PURCHASE AGREEMENT
between
THE XXXXXX-XXXXX CORPORATION
and
EG&G, INC
Dated as of March 8, 1999
TABLE OF CONTENTS
Page
1. Sale and Transfer of Subsidiary Stock; Purchase and Sale of
Assets; Assumption of Liabilities . . . . . . . . . . . . . . . 2
1.1. Sale and Transfer of Subsidiary Stock . . . . . . . 2
1.2. Transfer of Assets . . . . . . . . . . . . . . . . . 2
1.3. Excluded Assets . . . . . . . . . . . . . . . . . . 5
1.4. Instruments of Conveyance and Transfer . . . . . . . 6
1.5. Further Assurances . . . . . . . . . . . . . . . . . 7
1.6. Assumed Liabilities . . . . . . . . . . . . . . . . 7
1.7. Excluded Liabilities . . . . . . . . . . . . . . . . 8
2. Closing; Payment of Purchase Price at Closing . . . . . . . . . 10
2.1. Closing Date . . . . . . . . . . . . . . . . . . . . 10
2.2. Closing Deliveries by Seller . . . . . . . . . . . . 11
2.3. Closing Deliveries by Buyer . . . . . . . . . . . . 11
2.4. Purchase Price Allocation . . . . . . . . . . . . . 12
2.5. Restricted Assets . . . . . . . . . . . . . . . . . 12
2.6. Post-Closing Adjustment . . . . . . . . . . . . . . 16
3. Representations and Warranties . . . . . . . . . . . . . . . . . 18
3.1. Representations and Warranties of Seller . . . . . . 18
3.2. Representations and Warranties of Buyer . . . . . . 42
3.3. Expiration of Representations and Warranties . . . . 44
4. Transactions Prior to Closing . . . . . . . . . . . . . . . . . 44
4.1. Access to Information Concerning Properties and
Records; Confidentiality . . . . . . . . . . . . . . 44
4.2. Conduct of the Analytical Instruments Business
Pending the Closing Date. . . . . . . . . . . . . . 45
4.3. Transactions with Transferred Subsidiaries . . . . . 47
4.4. Guarantees . . . . . . . . . . . . . . . . . . . . . 48
4.5. Further Actions . . . . . . . . . . . . . . . . . . 48
4.6. Notification . . . . . . . . . . . . . . . . . . . . 49
4.7. No Inconsistent Action . . . . . . . . . . . . . . . 50
4.8. License Agreements. . . . . . . . . . . . . . . . . 50
4.9. Facilities and Services Agreement . . . . . . . . . 50
4.10. No Solicitation . . . . . . . . . . . . . . . . . . 50
5. Conditions Precedent . . . . . . . . . . . . . . . . . . . . . . 51
5.1. Conditions Precedent to Obligations of Buyer and
Seller . . . . . . . . . . . . . . . . . . . . . . . 51
5.2. Conditions Precedent to Obligations of Buyer . . . . 52
5.3. Conditions Precedent to the Obligations of
Seller . . . . . . . . . . . . . . . . . . . . . . . 53
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6. Employee Relations and Benefits . . . . . . . . . . . . . . . . 54
6.1. Pre-Closing Conduct; Other Liabilities. . . . . . . 54
7. Termination . . . . . . . . . . . . . . . . . . . . . . . . . . 58
7.1. General . . . . . . . . . . . . . . . . . . . . . . 58
7.2. Obligations in Event of Termination . . . . . . . . 59
8. Transactions and Activities Subsequent to Closing . . . . . . . 59
8.1. Access to Books and Records; Confidentiality . . . . 59
8.2. Further Agreements . . . . . . . . . . . . . . . . . 60
8.3. Asset Returns . . . . . . . . . . . . . . . . . . . 61
8.4. Certain Tax Matters. . . . . . . . . . . . . . . . . 61
8.5. Non-Solicitation of Employees . . . . . . . . . . . 63
8.6. Non-Competition . . . . . . . . . . . . . . . . . . 63
9. Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . 64
9.1. Public Announcements . . . . . . . . . . . . . . . . 64
9.2. Expenses . . . . . . . . . . . . . . . . . . . . . . 64
9.3. Transfer Taxes and Recording Expenses . . . . . . . 64
9.4. Indemnification . . . . . . . . . . . . . . . . . . 65
9.5. Environmental Remediations . . . . . . . . . . . . . 69
9.6. Pre-Closing Litigation . . . . . . . . . . . . . . . 70
9.7. Notices . . . . . . . . . . . . . . . . . . . . . . 71
9.8. Entire Agreement . . . . . . . . . . . . . . . . . . 71
9.9. Binding Effect; Benefit . . . . . . . . . . . . . . 71
9.10. Bulk Sales Law . . . . . . . . . . . . . . . . . . . 72
9.11. Assignability . . . . . . . . . . . . . . . . . . . 72
