the
Products (as defined below). Except as set forth in SCHEDULE 3.13, no claim is
pending against the Company or, to the Company's knowledge, pending against its
officers, employees and/or consultants or, to the Company's knowledge,
threatened against the Company and/or its officers, employees, and consultants
to the effect that the Company's right, title and interest in and to the
Intellectual Property Assets or Trade Secrets (as defined below) is invalid or
unenforceable by the Company. All former and current employees and consultants
of the Company have executed written instruments with the Company that assign to
the Company or vest in the Company all rights to any inventions, improvements,
discoveries, or proprietary information relating to or used in connection with
the business of the Company. Except as set forth in SCHEDULE 3.13, to the
Company's knowledge, no employee of the Company has entered into any agreement
that restricts or limits in any way the scope or type of work in which the
employee may be engaged or requires the employee to transfer, assign, or
disclose information concerning his work to anyone other than the Company.
(b) PATENTS. SCHEDULE 3.13 (with exceptions noted therein) sets forth a
complete and accurate list and summary description of all Patents (as defined
below) used in the Company's business or otherwise necessary for the sale and
distribution of the Products. Except as set forth in SCHEDULE 3.13, in each case
where a Patent is held by the Company by assignment, the assignment has been
duly recorded with the U.S. Patent and Trademark Office and all other
jurisdictions of registration. No Patent has been or is now involved in any
interference, reissue, re-examination or opposition proceeding. To the Company's
knowledge, there is no potentially interfering patent or patent application of
any third party.
(c) TRADEMARKS. SCHEDULE 3.13 sets forth a complete and accurate list
and summary description of all Marks (as defined below) used in the Company's
business or otherwise necessary for the sale and distribution of the Products.
The Company has filed an application for registration for the xxxx "XXXXX" with
the United States Patent and Trademark Office. This application is currently
pending. No Xxxx has been or is now involved in any opposition, invalidation or
cancellation proceeding and, to the Company's knowledge, no such action is
threatened with respect to any of the Marks.
(d) COPYRIGHTS. SCHEDULE 3.13 sets forth a complete and accurate list
and summary description of all Copyrights (as defined below) used in the
Company's business or otherwise necessary for the sale and distribution of the
Products. In each case where a Copyright is held by the Company by assignment,
the assignment has been duly recorded with the U.S. Copyright Office and all
other domestic or foreign jurisdictions of registration. None of the source or
object code, algorithms, or structure included in the Products is copied from,
based
18
upon, or derived from any other source or object code, algorithm or structure in
violation of the rights of any third party.
(e) TRADE SECRETS. The Company has taken all reasonable security
measures (including, without limitation, entering into appropriate
confidentiality and nondisclosure agreements (substantially in the form
previously provided to HBIO) with all current and former officers, directors,
employees, and consultants of the Company and any other persons with access to
the Trade Secrets (as defined below)) to protect the secrecy, confidentiality
and value of all Trade Secrets. To the knowledge of the Company, there has not
been any breach by any party to any such confidentiality or non-disclosure
agreement. The Trade Secrets have not been disclosed by the Company to any
person or entity other than employees, consultants or contractors of the Company
who had a need to know and use the Trade Secrets in the course of their
employment or contract performance. Except as set forth on SCHEDULE 3.13, (i)
the Company has not directly or indirectly granted any rights or interests in
the source code of the Products, and (ii) since the Company developed the source
code of the Products, the Company has not provided, licensed or disclosed the
source code of the Products to any person or entity. To the Company's knowledge,
the Company has the right to use, free and clear of all claims of third parties,
all Trade Secrets. No third party has asserted that the use by the Company of
any Trade Secret violates the rights of any third party.
(f) EXCLUSIVITY OF RIGHTS. Except as set forth in SCHEDULE 3.13, the
Company has the exclusive right to use, license, distribute, transfer and bring
infringement actions with respect to the Intellectual Property Assets used in
the Company's business or otherwise necessary for the sale and distribution of
the Products. Except as set forth on SCHEDULE 3.13, the Company (i) has not
licensed or granted to anyone rights of any nature to use any of its
Intellectual Property Assets; and (ii) is not obligated to and does not pay
royalties or other fees to anyone for the Company's ownership, use, license or
transfer of any of its Intellectual Property Assets.
(g) LICENSES RECEIVED. All licenses or other agreements under which the
Company is granted rights or options by others in Intellectual Property Assets
are listed in SCHEDULE 3.13. Except as set forth on SCHEDULE 3.13, all such
licenses or other agreements are in full force and effect, to the knowledge of
the Company there is no default by any party thereto, and, all of the rights of
the Company thereunder are not freely assignable; provided, however, that all
rights of the Company may be transferred to Newco by operation of the Merger
without requiring the consent of any other party to such licenses or other
agreements. True and complete copies of all such licenses or other agreements,
and any amendments thereto, have been provided to HBIO, and to the knowledge of
the Company, the licensors under the licenses and other agreements under which
the Company is granted rights have all requisite power and authority to grant
the rights purported to be conferred thereby.
(h) LICENSES GRANTED. All licenses or other agreements under which the
Company has granted rights or options to others in Intellectual Property Assets
are listed in SCHEDULE 3.13. Except as set forth therein, all such licenses or
other agreements are in full force and effect, and to the knowledge of the
Company there is no default by any party thereto. True
19
and complete copies of all such licenses or other agreements, and any amendments
thereto, have been provided to HBIO.
(i) AFFIRMATIVE OBLIGATIONS. Except as set forth in SCHEDULE 3.13 the
Company has no obligation to any other person to maintain, modify, improve or
upgrade the Products.
(j) SUFFICIENCY. The Intellectual Property Assets constitute all of the
assets of Company used in designing, creating and developing the Products, and
are all those necessary for the operation of the Company's business as currently
conducted and planned to be conducted.
(k) INFRINGEMENT. To the knowledge of the Company and Xxxxx Xxxxxxxxx,
none of the Products manufactured and sold, nor any process or know-how used, by
the Company infringes or is alleged to infringe any patent, trademark, service
xxxx, trade name, copyright or other proprietary right or is a derivative work
based on the work of any other person.
(l) PERFORMANCE OF PRODUCTS. Without limiting the foregoing, to the
knowledge of the Company, the Products do not intentionally contain any
"viruses", "time-bombs", "key-locks", or any other devices intentionally created
that could disrupt or interfere with the operation of the Products or the
integrity of the data, information or signals they produce in a manner adverse
to the Company or any licensee.
(m) OTHER INTANGIBLES. SCHEDULE 3.13 sets forth a complete and accurate
list of Other Intangibles (as defined below).
(n) ADEQUACY OF TECHNICAL DOCUMENTATION. The technical documentation
with respect to the Products includes all Company developed flowcharts, source
code, system documentation, statements of principles of operations, and
schematics for all Products, as well as any pertinent commentary or explanation
that may be necessary to render such materials understandable and useable by a
reasonably skilled computer programmer. The technical documentation also
includes any Company developed program (including compilers), "workbenches",
tools, and higher level (or "proprietary") language used for the development,
maintenance and implementation of the Products. Vendor supplied documentation is
provided as is.
(o) NONDISCLOSURE CONTRACTS. Each of the Nondisclosure Contracts (as
defined below) is a valid and binding obligation of the Company enforceable in
accordance with its terms, subject to applicable bankruptcy, insolvency and
similar laws affecting creditors' rights generally.
(p) For purposes of this Agreement,
(i) "Intellectual Property Assets" means:
(A) the Products;
20
(B) all patents, patent applications, patent rights, and
inventions and discoveries and invention disclosures (whether or not
patented) (collectively, "Patents");
(C) the names "Union Biometrica" and "XXXXX," all trade
names, trade dress, logos, packaging design, slogans, Internet domain
names, registered and unregistered trademarks and service marks and
applications (collectively, "Marks");
(D) all registered copyrights in both published and
unpublished works, including without limitation all compilations,
databases and computer programs, software, specifications,
documentation, methods and concepts, and all copyright registrations
and applications, and all derivatives, translations, adaptations and
combinations of the above (collectively, "Copyrights");
(E) all secret know-how, trade secrets, confidential or
proprietary information, research in progress, algorithms, data,
designs, processes, formulae, drawings, schematics, blueprints, flow
charts, models, prototypes, techniques, Beta testing procedures and
Beta testing results (collectively, "Trade Secrets");
(F) all goodwill, franchises, licenses, permits, consents,
approvals, technical information, telephone numbers, and claims of
infringement against third parties (the "Rights"); and
(G) all customer lists and telephone numbers, business
strategies, outside analyst's plans and reports, outlooks, forecasts
and other similar documents (collectively, "Other Intangibles")
(ii) "Products" means those products and related documentation
sold, marketed, and distributed by the Company. A complete list of the
Products owned by the Company is provided in SCHEDULE 3.13 attached hereto.
(iii) "Nondisclosure Contracts" means all nondisclosure and/or
confidentiality agreements entered into between the Company and persons in
connection with disclosures by the Company relating to the Products and the
Intellectual Property Assets. A complete list of all Nondisclosure Contracts
is provided on SCHEDULE 3.13.
3.14 CONTRACTS. Except for contracts, commitments, plans, agreements and
licenses expressly contemplated hereby or described in SCHEDULE 3.6(a), SCHEDULE
3.9, Schedule 3.13, SCHEDULE 3.14 or SCHEDULE 3.22 attached hereto (true and
complete copies of which have been delivered to HBIO), the Company is not a
party to or subject to:
(a) any plan or contract providing for bonuses, pensions, options,
stock (or beneficial interest) purchases (or other securities or phantom equity
purchases), deferred compensation, retirement payments, profit sharing, or the
like;
21
(b) any employment contract or contract for services which is not
terminable at will by the Company (and, after giving effect to the Merger,
Newco) without liability for any penalty or severance payment (except for
regular payments in arrears for services rendered under contracts which require
payment for services rendered to the date of such termination);
(c) any contract or agreement for the purchase of any assets, material
or equipment except purchase orders in the ordinary course for less than $10,000
each, such orders not exceeding $50,000 in the aggregate;
(d) any other contracts or agreements creating any obligations of the
Company of $25,000 or more with respect to any such contract or agreement not
specifically disclosed elsewhere under this Agreement;
(e) any contract or agreement not made in the ordinary course of
business (including, without limitation, any contract for the sale of all or any
material portion of the assets of the Company or any contract for the purchase
of all or any material portion of the assets of any other entity (other than
this Agreement));
(f) any contract with any solicitor or sales agent;
(g) any contract containing covenants limiting the freedom of the
Company (or its affiliates) to compete in any line of business or with any
Person or entity;
(h) any license agreement (as licensor or licensee);
(i) any agreement providing for the borrowing or lending of money, and
the Company does not have any obligations: (i) for borrowed money, (ii)
evidenced by bonds, debentures, notes or similar instruments, (iii) to pay the
deferred purchase price of property or services, (iv) under leases that would,
in accordance with generally accepted accounting principles, appear on the
balance sheet of the lessee as a liability, (v) secured by a lien, (vi) in
respect of letters of credit, or bankers acceptances, contingent or otherwise,
or (vii) in respect of any guaranty or endorsement or other obligations to be
liable for the debts of another person or entity; or
(j) any other material contract or agreement to which the Company is a
party or by which it is bound.
Each of the contracts described in SCHEDULE 3.6(a), SCHEDULE 3.9,
SCHEDULE 3.13, SCHEDULE 3.14 or SCHEDULE 3.22 attached hereto is, and will be
after giving effect to the Merger, valid and effective in accordance with its
respective terms, and there is not, under any such contract, an existing
material breach or event by the Company or, to the knowledge of the Company
Parties, other parties thereto which, with the giving of notice or the lapse of
time or both, would become such a breach. The Company has no knowledge of any
notice or threat to terminate any such contracts, agreements, leases or
instruments, which termination would reasonably be expected to have a Material
Adverse Effect. The Company is not bound by any
22
agreement, contract or arrangement which could reasonably be expected to have a
Material Adverse Effect on Newco or the Company.
