EXHIBIT 2.5
Execution Copy
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ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement is made and entered into as of
the 25th day of January, 1996, by and among Thermedics Detection
Inc., a corporation organized under the laws of Massachusetts
(the "Buyer"), Moisture Systems Corporation, a Massachusetts
corporation ("MSC"), Moisture Systems Limited, a limited company
organized under the laws of England ("MSC-UK"), Anacon
Corporation, a Massachusetts corporation ("Anacon"), and the
principals of MSC, MSC-UK and Anacon whose names appear on the
signature pages hereto (the "Principals"). MSC, MSC-UK and
Anacon are referred to herein individually as the Seller and
collectively as the Sellers.
The Buyer desires to purchase, and the Sellers desire to
sell substantially all of their assets, subject to the assumption
by the Buyer of certain liabilities.
NOW THEREFORE, in consideration of the premises and the
mutual covenants, agreements and provisions herein contained, the
parties hereto agree as follows:
AGREEMENT
The parties, intending to be legally bound, agree as
follows:
1. DEFINITIONS
For purposes of this Agreement, the following terms have the
meanings specified or referred to in this Section 1:
"Accounts Receivable" -- as defined in Section 3.7.
"Assets" -- as defined in Section 2.1.
"Applicable Contract"-- any Contract (a) under which any of
the Sellers has any rights, (b) under which any of the Sellers
has subject to any obligation or liability, or (c) by which any
of the Sellers or any of the assets owned or used by any of the
Sellers is bound.
"Assumed Liabilities" -- as defined in Section 2.4.
"Balance Sheet Date" -- as defined in Section 2.4.
"Best Efforts"-- the efforts that a prudent Person desirous
of achieving a result would use in similar circumstances to
ensure that such result is achieved as expeditiously as possible;
provided, however, that a Person required to use his Best
Efforts under this Agreement will not be required to take actions
that would result in a materially adverse change in the benefits
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to such Person of this Agreement and the Contemplated
Transactions.
"Breach"--a "Breach" of a representation, warranty,
covenant, obligation, or other provision of this Agreement or any
instrument delivered pursuant to this Agreement will be deemed to
have occurred if there is or has been any inaccuracy in or breach
of, or any failure to perform or comply with, such
representation, warranty, covenant, obligation, or other
provision, and the term "Breach" means any such inaccuracy,
breach, or failure.
"Buyer"-- as defined in the first paragraph of this
Agreement.
"Closing"-- as defined in Section 2.7.
"Closing Balance Sheet" -- as defined in Section 2.5.
"Closing Date" -- as defined in Section 2.7.
"Code"-- the Internal Revenue Code of 1986 or any successor
law, and regulations issued by the IRS pursuant to the Internal
Revenue Code or any successor law.
"Competitive Business" -- as defined in Section 6.17.
"Consent"-- any approval, consent, ratification, waiver, or
other authorization (including any Governmental Authorization ).
"Contemplated Transactions"-- all of the transactions
contemplated by this Agreement, including:
(a) the sale of the Assets by the Sellers to Buyer;
(b) the performance by Buyer and the Sellers of their
respective covenants and obligations under this Agreement; and
(c) Buyer's acquisition and ownership of the Assets
and exercise of control over the Assets.
"Contract"-- any agreement, contract, obligation, promise,
or undertaking (whether written or oral and whether express or
implied) that is legally binding.
"Damages"-- as defined in Section 5.2.
"Disclosure Letter"-- the disclosure letter delivered by the
Sellers to the Buyer concurrently with the execution and delivery
of this Agreement and attached hereto as Exhibit A and
incorporated into this Agreement as a part hereof.
"Draft Closing Balance Sheet" -- as defined in Section 2.5.
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"Encumbrance"-- any charge, claim, community property
interest, condition, equitable interest, lien, option, pledge,
security interest, right of first refusal, or restriction of any
kind, including any restriction on use, voting (in the case of
any security), transfer, receipt of income, or exercise of any
other attribute of ownership.
"Environment"-- soil, land, surface or subsurface strata,
surface waters (including navigable waters and ocean waters),
groundwater, drinking water supply, stream sediments, ambient air
(including indoor air), plant and animal life, and any other
environmental medium or natural resource.
"Environmental, Health and Safety Liabilities"-- any cost,
damages, expense, liability, obligation, or other responsibility
arising from or under Environmental Law, Occupational Safety and
Health Law, a contract or other obligation relating to:
(a) any environmental, health, or safety matters or
conditions (including on-site or off-site contamination,
occupational safety and health, and regulation of chemical
substances or products);
(b) fines, penalties, judgments, awards, settlements,
legal or administrative proceedings, damages, losses, claims,
demands and response, remedial, or inspection costs and expenses
arising under Environmental Law or Occupational Safety and Health
Law;
(c) financial responsibility under Environmental Law
or Occupational Safety and Health Law for cleanup costs or
corrective action, including any cleanup, removal, containment,
or other remediation or response actions ("Cleanup") required by
applicable Environmental Law or Occupational Safety and Health
Law (whether or not such Cleanup has been required or requested
by any Governmental Body or any other Person) and for any natural
resource damages; or
(d) any other compliance, corrective, or remedial
measures required under Environmental Law or Occupational Safety
and Health Law.
The terms "removal," "remedial," and "response action" include
the types of activities covered by the United States
Comprehensive Environmental Response, Compensation, and Liability
Act, 42 U.S.C. Sec. 9601 et seq., as amended ("CERCLA").
"Environmental Law"-- any Legal Requirement designed:
(a) to advise appropriate authorities, employees, and
the public of intended or actual releases of pollutants or
hazardous substances or materials, violations or discharge
limits, or other prohibitions and of the commencements of
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activities, such as resource extraction or construction, that
could have an adverse impact on the Environment;
(b) to permit or license, or to prevent or acceptably
minimize the release of pollutants or hazardous substances or
materials into the Environment;
(c) to reduce the quantities, prevent the release, and
minimize the hazardous characteristics of wastes that are
generated;
(d) to protect resources, species, or ecological
amenities;
(e) to acceptably minimize the risks inherent in
transportation of hazardous substances, pollutants, oil, or other
potentially harmful substances;
(f) to clean up pollutants that have been released,
prevent the threat of release, or pay the costs of such clean up
or prevention; or
(g) to make responsible parties pay private parties,
or groups of them, for damages done to their health or
Environment, or to permit self-appointed representatives of the
public interest to recover for injuries done to public assets.
"ERISA"-- the Employee Retirement Income Security Act of
1974 or any successor law, and regulations and rules issued
pursuant to that Act or any successor law.
"ERISA Affiliate" -- as defined in Section 3.9.
"Exchange Act" -- the Securities Exchange Act of 1934 or any
successor law, and regulations and rules issued pursuant to that
Act or any successor law.
"Excluded Assets"-- as defined in Section 2.2.
"Excluded Liabilities" --as defined in Section 2.4.
"Facilities"-- any real property, leaseholds, or other
interests currently or formerly owned or operated by any of the
Sellers (or any predecessor Person) and any buildings, plants,
structures, or equipment currently or formerly owned, leased, or
operated by any of the Sellers (or any predecessor Person).
"FERC" -- Federal Energy Regulatory Commission
"Financial Statements -- as defined in Section 3.4.
"GAAP"-- generally accepted United States accounting
principles, applied on a basis consistent with the basis on which
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the Balance Sheet and the other financial statements referred to
in Section 3.4 were prepared.
"Governmental Authorization"-- any approval, consent,
license, permit, waiver, exemption or variance, or other
authorization issued, granted, given, or otherwise made available
by or under the authority of any Governmental Body or pursuant to
any Legal Requirement.
"Governmental Body"-- any:
(a) nation, state, county, city, town, village,
district, or other jurisdiction of any nature;
(b) federal, state, local, municipal, foreign, or
other government;
(c) governmental or quasi-governmental authority of
any nature (including any governmental agency, branch,
department, official, or entity and any court or other tribunal);
(d) multi-national organization or body; or
(e) body exercising, or entitled or purporting to
exercise, any administrative, executive, judicial (including
court), legislative, police, regulatory, or taxing authority or
power of any nature.
"Hazardous Activity"-- the distribution, generation,
handling, importing, management, manufacturing, processing,
production, refinement, Release, storage, transfer,
transportation, treatment, or use (including any withdrawal or
other use of groundwater) of Hazardous Materials in, on, under,
about, or from the Facilities or any part thereof into the
Environment, and any other act, business, operation, or thing
that increases the danger, or risk of danger, or poses an
unreasonable risk of harm to persons or property on or off the
Facilities.
"Hazardous Materials"-- any substance that is listed,
deemed, designated, or classified as, or otherwise determined to
be, hazardous, radioactive, or toxic or a pollutant or a
contaminant under or pursuant to any Environmental Law, including
any admixture or solution thereof, and specifically including
petroleum and all derivatives thereof or synthetic substitutes
therefor and asbestos or asbestos containing materials.
"Indemnified Persons"-- as defined in Section 5.2.
"IRS"-- the United States Internal Revenue Service or any
successor agency, and, to the extent relevant, the United States
Department of the Treasury.
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"Knowledge"-- an individual will be deemed to have
"Knowledge" of a particular fact or other matter if:
(a) such individual is actually aware of such fact or
other matter; or
(b) a prudent individual could be expected to discover
or otherwise become aware of such fact or other matter in the
Ordinary Course of Business or in the course of a reasonable
investigation made in connection with making representations and
warranties concerning the sale of a business.
A Person (other than an individual) will be deemed to have
"Knowledge" of a particular fact or other matter if any
individual who is serving, or who has at any time served, as a
director, officer, employee, partner, executor, or trustee of
such Person (or in any similar capacity) has, or at any time had,
Knowledge of such fact or other matter; provided that, the
Sellers will be deemed to have "Knowledge" of a particular fact
or other matter only if any of Xxxxxx Xxxxxxx, Xxxxx Xxxxxxx,
Xxxx Xxxxxxx or Xxxxxxxxx Xxxxx has, or at any time had,
Knowledge of such fact or other matter.
"Lease" -- a lease of MSC-UK's premises at the Xxx Xxxxxx,
Xxxxxxx Xxxx, Xxxxxxxx, Xxxxxxxxxxx Xxxxxxx to be entered into at
the Closing by MSC-UK (as lessor) and the Buyer or the Buyer's
designee (as lessee).