9.12. Amendment; Waiver . . . . . . . . . . . . . . . . . 72
9.13. Schedules and Exhibits . . . . . . . . . . . . . . . 72
9.14. Other Covenants . . . . . . . . . . . . . . . . . . 72
9.15. Section Headings; Table of Contents . . . . . . . . 73
9.16. Severability . . . . . . . . . . . . . . . . . . . . 73
9.17. Counterparts . . . . . . . . . . . . . . . . . . . . 73
9.18. Governing Law; Jurisdiction and Service of
Process . . . . . . . . . . . . . . . . . . . . . . 73
9.19. No Third Party Beneficiaries . . . . . . . . . . . . 73
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LIST OF SCHEDULES AND EXHIBITS TO AGREEMENT
Seller Schedule
Section 1.2(a) - Intellectual Property assets to be sold
Section 1.2(b) - Real property and leasehold interests to be
sold
Section 1.2(e) - Management information system assets to be
sold
Section 1.2(g)(i) - Contracts not to be assigned to Buyer
Section 1.2(g)(ii) - Contracts to be assigned to Buyer
Section 1.2(h) - Licenses, permits or franchises not to be
assigned to Buyer
Section 1.3(h) - Real property and improvements not to be
sold to Buyer
Section 1.3(k) - Intercompany receivables, notes or loans
not to be assigned to Buyer
Section 1.7(e) - Intercompany receivables, notes or loans
not to be assumed by Buyer
Section 2.4 - Purchase Price Allocation
Section 3.1(a) - Subsidiaries, Subsidiaries' outstanding
capital stock and the number of shares
owned beneficially and of record by the
applicable seller
Section 3.1(c) - Government approvals or notices required,
and other party conflicts
Section 3.1(d) - Nominee shares
Section 3.1(f) - Permitted encumbrances
Section 3.1(g) - Financial information
Section 3.1(h) - No undisclosed liabilities
Section 3.1(i) - Absence of certain changes
Section 3.1(j) - Legal proceedings
Section 3.1(k) - Regulatory matters
Section 3.1(l) - Labor controversies
Section 3.1(n)(iii) - Intellectual Property
Section 3.1(n)(iv) - Intellectual Property
Section 3.1(o) - Exceptions to possession of required
government licenses, permits and approvals
Section 3.1(p) - Employee benefit and business plans and
related information
Section 3.1(q) - Environmental Laws and related legal
proceedings
Section 3.1(r)(ii) - Tax
Section 3.1(s)(i) - Material Contracts
Section 3.1(s)(iii) - Breach of Material Contracts
Section 3.1(t) - Recall
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Section 3.1(u) - Affiliate Relationships
Section 3.1(w) - Customers and Suppliers
Section 3.1(x) - Year 2000
Section 3.1(y) - Acquisitions
Section 3.1(aa) - Real Estate
Section 4.2 - Planned exceptions to ordinary course of
operation prior to Closing
Section 4.3(a) - Assets and liabilities of Transferred
Subsidiaries to be assumed by Seller or
Seller's Subsidiaries
Section 4.4 - Guarantees, etc. to be assumed by Buyer
Section 4.8(a) - Intellectual Property to be licensed to
Buyer
Section 4.8(b) - Intellectual Property to be licensed to
Seller
Section 4.9 - Facilities and Services
Section 5.2(d) - No Material Adverse Change
Section 6.1 (a)(i) - Seller's Severance Plan
Section 6.1(a)(ii) - Excluded Severance Liabilities
Section 6.1(c) - Asset Employees
Section 8.6(a) - Products not to be sold by Seller after
Closing Date
Section 8.6(b) - Excluded Fields
Section 8.6(c) - Additional Excluded Fields for other than
Life Sciences
Section 9.6 - Pre-Closing Litigation
Buyer Schedule
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Exhibits
EXHIBIT A - Subsidiaries
EXHIBIT B - Locations of Operations
EXHIBIT C - Transferred Subsidiaries
EXHIBIT D - Subsidiary Asset Sellers
EXHIBIT E - Terms of Note
EXHIBIT F - Form of Buyer License Agreement
EXHIBIT G - Form of Seller License Agreement
EXHIBIT H - Form of Transition Agreement
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GLOSSARY OF TERMS
Defined Term Section
Accounting Firm 2.6(b)
Accounts Receivable 1.2(j)
Action 3.1(j)(i)
Actively at Work 6.1(c)
Adjusted Closing Net Assets 2.6(b)
Affiliate 3.1(u)
Agreement Preamble
Allocation Schedule 2.4
Analytical Instruments Business Recitals