3.15 LITIGATION. There is no litigation or legal or other action, suit,
proceeding or, to the knowledge of the Company Parties, investigation, at law or
in equity, or before any federal, state, municipal or other governmental
department, commission, bureau, board, agency or instrumentality, domestic or
foreign (including, without limitation, any voluntary or involuntary proceeding
under any bankruptcy laws or any action, suit, proceeding or investigation under
any foreign, federal or state securities law, rule or regulation), in which any
Company Party or, to the knowledge of each Company Party, any officer, director,
stockholder, partner or employee thereof is engaged, or, to the knowledge of
each Company Party, with which any of them is threatened, in connection with the
business, affairs, properties or assets of the Company, or which might call into
question the validity or hinder the enforceability or performance of this
Agreement, or of the other agreements, documents and instruments contemplated
hereby and the transactions contemplated hereby and thereby.
3.16 COMPLIANCE WITH LAWS. The Company is in compliance in all respects with
all applicable laws and regulations, except where the failure to be in
compliance would not have a Material Adverse Effect. The Company has all of the
material permits, licenses, orders, franchises and other rights and privileges
of all federal, state, local or foreign governmental or regulatory bodies
necessary for the Company to conduct its business as presently conducted and as
contemplated to be conducted. All such permits, licenses, orders, franchises and
other rights and privileges are in full force and effect (and, except as set
forth on SCHEDULE 3.16 hereto, will be in full force and effect after giving
effect to the transactions contemplated hereby) and, to the knowledge of the
Company, no suspension or cancellation of any of them is threatened, and none of
such permits, licenses, orders, franchises or other rights and privileges will
be affected by the consummation of this Agreement and all agreements, documents
and instruments contemplated hereby. The Company has never entered into or been
subject to any judgment, consent decree, compliance order or administrative
order with respect to any aspect of the business, affairs, properties or assets
of the Company or received any request for information, notice, demand letter,
administrative inquiry or formal or informal complaint or claim from any
regulatory agency with respect to any aspect of the business, affairs,
properties or assets of the Company.
3.17 INSURANCE. The Company has in full force and effect such insurance as
is customarily maintained by companies of similar size in the same or a similar
business, with respect to its businesses, properties and assets (including,
without limitation, errors and omissions liability insurance), and all bonds
required by ERISA and by any contract to which the Company is a party, all as
listed on SCHEDULE 3.17 hereto. The Company is not in material default under any
such insurance policy. Immediately after giving effect to the Merger, each such
insurance policy or equivalent policies will be in full force and effect with
Newco as the sole owner and beneficiary of each such policy.
3.18 POWERS OF ATTORNEY. Except as is otherwise contemplated herein, none of
the Company or any Stockholders has any outstanding power of attorney with
respect to any shares of the Company's capital stock.
23
3.19 FINDER'S FEE. Except for the fee of $200,000 payable by the Company to
Gateway Financial Group, Inc. in accordance with Section 14.1 hereinafter, no
Company Party has incurred or become liable for any broker's commission or
finder's fee relating to or in connection with the transactions contemplated by
this Agreement.
3.20 CORPORATE RECORDS; COPIES OF DOCUMENTS. The record books of the Company
accurately record all corporate action taken by its stockholders and board of
directors and committees, as applicable, and true and complete copies of the
originals of such documents have been made available to HBIO for review. The
Company and the Stockholders have provided to HBIO and its counsel true and
correct copies of all documents referred to in this Agreement or in the
Schedules delivered to HBIO in connection herewith.
3.21 TRANSACTIONS WITH INTERESTED PERSONS. Except as set forth on SCHEDULE
3.21 hereto, neither the Company nor any stockholder, partner, officer,
supervisory employee or director of the Company or, to the knowledge of the
Company and Xxxxx Xxxxxxxxx, any of their respective affiliates, spouses or
family members, is a party to any transaction or contract or arrangement with
the Company, or owns directly or indirectly in an individual or joint basis any
interest (excluding passive investments in the shares of any enterprise which
are publicly traded provided his or her holdings therein, together with any
holdings of his or her affiliates and family members, do not exceed one percent
(1%) of the outstanding shares of comparable interest in such entity) in, or
serves as an officer or director or in another similar capacity of, any
competitor or client of the Company, or any organization which has a contract or
arrangement with the Company (in each case, other than as expressly contemplated
hereby).
3.22 EMPLOYEE BENEFIT PROGRAMS.
(a) SCHEDULE 3.22 hereto lists every Employee Program (as defined
below) that has been maintained (as defined below) by the Company at any time
during the six-year period ending on the date of the Closing.
(b) Each Employee Program which has ever been maintained by the Company
of any ERISA Affiliate (as defined below) and which has at any time been
intended to qualify under Section 401(a) or 501(c)(9) of the Code has received a
favorable determination or approval letter from the IRS regarding its
qualification under such section and has, in fact, been qualified under the
applicable section of the Code from the effective date of such Employee Program
through and including the Closing (or, if earlier, the date that all of such
Employee Program's assets were distributed). No event or omission has occurred
which would cause any such Employee Program to lose its qualification or
otherwise fail to satisfy the relevant requirements to provide tax-favored
benefits under the applicable Code section. Each asset held under any such
Employee Program may be liquidated or terminated without the imposition of any
redemption fee, surrender charge or comparable liability.
(c) Neither the Company nor any ERISA Affiliate knows, has reason to
know, of any failure of any party to comply with any laws applicable to the
Employee Programs that have been maintained by the Company or any ERISA
Affiliate. With respect to any Employee
24
Program ever maintained by the Company or any ERISA Affiliate, there has
occurred no "prohibited transaction," as defined in Section 406 of ERISA or
Section 4975 of the Code, or breach of any duty under ERISA or other applicable
law (including, without limitation, any health care continuation requirements or
any other tax law requirements, or conditions to favorable tax treatment,
applicable to such plan), which could result, directly or indirectly, in any
taxes, penalties or other liability to the Company or any ERISA Affiliate or
Newco. No litigation, arbitration, or governmental administrative proceeding (or
investigation) or other proceeding (other than those relating to routine claims
for benefits) is pending or threatened with respect to any such Employee
Program.
(d) Neither the Company nor any ERISA Affiliate (as defined below) (i)
has ever maintained any Employee Program which has been subject to title IV of
ERISA (including, but not limited to, any Multiemployer Plan (as defined below))
or (ii) has ever provided health care or any other non-pension benefits to any
employees after their employment is terminated (other than as required by part 6
of subtitle B of title I of ERISA) or has ever promised to provide such
post-termination benefits.
(e) With respect to each Employee Program maintained by the Company
within the three (3) years preceding the Closing, complete and correct copies of
the following documents (if applicable to such Employee Program) have previously
been delivered to HBIO: (i) all documents embodying or governing such Employee
Program, and any funding medium for the Employee Program (including, without
limitation, trust agreements) as they may have been amended; (ii) the most
recent IRS determination or approval letter with respect to such Employee
Program under Code Sections 401 or 501(c)(9), and any applications for
determination or approval subsequently filed with the IRS; (iii) the six (6)
most recently filed IRS Forms 5500, with all applicable schedules and
accountants' opinions attached thereto; (iv) the summary plan description for
such Employee Program (or other descriptions of such Employee Program provided
to employees) and all modifications thereto; (v) any insurance policy (including
any fiduciary liability insurance policy) related to such Employee Program; (vi)
any documents evidencing any loan to an Employee Program that is a leveraged
employee stock ownership plan; and (vii) all other materials reasonably
necessary for HBIO to perform any of its responsibilities with respect to any
Employee Program subsequent to the Closing (including, without limitation,
health care continuation requirements).
(f) Each Employee Program required to be listed on Schedule 3.22 may be
amended, terminated, or otherwise modified by the Company to the greatest extent
permitted by applicable law, including the elimination of any and all future
benefit accruals under any Employee Program and no employee communication or
provision of any Employee Program document has failed to effectively reserve the
right of the Company or the ERISA Affiliate to so amend, terminate or otherwise
modify such Employee Program.
(g) For purposes of this section:
(i) "Employee Program" means (A) all employee benefit plans within
the meaning of ERISA Section 3(3), including, but not limited to, multiple
employer
25
welfare arrangements (within the meaning of ERISA Section 3(0)), plans to
which more than one unaffiliated employer contributes and employee benefit
plans (such as foreign or excess benefit plans) which are not subject to
ERISA; and (B) all stock option plans, bonus or incentive award plans,
severance pay policies or agreements, deferred compensation agreements,
supplemental income arrangements, vacation plans, and all other employee
benefit plans, agreements, and arrangements not described in (A) above,
including without limitation, any arrangement intended to comply with Code
Section 120, 125, 127, 129 or 137. In the case of an Employee Program funded
through a trust described in Code Section 401(a) or an organization
described in Code Section 501(c)(9), or any other funding vehicle, each
reference to such Employee Program shall include a reference to such
organization.
(ii) An entity "maintains" an Employee Program if such entity
sponsors, contributes to, or provides (or has promised to provide) benefits
under such Employee Program, or has any obligation (by agreement or under
applicable law) to contribute to or provide benefits under such Employee
Program, or if such Employee Program provides benefits to or otherwise
covers employees of such entity, or their spouses, dependents, or
beneficiaries.
(iii) An entity is an "ERISA Affiliate" of the Company if it would
have ever been considered a single employer with the Company under ERISA
Section 4001(b) or part of the same "controlled group" as the Company for
purposes of ERISA Section 302(d)(8)(C).
(iv) "Multiemployer Plan" means a (pension or non-pension)
employee benefit plan to which more than one employer contributes and which
is maintained pursuant to one or more collective bargaining agreements.
3.23 LIST OF DIRECTORS, OFFICERS AND EMPLOYEES.
(a) SCHEDULE 3.23(a) hereto contains a true and complete list of all
current directors and officers of the Company. In addition, SCHEDULE 3.23(a)
hereto contains a list of all managers and employees of, and consultants to, the
Company who, individually, have received or are scheduled to receive
compensation from the Company for the fiscal years ending December 31, 2000 or
2001, in excess of $75,000. In each case such Schedule includes the current job
title and aggregate annual compensation of each such individual.
(b) The Company employs 33 full-time employees and 6 part-time
employees and generally enjoys good employer-employee relationships. Except as
set forth on SCHEDULE 3.23(b) hereto (or SCHEDULE 3.22 hereto), the Company does
not have any obligation, contingent or otherwise, under (a) any employment,
collective bargaining or other labor agreement, (b) any written or oral
agreement containing severance or termination pay arrangements, (c) any deferred
compensation agreement, retainer or consulting arrangements, (d) any pension or
retirement plan, any bonus or profit-sharing plan, any stock option or stock
purchase plan, or (e) any other employee contract or non-terminable (whether
with or without
26
penalty) employment arrangement (each an "Employment Arrangement"). The Company
is not in default with respect to any material term or condition of any
Employment Arrangement nor will the Merger (or the transactions contemplated
hereby) result in any such default, including, without limitation, after the
giving of notice, lapse of time or both. The Company is not delinquent in
payments to any of its employees for any wages, salaries, commissions, bonuses
or other direct compensation for any services performed for it to the date
hereof or amounts required to be reimbursed to such employees. Except as set
forth on SCHEDULE 3.23(b) hereto, upon termination of the employment of any of
said employees, neither the Company nor Newco would, by reason of the
transactions contemplated under this Agreement or anything done prior to the
Closing, be liable to any of said employees for so-called "severance pay" or any
other payments. The Company has not made any payments, is not obligated to make
any payments and is not a party to any agreement that under certain
circumstances could obligate the Company or Newco to make any payments that will
not be deductible under Section 280G of the Code. The Company does not have any
policy, practice, plan or program of paying severance pay or any form of
severance compensation in connection with the termination of employment. The
Company is in compliance in all material respects with all applicable laws and
regulations respecting labor, employment, fair employment practices, work place
safety and health, terms and conditions of employment, and wages and hours.