"Legal Requirement"-- any federal, state, local, municipal,
foreign, international, multinational, or other constitution,
law, ordinance, order, principle of common law, regulation,
statute, or treaty.
"Material Adverse Effect" -- any loss to the Sellers or,
after the Closing, to the Buyer that, taken as a whole, is in
excess of $100,000 .
"Net Asset Benchmark" -- as defined in Section 2.5.
"Occupational Safety and Health Law"-- any Legal Requirement
designed to provide safe and healthful working conditions and to
reduce occupational safety and health hazards.
"Order"-- any award, decision, injunction, judgment, order,
ruling, subpoena, or verdict entered, issued, made, or rendered
by any court, administrative agency, or other Governmental Body
or by any arbitrator.
"Ordinary Course of Business"-- an action taken by a Person
will be deemed to have been taken in the "Ordinary Course of
Business" only if:
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(a) such action is consistent with the past practices
of such Person and is taken in the ordinary course of the normal
day-to-day operations of such Person;
(b) such action is not required to be authorized by
the board of directors of such Person (or by any Person or group
of Persons exercising similar authority), is not required to be
specifically authorized by the parent company (if any) of such
Person, and does not require any other separate or special
authorization of any nature; and
(c) such action is similar in nature and magnitude to
actions customarily taken, without any separate or special
authorization, in the ordinary course of the normal day-to-day
operations of other Persons that are in the same line of business
as such Person.
"Organizational Documents"-- (a) the articles or certificate
of incorporation and the bylaws of a corporation; (b) the
partnership agreement and any statement of partnership of a
general partnership; (c) the limited partnership agreement and
the certificate of limited partnership of a limited partnership;
(d) any charter or similar document adopted or filed in
connection with the creation, formation, or organization of a
Person; (e) the memorandum and articles of association of an
English company; and (f) any amendment to any of the foregoing.
"Person"-- any individual, corporation (including any
non-profit corporation), general or limited partnership, limited
liability company, joint venture, estate, trust, association,
organization, or other entity or Governmental Body.
"Plan"-- as defined in Section 3.9.
"Principals" -- as defined in the first paragraph of this
Agreement.
"Proceeding"-- any action, arbitration, audit, hearing,
investigation, litigation, or suit (whether civil, criminal,
administrative, investigative, or informal) commenced, brought,
conducted, or heard by or before, or otherwise involving, any
Governmental Body or arbitrator.
"Purchase Price" -- as defined in Section 2.3.
"Related Person"-- with respect to a particular individual:
(a) each other member of such individual's Family;
(b) any Person that is directly or indirectly
controlled by any one or more members of such individual's
Family;
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(c) any Person in which members of such individual's
Family hold (individually or in the aggregate) a Material
Interest; and
(d) any Person with respect to which one or more
members of such individual's Family serves as a director,
officer, partner, executor, or trustee (or in a similar
capacity).
With respect to a specified Person other than an individual:
(a) any Person that directly or indirectly controls,
is directly or indirectly controlled by, or is directly or
indirectly under common control with such specified Person;
(b) any Person that holds a Material Interest in such
specified Person;
(c) each Person that serves as a director, officer,
partner, executor, or trustee of such specified Person (or in a
similar capacity);
(d) any Person in which such specified Person holds a
Material Interest; and
(e) any Person with respect to which such specified
Person serves as a general partner or a trustee (or in a similar
capacity).
For purposes of this definition, (a) the "Family" of an
individual includes (i) the individual, (ii) the individual's
spouse and former spouses, (iii) the brother, sister or child of
the individual or the individual's spouse, and (iv) any other
natural person who resides with such individual, and (b)
"Material Interest" means direct or indirect beneficial ownership
(as defined in Rule 13d-3 under the Exchange Act) of voting
securities or other voting interests representing at least 5% of
the outstanding voting power of a Person or equity securities or
other equity interests representing at least 5% of the
outstanding equity securities or equity interests in a Person.
"Release"-- any spilling, leaking, emitting, discharging,
depositing, escaping, leaching, dumping, or other releasing into
the Environment.
"Representative"-- MSC, as representative of all of the
Sellers and the Principals.
"Restricted Employee" -- as defined in Section 6.16.
"Securities Act"-- the Securities Act of 1933 or any
successor law, and regulations and rules issued pursuant to that
Act or any successor law.
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"Seller" and "Sellers"-- as defined in the first paragraph
of this Agreement.
"Subsidiary"-- with respect to any Person (the "Owner"), any
corporation or other Person of which securities or other
interests having the power to elect a majority of that
corporation's or other Person's board of directors or similar
governing body, or otherwise having the power to direct the
business and policies of that corporation or other Person (other
than securities or other interests having such power only upon
the happening of a contingency that has not occurred) are held by
the Owner or one or more of its Subsidiaries.
"Tax"-- any tax (including without limitation any income,
capital gains, gross receipts, license, payroll, employment,
excise severance, stamp, occupation, premium, windfall profits,
environmental (including without limitation taxes under Code
Section 59A), customs duties, capital stock, franchise, profits,
withholding, social security (or similar), unemployment,
disability, real property, personal property, sales, use,
transfer, registration, value added, alternative or add-on
minimum, estimated, or other tax or other fiscal charges of any
kind whatsoever, including any fine, interest, penalty, or
addition thereto, whether disputed or not), imposed, assessed, or
collected by or under the authority of any Governmental Body or
payable pursuant to any tax-sharing agreement or any other
Contract relating to the sharing or payment of any such tax.
"Tax Return"-- any return, declaration, report, claim for
refund, or information return or statement relating to Taxes,
including without limitation any schedule or attachment thereto,
and any amendment thereof.
"Threat of Release"-- a substantial likelihood of a Release
that may require action in order to prevent or mitigate damage to
the Environment that may result from such Release.
"Threatened"--a claim, Proceeding, dispute, action, or other
matter will be deemed to have been "Threatened" if any demand or
statement has been made (orally or in writing) or any notice has
been given (orally or in writing), or if any other event has
occurred or any other circumstances exists, that would lead a
prudent Person to conclude that such a claim, Proceeding, action
or other matter is likely to be asserted, commenced, taken, or
otherwise pursued in the future.
"UK Employees" -- all employees of MSC-UK, as listed in
Exhibit G attached hereto.
2. SALE AND TRANSFER OF ASSETS; CLOSING
2.1 Sale of Assets. Subject to Section 2.2, at the
Closing, the Buyer shall purchase, acquire and accept, and the
Sellers shall assign, transfer, convey and deliver all of the
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Sellers' right, title and interest in and to, the assets,
properties and rights (contractual or otherwise) of every kind,
nature and description owned by the Sellers (collectively, the
"Assets"). The Assets shall include, without limitation, the
following:
(a) Inventories. All inventories of raw materials,
work in process, finished products and resale merchandise, scrap
inventory, and expendable manufacturing supplies.
(b) Machinery and Equipment. All machinery and
equipment used in the research and development, manufacture,
production, assembly, test, handling, distribution, demonstration
and sale of products, together with the spare-parts inventories
and all manufacturing or production tools and maintenance
supplies pertaining thereto.
(c) Intellectual Property Rights and Trademarks. All
patents, trademarks, service marks, copyrights, trade names and
applications therefor.
(d) Technical Information and Intangibles. All
inventions, discoveries (whether patentable or unpatentable),
processes, designs, know-how, trade secrets, proprietary data,
software programs and intellectual property of all kinds,
including drawings, plans, specifications, processes, patents,
dies, designs, blue prints, records, data, product development
records, production outlines, diskettes, source code, object
code, flow charts, information, media or knowledge and
procedures, and customer and supplier lists.
(e) Contracts. All real and personal property leases,
licenses, sales, secrecy, confidentiality, distribution, supply
and other Contracts, purchase contracts, sales orders, prepaid
items, warranties and all causes of action and claims related
thereto.
(f) Motor Vehicles. All cars, trucks and other motor
vehicles, automotive equipment and other rolling stock.
(g) Books and Records. All books, records and
accounts, correspondence, production records, technical,
accounting, manufacturing and procedural manuals, and customer
lists; employment records, studies, reports or summaries relating
to any environmental conditions or consequences of any operation,
as well as all studies, reports or summaries relating directly to
the general condition of the Sellers; and any confidential
information which has been reduced to writing relating to or
arising out of the business of the Sellers.
(h) Permits and Approvals. To the extent
transferable, all Governmental Authorizations.
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(i) Claims. All claims, prepayments, refunds, causes
of action, choses in action, rights of recovery, rights of
setoff, rights of recoupment, rights under warranties and other
similar assets.
(j) Furniture and Fixtures. All office furniture,
office equipment and supplies and computer hardware.
(k) Accounts Receivable. All trade and other accounts
and notes receivable and any rights of recovery or setoff of
every type and character.
(l) Miscellaneous Supplies. All catalogs, brochures,
product literature, product-related application notes, manuals,
technical papers, other printed materials, shipping and packaging
materials and labels, cartons and shipping containers, palettes,
shipping equipment, graphics, artwork, photographic film, slides,
negatives, color separations, printer's and photographer's plates
and so-called "camera-ready materials" and sales and advertising
materials.
(m) Cash and Securities. All cash, bank accounts,
money market accounts, certificates of deposit, treasury bills,
bonds, notes, securities and similar assets.
(n) Stock in Subsidiaries. All of the Sellers' stock
in any Subsidiaries.
2.2 Excluded Assets. Notwithstanding anything to the
contrary herein, the Assets shall not include the following
assets of the Sellers (the "Excluded Assets"):
(a) The buildings and real property located at Xxx Xxx
Xxxxxx, Xxxxxxx Xxxx, Xxxxxxxx, Xxxxxxxxxxx, Xxxxxxx owned by
MSC-UK.
(b) The assets described on Exhibit B attached hereto.
2.3 Purchase Price for the Assets. Subject to Section 2.5,
the aggregate purchase price for the Assets shall be $13,500,000
(the "Purchase Price") payable as follows: (a) $12,225,000 to
MSC, (b) $475,000 to MSC-UK and (c) $800,000 to Anacon.