Analytical Instruments Products 8.6
Asset Employees 6.1(c)
Asset Purchase Recitals
Asset Sellers Recitals
Assets Recitals
Assumed Liabilities 1.6
Assumption Agreement 1.6
Benefit Plans 3.1(p)(i)
BSW 2.6(e)
Business Day 2.5(c)
Buyer Preamble
Buyer License Agreement 4.8(a)
Buyer Plans 6.1(c)(ii)
Buyer Schedule 3.2
Buyer's Objection 2.6(b)
Cash Purchase Price 2.3(a)
CERCLA 3.1(q)(i)
Claim Notice 9.4(c)
Closing 2.1
Closing Balance Sheet 2.6(a)
Closing Date 2.1
Closing Net Assets 2.6(a)
Code 2.4
Company Recitals
Confidentiality Agreement 4.1(a)
Continuing Employee 6.1(a)
Contracts 1.2(g)
Covered Period 3.1(s)(ii)
Damages 9.4(a)
Encumbrances 3.1(f)
Environmental Law 3.1(q)(i)
Environmental Remediation 9.5(a)
Equipment 1.2(c)
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ERISA 3.1(p)(i)
ERISA Affiliate 3.1(p)(i)
Excluded Asset 1.3
Excluded Fields 8.6
Excluded Liabilities 1.7
External Software 3.1(x)(i)
Final Adjustment Amount 2.6(b)
Financial Information 3.1(g)
Finished Goods 1.2(d)
Foreign Seller Plan 3.1(p)(ix)
Governmental Authority 3.1(j)(i)
Guarantees 4.4
HSR Act 3.1(c)
Indebtedness 1.7(b)
Indemnified Party 9.4(c)
Indemnifying Party 9.4(c)
Indemnity Claim 9.4(e)
Intellectual Property 1.2(a)
Interest Rate 2.6(d)
Internal Systems 3.1(x)(i)
Inventory 1.2(d)
Leased Real Property 3.1(aa)(i)
License Agreements 4.8(b)
Life Sciences 8.6
Material Adverse Closing Event 7.1
Material AI Contracts 3.1(s)(i)
Material Contract 3.1(s)(ii)
Material Permits 3.1(o)(i)
Materials 1.2(d)
Materials of Environmental Concern 3.1(q)(i)
Multiemployer Plan 3.1(p)(v)
Net Assets 2.6(a)
Nominee Shares 3.1(d)(ii)
Note 2.3(a)
Notice Period 9.4(c)
Ordinary Course of Business 1.3(k)
Owned Real Property 3.1(aa)(i)
PE Group 2.5(a)
PEH 2.6(e)
Xxxxxx-Xxxxx Asset Purchase Recitals
Xxxxxx-Xxxxx Assets Recitals
Permitted Encumbrances 3.1(f)
Person 3.1(d)(iv)
Plant or Plants 1.2(b)
Pre-closing Litigation 9.6(a)
Preliminary Adjustment Amount 2.6(a)
Prepaid Assets 1.2(k)
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Purchase Price 2.3(a)
Representatives 4.1(a)
Required Consents 5.1(b)
Restricted Assets 2.5(f)
Seller 401(k) Plan 6.1(b)
Seller Preamble
Seller Benefit Plans 3.1(p)(i)
Seller Plan 6.1(b)
Seller Schedule 1.2(a)
Seller License Agreement 4.8(b)
Seller Material Adverse Effect 3.1
Seller Representation Adverse Effect 3.1
Seller's Severance Plan 6.1(a)
Shared Contracts 2.5(g)
Shared Litigation 9.6(b)
Shared Remediations 9.5(b)
Stock and Asset Purchase Recitals
Stock Purchase Recitals
Subsidiaries Recitals
Subsidiaries Asset Purchase Recitals
Subsidiary Asset Sellers Recitals
Subsidiary Assets Recitals
Subsidiary Cash Amount 2.6(a)
Subsidiary Debt Amount 2.6(a)
Subsidiary Statement 2.6(a)
Subsidiary Tax Accrual 2.6(a)
Subsidiary Stock Recitals
Tax or Taxes 3.1(r)(iii)
Tax Benefit 9.4(e)
Tax Item 8.4(a)
Tax Returns 3.1(r)(iii)
Transfer Laws 6.1(c)(iii)
Transferred Employees 6.1(c)
Transferred Subsidiaries Recitals
Transition Agreements 4.9
U.K. Pension Plan 6.1(d)(iv)
U.S. GAAP 3.1(g)
WDR 3.1(z)
Year 2000 Compliant 3.1(x)(iv)
Year 2000 Program 3.1(x)(i)
1060 Forms 2.4
1998 Financial Statements 3.1(g)
1998 Statement of Net Assets 3.1(g)
1999 Financial Statements 3.1(g)
1999 Statement of Net Assets 3.1(g)
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PURCHASE AGREEMENT
PURCHASE AGREEMENT (this "Agreement"), dated as of March 8, 1999,
between THE XXXXXX-XXXXX CORPORATION, a New York corporation ("Seller"), and
EG&G, INC., a Massachusetts corporation ("Buyer").
W I T N E S S E T H :
WHEREAS, Seller and Seller's subsidiaries (including subsidiaries
not otherwise engaged in the Analytical Instruments Business, as defined
below, that own capital stock of any Transferred Subsidiaries, as defined
below) listed on Exhibit A (the "Subsidiaries" and, collectively with Seller,
the "Company") are engaged, in part, in the business of development,
production, marketing, distribution, sale and servicing of analytical
instruments (including without limitation the Analytical Instruments