There are no and have never been any charges or, to the knowledge of the Company
Parties, threatened charges of employment discrimination or unfair labor
practices against or involving the Company. There are no grievances, complaints
or charges that have been filed against the Company under any dispute resolution
procedure that might have a Material Adverse Effect on the Company, and there is
no arbitration or similar proceeding pending and no claim therefor has been
asserted. Except as set forth on SCHEDULE 3.23(b), the Company has in place all
employee policies required by applicable laws, rules and regulations, and there
have been no material violations or alleged material violations of any of such
policies. Neither the Company nor any Stockholder has received any notice
indicating that any of the Company's employment policies or practices is
currently being audited or investigated by any federal, state or local
government agency. The Company is, and at all times since November 6, 1986 has
been, in compliance with the requirements of the Immigration Reform Control Act
of 1986.
3.24 [Reserved]
3.25 TRANSFER OF SHARES. Except as set forth on SCHEDULE 3.25 hereto, no
holder of stock of the Company has at any time transferred any of such stock to
any employee of the Company or other Person, which transfer constituted or could
be viewed as compensation for services rendered to the Company by said employee.
3.26 STOCK REPURCHASE. Except as set forth on SCHEDULE 3.26, the Company has
not redeemed or repurchased any of its capital stock or interests.
3.27 ENVIRONMENTAL MATTERS. No hazardous waste, substances or materials, or
oil or petroleum products have been generated, transported, used, disposed,
stored or treated by the Company, except in material compliance with applicable
environmental laws. No hazardous wastes, substances or materials, or oil or
petroleum products have been released, discharged,
27
disposed, or otherwise caused to enter the soil or water in, under or upon any
real property owned, leased or operated by the Company, except in material
compliance with applicable environmental laws. The Company is in compliance in
all material respects with all applicable environmental, health and safety laws
and regulations, except where such violation has not or will not have a Material
Adverse Effect on the Company or, after giving effect to the transactions
contemplated hereby, Newco.
3.28 CUSTOMERS, DISTRIBUTORS AND PARTNERS. SCHEDULE 3.28 sets forth the name
of each customer and distributor of the Company who accounted for revenues of
the Company greater than $25,000 since its inception (the "Customers" and
"Distributors", respectively) together with the names of any persons or entities
with which the Company has a material strategic partnership or similar
relationship ("Partners"). No Customer, Distributor or Partner of the Company
has canceled or otherwise terminated its relationship with the Company. No
Customer, Distributor or Partner has, to the knowledge of the Company, any plan
or intention to terminate, to cancel or otherwise materially and adversely
modify its relationship with the Company or to decrease materially or limit its
usage, purchase or distribution of the services or products of the Company.
3.29 SUPPLIERS. SCHEDULE 3.29 lists all of the Company's suppliers who have
provided services, supplies or materials to the Company within the past twelve
months in an amount in excess of $5,000. The Company's relationships with its
suppliers are good commercial working relationships, and except as disclosed on
SCHEDULE 3.29, within the past twelve months, no supplier that the Company has
paid or is under contract to pay has canceled, materially modified, or otherwise
terminated its relationship with the Company, nor to the knowledge of the
Company, does any supplier have any plan or intention to do any of the foregoing
in a manner which would be reasonably likely to have a Material Adverse Effect.
Nor has the Company agreed to do any of the foregoing.
3.30 WARRANTY AND RELATED MATTERS. SCHEDULE 3.30 sets forth a complete list
of all outstanding product and service warranties, guarantees or rights of
return on any of the products or services that the Company distributes,
services, markets, sells or produces for itself, a customer or a third party
(each such product or service shall be referred to herein as a "COMPANY
PRODUCT"). The Company has made no promises or commitments with respect to any
Company Product it has sold, distributed, marketed or produced or that it
intends, plans or expects to distribute, service, market, sell or produce in the
future except as set forth on SCHEDULE 3.30. There are no existing or, to the
knowledge of the Company, threatened, claims against the Company relating to any
work performed by the Company, product liability, warranty or other similar
claims against the Company alleging that any Company Product is defective or
fails to meet any product or service warranties. There are (a) no inherent
design defects or systemic or chronic problems in any Company Product and (b) no
liabilities for warranty or other claims or returns with respect to any Company
Product relating to any such defects or problems which would reasonably be
expected to have a Material Adverse Effect. Each Company Product performs in
accordance with its documented specifications and other documentation and as the
Company has warranted to its customers.
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3.31 BACKLOG. As of the date hereof, the Company has a backlog of firm
orders for the sale of its products or services for which revenues have not been
recognized by the Company as set forth in SCHEDULE 3.31 (the "Backlog").
3.32 DISCLOSURE. Except as set forth on SCHEDULE 3.32, the representations,
warranties and statements contained in this Agreement and the agreements,
documents and instruments contemplated hereby, and in the certificates, exhibits
and schedules delivered by the Company Parties to HBIO pursuant to this
Agreement or any of such other agreements, documents and instruments, do not
contain any untrue statement of a material fact, and, when taken together, do
not omit to state a material fact required to be stated therein or necessary in
order to make such representations, warranties or statements not misleading in
light of the circumstances under which they were made. Except as set forth on
SCHEDULE 3.32, there are no facts (other than changes in general economic
conditions) which presently have or could reasonably be expected to have in the
future a Material Adverse Effect on the Company (or, after giving effect to the
Merger, Newco) which have not been specifically disclosed herein or in a
Schedule furnished herewith.
SECTION 4. SEVERAL REPRESENTATIONS AND WARRANTIES OF THE STOCKHOLDERS.
As a material inducement to HBIO to enter into this Agreement and consummate
the transactions contemplated hereby, each Stockholder hereby severally makes to
HBIO each of the representations and warranties set forth in this Section 4 with
respect to such Stockholder; provided, however, that only Stockholders who are
also employees of the Company on the date hereof are making the representations
and warranties set forth in Section 4.4.
4.1 COMPANY SHARES. Except as set forth in SCHEDULE 4.1, such Stockholder
owns of record and beneficially the number of the shares of the Company's
capital stock set forth opposite such Stockholder's name in SCHEDULE 3.3(b) (the
"Company Shares") and such Company Shares are fully paid and non-assessable and
free and clear of any and all Claims. The Company Shares set forth opposite such
Stockholder's name in SCHEDULE 3.3(b), if any, are, except as reflected in
SCHEDULE 3.3(b), the only shares of capital stock held by such Stockholder or
with respect to which such Stockholder has any rights in the Company.
4.2 AUTHORITY. Such Stockholder has full right, authority, power and
capacity to enter into this Agreement and each agreement, document and
instrument to be executed and delivered by or on behalf of such Stockholder
pursuant to, or as contemplated by, this Agreement and to carry out the
transactions contemplated hereby and thereby. This Agreement and each agreement,
document and instrument executed and delivered by such Stockholder pursuant to
this Agreement constitutes, or when executed and delivered will constitute, a
valid and binding obligation of such Stockholder, enforceable in accordance with
its respective terms, except as enforceability may be restricted, limited or
delayed by applicable bankruptcy or other laws affecting creditors' rights
generally. The execution, delivery and performance of this Agreement and each
such agreement, document and instrument:
29
(i) does not and will not violate any laws of the United States or
any state or other jurisdiction applicable to such Stockholder, or require
such Stockholder to obtain any approval, consent or waiver from, or make any
filing with, any Person or entity (governmental or otherwise) that has not
been obtained or made; and
(ii) does not and will not result in a breach of, constitute a
default under, accelerate any obligation under, or give rise to a right of
termination of, any agreement, contract, instrument, mortgage, lien, lease,
permit, authorization, order, writ, judgment, injunction, decree,
determination or arbitration award to which such Stockholder is a party or
by which the property of such Stockholder is bound or affected, or result in
the creation or imposition of any Claim on any assets of the Company.
4.3 FINDER'S FEE. Such Stockholder has not incurred or become liable for any
broker's commission or finder's fee relating to or in connection with the
transactions contemplated by this Agreement.
4.4 AGREEMENTS.
(a) Such Stockholder is not a party to any employment, non-competition,
trade secret or confidentiality agreement, arrangement, understanding or
obligation with or to any party other than the Company. There are no agreements
or arrangements not contained herein or disclosed in a Schedule hereto, to which
such Stockholder is a party relating to the business of the Company or to such
Stockholder's rights and obligations as a stockholder, director, officer or
employee of the Company.
(b) Such Stockholder does not own, directly or indirectly, on an
individual or joint basis, any interest (excluding passive investments in the
shares of any enterprise which are publicly traded, provided his or her holdings
therein, together with any holdings of his or her Affiliates and family members,
are less than one percent (1%) of the outstanding shares of comparable interest
in such entity) in, or serve as an officer or director of, any organization
which has a contract or arrangement with the Company or which could be
considered a competitor of the Company.
4.5 INVESTMENT REPRESENTATION.
(a) Such Stockholder (other than Xxxxxxx Xxxxxxxx, Xxxxxxx Xxxxxxxx,
Xxxxxxx Xxxxxxxxxx and Xxx Xxx Xxxxxxx) is an "accredited investor" as defined
in Regulation D under the Securities Act.
(b) Such Stockholder has read or reviewed and is familiar with HBIO's
latest reports on Forms 10-K, 10-Q and 8-K as filed with the SEC under the
Exchange Act.
(c) Such Stockholder has had an opportunity to ask questions of and
receive answers from HBIO, or a person or persons acting on HBIO's behalf,
concerning the terms and conditions of the shares of HBIO Common Stock to be
issued in the Merger.
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(d) Such Stockholder understands that the shares of HBIO Common Stock
to be issued in the Merger have not been registered under the Securities Act or
under the securities laws of any state or other jurisdiction and are being
offered and issued in reliance upon exemptions for private offerings, and that
HBIO is under no obligation to do so, and such Stockholder further understands
that such Stockholder is acquiring shares of HBIO Common Stock without being
furnished any offering literature or prospectus other than the reports referred
to in Section 4.5(b) hereof.
(e) Such Stockholder represents that the shares of HBIO Common Stock to
be issued in the Merger to such Stockholder are being acquired solely for such
Stockholder's own account, for investment and not with a view to or for the
resale, distribution, subdivision, or fractionalization thereof; such
Stockholder has no present plans to enter into any contract, undertaking,
agreement, or arrangement relating thereto.
(f) Such Stockholder acknowledges and is aware that there are
substantial restrictions on the transferability of the shares of HBIO Common
Stock to be issued in the Merger; the shares of HBIO Common Stock to be issued
in the Merger cannot be resold unless they are registered under the Securities
Act and qualified under any applicable securities law of any state or other
jurisdiction, or an exemption from such registration or qualification is
available.
(g) Such Stockholder has such knowledge and experience in financial and
business matters that such Stockholder is capable of evaluating the relative
risks and merits of the shares of HBIO Common Stock to be issued in the Merger.
4.6 NON-FOREIGN STATUS. The Stockholder is not a "foreign person" within the
meaning of Section 1445 of the Code and Treasury Regulations Section 1.1445-2.
SECTION 5. COVENANTS OF THE COMPANY PARTIES.
5.1 MAKING OF COVENANTS AND AGREEMENTS. The Company and each Stockholder set
forth on SCHEDULE 5.1 hereto jointly and severally (for the purposes of this
Section 5, "Company Parties" shall mean the Company and each such Stockholder so
scheduled) hereby make the covenants and agreements set forth in this Section 5.
5.2 CONFIDENTIAL INFORMATION AND UNFAIR COMPETITION.
(a) CONFIDENTIAL INFORMATION. The parties acknowledge that the
Company's assets include confidential or proprietary information, which is a
competitive asset of the Company (and, following the Closing, of the Surviving
Corporation) or constitutes a "trade secret," as that term is defined by the
Uniform Trade Secrets Act (collectively, "Confidential Information"). Each of
the Company Parties acknowledges and agrees that Confidential Information
includes all information that the Company possesses or to which the Company has
rights with respect to its business and assets, whether or not reduced to
writing (or in a form from which information can be obtained, translated, or
derived into reasonably usable form), which both derives independent economic
value (actual or potential) from not being readily known to
31
or ascertainable by proper means by others who can obtain economic value from
the disclosure or use of such information and is the subject of efforts that are
reasonable under the circumstances to maintain its secrecy. The term
Confidential Information shall also include, without limitation, the Company's
(i) planning data, marketing and operational strategies; (ii) financial results
and information; (iii) terms of any agreement or material contract; (iv) client
and prospecting lists and contact persons at such clients and prospects; and (v)
material information concerning customers or their operations, condition
(financial or otherwise) or plans (clauses (iv) and (v) collectively herein
referred to as the "Customer Information"). Each of the Company Parties
specifically acknowledges and agrees that the Customer Information, including
without limitation, the names and addresses of the clients and customers of the
Company and all other non-public information relating to such clients and
customers, including but not limited to their special needs or requirements,
constitutes Confidential Information.