2.4 Assumption of Liabilities. At the Closing, the Buyer
shall assume only the following liabilities of the Sellers (the
"Assumed Liabilities"): (i) liabilities reflected on the
September Balance Sheets, except for any such liabilities
discharged since the date of the September Balance Sheets (the
"Balance Sheet Date") and except for liabilities excluded from
the Draft Closing Balance Sheet pursuant to Section 2.5(a), (ii)
liabilities incurred by the Sellers in the Ordinary Course of
Business since the Balance Sheet Date, (iii) liabilities under
bona fide warranty obligations of the Sellers outstanding as of
the Closing Date, and (iv) liabilities and obligations under any
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Contract assigned to the Buyer pursuant hereto, except for any
such liabilities or obligations resulting from the actual or
alleged breach by any of the Sellers of any such Contracts. In
furtherance of, but without limiting, the foregoing, except to
the extent reflected on the September Balance Sheets, the Assumed
Liabilities will not include any liabilities or obligations of
the Sellers (a) for any Environmental Health and Safety
Liabilities resulting from the ownership, operation or condition
of the Facilities, or for any liabilities or obligations
resulting from any Hazardous Activity conducted on or prior to
the Closing Date, (b) for any Taxes resulting from the conduct of
the business of the Sellers prior to the Closing Date, (c) to any
retired or other former employees of any of the Sellers for
salaries or benefits accrued prior to the Closing Date, (d) under
any agreements with any employees providing for severance
payments in the event such employees are terminated by Buyer
after the Closing, (e) under any employee benefit plan maintained
by any of the Sellers, including, without limitation, the defined
benefit plan maintained by MSC-UK or (f) payables relating to the
dust monitor business. The Sellers and the Buyer anticipate that
the United Kingdom Transfer of Undertakings (Protection of
Employment) Regulations 1981 (the "Transfer Regulations") will
apply to the sale and purchase under this Agreement in respect of
the UK Employees. The Sellers and the Buyer acknowledge and
agree that under the Transfer Regulations the contracts of
employment between MSC-UK and the UK Employees will have effect
after the Closing Date as if originally made between Buyer and
the UK Employees. This shall not, however, diminish the Sellers'
obligations pursuant to Section 5.2 to indemnify the Buyer
against the liabilities specified in clauses (c), (d) and (e) of
the preceding sentence or any other liabilities not specifically
assumed by the Buyer under this Section 2.4, in relation to the
UK Employees or any other past or present employees of MSC-UK or
any predecessor of MSC-UK. Notwithstanding the foregoing, the
Buyer acknowledges and agrees that it will be responsible for any
severance payments imposed by statute incurred when any UK
Employee is terminated by Buyer after the Closing. Any
liabilities or obligations of the Sellers that are not Assumed
Liabilities are referred to herein as "Excluded Liabilities."
2.5 Post-Closing Adjustments. The Purchase Price set forth
in Section 2.2 shall be subject to adjustment after the Closing
Date as follows:
(a) Within 60 days after the Closing Date, the Buyer
shall prepare and deliver to the Representative balance sheets
reflecting the net tangible assets of each Seller (each, a "Draft
Closing Balance Sheet"). The Buyer shall prepare the Draft
Closing Balance Sheets in accordance with GAAP. For purposes of
this Agreement, "net tangible assets" shall mean tangible Assets
minus Assumed Liabilities. Notwithstanding anything to the
contrary herein, the Draft Closing Balance Sheets shall not
include any liabilities for vacation time for employees of the
Sellers accrued between June 1, 1995 and the Closing Date or any
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of the following liabilities: (i) as described in the September
Balance Sheet of MSC, (A) notes payable-officers, (B) accrued
royalties payable, (C) accrued salaries-officers and (D) accrued
dividends, (ii) as described in the September Balance Sheet of
Anacon, (A) notes payable-officers, (B) accrued rent-related, (C)
accrued expenses-related and (D) accrued dividends, and (iii) any
payables from MSC-UK to Moisture Systems Consolidated Corporation
In addition, the Draft Closing Balance Sheets shall not include
any of the following assets as described on the September Balance
Sheet of MSC: (i) notes receivable, (ii) interest receivable and
(iii) rents receivable. It is agreed that the valuation for all
inventory on the Draft Closing Balance Sheet for Anacon shall be
no greater than $150,000.
(b) The Representative shall deliver to the Buyer
within 60 days after receiving the Draft Closing Balance Sheets a
detailed statement describing its objections (if any) thereto.
Failure of the Representative so to object to any Draft Closing
Balance Sheet shall constitute acceptance thereof, whereupon such
Draft Closing Balance Sheet shall be deemed to be a "Closing
Balance Sheet". The Buyer and the Representative shall use
reasonable efforts to resolve any such objections, but if they do
not reach a final resolution within 30 days after the Buyer has
received the statement of objections, the Buyer and
Representative shall select an internationally recognized
accounting firm mutually acceptable to them (the "Neutral
Auditors") to resolve any remaining objections. If the Buyer and
Representative are unable to agree on the choice of Neutral
Auditors, they shall select as Neutral Auditors an
internationally recognized accounting firm by lot (after
excluding their respective regular independent accounting firms).
The Neutral Auditors shall determine whether the objections
raised by the Representative are valid. Each Draft Closing
Balance Sheet that is the subject of objections by the
Representative shall be adjusted in accordance with the Neutral
Auditor's determination and, as so adjusted, shall be a Closing
Balance Sheet. Such determination by the Neutral Auditors shall
be conclusive and binding upon the Buyer and Representative. The
Buyer, on one hand, and the Sellers, on the other, shall share
equally the fees and expenses of the Neutral Auditors.
(c) If the net tangible assets as shown on the Closing
Balance Sheet applicable to any Seller is less than the Net Asset
Benchmark for such Seller, such Seller shall pay to the Buyer, by
wire transfer in immediately available funds, within ten business
days after the date on which the Closing Balance Sheet is finally
determined pursuant to this Section 2.5, an amount equal to such
deficiency (plus interest thereon from the Closing Date at the
interest rate equal to the base rate of the Bank of Boston as
announced from time to time).
(d) If the net tangible assets as shown on the Closing
Balance Sheet applicable to any Seller is more than the Net Asset
Benchmark for such Seller, the Buyer shall pay to such Seller, by
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wire transfer in immediately available funds, within ten business
days after the date on which the Closing Balance Sheet is finally
determined pursuant to this Section 2.5, an amount equal to such
excess (plus interest thereon from the Closing Date at the
interest rate equal to the base rate of Bank of Boston as
announced from time to time).
(e) As used in this Section 2.5, "Net Asset Benchmark"
means (i) with respect to MSC, $2,415,000, (ii) with respect to
MSC-UK, $313,500 and (iii) with respect to Anacon, $250,000.
2.6 Allocation of Purchase Price. The final allocation of
the Purchase Price among the Assets shall reflect the book value
of the Assets as shown on the Closing Balance Sheets. The Buyer
and the Sellers each shall report the federal, state, provincial,
foreign and local income and other tax consequences of the
transaction contemplated hereby in a manner consistent with such
allocation.
2.7 The Closing. The closing of the transactions
contemplated by this Agreement (the "Closing") shall occur at the
offices of Thermo Electron Corporation, 00 Xxxxx Xxxxxx, Xxxxxxx,
Xxxxxxxxxxxxx, at 10:00 a.m. on the date set forth in the first
paragraph of this Agreement (the "Closing Date").
2.8 Deliveries by the Sellers to the Buyer. At the
Closing, the Sellers shall deliver, or cause to be delivered, to
the Buyer, or any Subsidiary of the Buyer designated by the Buyer
for this purpose:
(a) such executed assignments, patent assignments,
trademark assignments, bills of sale, certificates of title, or
other documents, each dated the Closing Date, as shall be
necessary, in the reasonable opinion of Buyer and its counsel to
transfer to the Buyer all of the Sellers' right, title and
interest in and to the Assets; and
(b) an opinion of Xxxxxxx, Xxxx & Xxxxx, counsel to
the Sellers, in the form attached hereto as Exhibit C;
(c) consents to the assignment of the Contracts listed
on Exhibit D; and
(d) the Lease.
2.9 Deliveries by the Buyer to the Sellers. At the
Closing, the Buyer shall deliver to the Sellers:
(a) the Purchase Price less the retention described in
Section 2.10 by wire transfer to the account(s) designated by the
Sellers; and
(b) an executed assumption agreement and such other
documents, each dated as of the Closing Date, as shall be
14PAGE
necessary, in the reasonable opinion of the Sellers and their
counsel, for the assumption by the Buyer of all of the Assumed
Liabilities.
(c) an opinion of Xxxx X. Xxxxxxxxx, general counsel
of the Buyer, in the form attached hereto as Exhibit E.
2.10 Escrow. For the purpose of providing security for the
obligations of the Sellers and the Principals under section 5.2,
$1,350,000 (the "Escrow Amount") shall be withheld from the
Purchase Price delivered at Closing and shall be placed in an
escrow account with an escrow agent (the "Agent") satisfactory
to the parties. On the first anniversary of the Closing Date,
the Representative may withdraw for distribution to the Sellers,
as their interests appear, 50% of the Escrow Amount, together
with interest earned on such portion, less the amount of any
unsatisfied claims for indemnification made by the Buyer prior to
such first anniversary. On the second anniversary of the
Closing, the Representative may withdraw the remainder of the
Escrow Amount, together with any interest thereon, for
distribution to the Sellers, as their interests appear, less the
amount of any unsatisfied claims for indemnification made by the
Buyer on or prior to such second anniversary. Any portion of the
Escrow Amount that cannot be withdrawn from the escrow account
due to pending claims by the Buyer for indemnification, shall
remain in the escrow account until the resolution of such claims
by judgment of a court from which no appeal can be made, decision
of an arbitrator or agreement of the Buyer and the
Representative.
3. REPRESENTATIONS AND WARRANTIES OF THE SELLERS
The Sellers represent and warrant to Buyer as follows:
3.1 Organization and Good Standing.
(a) Each of the Sellers is a corporation duly
organized, validly existing, and in good standing under the laws
of the state or other jurisdiction of its incorporation or
organization, with full corporate power and authority to conduct
its business as it is now being conducted, to own or use the
properties and assets that it purports to own or use, and to
perform all its obligations under Applicable Contracts. Each of
the Sellers is duly qualified to do business as a foreign
corporation and is in good standing under the laws of each state
or other jurisdiction in which either the ownership or use of the
properties owned or used by it, or the nature of the activities
conducted by it, requires such qualification, except where the
failure to so qualify, individually or in the aggregate, would
not have a Material Adverse Effect.