Products), software, services and consumables in various areas throughout the
world (the "Analytical Instruments Business"), operating currently from the
locations specified in Exhibit B; and
WHEREAS, Buyer desires to purchase from Seller and Seller desires
to sell to Buyer the assets (other than assets expressly excluded pursuant to
Section 1.3 hereof), subject to the assumption of certain liabilities as set
forth in Section 1.6 hereof, of the Analytical Instruments Business held by
Seller (the "Xxxxxx-Xxxxx Assets") upon the terms and subject to the
conditions set forth herein (the "Xxxxxx-Xxxxx Asset Purchase"); and
WHEREAS, Buyer desires to purchase from Seller and certain of the
Subsidiaries, and Seller desires to sell, and to cause certain of the
Subsidiaries to sell, to Buyer, all of the outstanding shares of capital
stock (collectively, the "Subsidiary Stock") of the Subsidiaries listed on
Exhibit C (the "Transferred Subsidiaries") (the sale and purchase of the
Subsidiary Stock being referred to herein as the "Stock Purchase") upon the
terms and subject to the conditions set forth herein; and
WHEREAS, Buyer desires to purchase from the Subsidiaries listed on
Exhibit D (such Subsidiaries, the "Subsidiary Asset Sellers", and together
with Seller, the "Asset Sellers"), and Seller desires to cause such
Subsidiary Asset Sellers to sell to Buyer, the assets of the Analytical
Instruments Business held by the Subsidiaries other than the Transferred
Subsidiaries (other than the assets expressly excluded pursuant to
Section 1.3 hereof), subject to the assumption of certain liabilities as set
forth in Section 1.6 hereof (such assets, the "Subsidiary Assets", and
together with the Xxxxxx-Xxxxx Assets, the "Assets"; such purchase, the
"Subsidiaries Asset Purchase", and together with the Xxxxxx-Xxxxx Asset
Purchase, the "Asset Purchase"; the Stock Purchase and the Asset Purchase are
collectively referred to herein as the "Stock and Asset Purchase"), upon the
terms and subject to the conditions set forth herein.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants of the parties hereto, it is hereby agreed as follows:
1. Sale and Transfer of Subsidiary Stock; Purchase and Sale of Assets;
Assumption of Liabilities
1.1. Sale and Transfer of Subsidiary Stock. On the basis of the
representations, warranties, covenants and agreements and subject to the
satisfaction or waiver of the conditions set forth in this Agreement, and
further subject to the qualifications and limitations herein provided, at the
Closing, Seller shall sell, transfer, convey, assign and deliver to Buyer,
or, in the case of Subsidiary Stock held by a Subsidiary, cause to be sold,
transferred, assigned and delivered to Buyer, all outstanding shares of
capital stock of the Transferred Subsidiaries. At the Closing, Seller shall
deliver or cause to be delivered to Buyer certificates representing the
Subsidiary Stock, duly endorsed, or accompanied by stock powers duly
executed, with all necessary stock transfer stamps attached thereto, or such
other assignments, deeds, share transfer forms, endorsements, notarial deeds
of transfer or other instruments or documents, duly stamped where necessary,
as are required by the jurisdiction of organization of each Transferred
Subsidiary.
1.2. Transfer of Assets. On the basis of the representations,
warranties, covenants and agreements and subject to the satisfaction or
waiver of the conditions set forth in this Agreement, and further subject to
the qualifications and limitations herein provided, at the Closing, Seller
shall sell, convey, assign, transfer and deliver to Buyer, or, in the case of
Subsidiary Assets, shall cause the Subsidiary Asset Sellers to sell, convey,
assign, transfer and deliver to Buyer, and Buyer shall purchase and acquire
from the Asset Sellers, all of the Asset Sellers' right, title and interest
in and to the assets, rights, properties, claims, contracts and business of