(b) NON-DISCLOSURE OF CONFIDENTIAL INFORMATION.
(i) Each Company Party acknowledges and agrees to maintain the
confidentiality of such Confidential Information. Each Company Party further
acknowledges and agrees that any retention, use or disclosure of
Confidential Information during or after the Closing, except in the conduct
of the Company's business, constitutes a misappropriation of Confidential
Information. Accordingly, each Company Party covenants that it shall not
retain, disclose, use, or suffer to be used, in any manner, directly or
indirectly, any Confidential Information under any circumstances without
HBIO's prior written consent, which may be withheld in its sole discretion.
(ii) Each Company Party's obligations under this Agreement with
respect to Confidential Information shall continue until such Confidential
Information shall have become, through no fault of such Company Party,
generally known to the public or in the trade or industry or such Company
Party is required by law (after providing HBIO with prior written notice so
that HBIO may have an opportunity to contest such requirement) to make
disclosure.
(c) NON-SOLICITATION OF EMPLOYEES OF THE SURVIVING CORPORATION. Each
Company Party hereby acknowledges that the provisions of this Section 5.2 are
necessary to protect the legitimate interests of HBIO and the Surviving
Corporation from improper use or disclosure of Confidential Information.
Therefore, during a period of three (3) years following the Closing, (i) no
Company Party shall recruit, solicit or induce (or in any way assist another
person or enterprise in recruiting, soliciting or inducing) any employee or
consultant of the Surviving Corporation or HBIO to terminate his or her
employment or other relationship with the Surviving Corporation or HBIO or (ii)
hire or employ, directly or indirectly through any enterprise with which such
Stockholder is associated, any employee or consultant of the Surviving
Corporation or HBIO.
(d) UNFAIR COMPETITION. During the period commencing on the date hereof
and continuing until three (3) years (one (1) year in the case of Xxxxxxx
Xxxxxxxxxx) following the Closing, no Company Party hereto shall compete with
the Company. For purposes of this
32
Section 5.2(d)(i), the phrase "compete with the Company" includes, without
limitation, directly or indirectly participating (other than as an investor in
not more than 1% of the stock of a publicly traded corporation) in any way
(whether as a founder, director, general or limited partner, manager member,
employee, consultant, contractor or otherwise), assisting in any manner or in
any capacity, or having any interest in or making any loan to any person, firm,
corporation or business in connection with or with respect to the design,
manufacture, marketing, development or sale of products or services that compete
with (or products or services that are like or substantially similar to) the
products and services that are designed, manufactured, marketed, developed or
sold by the Surviving Corporation or its successors and assigns, including,
without limitation, the sales or marketing of such products or services to
consumers, resellers, retailers or wholesalers.
5.3 AUTHORIZATIONS. The Company will use all commercially reasonable best
efforts, and the other Company Parties will use all commercially reasonable best
efforts to cause the Company to, obtain all authorizations, consents, orders and
approvals of federal, state and local regulatory bodies and officials that may
be or become necessary for its execution and delivery of, and the performance of
its obligations pursuant to, this Agreement and the other agreements, documents
and instruments contemplated hereby, and for Newco to conduct the business
presently being conducted by the Company.
5.4 AUTHORIZATION FROM OTHERS. The Company Parties will use their respective
commercially reasonable best efforts to obtain all other authorizations,
consents, approvals and permits of others required to permit the consummation by
the Company Parties of the transactions contemplated by this Agreement.
5.5 CONDUCT OF BUSINESS Between the date of this Agreement and the Closing,
except as set forth in SCHEDULE 5.5 hereto, without the prior written consent of
HBIO:
(a) The Company will conduct its business only in the ordinary course
of business, and consistent with past practices;
(b) The Company will not (i) make (or incur any obligation to make) any
purchase, sale or disposition of any asset or property other than as
specifically provided for in this Agreement, or in the ordinary course of
business consistent with past practices, or (ii) subject to any Claim any of its
properties or assets, nor permit any of the foregoing to exist except for minor
imperfections of title or insignificant liens which do not, in the aggregate,
detract from the value of such assets, or interfere with the Merger or the
transactions contemplated by this Agreement or the present or proposed uses of
such properties or assets or the business of the Company or Newco;
(c) The Company will not incur any contingent or fixed obligations or
liabilities including, without limitation, any liability (contingent or fixed)
as a guarantor or otherwise with respect to the obligations of others except,
with respect to the Company, in the ordinary course of business consistent with
the past practices of the Company;
33
(d) The Company will not make or incur any obligation to make a change
in its Articles of Organization, By-Laws or authorized or issued capital stock;
(e) The Company will not declare, set aside or pay any dividend or
distribution, make (or incur an obligation to make) any other distribution in
respect of its capital stock or make (or incur an obligation to make) any direct
or indirect redemption, purchase or other acquisition of its stock;
(f) The Company will not make any change in the compensation payable or
to become payable to any of the Company's officers, employees, agents or
independent contractors, (including by means of any change to any stock option
issued to any such person) and the Company will not hire any directors,
officers, employees or agents (other than to fill vacant positions at the
Company), or enter into any collective bargaining agreement, bonus, equity,
option, profit sharing, compensation, welfare, retirement, or other similar
arrangement, or any employment contract;
(g) The Company will not make any change in its borrowing arrangements;
(h) The Company will use all commercially reasonable best efforts to
prevent any change with respect to its management and supervisory personnel and
banking arrangements;
(i) The Company will have in effect and maintain at all times all
insurance of the kind, in the amount and with the insurers set forth in SCHEDULE
3.17 hereto or substantially equivalent insurance with any substitute insurers
approved in writing by HBIO; and
(j) The Company will not settle any material litigation without HBIO's
consent (which consent will not be unreasonably withheld); and
(k) The Company will not enter into any agreement, commitment or
understanding, whether in writing or otherwise, for the Company to take any of
the actions specified in paragraphs (a) through (j) above, except as
specifically contemplated hereby.
5.6 FINANCIAL STATEMENTS. The Company will furnish HBIO with unaudited
monthly balance sheets and statements of income and retained earnings and cash
flows of the Company on a consolidated and consolidating basis within ten (10)
business days after each month end for each month ending more than ten (10)
business days prior to the Closing, in each case certified by the Controller of
the Company, which financial statements shall be prepared in accordance with
generally accepted accounting principles applied consistently using the accrual
method of accounting (except that they need not include footnotes), shall be
complete and correct in all material respects and shall present fairly in all
material respects the financial condition of the Company at the dates of said
statements and the results of its operations for the periods covered thereby
(subject to year end audit adjustments that individually and in the aggregate
are not material).
34
5.7 PRESERVATION OF BUSINESS AND ASSETS. Until the Closing, the Company
shall use all commercially reasonable best efforts, and each other Company Party
shall use all commercially reasonable best efforts to cause the Company, to: (a)
preserve the current business of the Company, (b) preserve the goodwill of the
Company, and (c) preserve any licenses or permits required for, or useful in
connection with, the business of the Company. In addition, except as expressly
contemplated by this Agreement, no Company Party shall take any material action
not in the ordinary course of business relating to the Company or which could
reasonably be expected to have a material adverse effect on the transactions
contemplated hereby, without the prior consent of HBIO.
5.8 TAX RETURNS. The Company Parties shall cooperate with HBIO with respect
to and cause the Company to prepare and file, on or before the due date or any
extension thereof, all Tax Returns required to be filed by the Company prior to
the Closing, so that such returns are consistent with the provisions of this
Agreement.
5.9 NOTICE OF DEFAULT. Promptly upon the occurrence of, or promptly upon any
Company Party becoming aware of the threatened occurrence of, any event which
would cause or constitute a breach or default, or would have caused or
constituted a breach or default had such event occurred or been known to the
Company Parties prior to the date hereof, of any of the representations,
warranties or covenants of the Company Parties contained in or referred to in
this Agreement or in any Schedule or Exhibit referred to in this Agreement, such
Company Party shall give detailed written notice thereof to HBIO and the other
Company Parties, and the Company Parties shall use their commercially reasonable
best efforts to prevent or promptly remedy the same.
5.10 CONSUMMATION OF AGREEMENT. The Company Parties shall use their
respective commercially reasonable best efforts to perform and fulfill all
conditions and obligations to be performed and fulfilled by each of them under
this Agreement, to the end that the transactions contemplated by this Agreement
shall be fully carried out.
5.11 COOPERATION OF THE COMPANY AND COMPANY PARTIES. The Company Parties
shall cooperate with all reasonable requests of HBIO and HBIO's counsel in
connection with the consummation of the transactions contemplated hereby,
including, without limitation, providing HBIO with all access or information
necessary to permit HBIO to verify the amounts certified by the Company pursuant
to Section 8.6 hereof, and the making of any filings required in connection of
the transactions contemplated hereby, including, without limitation, filings
under the HSR Act.
5.12 [Reserved]
5.13 CONFIDENTIALITY. The Company Parties agree that, unless and until the
Closing has been consummated, each of the Company Parties and their officers,
directors, partners, agents and representatives will hold in strict confidence,
and will not use, any confidential or proprietary data or information obtained
from HBIO with respect to its business or financial condition except for the
purpose of evaluating, negotiating and completing the transaction
35
contemplated hereby unless such party is otherwise required to disclose such
data or information by law and has given prior notice of such requirement to
HBIO. Information generally known in HBIO's industry or which has been disclosed
to the Company Parties by third parties which have a right to do so shall not be
deemed confidential or proprietary information for purposes of this Agreement.
If the transactions contemplated by this Agreement are not consummated, the
Company Parties will return, and cause their respective officers, directors,
partners, agents and representatives to return, to HBIO (or certify that they
have destroyed) all copies of such data and information, including but not
limited to financial information, customer lists, business and corporate
records, worksheets, test reports, tax returns, lists, memoranda, and other
documents prepared by or made available by HBIO to the Company Parties (and
their officers, directors, partners, agents and representatives) in connection
with the transaction.
5.14 AUDITED FINANCIAL INFORMATION. At the expense of HBIO or the Surviving
Corporation, within sixty (60) days after the Closing Date, the Company Parties
shall prepare and deliver, or cause to be prepared and delivered, to HBIO the
audited financial information, including a manually signed accountants' report
and consent from Xxxxxx Xxxxxxxx LLP, required to be filed by HBIO with the SEC
pursuant to Item 7 of Form 8-K (the "Audited Financial Information"). The
Audited Financial Information will be prepared based in the books and records of
the Company and will include items accounted for in accordance with GAAP
consistent with the method used for the purpose of preparing the accounting for
such items in connection with the Company's audited financial statements for
prior periods and will present fairly the financial condition and results of
operations of the Company as of the dates indicated or for the periods
indicated.
SECTION 6. REPRESENTATIONS AND WARRANTIES OF HBIO.
6.1 MAKING OF REPRESENTATIONS AND WARRANTIES. As a material inducement to
the Company Parties to enter into this Agreement and consummate the transactions
contemplated hereby, HBIO and Newco jointly and severally hereby make the
representations and warranties to the Company Parties contained in this Section
6.
6.2 ORGANIZATION OF HBIO AND NEWCO.
(a) HBIO is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware with full corporate power and
authority to own or lease its properties and to conduct its business in the
manner and in the places where such properties are owned or leased or such
business is conducted by it.
(b) Newco is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware with full corporate power and
authority to own or lease its properties and to conduct its business in the
manner and in the places where such properties are owned or leased or such
business is conducted by it.
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6.3 AUTHORITY OF HBIO AND NEWCO.