(b) Each of the Sellers has delivered to Buyer copies
of its Organizational Documents, as currently in effect.
15PAGE
3.2 Authority; No Conflict.
(a) This Agreement constitutes the legal, valid, and
binding obligations of the Sellers, enforceable against them in
accordance with its terms.
(b) Except as set forth in Part 3.2 of the Disclosure
Letter, neither the execution and delivery of this Agreement nor
the consummation or performance of any of the Contemplated
Transactions will, directly or indirectly (with or without notice
or lapse of time): (i) contravene, conflict with, or result in a
violation of (A) any provision of the Organizational Documents of
any of the Sellers, or (B) any resolution adopted by the board of
directors or the stockholders of any of the Sellers; (ii)
contravene, conflict with, or result in a violation of, or give
any Governmental Body or other Person the right to challenge any
of the Contemplated Transactions or to exercise any remedy or
obtain any relief under, any Legal Requirement or any Order to
which any of the Sellers, or any of the assets owned or used by
any of the Sellers, may be subject; (iii) contravene, conflict
with, or result in a violation or breach of any provision of, or
give any Person the right to declare a default or exercise any
remedy under, or to accelerate the maturity or performance of, or
to cancel, terminate, or modify, any Applicable Contract; (iv)
result in the imposition or creation of any Encumbrance upon or
with respect to any of the assets owned or used by any of the
Sellers; or (v) entitle any employee or other person to severance
or other payments by any of the Sellers or create any other
obligation to an employee or other person, including any increase
in benefits.
(c) Except as set forth in Part 3.2 of the Disclosure
Letter, none of the Sellers will be required to give any notice
to or obtain any Consent from any Person in connection with the
execution and delivery of this Agreement or the consummation or
performance of any of the Contemplated Transactions.
3.3 Subsidiaries. Set forth in Part 3.3 of the Disclosure
Letter is a list of all Subsidiaries of the Sellers, including,
with respect to each Subsidiary, its jurisdiction of
incorporation. All of the outstanding capital stock of each
Subsidiary has been duly authorized and validly issued, is fully
paid, nonassessable and free of preemptive rights, and is owned
beneficially and of record by the respective Seller or by another
Subsidiary of a Seller free and clear of any Encumbrance or
restriction of any nature, including, without limitation, any
restriction on transfer or voting. No shares of any Subsidiary's
capital stock are reserved for issuance, and there are no
options, warrants, convertible instruments or other rights,
agreements or commitments, contingent or otherwise, obligating a
Subsidiary to issue, sell or purchase shares of capital stock.
None of the Sellers is a partner or joint venturer with any other
person. None of the Sellers is subject to any obligation,
contingent or otherwise, to provide funds to or make an
16PAGE
investment (in the form of a loan, capital contribution or
otherwise) in any entity. None of the Sellers has any equity
interest in any corporation, partnership or other business entity
other than the Subsidiaries listed on the Disclosure Letter.
Each Subsidiary is in good standing under the laws of its
jurisdiction of incorporation and has all requisite power and
authority to own, operate and lease its properties and to carry
on its business as it is now being conducted. The Sellers have
delivered to Buyer complete and correct copies of the
Organizational Documents of each Subsidiary, as amended. Each
Subsidiary is duly qualified as a foreign corporation to do
business, and is in good standing, in each jurisdiction in which
the character of the properties owned, operated or leased by it
or the nature of its activities is such that qualification is
required by applicable laws, except where the failure to so
qualify would not, individually or in the aggregate, have a
Material Adverse Effect. All jurisdictions where the
Subsidiaries are qualified as foreign corporations or are
required to be so qualified are listed on Part 3.3 of the
Disclosure Letter.
3.4 Financial Statements. Each Seller has delivered to
Buyer: (a) an unaudited consolidated balance sheet of such
Seller as at December 31, 1994 (each a "1994 Balance Sheet"), and
the related unaudited statement of income and cash flows for the
fiscal year then ended (each a "1994 Income Statement") and (b)
an unaudited balance sheet of such Seller as at September 31,
1995 (each a "September Balance Sheet") and the related unaudited
statement of income and cash flows for the nine months then ended
(each a "September Income Statement"). The 1994 Balance Sheets,
September Balance Sheets, 1994 Income Statements and September
Income Statements are referred to collectively as the "Financial
Statements". The Financial Statements fairly present the
financial condition and the results of operations and cash flows
of the Sellers as at the respective dates of and for the periods
referred to therein all in accordance with GAAP, except that the
September Balance Sheets are subject to normal year-end
adjustments. The Financial Statements reflect the consistent
application of such accounting principles throughout the periods
involved.
3.5 Books and Records. The books of account, minute books,
and other records of the Sellers, all of which have been made
available to Buyer, are complete and correct in all material
respects.
3.6 Title to Properties; Encumbrances. Except as set forth
in part 3.6 of the Disclosure Letter, the Sellers have valid and
legally enforceable title to all of the Assets free and clear of
any Encumbrances whatsoever, and the consummation of the
Contemplated Transactions will vest in Buyer all of the Sellers'
right, title and interest in and to the Assets.
17PAGE
3.7 Accounts Receivable. All accounts receivable of the
Sellers that are reflected on the September Balance Sheets
(except for those collected in full prior to the Closing Date) or
on the accounting records of the Sellers as of the Closing Date
(collectively, the "Accounts Receivable") represent or will
represent valid obligations arising from sales actually made or
services actually performed in the Ordinary Course of Business.
Unless paid prior to the Closing Date and except as set forth on
Part 3.7 of the Disclosure Letter, to the Knowledge of the
Sellers, the Accounts Receivable are or will be as of the Closing
Date current and collectible net of the respective reserves shown
on the September Balance Sheets or on the accounting records of
the Sellers as of the Closing Date. Except as set forth on Part
3.7 of the Disclosure Letter, none of the Sellers has received
notice that there is any contest, claim, or right of set-off with
any maker of an Account Receivable relating to the amount or
validity of such Account Receivable. The Sellers do not have any
accounts receivable from Moisture Systems Consolidated
Corporation and MSC does not have any accounts receivable from
MSC-UK which were assigned to MSC from Moisture Systems
Consolidated Corporation.
3.8 Taxes. Except as set forth in Part 3.8 of the
Disclosure Letter:
Each of the Sellers has accurately prepared and duly
and timely filed all Tax Returns that it was required to file.
All such Tax Returns were correct and complete in all material
respects. All Taxes owed by the Sellers have been paid when due,
other than those being contested in good faith and where adequate
reserves (determined in accordance with GAAP) have been
established therefor. All Taxes of any of the Sellers
attributable to Tax periods or portions thereof ending on or
prior to the Closing Date, including Taxes that may become
payable by any of the Sellers in future periods in respect of any
transactions or sales occurring on or prior to the Closing Date,
that have not yet been paid have, in the aggregate, been
adequately reflected as a liability on the books of the Sellers
in accordance with GAAP. None of the Sellers is currently being
audited or examined by any Governmental Body, nor have any
deficiencies for any Tax been asserted against any of the
Sellers. No claim or inquiry with respect to any material amount
of Taxes has been made within the past seven years by an
authority in a jurisdiction where any of the Sellers did not file
Tax Returns that it is or may be subject to any Tax by that
jurisdiction. Without limiting the generality of the foregoing,
each of the Sellers has withheld or collected and duly paid all
Taxes required to have been withheld or collected and paid in
connection with payments to foreign persons, sales and use Tax or
Value Added Tax obligations, and amounts paid or owing to any
employee, independent contractor, creditor, stockholder or other
person.
18PAGE
3.9 Employee Benefits. Part 3.9 of the Disclosure Letter
contains a true, correct and complete list of all benefit plans
(as defined in Section 3(3) of ERISA) and all pension, benefit,
profit sharing, retirement, deferred compensation, welfare,
insurance, disability, bonus, vacation pay, severance pay and
other similar plans, programs and agreements, whether reduced to
writing or not, relating to any of the employees of any of the
Sellers (the "Plans") and, except as set forth in Part 3.9 of the
Disclosure Letter, none of the Sellers has any obligations,
contingent or otherwise, past or present, under applicable law or
the terms of any Plan. With respect to all Plans, each of the
Sellers is in compliance with all applicable Legal Requirements,
including ERISA. Each of the Sellers has performed all material
obligations required to be performed by it under, and is not in
material violation of, and there has been no material default or
violation by any other party with respect to, any of the Plans.
There are no pending or, to the Knowledge of the Sellers,
Threatened Proceedings by employees or former employees of any of
the Sellers, or beneficiaries or spouses of any of the above,
involving any Plan (other than routine, undisputed claims for
benefits). The Sellers have provided the Buyer with copies of
each Plan that is in writing and with a written summary of each
oral Plan. Except for MSC's 401(k) plan, no Plan is an "employee
pension benefit plan" as such term is defined in Section 3(2) of
ERISA. None of the Sellers nor any ERISA Affiliate (as defined
below) contributes to or has an obligation to contribute to or
has contributed to or had an obligation to contribute to within
the past six years, a "multiemployer" plan as defined in Section
4001(a)(3) of ERISA. None of the Sellers nor any ERISA Affiliate
has withdrawn from a multi-employer plan in a complete or partial
withdrawal that resulted in any unsatisfied employer liability.
None of the Sellers contributes to an employee pension benefit
plan that is subject to Section 412 of the Code or Title IV of
ERISA. "ERISA Affiliate" means an entity which is a member of
(i) a controlled group of corporations (as defined in Section
414(b) of the Code), (ii) a group of trades or businesses under
common control (as defined in Section 414(c) of the Code), or
(iii) an affiliated service group (as defined in Section 414(m)
of the Code or the regulations under Section 414(o) of the Code),
any of which includes any of the Sellers.
3.10 Compliance with Legal Requirements;
(a) Except as set forth in Part 3.10 of the Disclosure
Letter: (i) each of the Sellers is, and at all times since
January 1, 1991 has been, in compliance with each Legal
Requirement that is or was applicable to it or to the conduct or
operation of its business or the ownership or use of any of its
assets; (ii) no event has occurred or circumstance exists that
(with or without notice or lapse of time) may constitute or
result in a violation by any of the Sellers of, or a failure on
the part of any of the Sellers to comply with, any Legal
Requirement; (iii) none of the Sellers has received, at any time
since January 1, 1991, any notice or other communication (whether
19PAGE
oral or written) from any Governmental Body or any other Person
regarding any actual, alleged, possible, or potential violation
of, or failure to comply with, any Legal Requirement.