the Asset Sellers as the same shall exist on the Closing Date (of every kind,
nature, character and description, tangible and intangible, real, personal or
mixed, wherever located, in each case free of any Encumbrance other than
Permitted Encumbrances) which, together with the licenses and services to be
provided to Buyer pursuant to the Buyer License Agreement and the Transition
Agreements, are all of the assets, rights, properties, claims, contracts and
business necessary to conduct the Analytical Instruments Business as
currently conducted, including, without limitation, the following:
(a) Subject to the provisions of the License Agreements, all of
each Asset Seller's right, title and interest in and to (i) all (A) patents,
patent applications, patent or invention disclosures, provisional patent
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applications and all related continuation, continuation-in-part, divisional,
reissue, re-examination, utility model, certificate of invention and design
patents, registrations and applications for registrations, (B) trademarks,
service marks, common law trademarks and service marks, trade dress, logos,
trade names and corporate names and registrations and applications for
registration thereof, (C) copyrightable works, copyrights and registrations
and applications for registration thereof, (D) mask works and registrations
and applications for registration thereof, (E) computer software, databases
and documentation, (F) trade secrets and confidential business information,
whether patentable or nonpatentable and whether or not reduced to practice,
know-how, manufacturing and product processes and techniques, research and
development information, financial, marketing and business data, pricing and
cost information, business and marketing plans and customer and supplier
lists and information and (G) other proprietary rights relating to any of the
foregoing (including protection of interest therein under the laws of all
jurisdictions) (collectively, "Intellectual Property") in each case as set
forth, summarized and/or described in Section 1.2(a) of the Seller Schedule
dated March 8, 1999 that was previously delivered to Buyer (the "Seller
Schedule"), including all rights in existence on the Closing Date to initiate
or file suit for infringements occurring before or on the Closing Date; and
(ii) all licenses and other agreements to which any Asset Seller is a party
or by which any Asset Seller is bound relating to Intellectual Property, the
material ones of which are set forth in Section 1.2(a) of the Seller
Schedule;
(b) The real property and leasehold interests in real property
described in Section 1.2(b) of the Seller Schedule, including all buildings,
structures, fixtures and other improvements situated thereon or attached
thereto (individually, a "Plant" and collectively, the "Plants"), and
including all the Asset Sellers' right, title and interest in and to all
leases, subleases, franchises, licenses, permits, easements, privileges,
rights-of-way, riparian and other water rights, lands underlying any adjacent
streets or roads and appurtenances pertaining to or accruing to the benefit
of such property, in each case subject to the exceptions described on
Section 1.2(b) of the Seller Schedule;
(c) Each Asset Seller's right, title and interest in and to the
equipment, furniture, furnishings, fixtures, machinery, vehicles, tools and
other tangible personal property necessary to conduct the Analytical
Instruments Business as currently conducted (collectively, the "Equipment")
and all warranties and guarantees, if any, express or implied, existing for
the benefit of the Asset Sellers in connection with the Equipment to the
extent transferable;
(d) The inventories of the Analytical Instruments Business,
wherever located on the Closing Date, including without limitation, all
finished products on hand at the Plants, in transit or in the distribution
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system of the Asset Sellers (the "Finished Goods") and the raw materials,