(a) HBIO has full right, authority and power to enter into this
Agreement and each agreement, document and instrument to be executed and
delivered by HBIO pursuant to or as contemplated by, this Agreement and to carry
out the transactions contemplated hereby and thereby. The execution, delivery
and performance by HBIO of this Agreement and each such other agreement,
document and instrument have been duly authorized by all necessary corporate
action of HBIO and no other action on the part of HBIO is required in connection
therewith. This Agreement and each other agreement, document and instrument
executed and delivered by HBIO pursuant to this Agreement constitute, or when
executed and delivered will constitute, valid and binding obligations of HBIO
enforceable in accordance with their terms. The execution, delivery and
performance by HBIO of this Agreement and each such agreement, document and
instrument:
(i) does not and will not violate any provision of the Certificate
of Incorporation or By-Laws of HBIO, each as amended to date;
(ii) does not and will not violate any laws of the United States
or of any state or any other jurisdiction applicable to HBIO or require HBIO
to obtain any approval, consent or waiver of, or make any filing with, any
Person or entity (governmental or otherwise) which has not been obtained or
made, except as set forth on SCHEDULE 6.3 hereto; and
(iii) does not and will not result in a breach of, constitute a
default under, accelerate any obligation under, or give rise to a right of
termination of any indenture, loan or credit agreement, or other agreement,
mortgage, lease, permit, order, judgment or decree to which HBIO is a party
and which would prevent or hinder the consummation of the transactions
contemplated by this Agreement.
(b) Newco has full right, authority and power to enter into this
Agreement and each agreement, document and instrument to be executed and
delivered by Newco pursuant to or as contemplated by, this Agreement and to
carry out the transactions contemplated hereby and thereby. The execution,
delivery and performance by Newco of this Agreement and each such other
agreement, document and instrument have been duly authorized by all necessary
corporate action of Newco and no other action on the part of Newco is required
in connection therewith. This Agreement and each other agreement, document and
instrument executed and delivered by Newco pursuant to this Agreement
constitute, or when executed and delivered will constitute, valid and binding
obligations of Newco enforceable in accordance with their terms. The execution,
delivery and performance by Newco of this Agreement and each such agreement,
document and instrument:
(i) does not and will not violate any provision of the Certificate
of Incorporation or By-Laws of Newco, each as amended to date;
37
(ii) does not and will not violate any laws of the United States
or of any state or any other jurisdiction applicable to Newco or require
Newco to obtain any approval, consent or waiver of, or make any filing with,
any Person or entity (governmental or otherwise) which has not been obtained
or made, except as set forth on SCHEDULE 6.3 hereto; and
(iii) does not and will not result in a breach of, constitute a
default under, accelerate any obligation under, or give rise to a right of
termination of any indenture, loan or credit agreement, or other agreement,
mortgage, lease, permit, order, judgment or decree to which Newco is a party
and which would prevent or hinder the consummation of the transactions
contemplated by this Agreement.
6.4 LITIGATION. There is no action, suit or proceeding pending or, to its
knowledge, threatened against HBIO or Newco which would prevent or hinder the
consummation of the transactions contemplated by this Agreement.
6.5 FINDER'S FEE. Neither HBIO nor Newco has incurred or become liable for
any broker's commission or finder's fee relating to or in connection with the
transactions contemplated by this Agreement.
6.6 SEC REPORTS. HBIO has filed all of the reports required to be filed with
the SEC pursuant to Sections 13, 14 and 15(d) of the Exchange Act since its
initial public offering in December 2000 (the "SEC Reports"). The SEC Reports
were prepared in all material respects in accordance with the requirements of
the Exchange Act.
6.7 SHARES. The HBIO Common Stock to be issued to the Stockholders pursuant
to this Agreement will be, when issued and delivered to the Stockholders in
accordance with this Agreement, duly authorized, validly issued, fully paid and
non-assessable and free and clear of any Claims, subject to the restrictions
imposed herein or by the agreements contemplated hereby, on the certificate or
certificates therefor, or by the Securities Act or other applicable securities
laws.
SECTION 7. COVENANTS OF HBIO.
7.1 MAKING OF COVENANTS AND AGREEMENT. HBIO and Newco jointly and severally
hereby make the covenants and agreements set forth in this Section 7.
7.2 CONFIDENTIALITY. HBIO and Newco each agree that, unless and until the
Closing has been consummated, each of HBIO and Newco and their respective
officers, directors, agents and representatives will hold in strict confidence,
and will not use, any confidential or proprietary data or information obtained
from the Company Parties with respect to its business or financial condition
except for the purpose of evaluating, negotiating and completing the transaction
contemplated hereby and unless HBIO or Newco is otherwise required to disclose
such data or information by law. Information generally known in the Company's
industry or which has been disclosed to HBIO or Newco by third parties which
have a right to do so shall not be deemed confidential or proprietary
information for purposes of this Agreement. If the
38
transactions contemplated by this Agreement are not consummated, HBIO and Newco
will return, and will cause their respective officers, directors, agents and
representatives to return, to the Company (or certify that they have destroyed)
all copies of such data and information, including but not limited to financial
information, customer lists, business and corporate records, worksheets, test
reports, tax returns, lists, memoranda, and other documents prepared by or made
available to HBIO or Newco (and their respective officers, directors, agents and
representatives) in connection with the transaction.
7.3 COOPERATION OF HBIO. HBIO and Newco each shall cooperate with all
reasonable requests of the Company in connection with the Company's compliance
with its covenants in Sections 5.3 and 5.4 hereof.
7.4 NOTICE OF DEFAULT. Promptly upon the occurrence of, or promptly upon
HBIO becoming aware of the threatened occurrence of, any event which would cause
or constitute a breach or default, or would have caused or constituted a breach
or default had such event occurred or been known to HBIO prior to the date
hereof, of any of the representations, warranties or covenants of HBIO contained
in or referred to in this Agreement or in any Schedule or Exhibit referred to in
this Agreement, HBIO shall give detailed written notice thereof to the Company,
and HBIO shall use its commercially reasonable best efforts to prevent or
promptly remedy the same.
7.5 IMMIGRATION. HBIO assumes and agrees to pay all immigration-related
obligations and liabilities of the Company in connection with a H-1B visa
application, on Form ETA 9035, filed with the U.S. Department of Labor for each
of Xx. Xxxxxx Xxxxxxxx and Xxxx-Xxxxx Xxxxx, if any, which may arise or be
incurred, including, without limitation, those arising under or related to labor
condition applications, and their attestation provisions, filed by the Company
for or on behalf of each of Xx. Xxxxxx Xxxxxxxx and Xxxx-Xxxxx Xxxxx.
SECTION 8. CONDITIONS TO THE OBLIGATIONS OF HBIO.
The obligations of HBIO and Newco to consummate this Agreement and the
transactions contemplated hereby are subject to the fulfillment (or waiver by
HBIO), prior to or at the Closing, of the following conditions precedent:
8.1 LITIGATION; NO OPPOSITION. No judgment, injunction, order or decree
enjoining or prohibiting any of HBIO, Newco, the Company Parties or other
parties to this Agreement or any of the agreements, documents and instruments
contemplated hereby, from consummating the transactions contemplated hereby or
thereby, shall have been entered and no suit, action or proceeding shall be
pending or threatened at any time prior to or on the date of the Closing before
or by any court or governmental body seeking to restrain or prohibit, or seeking
material damages or other material relief in connection with, the execution and
delivery of this Agreement or any of the agreements, documents and instruments
contemplated hereby, or the consummation of the transactions contemplated hereby
or thereby or which could reasonably be expected to have an Material Adverse
Effect on the Company, Newco or HBIO.
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8.2 REPRESENTATIONS, WARRANTIES AND COVENANTS. Each of the representations
and warranties of the Company Parties contained in this Agreement and in any
Schedule or Exhibit attached hereto and in each other agreement, document,
instrument or certificate contemplated hereby or otherwise made in writing by
any of them or made by any person authorized by them to make representations on
their behalf, shall be true and correct in all material respects (except for any
representations and warranties that are qualified by their terms as to
materiality, which such representations and warranties as so qualified shall be
true in all respects and except for the representations contained in Sections
3.8(i) and 3.8(j), which shall be true and correct in all respects) as of the
date of this Agreement and at, as of and after giving effect to the Closing as
though newly made at such time. Each and all of the agreements and conditions to
be performed or satisfied by the Company Parties hereunder and under the other
agreements, documents and instruments contemplated hereby at or prior to the
Closing shall have been duly performed in all material respects; and the Company
Parties shall have furnished HBIO with a certificate or certificates dated as of
the Closing Date with respect to each of the foregoing.
8.3 [Reserved]
8.4 APPROVALS. Except as otherwise specifically contemplated hereby, all
actions by or in respect of, or filings with, any governmental body, agency, or
official or authority required to permit the consummation of the transactions
contemplated hereby (so that after the Closing Newco shall be able to carry on
the Company's business in the manner now conducted) shall have been taken, made
or obtained, and any and all other material permits, approvals, consents or
other actions necessary to consummate the transactions hereunder, including,
without limitation, the consent of the Company's stockholders, shall have been
received or taken, and none of such permits, approvals or consents shall contain
any provisions which, in the reasonable judgment of HBIO, are unduly burdensome.
8.5 EMPLOYMENT/NON-COMPETITION AGREEMENTS. Each of Xxxxx Xxxxxx and Xxxxx
Xxxxxxxxx shall have entered into an Employment/Non-Competition Agreement with
the Surviving Corporation in the form attached hereto as EXHIBIT 8.5 (the
"Employment/Non-Competition Agreement"), and each such
Employment/Non-Competition Agreement shall be in full force and effect.
8.6 STOCKHOLDERS' EQUITY AND CASH. At April 30, 2001, the Company had (a)
total stockholders' equity of $146,820 and (b) $596,295 of cash. At the Closing,
HBIO shall be provided with a certificate from the Controller of the Company
representing that there has been no material change in the foregoing amounts and
also certifying as to the true and correct amounts of the Company's cash on hand
at the Closing, after taking into account all transaction costs of the Company.
8.7 DELIVERY. Each Company Party shall have executed (where applicable) and
delivered to HBIO (or shall have caused to be executed and delivered to HBIO by
the appropriate person) the following:
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(a) certified copies of resolutions of the board of directors and the
shareholders of the Company authorizing the execution of this Agreement and each
of the agreements, documents and instruments contemplated hereby to which the
Company is a party;
(b) a copy of the Articles of Organization and by-laws of the Company
which, in the case of the charter, is certified as of a recent date by the
Secretary of State of the Commonwealth of Massachusetts;
(c) certificates issued by the appropriate Secretary of State of each
state in which the Company does business certifying that the Company is in good
standing in such state as of the most recent practicable date;
(d) true and correct copies of each of the agreements, documents and
instruments contemplated hereby and all agreements, documents, instruments and
certificates delivered or to be delivered in connection therewith;
(e) a certificate of the Clerk of the Company, certifying that the
resolutions, Articles of Organization and by-laws referenced in paragraphs (a)
and (b) above are in full force and effect and have not been amended or
modified, and that the officers of such corporation are those Persons named in
the certificate;
(f) an opinion from Xxxxxxx, Xxxxx & Xxxxx, LLP, in form reasonably
acceptable to HBIO and its counsel;
(g) from each Stockholder a "transferor's certificate of non-foreign
status" as provided in the Treasury Regulations under Section 1445 of the Code
outstanding in the form attached hereto as EXHIBIT 8.7(g) attached hereto; and
(h) such other Certificates and documents as are required hereby or are
reasonably requested by HBIO.
8.8 ESCROW AGREEMENT. The Escrow Agent and the Representatives shall have
executed and delivered to HBIO, the Escrow Agreement in substantially the form
of EXHIBIT 1.4 attached hereto.
8.9 RELEASE. Each Stockholder shall have executed and delivered to HBIO a
release in substantially the form of EXHIBIT 8.9 attached hereto.
8.10 OPTION MATTERS. Each holder of an option to purchase Company Common
Stock set forth on SCHEDULE 8.10 hereto shall have executed and delivered to
HBIO an Agreement in substantially the form of EXHIBIT 8.10 attached hereto with
respect to the cancellation of its existing Options and the substitution
therefor of HBIO Options. The Company's Board of Directors or the Compensation
Committee thereof shall have determined that such HBIO Options are equivalent
and comparable to the existing Options.