Notwithstanding anything herein to the contrary, the Sellers make
no representation or warranty with respect to the applicability
of the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as
amended, to the Contemplated Transactions.
(b) The Sellers have obtained all Governmental
Authorizations necessary for the conduct of their respective
businesses as currently conducted. Except as set forth in Part
3.10 of the Disclosure Letter: (i) each of the Sellers is, and
at all times since January 1, 1991 has been, in compliance in
all material respects with each such Governmental Authorization,
(ii) no event has occurred or circumstance exists that may (with
or without notice or lapse of time) constitute or result directly
or indirectly in a violation of or a failure to comply with any
term or requirement of any such Governmental Authorization; (iii)
none of the Sellers has received, at any time since January 1,
1991, any notice or other communication (whether oral or written)
from any such Governmental Body or any other Person regarding (A)
any actual, alleged, possible, or potential violation of or
failure to comply with any term or requirement of any such
Governmental Authorization, or (B) any actual, proposed,
possible, or potential revocation, withdrawal, suspension,
cancellation, termination of, or modification to any such
Governmental Authorization; and (iv) the rights of the Sellers
under such Governmental Authorizations shall not be affected by
the consummation of the Contemplated Transactions.
Notwithstanding anything herein to the contrary, the Sellers make
no representation or warranty with respect to the applicability
of the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as
amended, to the Contemplated Transactions.
3.11 Legal Proceedings; Orders.
(a) Except as set forth in Part 3.11 of the Disclosure
Letter, there is no pending Proceeding: (i) that has been
commenced by or against any of the Sellers or that otherwise
relates to or may affect the business of, or any of the assets
owned or used by, any of the Sellers, or (ii) that challenges, or
that may have the effect of preventing, delaying, making illegal,
or otherwise interfering with, any of the Contemplated
Transactions. To the Knowledge of the Sellers, (A) no such
Proceeding has been Threatened, and (B) no event has occurred or
circumstance exists that may give rise to or serve as a basis for
the commencement of any such Proceeding.
(b) Except as set forth in Part 3.11 of the Disclosure
Letter there is no Order to which any of the Sellers, or any of
the assets owned or used by any of the Sellers is subject. Each
of the Sellers is in full compliance with all of the terms and
requirements of each Order to which it, or any assets owned or
used by it, is subject.
20PAGE
3.12 Absence of Certain Changes and Events. Except as set
forth in Part 3.12 of the Disclosure Letter, since the Balance
Sheet Date, each of the Sellers has conducted its business only
in the Ordinary Course of Business and there has not been any:
(a) except in the Ordinary Course of Business, payment
or increase by any of the Sellers of any bonuses, salaries,
commissions or other compensation to any stockholder, director,
officer, or employee or entry into any employment, severance, or
similar Contract with any director, officer, or employee;
(b) adoption of, or, except in the Ordinary Course of
Business, increase in the payments to or benefits under, any
profit sharing, bonus, deferred compensation, savings, insurance,
pension, retirement, or other employee benefit plan for or with
any employees of any of the Sellers;
(c) damage to or destruction or loss of any asset or
property of any of the Sellers, whether or not covered by
insurance, having a Material Adverse Effect;
(d) except in the Ordinary Course of Business, sale
(other than sales of inventory in the Ordinary Course of
Business), lease, or other disposition of any asset or property
of any of the Sellers or mortgage, pledge, or imposition of any
Encumbrance on any asset or property of any of the Sellers;
(e) cancellation or waiver of any claims or rights
with a value to any of the Sellers in excess of $25,000;
(f) material change in the accounting methods used by
any of the Sellers;
(g) material adverse change in the financial
condition, assets, liabilities, earnings, business or prospects
of the Sellers, taken as a whole;
(h) indebtedness or other liability or obligation
(whether absolute, accrued, contingent or otherwise) incurred, or
other transaction (except that reflected in this Agreement)
engaged in, by any of the Sellers, except those in the Ordinary
Course of Business which are, individually and in the aggregate
to one group of related parties, less than $25,000 in amount;
(i) acquisition of any assets other than in the
Ordinary Course of Business;
(j) any material reduction in the rate of, or gross
margins associated with, bookings or orders for the products
or services of the Sellers, taken as a whole; or
(k) agreement, whether oral or written, by any of the
Sellers to do any of the foregoing.
21PAGE
3.13 Contracts; No Defaults.
(a) Part 3.13(a) of the Disclosure Letter contains a
complete and accurate list, and the Sellers have delivered to
Buyer true and complete copies of, each of the following
Applicable Contracts: (i) each agreement that involves aggregate
future payments by any of the Sellers of more than $25,000; (ii)
each distributorship, sales agency, franchise, joint venture or
partnership agreement; (iii) each agreement not made in the
ordinary course of business which is to be performed after the
Closing; (iv) each outstanding commitment to make a capital
expenditure, capital addition or capital improvement involving an
amount in excess of $20,000; (v) each real or personal property
lease; (vi) each agreement relating to the loan of money or
availability of credit to or from any of the Sellers; (vii) each
agreement limiting the freedom of any of the Sellers to compete
in any line of business or with any Person; (viii) each written
agreement, contract, arrangement or understanding between any of
the Sellers and any present or former employee; (ix) each license
agreement relating to patents, trademarks, know-how or other
intellectual property, whether as licensee or licensor; (x) each
collective bargaining agreement or other contract or commitment
to or with any labor union or other group of employees; (xi) each
mortgage, pledge, security, title retention, or similar agreement
encumbering any of the Assets; (xii) each agreement providing
for payments to or by any Person based on sales, purchases,
revenues, profits or assets; (xiii) each guaranty or similar
undertaking with respect to the obligations of any other Person;
(xiv) each agreement relating to the acquisition or disposition
of significant assets, businesses or companies within the past
five years; and (xv) each other agreement which cannot be
terminated by the Sellers within one year after the date hereof
without penalty or under which the consequences of a default or
termination would have a Material Adverse Effect.
(b) Except as set forth in Part 3.13(b) of the
Disclosure Letter, to the Knowledge of the Sellers, each Contract
identified or required to be identified in Part 3.13(a) of the
Disclosure Letter is in full force and effect and is valid and
enforceable in accordance with its terms. Except as set forth in
Part 3.13(b) of the Disclosure Letter and except where
non-compliance would not result in a Material Adverse Effect:
(i) each of the Sellers is, and at all times since January 1,
1991 has been, in compliance with all applicable terms and
requirements of each Applicable Contract; (ii) each other Person
that has any obligation or liability under any Applicable
Contract is, and at all times since January 1, 1991 has been, in
compliance with all applicable terms and requirements of such
Applicable Contract; and (iii) none of the Sellers has given to
or received from any other Person, at any time since January 1,
1991, any notice or other communication (whether oral or written)
regarding any actual, alleged, possible, or potential violation
or breach of, or default under, any Applicable Contract.
22PAGE
(c) There are no renegotiations of, attempts to
renegotiate, or outstanding rights to renegotiate any material
amounts paid or payable to any of the Sellers under Applicable
Contracts with any Person having the contractual or statutory
right to demand or require such renegotiation and no such Person
has made written demand for such renegotiation.
3.14 Insurance. Part 3.14 of the Disclosure Letter sets
forth a list (including the name of the insurer, the name of the
policyholder, the name of each insured, the policy number and
periods of coverage, and the scope of coverage) of all policies
of fire, theft, casualty, liability, burglary, fidelity, workers
compensation, business interruption, environmental, product
liability, automobile and other forms of insurance under which
any of the Sellers is the beneficiary. None of the Sellers has
received notice from any insurer under any such policy
disclaiming coverage or canceling or materially amending any such
policy. Such policies or extensions or renewals thereof in such
amounts will be outstanding and in full force without
interruption until the Closing Date. The Sellers have paid all
premiums due, and have otherwise performed all of their
respective obligations under, each such policy. The Sellers have
given proper and timely notice to the insurer of all claims that
may be insured under such policies.
3.15 Environmental Matters. Except as set forth in Part
3.15 of the Disclosure Letter:
(a) To the knowledge of the Sellers, the Sellers are
in full compliance with all Environmental Laws. None of the
Sellers has any basis to expect, nor has any of them or any other
Person for whose conduct they are or may be held to be
responsible received, any actual or Threatened order, notice, or
other communication from (i) any Governmental Body or private
citizen acting in the public interest, (ii) the current or prior
owner or operator of any Facilities, or (iii) any other Person,
of any actual or potential violation or failure to comply with
any Environmental Law, or of any actual or Threatened obligation
to undertake or bear the cost of any Environmental, Health, and
Safety Liabilities with respect to any of the Facilities or any
other properties or assets (whether real, personal, or mixed) in
which any of the Sellers has had an interest, or with respect to
any property or Facility at or to which Hazardous Materials were
generated, manufactured, refined, transferred, imported, used,
transported or processed by any of the Sellers, or any other
Person for whose conduct they are or may be held responsible, or
from which Hazardous Materials have been transported, treated,
stored, handled, transferred, disposed, recycled, or received.
(b) There are no pending or, to the Knowledge of any
of the Sellers, Threatened claims, Encumbrances, or other
restrictions of any nature, resulting from any Environmental,
Health, and Safety Liabilities or arising under or pursuant to
23PAGE
any Environmental Law, with respect to or affecting any of the
Facilities or any other properties and assets (whether real,
personal, or mixed) in which any of the Sellers has or had an
interest.
(c) To the knowledge of the Sellers, none of the
Sellers nor any other Person for whose conduct they are or may be
held responsible, has any Environmental, Health, and Safety
Liabilities with respect to the Facilities or any other
properties and assets (whether real, personal, or mixed) in which
any of the Sellers (or any predecessor) has or had an interest,
or at any property geologically or hydrologically adjoining the
Facilities or any such other property or assets.
(d) To the knowledge of the Sellers, there has been no
Release or, to the Knowledge of any of the Sellers, Threat of
Release, of any Hazardous Materials at or from the Facilities or
at any other locations where any Hazardous Materials were
generated, manufactured, refined, transferred, transported,
produced, imported, used, or processed from or by the Facilities,
or from or by any other properties and assets (whether real,
personal, or mixed) in which any of the Sellers has or had an
interest, or to the Knowledge of any of the Sellers any
geologically or hydrologically adjoining property, whether by the
Sellers or any other Person.