packaging materials and work in process for Analytical Instruments Business
products wherever located on the Closing Date, including without limitation
all such raw materials, packaging materials and work in progress on hand at
any property of the Asset Sellers, in transit or in the distribution system
of the Asset Sellers, together with each Asset Seller's right, title and
interest in and to the spare parts, supplies and promotional materials and
inventory that are required for the development, manufacture, sale or
distribution of any Analytical Instruments Business products (the
"Materials"; together with the Finished Goods, the "Inventory");
(e) All management information systems, software and information
systems network connectivity identified in Section 1.2(e) of the Seller
Schedule, and related third party servicing arrangements;
(f) All books, records and accounts, correspondence, production
records, technical, accounting, manufacturing and procedural manuals,
customer lists, vendor lists, employment records, research material,
drawings, studies, reports or summaries relating to any environmental
conditions or consequences of any current operation of the Analytical
Instruments Business, as well as all studies, reports or summaries relating
to any environmental aspect or the general condition of the Assets or any
assets of the Transferred Subsidiaries, or otherwise relating to the
Analytical Instruments Business as currently conducted, and any confidential
information which has been reduced to writing relating to the Analytical
Instruments Business as currently conducted; provided that the Asset Sellers
shall retain the originals and Buyer shall receive copies of any such items
which relate primarily to the Excluded Assets or Excluded Liabilities or
other business operations of the Asset Sellers; and provided further that in
no event shall the Asset Sellers be obligated to transfer books and records
relating exclusively to Taxes (except with respect to Transferred
Subsidiaries);
(g) (i) Each Asset Seller's right, title and interest as of the
Closing in and to contracts, maintenance and service agreements, purchase
commitments for materials and other services, advertising and promotional
agreements, leases and other agreements (including but not limited to, any
agreements of the Asset Sellers with suppliers, sales representatives,
distributors, agents, personal property lessors, personal property lessees,
licensors, licensees, consignors and consignees specified therein)
(collectively, "Contracts") necessary to the conduct of the Analytical
Instruments Business as currently conducted, whether or not entered into in
the Ordinary Course of Business and whether or not identified in the Seller
Schedule, except for those contracts, agreements and commitments set forth in
Section 1.2(g)(i) of the Seller Schedule; and (ii) each Asset Seller's right,
title and interest in and to the contracts, agreements and commitments set
forth in Section 1.2(g)(ii) of the Seller Schedule;
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(h) Each Asset Seller's licenses, permits or franchises issued by
any federal, state, municipal or foreign authority relating to the
development, use, maintenance or occupation of the Plants or necessary to
enable Buyer to conduct the Analytical Instruments Business as currently
conducted immediately following the Closing after giving effect to the
consummation of the transactions contemplated hereby, to the extent that such
licenses, permits or franchises are transferable, but excluding those items
relating to the corporate existence of any Asset Seller or described in
Section 1.2(h) of the Seller Schedule;
(i) All rights of each Asset Seller under express or implied
warranties from the suppliers of each Asset Seller with respect to any assets
of the Assets Sellers to be transferred to Buyer at the Closing, but
excluding any such warranties with respect to any Excluded Liabilities;