41
8.11 HSR ACT. Any applicable waiting period under the HSR Act (including any
extensions thereof) shall have expired or been terminated.
8.12 MATERIAL ADVERSE CHANGE. Since the date of this Agreement, there shall
have been no event or condition or events or conditions, which, either
individually or in the aggregate, has had or could reasonably be expected to
have a Material Adverse Effect on the Company, and HBIO shall be provided with a
certificate from the Controller of the Company to that effect at the Closing.
8.13 MASS BUSINESS MEZZANINE FUND I, LLC BRIDGE LOAN. The Company shall have
received and delivered to HBIO a copy of a letter agreement from Mass Business
Mezzanine Fund I, LLC permitting its $500,000 loan to the Company to remain
outstanding following the Effective Date until June 25, 2001, as well as
acknowledging the full amount owed.
8.14 GATEWAY FINANCIAL GROUP, INC. FINDER'S FEE. The Company shall have
received and delivered to HBIO a copy of a payoff letter from Gateway Financial
Group, Inc. in an amount not to exceed $200,000 related to that certain letter
agreement dated as of February 8, 2001 by and between Gateway Financial Group,
Inc. and the Company.
8.15 BANK SIGNATURES. Xxxxx Xxxxxx shall have been added an authorized
signatory on all of the Company's banking accounts and other banking relations
including, without limitation, those described in SCHEDULE 3.12 attached hereto.
SECTION 9. CONDITIONS TO OBLIGATIONS OF THE COMPANY PARTIES.
The obligations of the Company Parties to consummate this Agreement and the
transactions contemplated hereby are subject to the fulfillment (or waiver by
the Company), prior to or at the Closing, of the following conditions precedent:
9.1 NO LITIGATION; NO OPPOSITION. No judgment, injunction, order or decree
enjoining or prohibiting any of HBIO, Newco, the Company Parties or other
parties to this Agreement or any of the agreements, documents and instruments
contemplated hereby, from consummating the transactions contemplated hereby or
thereby shall have been entered and no suit, action or proceeding shall be
pending or threatened on the date of Closing before or by any court or
governmental body seeking to restrain or prohibit the execution and delivery of
this Agreement or any of the agreements, documents or instruments contemplated
hereby or the consummation of the transactions contemplated hereby or thereby.
9.2 REPRESENTATIONS, WARRANTIES AND COVENANTS. Each of the representations
and warranties of HBIO or Newco contained in this Agreement and in any Schedule
or Exhibit attached hereto and in the other agreements, documents or instruments
contemplated hereby or otherwise made in writing by HBIO or Newco or by any
Person authorized by HBIO or Newco to make representations on its behalf shall
be true and correct in all material respects (except for any representations and
warranties that are qualified by their terms as to materiality, which such
representations and warranties as so qualified shall be true in all respects) at
and as of the Closing as though newly made at such time. Each and all the
agreements and conditions to be
42
performed or satisfied by HBIO or Newco hereunder and under the other
agreements, documents as instruments contemplated hereby at or prior to the
Closing shall have been duly performed in all material respects; and HBIO and
Newco shall have furnished the Company with certificates dated as of the date of
the Closing to the foregoing effect.
9.3 DELIVERY. HBIO shall have executed and delivered to the Company, as
applicable, the following:
(a) certified copies of resolutions of the board of directors of HBIO
authorizing the execution of this Agreement and each of the other agreements,
documents or instruments contemplated hereby to which HBIO is a party;
(b) a copy of the Certificate of Incorporation and By-laws of HBIO
which, in the case of the Certificate of Incorporation, is certified as of a
recent date by the Secretary of State of the State of Delaware;
(c) a certificate issued by the Secretary of State of the State of
Delaware certifying that HBIO is validly existing and in good standing in the
State of Delaware as of the most recent practicable date;
(d) true and correct copies of each of the agreements, documents and
instruments contemplated hereby to which HBIO is a party, and all agreements,
documents, instruments and certificates delivered or to be delivered in
connection therewith by HBIO;
(e) certified copies of resolutions of the board of directors and
stockholder of Newco authorizing the execution of this Agreement and each of the
other agreements, documents or instruments contemplated hereby to which Newco is
a party;
(f) a copy of the Certificate of Incorporation and By-laws of Newco
which, in the case of the Certificate of Incorporation, is certified as of a
recent date by the Secretary of State of the State of Delaware;
(g) certificates issued by the Secretary of State of the State of
Delaware certifying that Newco is validly existing and in good standing in the
State of Delaware as of the most recent practicable date;
(h) true and correct copies of each of the agreements, documents and
instruments contemplated hereby to which Newco is a party, and all agreements,
documents, instruments and certificates delivered or to be delivered in
connection therewith by Newco;
(i) a certificate of the Secretary of HBIO certifying that the
resolutions, Certificate of Incorporation and By-laws in paragraphs (a) and (b)
above are in full force and effect and have not been amended or modified, and
that the officers of HBIO are those Persons named in the certificate;
43
(j) a certificate of the Secretary of Newco certifying that the
resolutions, Certificate of Incorporation and By-laws in paragraphs (e) and (f)
above are in full force and effect and have not been amended or modified, and
that the officers of HBIO are those Persons named in the certificate; and
(k) an opinion from Xxxxxxx Procter LLP in form reasonably acceptable
to the Company and its counsel.
9.4 ESCROW AGREEMENT. HBIO and the Escrow Agent shall have executed and
delivered to the Representatives, the Escrow Agreement in substantially the form
of EXHIBIT 1.4 attached hereto.
9.5 HSR ACT. Any applicable waiting period under the HSR Act (including any
extensions thereof) shall have expired or been terminated.
SECTION 10. [RESERVED.]
SECTION 11. RIGHTS AND OBLIGATIONS SUBSEQUENT TO CLOSING.
11.1 SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS. Each of the
representations and warranties herein or in any schedule, exhibit or certificate
delivered by any party to any other party incident to the transactions
contemplated hereby are material, shall be deemed to have been relied upon by
the other party and shall survive the Closing until the second anniversary of
the date of the Closing, except for the representations and warranties made in
Sections 3.3, 3.8, 4.1 or 4.3 and, to the extent it relates thereto, Section
3.32, each of which shall survive until the expiration of the applicable statute
of limitations, if any. The expiration of any representation or warranty shall
not affect any claim made prior to the date of such expiration. All covenants
herein not fully performed shall survive the Closing and continue thereafter
until fully performed. Any investigation, audit or other examination that may
have been made or may be made at any time by or on behalf of the party to whom
any such representation or warranty is made shall not limit or diminish such
representations and warranties, and the parties may rely on the representations
and warranties set forth in this Agreement irrespective of any information
obtained by them by any investigation, audit or examination or otherwise.
11.2 REGULATORY FILINGS. Each of the Company Parties will cooperate with
HBIO to enable HBIO, the Company and Newco to make any and all regulatory
filings required by them with respect to any of them or the transactions
contemplated hereby (including, by way of example and not of limitation, the
filing of tax returns).
SECTION 12. INDEMNIFICATION.
12.1 INDEMNIFICATION BY THE STOCKHOLDERS.
The Stockholders jointly and severally agree (except with respect to
Sections 3.3(b) and 4.1, in which respect each Stockholder severally, and not
jointly, agrees) to indemnify and hold HBIO and its subsidiaries and affiliates
and persons serving as officers, directors, partners,
44
stockholders or employees thereof (individually a "HBIO Indemnified Party" and
collectively the "HBIO Indemnified Parties") harmless from and against any
damages, liabilities, losses (including, without limitation, diminution in
value), taxes, fines, penalties, costs, and expenses (including, without
limitation, reasonable fees of counsel) of any kind or nature whatsoever
(whether or not arising out of third-party claims and including all amounts paid
in investigation, defense or settlement of the foregoing) which may be sustained
or suffered by any of them arising out of or based upon any of the following
matters:
(a) fraud, intentional misrepresentation or a deliberate or willful
breach by any Company Party of any of their representations, warranties or
covenants under this Agreement or any agreement, document or instrument
contemplated hereby or in any certificate, schedule or exhibit delivered
pursuant hereto or thereto;
(b) any breach of any representation or warranty of any Company Party
under this Agreement or under any agreement, document or instrument contemplated
hereby, or in any certificate, schedule or exhibit delivered pursuant hereto or
thereto, or by reason of any claim, action or proceeding asserted or instituted
growing out of any matter or thing constituting such a breach;
(c) any breach of any covenant of any Company Party under this
Agreement or under any agreement, document or instrument contemplated hereby, or
in any certificate, schedule or exhibit delivered pursuant hereto or thereto, or
by reason of any claim, action or proceeding asserted or instituted growing out
of any matter or thing constituting such a breach;
(d) the activities, conduct, business or operation of the Company prior
to the Closing, or arising out of facts, events or circumstances regarding the
Company existing prior to the Closing; and
(e) any unpaid Taxes of the Company and its Subsidiary relating to
periods ending on or prior to the Closing Date except to the extent that (i)
such unpaid Taxes would result in an offset against the Company's net operating
losses and (ii) no amounts would be payable by HBIO or the Surviving Corporation
to any tax authority with respect to such Taxes.
12.2 LIMITATIONS ON INDEMNIFICATION BY THE COMPANY PARTIES. Notwithstanding
the foregoing, the right of HBIO Indemnified Parties to indemnification under
Section 12.1 shall be subject to the following provisions:
(a) No indemnification shall be payable pursuant to Section 12.1(b) or
12.1(d) above to any HBIO Indemnified Party, unless the total of all claims for
indemnification pursuant to Section 12.1 shall exceed $100,000 in the aggregate,
whereupon the full amount of such claims shall be recoverable in accordance with
the terms hereof;
(b) No indemnification shall be payable to a HBIO Indemnified Party by
the Stockholders with respect to claims asserted pursuant to Section 12.1(b),
12.1(c), 12.1(d) or 12.1(e) to the extent the cumulative amount of all losses
for which the HBIO Indemnified Parties have been indemnified pursuant to
Sections 12.1(b), 12.1(c), 12.1(d) and 12.1(e): (i) prior to the
45
second anniversary of the date of the Closing exceeds the fair market value of
the Escrow Shares (as determined in accordance with Section 5(h) of the Escrow
Agreement) then held in escrow; or (ii) on or after the second anniversary of
the date of the Closing, exceeds (A) $1,750,000 PLUS (B) the amount of any claim
with respect to which notice was given in the manner contemplated by Section
12.5 hereof prior to the second anniversary of the date of the Closing (such
amount in this clause (B) not to exceed the fair market value of the Escrow
Shares held in escrow after the second anniversary (as determined in accordance
with Section 5(h) of the Escrow Agreement)).
(c) No indemnification shall be payable to a HBIO Indemnified Party
with respect to claims asserted pursuant to Section 12.1(b), 12.1(c) or 12.1(d)
(exclusive of any claims for indemnification for Taxes or based upon or related
to a breach of any representation, warranty or covenant with respect to Taxes or
tax related matters (whether or not the representation which is breached
specifically relates to Taxes) (which such claims may not be made after the
expiration of the applicable statute of limitations relating to such Taxes) or
any claims for indemnification related to the representations and warranties set
forth in Sections 3.3, 4.1 or 4.3 and to the extent it relates thereto Section
3.32) after the second anniversary of the date of the Closing (the
"Indemnification Cut-Off Date"); PROVIDED, HOWEVER, that such expiration shall
not affect any claim with respect to which notice was given in the manner
contemplated by Section 12.5 hereof prior to the Indemnification Cut-Off Date;
PROVIDED, FURTHER, that this Section 12.2(c) shall not be applicable to claims
for indemnification asserted pursuant to Section 12.1(c) after the
Indemnification Cut-Off Date against Xxxxx Xxxxxxxxx.
(d) No indemnification shall be payable for a reduction in the
Company's net operating losses ("NOLs"). A reduction in the Company's NOLs shall
not give rise to a claim for indemnification.