(e) The Sellers have delivered to Buyer true and
complete copies and results of any reports, studies, analyses,
tests, or monitoring possessed or initiated by any of the Sellers
pertaining to Hazardous Materials or Hazardous Activities in, on,
or under the Facilities, or concerning compliance by any of the
Sellers, or any other Person for whose conduct they are or may be
held responsible, with Environmental Laws or Occupational Safety
and Health Laws.
(f) Part 3.15 of the Disclosure Letter sets forth or
describes in reasonable detail: (i) all landfills, surface
impoundments, pits, underground injections xxxxx, waste piles,
incinerators and any other units used by any of the Sellers for
the handling, treatment, recycling, storage or disposal of
Hazardous Materials at any Facility and (ii) all underground or
above-ground storage tanks at the Facilities or on any property
owned or operated at any time by any of the Sellers.
3.16 Labor Disputes; Compliance . Since January 1, 1991,
none of the Sellers has been a party to any collective bargaining
Contract or other labor Contract. Since January 1, 1991, there
has not been, there is not presently pending or existing, and to
the Knowledge of the Sellers or the Principals there is not
Threatened any strike, slowdown, picketing, work stoppage, labor
arbitration or proceeding in respect of the grievance of any
employee, application or complaint filed by an employee or union
with the National Labor Relations Board or any comparable
Governmental Body, organizational activity, or other labor
24PAGE
dispute against or affecting any of the Sellers or their
premises, and no application for certification of a collective
bargaining agent is pending or to the Knowledge of the Sellers is
Threatened. There is no lockout of any employees by any of the
Sellers, and no such action is contemplated by any of the
Sellers. There is no recognized trade union in respect of the UK
Employees.
3.17 Intellectual Property. The Sellers own or have
adequate license to use, free and clear of any Encumbrance or
obligation of payment, all patents, trademarks, trade names,
service marks, branch names and copyrights, and applications
therefor, used in the conduct of the business or the use of which
is necessary for the conduct of the business of the Sellers as
presently conducted (the "Intangibles"). Set forth in Part 3.17
of the Disclosure Letter is a complete list and summary
description of all Intangibles and licenses or sublicenses
entered into or granted by or to the Sellers with respect thereto
and the countries of registration. The Sellers own or possess
adequate rights to use, free and clear of any Encumbrance or
obligation of payment, all inventions, technology, technical
know-how, processes, designs, trade secrets, vendor and customer
lists and other confidential information required for or used in
the business of the Sellers as presently conducted ("Trade
Secrets"). No person has made any claim or demand upon any of
the Sellers pertaining to, and no proceedings are pending or to
the Knowledge of the Sellers Threatened, which challenge the
rights of any of the Sellers in respect of any Intangibles or
Trade Secrets. No Intangible owned or used by any of the Sellers
is subject to any Order. To the Knowledge of the Sellers, none
of the Sellers has infringed or engaged in the unauthorized use
of, or violated any confidentiality agreement that pertains to,
any patent, trademark, trade name, service xxxx, brand name or
copyright, or any invention, technology, technical know-how,
process, design, trade secret or other intellectual property of
another Person. To the Knowledge of the Sellers no third party
is engaged in the infringement or unauthorized use of any
Intangible or Trade Secret.
3.18 Relationships with Related Persons. Except as set
forth in Part 3.18 of the Disclosure Letter, no Related Person of
any of the Sellers has any interest in any property (whether
real, personal, or mixed and whether tangible or intangible) used
in or pertaining to the business of any of the Sellers. Except
as set forth in Part 3.18 of the Disclosure Letter, no Related
Person of any of the Sellers owns of record or as beneficial
owner, an equity interest or any other financial or profit
interest in any Person that (i) has business dealings or a
financial interest in any transaction with any of the Sellers, or
(ii) engages in a Competing Business except for ownership of less
than one percent of the outstanding capital stock of any
Competing Business that is publicly traded on any recognized
exchange or in the over-the-counter market. Except as set forth
in Part 3.18 of the Disclosure Letter, none of the Sellers nor
25PAGE
any Related Person of any of the Sellers is a party to any
Contract with, or has any claim or right against, any of the
Sellers.
3.19 Brokers or Finders. None of the Sellers or the
Principals or their respective agents have incurred any
obligation or liability, contingent or otherwise, for brokerage
or finders' fees or agents' commissions or other similar payment
in connection with the Contemplated Transactions.
3.20 No Termination of Relationship. To the Knowledge of
the Sellers no relationship between any of the Sellers and a
distributor, customer, supplier, lender, employee or other person
will be terminated or adversely affected as a result of the
execution of this Agreement or the performance of the
Contemplated Transactions.
3.21 Customers and Suppliers. No material supplier of the
Sellers has indicated within the past year that it will stop, or
materially decrease the rate of, supplying materials, products,
or services to the Sellers and no material customer of the
Sellers has indicated within the past year that it will stop, or
materially decrease the rate of, buying materials, products or
services from the Sellers. Part 3.21 of the Disclosure Letter
sets forth a list of (a) each customer that accounted for more
than 5% of the combined revenues of the Sellers during the last
fiscal year and (b) each supplier that is the sole supplier of
any significant product or component to the Sellers.
3.22 Recalls. No products of any of the Sellers have been
recalled since January 1, 1991 and, to the Knowledge of the
Sellers there is no basis for any such recall.
3.23 Backlog. The backlog of MSC as of the Closing Date is
greater than or equal to $1,750,000. For purposes of this
Section 3.23, "backlog" means all firm orders and commitments for
MSC's products and services which orders and commitments contain
terms and conditions that are consistent with MSC's practices
over the past year.
3.24 Inventories. All Inventories (as defined below) are of
a quality and quantity usable and salable in the Ordinary Course
of Business. Items included in such Inventories are carried on
the books of the Sellers at the lower of cost or market and, with
respect to Inventories existing as of the Balance Sheet Date, are
reflected on the September Balance Sheets net of applicable
reserves for excess and obsolete items. Such reserves have been
determined in accordance with past practices and conform to
generally accepted accounting principles consistently applied.
The term "Inventories" includes all stock of raw materials,
work-in-process and finished goods held by the Sellers, for
manufacturing, assembly, processing, finishing, and sale or
resale to others.
26PAGE
3.25 Product and Service Warranties. The Sellers have
provided the Buyer with copies of the current standard warranty
used for each of the products and services of the Sellers. Part
3.25 of the Disclosure Letter also describes any and all other
product or service warranties made by or on behalf of the Sellers
that deviate materially from the current standard warranties and
which remain in effect on the date hereof, or pursuant to which
any of the Sellers have any remaining obligations.
3.26 Authority of Representative. The Representative has
all necessary legal power and authority to act on behalf of the
Sellers and the Principals as provided herein.
3.27 No Additional Representations and Warranties. Except
as specifically set forth in this Agreement (including the
Disclosure Letter), the Sellers and Principals disclaim all
representations and warranties, whether express or implied,
written or oral.
3.28 Sufficiency of Assets. Except as set forth in Part
3.28 of the Disclosure Letter, the assets owned by the Sellers
are the only assets necessary for the continued conduct of the
businesses of the Sellers after the Closing in substantially the
same manner as conducted prior to the Closing.
4. REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to the Sellers as follows:
4.1 Organization and Good Standing. Buyer is a corporation
duly organized, validly existing, and in good standing under the
laws of the Commonwealth of Massachusetts.
4.2 Authority; No Conflict.
(a) This Agreement constitutes the legal, valid, and
binding obligation of Buyer, enforceable against Buyer in
accordance with its terms. Buyer has the absolute and
unrestricted right, power, and authority to execute and deliver
this Agreement and to perform its obligations under this
Agreement.
(b) Except as set forth in Exhibit D, neither the
execution and delivery of this Agreement by Buyer nor the
consummation or performance of any of the Contemplated
Transactions by Buyer will give any Person the right to prevent,
delay, or otherwise interfere with any of the Contemplated
Transactions pursuant to: (i) any provision of Buyer's
Organizational Documents; (ii) any resolution adopted by the
board of directors or the stockholders of Buyer; (iii) any Legal
Requirement or Order to which Buyer may be subject; or (iv) any
Contract to which Buyer is a party or by which Buyer may be
bound.
27PAGE
Except as set forth in Exhibit D, Buyer is not and will not be
required to obtain any Consent from any Person in connection with
the execution and delivery of this Agreement by Buyer or the
consummation or performance of any of the Contemplated
Transactions by Buyer.
4.3 Certain Proceedings. There is no pending Proceeding
that has been commenced against Buyer and that challenges, or may
have the effect of preventing, delaying, making illegal, or
otherwise interfering with, any of the Contemplated Transactions.
To Buyer's Knowledge, no such Proceeding has been Threatened.
4.4 Brokers and Finders. Buyer and its officers and agents
have incurred no obligation or liability, contingent or
otherwise, for brokerage or finders' fees or agents' commissions
or other similar payment in connection with this Agreement and
will indemnify and hold the Sellers and the Principals harmless
from any such payment alleged to be due by or through Buyer as a
result of the action of Buyer or its officers or agents.
5. INDEMNIFICATION; REMEDIES
5.1 Survival. Subject to Section 5.4, all representations,
warranties, covenants, and obligations in this Agreement, the
Disclosure Letter and any other certificate or document delivered
pursuant to this Agreement will survive the Closing; the right to
indemnification, reimbursement, or other remedy based on such
representations, warranties, covenants, and obligations will not
be affected by any investigation conducted with respect to, or
any Knowledge acquired (or capable of being acquired) about the
accuracy or inaccuracy of or compliance with, any such
representation, warranty, covenant, or obligation.