(j) Whether or not billed, all accounts receivable and other
receivables of the Asset Sellers (collectively, the "Accounts Receivable") to
the extent attributable to the Analytical Instruments Business and in
existence on the Closing Date but excluding any such receivables to the
extent attributable to any Excluded Assets or Excluded Liabilities;
(k) Each Asset Seller's right, title and interest in and to all
goods and services and all other economic benefits to be received subsequent
to the Closing arising out of prepayments and payments by the Asset Sellers
prior to the Closing to the extent attributable to the operation of the
Analytical Instruments Business, but excluding any such benefits to the
extent attributable to any Excluded Assets or Excluded Liabilities
(collectively, the "Prepaid Assets"); and
(l) Any other asset of the Asset Sellers not referred to in the
foregoing provisions of this Section 1.2 that is required to be included or
reflected in the Closing Balance Sheet referred to in Section 2.6 or the
notes thereto.
1.3. Excluded Assets. It is expressly understood and agreed that
the Assets shall not include the following (each, an "Excluded Asset"):
(a) Except to the extent expressly transferred pursuant to the
provisions of Sections 1.2(a) through (l), inclusive, all assets, rights,
properties, claims, contracts and business of any Asset Seller that, after
giving effect to the services to be provided to, and other rights of, Buyer
under the Buyer License Agreement and the Transition Agreements, are not
necessary to conduct the Analytical Instruments Business as currently
conducted;
(b) The capital stock of all direct or indirect subsidiaries and
affiliates of Seller other than the Transferred Subsidiaries;
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(c) Cash and cash equivalents or similar type investments, bank
accounts, certificates of deposit, Treasury bills and other marketable
securities of the Asset Sellers;
(d) All real property and leasehold interests in real property of
the Asset Sellers other than the Plants and the Equipment;
(e) Any refunds or credits with respect to any Taxes paid or
incurred by the Asset Sellers (plus any related interest received from the
relevant taxing authority);
(f) Each Asset Seller's right, title and interest in and to the
contracts listed on Section 1.2(g)(i) of the Seller Schedule;
(g) Any Intellectual Property of the Asset Sellers (other than the
Intellectual Property expressly set forth, summarized and/or described in
Section 1.2(a) hereof or expressly described in Section 1.2(a) of the Seller
Schedule);
(h) The real property, including all buildings, structures and
other improvements situated thereon, and other assets listed in Section
1.3(h) of the Seller Schedule;
(i) Other than claims under insurance policies in respect of
Assets that are lost, damaged or destroyed or Assumed Liabilities that are
incurred, in whole or in part, prior to the Closing, all right, title and
interest of any Asset Seller in any insurance policies relating to the
Analytical Instruments Business and all rights of any Asset Seller to
insurance claims and proceeds with respect to or relating to (i) occurrences
prior to the Closing with respect to the operation of the Analytical
Instruments Business and (ii) the Excluded Assets and Excluded Liabilities;
(j) Any foreign currency agreements to which any Asset Seller is a
party; and
(k) All rights with respect to intercompany receivables, notes or
loans between any of the Transferred Subsidiaries, on the one hand, and
Seller and its other subsidiaries (excluding Transferred Subsidiaries), on
the other hand, except as listed in Section 1.3(k) of the Seller Schedule and
except for trade payables or receivables relating to the provision of goods
and services to or by the Analytical Instruments Business in the ordinary
course of business of the Analytical Instruments Business consistent with
past practice and custom ("Ordinary Course of Business").