(e) No Stockholder shall be obligated to indemnify any HBIO Indemnified
Party for more than such Stockholder's pro rata share (based on the amount of
merger consideration delivered to such Stockholder pursuant to Section 1 hereof
relative to the aggregate merger consideration delivered to all of the
Stockholders pursuant to Section 1 hereof) of any claim asserted pursuant to
Section 12.1(b), 12.1(c), 12.1(d) or 12.1(e) hereof.
12.3 INDEMNIFICATION BY HBIO. HBIO agrees to indemnify and hold the Company
Parties harmless from and against any damages, liabilities, losses (including,
without limitation, diminution in value), taxes, fines, penalties, costs, and
expenses (including, without limitation, reasonable fees of counsel)of any kind
or nature whatsoever (whether or not arising out of third-party claims and
including all amounts paid in investigation, defense or settlement of the
foregoing) which may be sustained or suffered by the Company Parties arising out
of or based upon any breach of any representation, warranty or covenant made by
HBIO in this Agreement or in any agreement, document or instrument contemplated
hereby, or in any certificate, schedule or exhibit delivered pursuant hereto or
thereto, or by reason of any claim, action or proceeding asserted or instituted
growing out of any matter or thing constituting such a breach.
46
12.4 LIMITATION ON INDEMNIFICATION BY HBIO. Notwithstanding the foregoing,
the rights of the Company Parties to indemnification under Section 12.3 shall be
subject to the following provisions:
(a) No indemnification pursuant to Section 12.3 shall be payable to the
Company Parties, unless the total of all claims for indemnification pursuant to
Section 12.3 shall exceed $100,000 in the aggregate, whereupon the full amount
of such claims shall be recoverable in accordance with the terms hereof;
(b) No indemnification pursuant to Section 12.3 shall be payable to the
Company Parties to the extent the cumulative amount of all losses for which the
Company Parties have been indemnified pursuant to this Section 12: (i) on or
prior to the first anniversary of the date of the Closing, exceeds $5,250,000;
or (ii) following the first anniversary of the date of the Closing, exceeds (A)
$1,750,000 PLUS (B) the amount of any claim with respect to which notice was
given in the manner contemplated by Section 12.5 hereof prior to the first
anniversary of the date of the Closing (such amount in this clause (B) not to
exceed $3,500,000);
(c) No indemnification shall be payable to the Company Parties with
respect to claims asserted pursuant to Section 12.3 above after the
Indemnification Cut-Off Date; PROVIDED, HOWEVER, that such expiration shall not
affect any claim with respect to which notice was given in the manner
contemplated by Section 12.5 hereof prior to the Indemnification Cut-Off Date.
12.5 NOTICE; DEFENSE OF CLAIMS. An indemnified party may make claims for
indemnification hereunder by giving written notice thereof to the indemnifying
party within the period in which indemnification claims can be made hereunder,
provided that if the party seeking indemnification is a HBIO Indemnified Party
it shall, at its option, either (a) provide notice of such claim to all Company
Parties contemporaneously or (b) provide notice of such claim to the Company
Party or Company Parties from whom it elects to seek indemnification,
acknowledge that it has not provided notice to all Company Parties and
acknowledge that the Company Party or Company Parties receiving such notice may
elect to provide notice to all Company Parties. If indemnification is sought for
a claim or liability asserted by a third party, the indemnified party shall also
give written notice thereof to the indemnifying party promptly after it receives
notice of the claim or liability being asserted, but the failure to do so shall
not relieve the indemnifying party from any liability except to the extent that
it is prejudiced by the failure or delay in giving such notice. Such notice
shall summarize the bases for the claim for indemnification and any claim or
liability being asserted by a third party. Within twenty (20) days after
receiving such notice the indemnifying party shall give written notice to the
indemnified party stating whether it disputes the claim for indemnification and
whether it will defend against any third party claim or liability at its own
cost and expense. If the indemnifying party fails to give notice that it
disputes an indemnification claim within twenty (20) days after receipt of
notice thereof, it shall be deemed to have accepted and agreed to the claim,
which shall become immediately due and payable. The indemnifying party shall be
entitled to direct the defense against a third party claim or liability with
counsel selected by it (subject to the consent of the indemnified party, which
consent shall not be unreasonably withheld) as long as the indemnifying party is
conducting a
47
good faith and diligent defense. The indemnified party shall at all times have
the right to fully participate in the defense of a third party claim or
liability at its own expense directly or through counsel; provided, however,
that if the named parties to the action or proceeding include both the
indemnifying party and the indemnified party and the indemnified party is
advised in writing by its counsel that representation of both parties by the
same counsel would be inappropriate under applicable standards of professional
conduct, the indemnified party may engage separate counsel at the expense of the
indemnifying party. The indemnifying party may not compromise or settle such
claim or liability unless the compromise or settlement includes a release of all
liability against the indemnified party. If no such notice of intent to dispute
and defend a third party claim or liability is given by the indemnifying party,
or if such good faith and diligent defense is not being or ceases to be
conducted by the indemnifying party, the indemnified party shall have the right,
at the expense of the indemnifying party, to undertake the defense of such claim
or liability (with counsel selected by the indemnified party), and to compromise
or settle it, exercising reasonable business judgment. If the third party claim
or liability is one that by its nature cannot be defended solely by the
indemnifying party, then the indemnified party shall make available such
information and assistance as the indemnifying party may reasonably request and
shall cooperate with the indemnifying party in such defense, at the expense of
the indemnifying party.
12.6 ESCROW SHARES. At the Effective Time or as soon thereafter as
practicable, the Escrow Shares shall be deposited in escrow with the Escrow
Agent by HBIO as provided in Section 1.4 hereof as a mechanism to satisfy
potential claims for indemnification by HBIO under Section 12.1 of this Section
12. Subject to the limitations set forth in Section 12.2 above, any claims for
indemnification against the Stockholders pursuant to Sections 12.1(b), 12.1(c),
12.1(d) and 12.1(e) hereof shall be satisfied first out of the Escrow Shares and
then, to the extent such claim exceeds the Escrow Shares then available, by the
Stockholders personally.
SECTION 13. DEFINITIONS.
13.1 DEFINITIONS. For purposes of this Agreement and the Exhibits and
Schedules hereto, the following terms shall have the respective meanings set
forth in this Section 13.1:
"AGREEMENT" shall have the meaning specified in the preamble hereof.
"ARTICLES OF ORGANIZATION" shall have the meaning specified in Section 3.2
hereof.
"AUDITED FINANCIAL INFORMATION" shall have the meaning specified in Section
5.14 hereof.
"BASE BALANCE SHEET" shall have the meaning specified in Section 3.7(a)(i)
hereof.
"CAPITAL CHANGE" shall have the meaning specified in Section 1.1(g)(v)
hereof.
"CASH MERGER VALUE" shall have the meaning specified in Section 1.1(g)(vii)
hereof.
"CASH PER SHARE CONVERSION AMOUNT" shall have the meaning specified in
Section 1.1(g)(vii) hereof.
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"CLAIM" shall mean any restriction, lien, claim, charge, security interest,
assignment, mortgage, deposit arrangement, pledge or encumbrance of any kind or
nature whatsoever.
"CLOSING" shall have the meaning specified in Section 2.1 hereof.
"CLOSING DATE" shall have the meaning specified in Section 2.1 hereof.
"CODE" shall mean the Internal Revenue Code of 1986, as the same may be
amended from time to time, and any successor to such code. For purposes of this
Agreement, all references to Sections of the Code shall include any predecessor
provisions to such Sections and any similar provisions of federal, state, local
or foreign law.
"COMMON STOCK PER SHARE MERGER CONSIDERATION" shall have the meaning
specified in Section 1.1(g)(vii) hereof.
"COMPANY" shall mean Union Biometrica, Inc., a Massachusetts corporation.
"COMPANY CERTIFICATES" shall have the meaning specified in Section 1.2(a)
hereof.
"COMPANY COMMON STOCK" shall have the meaning specified in the preamble
hereof.
"COMPANY PARTIES" shall have the meaning specified in the preamble hereof.
"COMPANY PARTY" shall have the meaning specified in the preamble hereof.
"COMPANY PREFERRED STOCK" shall have the meaning specified in the preamble
hereof.
"COMPANY SHARES" shall have the meaning specified in Section 4.1 hereof.
"CONSTITUENT CORPORATION" shall have the meaning specified in Section 1.1(a)
hereof.
"DELAWARE LAW" shall mean the Delaware General Corporation Law 8 Del.
C.Section 101 et seq., as the same may be amended from time to time, and any
successor to such act.
"DISSENTING SHARES" shall have the meaning specified in Section 1.1(g)(iv)
hereof.
"EFFECTIVE TIME" shall have the meaning specified in Section 1.1(c) hereof.
"EMPLOYEE PROGRAM" shall have the meaning specified in Section 3.22(g)(i)
hereof.
"EMPLOYMENT/NON-COMPETITION AGREEMENT" shall have the meaning specified in
Section 8.5 hereof.
"EMPLOYMENT ARRANGEMENT" shall have the meaning specified in Section 3.23(b)
hereof.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
the same may be amended from time to time, and any successor to such act.
49
"ERISA AFFILIATE" shall have the meaning specified in Section 3.22(g)(iii)
hereof.
"ESCROW AGENT" shall have the meaning specified in Section 1.4 hereof.
"ESCROW AGREEMENT" shall have the meaning specified in Section 1.4 hereof.
"ESCROW SHARES" shall have the meaning specified in Section 1.4 hereof.
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as the same
may be amended from time to time, and any successor to such act.
"EXHIBITS" shall mean the exhibits attached to and made a part of this
Agreement.
"GAAP" shall mean United States generally accepted accounting principles as
in effect from time to time.
"HBIO" shall mean Harvard Bioscience, Inc., a Delaware corporation, or any
of its permitted assigns hereunder.
"HBIO AVERAGE PRICE PER SHARE" shall have the meaning specified in Section
1.1(g)(vii) hereof.
"HBIO CERTIFICATES" shall have the meaning specified in Section 1.2(a)
hereof.
"HBIO COMMON SHARES" shall have the meaning specified in Section 1.2(a)
hereof.
"HBIO COMMON STOCK" shall mean HBIO's common stock, par value $.01 per
share.
"HBIO INDEMNIFIED PARTY" shall have the meaning specified in Section 12.1
hereof.
"HBIO MERGER STOCK" shall have the meaning specified in Section 1.1(g)(vii)
hereof.
"HBIO OPTION" shall have the meaning specified in Section 1.1(g)(iii)
hereof.
"HSR ACT" means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as
amended, and the rules and regulations promulgated thereunder.
"INDEMNIFICATION CUT-OFF DATE" shall have the meaning specified in Section
12.2(c) hereof.
"INTELLECTUAL PROPERTY ASSETS" shall have the meaning set forth in Section
3.13(p) hereof.
"IRS" shall mean the Internal Revenue Service.
"LEASED REAL PROPERTY" shall have the meaning specified in Section 3.6(a)
hereof.
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"MASSACHUSETTS LAW" shall mean the Massachusetts Business Corporation Law
MGL Ch.Section 156B, as the same may be amended from time to time, and any
successor to such act.
"MATERIAL ADVERSE EFFECT" shall mean, with respect to a Person, a material
adverse effect on the condition (financial or otherwise), properties, assets,
liabilities, business, operations or prospects of such Person.
"MERGER" shall have the meaning specified in the preamble hereof.
"MERGER CONSIDERATION" shall have the meaning specified in Section 1.2(a)
hereof.
"MULTIEMPLOYER PLAN" shall have the meaning specified in Section 3.23(g)(iv)
hereof.
"NEWCO" shall have the meaning specified in the preamble hereof.
"OPTION" shall have the meaning specified in Section 1.1(g)(ii) hereof.
"OWNED REAL PROPERTY" shall have the meaning specified in Section 3.6(a)
hereof.
"PERSON" means any individual, partnership (general or limited),
corporation, limited liability company, limited liability partnership,
association, trust, joint venture, unincorporated organization, and any
government, governmental department or agency or political subdivision thereof.
"PREFERRED STOCK DIVIDENDS" shall have the meaning specified in Section
1.1(g)(vii) hereof.