5.2 Indemnification and Reimbursement By the Sellers and
the Principals. The Sellers and the Principals will indemnify
and hold harmless Buyer, its representatives, stockholders,
controlling persons, and affiliates (collectively, the
"Indemnified Persons"), and will reimburse the Indemnified
Persons, for any loss, liability, claim, damage, expense
(including costs of investigation and defense and reasonable
attorneys' fees) or diminution of value, whether or not involving
a third-party claim (collectively, "Damages"), arising from or in
connection with:
(a) any Breach of any representation or warranty made
by any of the Sellers in this Agreement, the Disclosure Letter,
or any other certificate or document delivered at and in
connection with the Closing of the Contemplated Transactions by
any of the Sellers pursuant to this Agreement;
(b) any Breach by any of the Sellers of any covenant
or obligation of any of the Sellers in this Agreement;
(c) any Excluded Liability;
28PAGE
(d) any claim by any Person for brokerage or finder's
fees or commissions or similar payments based upon any agreement
or understanding alleged to have been made by any such Person
with any of the Sellers or the Principals; or
(e) any product liability claim relating to products
sold by any of the Sellers prior to the Closing Date; provided
that such claim is not caused by Buyer's intervening negligence
in the service, maintenance or repair of such product.
5.3 Indemnification and Reimbursement by Buyer. Buyer will
indemnify and hold harmless the Sellers and the Principals, and
will reimburse the Sellers and the Principals, for any Damages
arising from or in connection with (a) any Breach of any
representation or warranty made by Buyer in this Agreement or in
any certificate delivered by Buyer pursuant to this Agreement,
(b) any Breach by Buyer of any covenant or obligation of Buyer in
this Agreement, (c) any claim by any Person for brokerage or
finder's fees or commissions or similar payments based upon any
agreement or understanding alleged to have been made by such
Person with Buyer (or any Person acting on its behalf) in
connection with any of the Contemplated Transactions or (d) any
Assumed Liabilities.
5.4 Time Limitations. None of the Sellers or the
Principals will have any liability for indemnification under
section 5.2(a) with respect to any representation or warranty in
Sections 3.4, 3.5, 3.7, 3.9, 3.12, 3.14, 3.16, 3.19, 3.20, 3.21,
3.22, 3.23, 3.24 unless on or before March 31, 1997 the
Representative is given notice of a claim specifying the factual
basis of that claim in reasonable detail to the extent then known
by Buyer. None of the Sellers or the Principals will have any
liability for indemnification under section 5.2(a) with respect
to any representation or warranty in Sections 3.8, 3.10, 3.11,
3.13, 3.15, 3.17, 3.18, 3.25, 3.26, unless on or before the
second anniversary of the Closing Date the Representative is
given notice of a claim specifying the factual basis of that
claim in reasonable detail to the extent then known by Buyer.
The Sellers and the Principals will have no liability for
indemnification under Section 5.2(a) with respect to Section 3.1,
3.2, 3.3, or 3.6, unless on or before the expiration of the
applicable statute of limitations the Representative is given
notice of a claim specifying the factual basis of that claim in
reasonable detail to the extent known by Buyer. A claim for
indemnification or reimbursement under Sections 5.2 (b), (c) or
(d) may be made at any time.
5.5 Limitations on Amount -- Sellers and Principals.
(a) None of the Sellers or the Principals will have
any liability for indemnification pursuant to Section 5.2(a), (i)
at any time with respect to any claim by the Buyer for less than
$5,000 and (ii) until the total of all Damages with respect to
29PAGE
such matters (including claims under $5,000) exceeds $100,000,
and then such liability shall only be for Damages in excess of
$100,000. Notwithstanding any provision herein to the contrary,
except for liability for indemnification with respect to breaches
of Sections 3.1, 3.2, 3.3 or 3.6, the maximum aggregate liability
of the Sellers and the Principals under Section 5.2 shall not
exceed $6,750,000.
(b) Notwithstanding any provision herein to the
contrary, except for liability for indemnification with respect
to breaches of Sections 3.1, 3.2, 3.3 or 3.6, no Principal shall
have any liability under section 5.2 in excess of the amount set
forth opposite such Principal's name on Exhibit F attached
hereto. In addition, with respect to any single claim (and
subject to the overall limitation set forth in the preceding
sentence) for indemnification, Xxxxxx Xxxxxxx shall not have any
liability which is greater than the product of (i) the amount set
forth opposite Xxxxxx Xxxxxxx'x name on Exhibit F attached hereto
divided by $6,750,000 and (ii) the total amount of the claim for
which Buyer is then seeking indemnification.
5.6 Procedures for Indemnification -- Third Party Claims.
(a) Promptly after receipt by an indemnified party
under Section 5.2 or Section 5.3 of notice of the commencement
of any Proceeding against it, such indemnified party will, if a
claim is to be made against an indemnifying party under such
Section, give notice to the indemnifying party of the
commencement of such claim, but the failure to notify the
indemnifying party will not relieve the indemnifying party of any
liability that it may have to any indemnified party, except to
the extent that the indemnifying party demonstrates that the
defense of such action is prejudiced by the indemnifying party's
failure to give such notice.
(b) If any Proceeding referred to in Section 5.6(a) is
brought against an indemnified party and it gives notice to the
indemnifying party of the commencement of such Proceeding, the
indemnifying party will, unless the claim involves Taxes, be
entitled to participate in such Proceeding and, to the extent
that it wishes (unless (i) the indemnifying party is also a party
to such Proceeding and the indemnified party determines in good
faith that joint representation would be inappropriate, or (ii)
the indemnifying party fails to provide reasonable assurance to
the indemnified party of its financial capacity to defend such
Proceeding and provide indemnification with respect to such
Proceeding), to assume the defense of such Proceeding with
counsel satisfactory to the indemnified party and, after notice
from the indemnifying party to the indemnified party of its
election to assume the defense of such Proceeding, the
indemnifying party will not, as long as it diligently conducts
such defense, be liable to the indemnified party under this
Section 5 for any fees of other counsel or any other expenses
with respect to the defense of such Proceeding, in each case
30PAGE
subsequently incurred by the indemnified party in connection with
the defense of such Proceeding, other than reasonable costs of
investigation. If the indemnifying party assumes the defense of
a Proceeding, (i) no compromise or settlement of such claims may
be effected by the indemnifying party without the indemnified
party's consent unless (A) there is no finding or admission of
any violation of Legal Requirements or any violation of the
rights of any Person and no effect on any other claims that may
be made against the indemnified party, and (B) the sole relief
provided is monetary damages that are paid in full by the
indemnifying party; and (ii) the indemnifying party will have no
liability with respect to any compromise or settlement of such
claims effected without its consent. If notice is given to an
indemnifying party of the commencement of any Proceeding and the
indemnifying party does not, within ten days after the
indemnified party's notice is given, give notice to the
indemnified party of its election to assume the defense of such
Proceeding, the indemnifying party will be bound by any
determination made in such Proceeding or any compromise or
settlement effected by the indemnified party. Notwithstanding
the foregoing, if a customer or a supplier any of the Sellers
asserts that the Buyer is liable to such customer or supplier for
a monetary obligation which may constitute or result in Damages
for which the Buyer may be entitled to indemnification pursuant
to this Section 5 and the Buyer reasonably determines that it has
a valid business reason to fulfill such obligations, then (i) the
Buyer shall be entitled to satisfy such obligation without prior
notice to or consent from the Sellers, (ii) the Buyer may make a
claim for indemnification pursuant to this Section 5 and (iii)
the Buyer shall be reimbursed, in accordance with the provisions
of this Section 5, for any such Damages for which it is entitled
to indemnification pursuant to the provisions of this Section 5;
provided, however, that if the Buyer makes a claim for
indemnification in accordance with this sentence the Sellers and
the Principals shall not be deemed to have waived any defense to
such claim by the Buyer, notwithstanding the Buyer's prior
satisfaction of the obligation for which indemnification is
sought, and it shall not be a defense to the Buyer's claim for
indemnification that the Buyer has satisfied the obligation for
which indemnification is sought.
(c) Notwithstanding the foregoing, if an indemnified
party determines in good faith that there is a reasonable
probability that a Proceeding may adversely affect it or its
affiliates other than as a result of monetary damages for which
it would be entitled to indemnification under this Agreement, the
indemnified party may, by notice to the indemnifying party,
assume the exclusive right to defend, compromise, or settle such
Proceeding, but the indemnifying party will not be bound by any
determination of a Proceeding so defended or any compromise or
settlement effected without its consent.
(d) For purposes of providing any notice required
under this Section 5, the Buyer may treat the Representative as
31PAGE
the authorized representative of all of the Sellers and
Principals any notice given to the Representative shall be deemed
given to each Seller and each Principal.
5.7 Procedure for Indemnification -- Other Claims. A claim
for indemnification for any matter not involving a third-party
claim may be asserted by notice to the party from whom
indemnification is sought.
6. GENERAL PROVISIONS
6.1 Expenses. Except as otherwise expressly provided in
this Agreement, each party to this Agreement will bear its
respective expenses incurred in connection with the preparation,
execution, and performance of this Agreement and the Contemplated
Transactions, including all fees and expenses of agents,
representatives, counsel, and accountants. In the event of
termination of this Agreement, the obligation of each party to
pay its own expenses will be subject to any rights of such party
arising from a breach of this Agreement by another party.
6.2 Public Announcements. Any public announcement or
similar publicity with respect to this Agreement or the
Contemplated Transactions will be issued, if at all, by the Buyer
only with the consent of the Representative, and by any of the
Sellers or the Principals, only with the consent of the Buyer,
none of which consents will unreasonably be withheld. The
content of any public announcement by the Buyer will be subject
to review and approval by the Representative, and the content of
any public announcement by any of the Sellers or the Principals
will be subject to review and approval by the Buyer, none of
which approvals will unreasonably be withheld. Sellers and Buyer
will consult with each other concerning the means by which the
Sellers' employees, customers, and suppliers and others having
dealings with the Sellers will be informed of the Contemplated
Transactions, and Buyer will have the right to be present for any
such communication.
6.3 Notices. All notices, consents, waivers, and other
communications under this Agreement must be in writing and will
be deemed to have been duly given when actually received or if
earlier, one day after deposit with a nationally recognized
overnight delivery service, charges prepaid, or three days after
deposit in the U.S. mail by certified mail, return receipt
requested, postage prepaid, in each case to the appropriate
addresses and telecopier numbers set forth below (or to such
other addresses and telecopier numbers a party may designate by
notice to the other parties):
any Seller or the Representative:
Moisture Systems Corporation
000 Xxxxx Xxxxxx
Xxxxxxxxx, XX 00000-0000
32PAGE
Attention: President
Fax No.: (000) 000-0000
with a copy to:
Xxxx X. Xxxxxxxxx III, Esq.
Xxxxxxx, Xxxx & Xxxxx
000 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000-0000
Fax No.: (000) 000-0000
Buyer:
Thermedics Detection Inc.
000 Xxxx Xxxx
Xxxxxxxxxx, XX 00000
Attention: President
Fax No.: (000) 000-0000
with a copy to:
Thermo Electron Corporation
00 Xxxxx Xxxxxx
Xxxxxxx, XX 00000-0000
Attention: General Counsel
Fax No. (000) 000-0000
6.4 Jurisdiction; Service of Process. Any action or
proceeding seeking to enforce any provision of, or based on any
right arising out of, this Agreement may be brought against any
of the parties in the courts of the Commonwealth of
Massachusetts, County of Middlesex, or, if it has or can acquire
jurisdiction, in the United States District Court for the
District of Massachusetts and each of the parties consents to the
jurisdiction of such courts (and of the appropriate appellate
courts) in any such action or proceeding and waives any objection
to venue laid therein. With respect to MSC-UK and the
Principals, any action or proceeding seeking to enforce any
provision of, or based on any right arising out of, this
Agreement may be brought against any of the parties in the courts
of England and each of MSC-UK, the Principals and Buyer consents
to the jurisdiction of such courts (and of the appropriate
appellate courts) in any such action or proceeding and waives any
objection to venue laid therein. Process in any action or
proceeding referred to in this Section 6.4 may be served on any
party anywhere in the world.
6.5 Further Assurances. The parties agree (a) to furnish
upon request to each other such further information, (b) to
execute and deliver to each other such other documents, and (c)
to do such other acts and things, all as the other party may
reasonably request for the purpose of carrying out the intent of
this Agreement and the documents referred to in this Agreement.
33PAGE
6.6 Waiver. The rights and remedies of the parties to this
Agreement are cumulative and not alternative. Neither the
failure nor any delay by any party in exercising any right,
power, or privilege under this Agreement or the documents
referred to in this Agreement will operate as a waiver of such
right, power, or privilege, and no single or partial exercise of
any such right, power, or privilege will preclude any other or
further exercise of such right, power, or privilege or the
exercise of any other right, power, or privilege. To the maximum
extent permitted by applicable law, (a) no claim or right arising
out of this Agreement or the documents referred to in this
Agreement can be discharged by one party, in whole or in part, by
a waiver or renunciation of the claim or right unless in writing
signed by the other party; (b) no waiver that may be given by a
party will be applicable except in the specific instance for
which it is given; and (c) no notice to or demand on one party
will be deemed to be a waiver of any obligation of such party or
of the right of the party giving such notice or demand to take
further action without notice or demand as provided in this
Agreement or the documents referred to in this Agreement.
6.7 Entire Agreement and Modification. This Agreement
supersedes all prior agreements between the parties with respect
to its subject matter and constitutes (along with the documents
referred to in this Agreement) a complete and exclusive statement
of the terms of the agreement between the parties with respect to
its subject matter. This Agreement may not be amended except by
a written agreement executed by the party to be charged with the
amendment.
6.8 Disclosure Letter. In the event of any inconsistency
between the statements in the body of this Agreement and those in
the Disclosure Letter (other than an exception expressly set
forth as such in the Disclosure Letter with respect to a
specifically identified representation or warranty), the
statements in the body of this Agreement will control.
6.9 Assignments, Successors, and Third-Party Rights. No
party hereto may assign any of its, his or her rights under this
Agreement without the prior consent of the other parties except
that Buyer may assign any of its rights under this Agreement to
any Subsidiary of Buyer, provided that Buyer shall remain jointly
and severally liable with such Subsidiary for any of Buyer's
obligations hereunder. Subject to the preceding sentence, this
Agreement will apply to, be binding in all respects upon, and
inure to the benefit of the successors and permitted assigns of
the parties. Nothing expressed or referred to in this Agreement
will be construed to give any Person other than the parties to
this Agreement any legal or equitable right, remedy, or claim
under or with respect to this Agreement or any provision of this
Agreement. This Agreement and all of its provisions and
conditions are for the sole and exclusive benefit of the parties
to this Agreement and their successors and assigns.
34PAGE
6.10 Severability. If any provision of this Agreement is
held invalid or unenforceable by any court of competent
jurisdiction, the other provisions of this Agreement will remain
in full force and effect. Any provision of this Agreement held
invalid or unenforceable only in part or degree will remain in
full force and effect to the extent not held invalid or
unenforceable.
6.11 Section Headings; Construction. The headings of
Sections in this Agreement are provided for convenience only and
will not affect its construction or interpretation. All
references to "Sections" refer to the corresponding Sections of
this Agreement. All words used in this Agreement will be
construed to be of such gender or number as the circumstances
require. Unless otherwise expressly provided, the word
"including" does not limit the preceding words or terms.
6.12 Time of Essence. With regard to all dates and time
periods set forth or referred to in this Agreement, time is of
the essence.
6.13 Governing Law. This Agreement will be governed by and
construed under the laws of the Commonwealth of Massachusetts
without regard to conflicts of laws principles.
6.14 Relief. In the event of a breach of the provisions of
this Agreement by a Seller, in addition to any other rights and
remedies that Buyer may have under law or in equity, Buyer shall
have the right to specific performance and injunctive relief, it
being acknowledged and agreed that money damages will not provide
an adequate remedy.
6.15 Access to Information. The Sellers shall make
available, and direct and authorize their respective independent
public accountants to make available, to the Buyer and to the
independent public accountants representing the Buyer (at no cost
to the Buyer), all working papers pertaining to the examination
by the Sellers' accountants of the accounting records of the
Sellers, and shall provide such cooperation as Buyer shall
reasonably request in connection with Buyer's preparation of any
financial statements relating to the businesses of the Sellers
required to be included in any filing made by Buyer or any
affiliate of Buyer with the Securities and Exchange Commission
pursuant to the Securities Act or the Exchange Act. For a period
of time as may be reasonably requested, upon written request of a
Seller or Principal, Buyer or its successor shall make or cause
to be made available to such Seller or Principal, as the case may
be, all books and records included in the Assets that are needed
by such Seller or Principal for a valid business or financial
purpose, and permit such Seller or Principal to inspect and copy
such books and records upon reasonable notice and at such
reasonable times as may be mutually agreed upon by such Seller or
Principal and Buyer and shall be at such Seller's or Principal's
sole cost and expense.
35PAGE
6.16 Solicitation. For a period of two years after the
Closing Date, none of the Sellers or the Principals shall, either
directly or indirectly as a stockholder, investor, partner,
director, officer, employee or in any other capacity, solicit or
attempt to induce any Restricted Employee to terminate his or her
employment with Buyer or any affiliate of the Buyer; provided,
however, that it shall not be a breach of this Section 6.16 for
any Seller or Principal to solicit Restricted Employees by means
of general public advertisements. For purposes of this
agreement, a "Restricted Employee" shall mean any person, other
than employees terminated involuntarily by the Buyer, who (i)
either (A) hold or have access to trade secrets or other
confidential information relating to the business of the Sellers
or (B) had annual base salary in 1994 of at least $50,000, and
(ii) either (X) was an employee of the Buyer or any affiliate of
the Buyer on either the date of this Agreement or the Closing
Date or (Y) was an employee of any of the Sellers on either the
date of this Agreement or the Closing Date and who is employed by
the Buyer immediately after the Closing.
6.17 Non-Competition.
(a) For a period of five years after the Closing Date,
none of the Sellers or the Principals shall, either directly or
indirectly as a stockholder, investor, partner, director,
officer, employee, consultant or otherwise, engage in a
Competitive Business in any territory. For purposes of this
Agreement, a "Competitive Business" means (i) the development,
manufacture, marketing or sale of any product utilizing near
infrared technology which is competitive with any product
manufactured, sold or developed (or under development) by a
Seller on or prior to the Closing Date or (ii) the rendering or
marketing of any service which is competitive with any service
rendered or marketed (or proposed to be rendered or marketed) by
a Seller on or prior to the Closing Date. Buyer acknowledges and
agrees that the Principals are and will be passive investors in
Sensortech Systems Inc.
(b) The Sellers and the Principals agree that the
duration and geographic scope of the non-competition provision
set forth in this Section 6.17 are reasonable. In the event that
any court determines that the duration or the geographic scope,
or both, are unreasonable and that such provision is to that
extent unenforceable, the parties agree that the provision shall
remain in full force and effect for the greatest time period and
in the greatest area that would not render it unenforceable. The
parties intend that this non-competition provision shall be
deemed to be a series of separate covenants, one for each and
every county of each and every state of the U.S. and each and
every political subdivision of each and every country outside the
U.S. where this provision is intended to be effective.
36PAGE
6.18 Seniority of Employees. To the extent that length of
service is relevant for vesting or benefit calculations or
allowances under retirement or other benefit plans made available
to Buyer's employees, any of the Seller's employees that accept
employment with the Buyer shall receive credit for their years of
service with the Sellers.
6.19 United Kingdom Value Added Tax. The Sellers and Buyer
intend that article 5 of the United Kingdom Value Added Tax
(Special Provisions) Order 1992 shall apply to the sale of Assets
located in the United Kingdom under this Agreement, so that the
sale is treated as neither a supply of goods nor a supply of
services.
6.20 Counterparts. This Agreement may be executed in one or
more counterparts, each of which will be deemed to be an original
copy of this Agreement and all of which, when taken together,
will be deemed to constitute one and the same agreement.
37PAGE
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first written above.
THERMEDICS DETECTION INC.
By: Xxxx X. Xxxx, Xx.
--------------------------
Name: Xxxx X. Xxxx, Xx.
--------------------------
Title: Chairman
-------------------------
SELLERS:
MOISTURE SYSTEMS CORPORATION
By: Xxxxx X. Xxxxxxx
-----------------------------
Name: Xxxxx X. Xxxxxxx
---------------------------
Title: President
--------------------------
MOISTURE SYSTEMS LIMITED
By: Xxxx Xxxxxxx
-----------------------------
Name: Xxxx Xxxxxxx
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Title: Director
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ANACON CORPORATION
By: Xxxxx X. Xxxxxxx
-----------------------------
Name: Xxxxx X. Xxxxxxx
---------------------------
Title: President
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PRINCIPALS:
Xxxxxx Xxxxxxx
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Xxxxxx Xxxxxxx
Xxxxx Xxxxxxx
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Xxxxx Xxxxxxx
Xxxx Xxxxxxx
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Xxxx Xxxxxxx