"PREFERRED STOCK LIQUIDATION PREFERENCE" shall have the meaning specified in
Section 1.1(g)(vii) hereof.
"PREFERRED STOCK PER SHARE LIQUIDATION PREFERENCE" shall have the meaning
specified in Section 1.1(g)(vii) hereof.
"PREFERRED STOCK PER SHARE MERGER CONSIDERATION" shall have the meaning
specified in Section 1.1(g)(vii) hereof.
"REAL PROPERTY" shall have the meaning specified in Section 3.6(a) hereof.
"REPRESENTATIVES" shall have the meaning specified in Section 1.5 hereof.
"SCHEDULES" shall mean the schedules attached to and made a part of this
Agreement.
"SEC" shall mean the Securities and Exchange Commission, or any successor
agency thereto.
"SEC REPORTS" shall have the meaning specified in Section 6.6 hereof.
51
"SECURITIES ACT" shall mean the Securities Act of 1933 and any successor to
such act.
"STOCK CONVERSION NUMBER" shall have the meaning specified in Section
1.1(g)(vii) hereof.
"STOCKHOLDER" shall have the meaning specified in the preamble hereof.
"STOCKHOLDERS" shall have the meaning specified in the preamble hereof.
"SUBSIDIARY" shall have the meaning specified in Section 3.4 hereof.
"SURVIVING CORPORATION" shall have the meaning specified in Section 1.1(a)
hereof.
"TAXES" shall have the meaning specified in Section 3.8(b) hereof.
"TAX RETURNS" shall have the meaning specified in Section 3.8(a) hereof.
SECTION 14. MISCELLANEOUS.
14.1 FEES AND EXPENSES. HBIO shall pay its own expenses (including, without
limitation, any legal fees and expenses and investment banking fees) incident to
the negotiation and consummation of the transactions contemplated by this
Agreement and the agreements, instruments and documents contemplated hereby. The
Stockholders shall pay the Company's and the Stockholders' expenses (including,
without limitation, any legal fees and expenses and investment banking fees)
incident to the negotiation and consummation of the transactions contemplated by
this Agreement and the agreements, instruments and documents contemplated
hereby; PROVIDED, HOWEVER, that the Company shall be permitted to pay or accrue
legal fees and expenses not in excess of $150,000 and investment banking fees to
Gateway Financial Group, Inc. not in excess of $200,000.
14.2 DISPUTE RESOLUTION. Except with respect to matters as to which
injunctive relief or specific performance is being sought, any dispute arising
out of or relating to this Agreement that has not been settled within thirty
(30) days by good faith negotiation between the parties to this Agreement shall
be submitted to JAMS/Endispute for final and binding arbitration pursuant to
JAMS/Endispute's Arbitration Rules. Any such arbitration shall be conducted in
Boston, Massachusetts. Such proceedings shall be guided by the following agreed
upon procedures:
(a) mandatory exchange of all relevant documents, to be accomplished
within forty-five (45) days of the initiation of the procedure;
(b) no other discovery;
(c) hearings before the neutral advisor which shall consist of a
summary presentation by each side of not more than three hours; such hearings to
take place on one or two days at a maximum; and
52
(d) decision to be rendered not more than ten (10) days following such
hearings.
14.3 WAIVERS. Any waiver of any terms or conditions or of the breach of any
covenant, representation or warranty of this Agreement in any one instance,
shall not operate as or be deemed to be or construed as a further or continuing
waiver of any other breach of such term, condition, covenant, representation or
warranty or any other term, condition, covenant, representation or warranty, nor
shall any failure or delay at any time or times to enforce or require
performance of any provision hereof operate as a waiver of or affect in any
manner such party's right at a later time to enforce or require performance of
such provision or of any provision hereof; provided, however, that no such
waiver, unless it, by its own terms, explicitly provides to the contrary, shall
be construed to effect a continuing waiver of the provision being waived and no
such waiver in any instance shall constitute a waiver in any other instance or
for any other purpose or impair the right of the party against whom such waiver
is claimed in all other instances or for all other purposes to require full
compliance.
14.4 GOVERNING LAW. This Agreement shall be construed under and governed by
the internal laws of The Commonwealth of Massachusetts without regard to its
conflict of laws provisions.
14.5 NOTICES. Any notice, request, demand or other communication required or
permitted hereunder shall be in writing and shall be deemed to have been given
if delivered or sent by facsimile transmission, upon receipt, if sent by a
recognized overnight delivery service, upon the next business day, or if sent by
registered or certified mail, upon the sooner of the date on which receipt is
acknowledged or the expiration of three days after deposit in United States post
office facilities properly addressed with postage prepaid. All notices to a
party will be sent to the addresses set forth below or to such other address or
person as such party may designate by notice to each other party hereunder:
TO HBIO OR NEWCO: Harvard Bioscience, Inc.
00 Xxxxxxx Xxxx Xxxx
Xxxxxxxxx, XX 00000
Attn: Mr. Xxxxx Xxxxx
Facsimile No.: (000) 000-0000
with a copy to: Xxxxxxx Procter LLP
Exchange Place
Boston, MA 02109-2881
Attn: H. Xxxxx Xxxxxx, P.C.
Facsimile No.: (000) 000-0000
TO THE COMPANY PARTIES: c/o Union Biometrica, Inc.
00 Xxxx Xxxxxx
Xxxxxxxxxx, XX 00000
53
Attn: Xx. Xxxxx Xxxxxxxxx
Facsimile No.: (000) 000-0000
with a copy to: Xxxxxxx, Xxxxx & Xxxxx, LLP
Xxx Xxxxxx Xxxxxx
Xxxxxx, XX 00000-0000
Attn: Xxxxxxx X. Xxxxx, Esq.
Facsimile No.: (000) 000-0000
Any notice given hereunder may be given on behalf of any party by his counsel or
other authorized representatives.
14.6 ENTIRE AGREEMENT. This Agreement, including the Schedules and Exhibits
referred to herein and the other writings specifically identified herein or
contemplated hereby, is complete, reflects the entire agreement of the parties
with respect to its subject matter, and supersedes all previous written or oral
negotiations, commitments and writings. No promises, representations,
understandings, warranties and agreements have been made by any of the parties
hereto except as referred to herein or in such Schedules and Exhibits or in such
other writings; and all inducements to the making of this Agreement and the
transactions contemplated hereby which were relied upon by either party hereto
have been expressed herein or in such Schedules or Exhibits or in such other
writings.
14.7 ASSIGNABILITY; BINDING EFFECT. This Agreement or any of the obligations
or rights hereunder (i) may not be assigned by HBIO or Newco without the prior
written consent of the Company, and (ii) may not be assigned by any of the
Company Parties without the prior written consent of HBIO. This Agreement shall
be binding upon and enforceable by, and shall inure to the benefit of, the
parties hereto and their respective successors, heirs, executors, administrators
and permitted assigns.
14.8 CAPTIONS AND GENDER. The captions in this Agreement are for convenience
only and shall not affect the construction or interpretation of any term or
provision hereof. The use in this Agreement of the masculine pronoun in
reference to a party hereto shall be deemed to include the feminine or neuter,
as the context may require.
14.9 EXECUTION IN COUNTERPARTS. For the convenience of the parties and to
facilitate execution, this Agreement may be executed (a) in two or more
counterparts, each of which shall be deemed an original, but all of which shall
constitute one and the same document, and (b) by facsimile.
14.10 AMENDMENTS. This Agreement may not be amended or modified, nor may
compliance with any condition or covenant set forth herein be waived, except by
a writing duly and validly executed by HBIO, the Company and the
Representatives, or in the case of a waiver, the party waiving compliance.
54
14.11 PUBLICITY AND DISCLOSURES. No press releases or public disclosure,
either written or oral, of the transactions contemplated by this Agreement,
shall be made by a party to this Agreement without the prior knowledge and
written consent of HBIO and the Company, which consent shall not be unreasonably
withheld, except as is otherwise required by applicable laws, rules and
regulations (including, without limitation, the HSR Act, the Securities Act, the
Exchange Act and the rules and regulations promulgated thereunder based on the
advice of counsel).
14.12 CONSENT TO JURISDICTION. Each of the parties hereby consents to
personal jurisdiction, service of process and venue in the federal or state
courts of the Commonwealth of Massachusetts for any claim, suit or proceeding
arising under this Agreement, or in the case of a third party claim subject to
indemnification hereunder, in the court where such claim is brought and hereby
irrevocably agrees that all claims in respect of such action or proceeding may
be heard and determined in such state court or, to the extent permitted by law,
in such federal court. Each of the parties hereby irrevocably consents to the
service of process in any such action or proceeding by the mailing by certified
mail of copies of any service or copies of the summons and complaint and any
other process to such party at the address specified in Section 14.5 hereof. The
parties agree that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit or in any other
manner permitted by law and shall affect the right of a party to service legal
process or to bring any action or proceeding in the courts of other
jurisdictions.
14.13 COMPANY PREFERRED STOCK ALLOCATION FOR TAX PURPOSES ONLY. If shares of
Company Preferred Stock were purchased on different dates, then, for tax
purposes only, the cash portion of the consideration payable to a holder of such
Company Preferred Stock shall be deemed to be allocated first to the earliest
lot purchased by such holder in the manner in described in Treas. Reg.
Section 1.1012-1(c)(1).
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
55
IN WITNESS WHEREOF the parties hereto have caused this Agreement to be
executed as of the date set forth above by their duly authorized
representatives.
HBIO: HARVARD BIOSCIENCE, INC., a
Delaware corporation
By: /s/ Xxxxx Xxxxx
-----------------------------------
Name: Xxxxx Xxxxx
Title: President
COMPANY: UNION BIOMETRICA, INC., a
Massachusetts corporation
By: /s/ Xxxxx Xxxxxxxxx
-----------------------------------
Name: Xxxxx Xxxxxxxxx
Title: President
NEWCO: UNION BIOMETRICA, INC., a
Delaware corporation
By: /s/ Xxxxx Xxxxx
-----------------------------------
Name: Xxxxx Xxxxx
Title: President
STOCKHOLDERS: /s/ Xxxxx Xxxxxxxxx
--------------------------------------
Xxxxx Xxxxxxxxx
/s/ Xxxxxxx Xxxxxxxx
--------------------------------------
Xxxxxxx Xxxxxxxx
/s/ Xxxxxxx Xxxxxxxx
--------------------------------------
Xxxxxxx Xxxxxxxx
/s/ Xxxxxxx Xxxxxxxxxx
--------------------------------------
Xxxxxxx Xxxxxxxxxx
/s/ Xxx Xxx Xxxxxxx
--------------------------------------
Xxx Xxx Xxxxxxx
[SIGNATURE PAGE TO AGREEMENT AND PLAN OF MERGER]
BROOK VENTURE FUND, L.P.
By: Brook Venture Partners LLC, its
General Partner
By: /s/ Xxxxxxxx X. Xxxxxx
--------------------------------
Name: Xxxxxxxx X. Xxxxxx
Title: Manager
BROOK CO-INVESTMENT UNION
LIMITED PARTNERSHIP
By: Brook Venture Partners LLC, its
General Partner
By: /s/ Xxxxxxxx X. Xxxxxx
--------------------------------
Name: Xxxxxxxx X. Xxxxxx
Title: Manager
FEDERAL STREET PARTNERS
By: Brook Venture Partners LLC, its
Managing Partner
By: /s/ Xxxxxxxx X. Xxxxxx
--------------------------------
Name: Xxxxxxxx X. Xxxxxx
Title: Manager
[SIGNATURE PAGE TO AGREEMENT AND PLAN OF MERGER]
/s/ Xxxxxxxx X. Xxxxxx
--------------------------------------
Xxxxxxxx X. Xxxxxx
/s/ Xxxxxxxx X. Xxxxxx (on behalf of
Xxxxxxx Xxxx)
--------------------------------------
Xxxxxxx Xxxx
/s/ Xxxxxx Xxxxx
--------------------------------------
Xxxxxx Xxxxx
/s/ Xxxxx XxXxxx
--------------------------------------
Xxxxx XxXxxx
[SIGNATURE PAGE TO AGREEMENT AND PLAN OF MERGER]