1.4. Instruments of Conveyance and Transfer. At the Closing, the
Asset Sellers shall (a) deliver or cause to be delivered to Buyer such deeds,
bills of sale, endorsements, consents, assignments, and other good and
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sufficient instruments of conveyance and assignment as the parties and their
respective counsel shall deem necessary or appropriate or as may be required
by the jurisdiction of organization of each Asset Seller to vest in Buyer all
right, title and interest of the Asset Sellers in and to the Assets
(including such supplemental purchase agreements, consistent with the
provisions of this Agreement, as may be required to be executed and delivered
by Buyer and Seller, or any of their respective subsidiaries, pursuant to the
laws of any foreign jurisdiction applicable to any Asset or Asset Seller),
and (b) transfer to Buyer all the contracts, agreements, commitments, books,
records, files and other data (or copies thereof to the extent originals are
not available or to the extent provided in Section 1.2(f)) relating to the
Assets reasonably necessary for the continued operation of the Analytical
Instruments Business by Buyer.
1.5. Further Assurances. From time to time after the Closing Date,
Seller, for no further consideration, will execute and deliver, or cause to
be executed and delivered, such other instruments of conveyance, assignment,
transfer and delivery, and will take such other actions, as Buyer may
reasonably request in order to more effectively transfer, convey, assign and
deliver to Buyer any of the Assets, or to put Buyer in possession and
operating control of the Analytical Instruments Business and enjoy the rights
and benefits thereof.
1.6. Assumed Liabilities. On the Closing Date, Buyer shall deliver
to Seller an undertaking in form reasonably satisfactory to Seller (the
"Assumption Agreement") whereby Buyer, on and as of the Closing Date, assumes
and agrees to pay, perform and discharge, upon the terms and subject to the
conditions of this Agreement, and further subject to the qualifications and
limitations herein provided, all liabilities and obligations of the Asset
Sellers as of the Closing, other than Excluded Liabilities, to the extent
they are attributable to the Analytical Instruments Business as conveyed to
Buyer on the Closing Date pursuant to this Agreement, including but not
limited to, the following:
(a) all debts, obligations and liabilities, including, without
limitation, liabilities arising under or relating to Environmental Laws, to
the extent attributable to the ownership or operation of the Analytical
Instruments Business after the Closing or the sale of any products after the
Closing (other than as a result of any breach by any Asset Seller of any of
its obligations to Buyer pursuant to this Agreement);
(b) all obligations of the Asset Sellers under the contracts,
commitments and agreements transferred pursuant to Section 1.2(g) (other than
obligations resulting from a breach by the Asset Sellers of any of their
obligations to Buyer pursuant to this Agreement);
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(c) all liabilities and obligations for post-Closing returns of
Analytical Instruments Business products sold prior to or after the Closing;
(d) all liabilities and obligations under the licenses, permits or
franchises included in the Assets pursuant to Section 1.2(h);
(e) all liabilities and obligations arising under or relating to
Environmental Laws for which Buyer expressly assumes responsibility pursuant
to Section 9.5;
(f) all liabilities and obligations in respect of employee
relations and benefits for which Buyer expressly assumes responsibility
pursuant to Section 6 hereof;
(g) all liabilities and obligations for any Taxes and expenses for
which Buyer expressly assumes responsibility pursuant to Section 9.3 hereof;
(h) all liabilities with respect to actions, suits, proceedings,
disputes, claims or investigations for which Buyer expressly assumes
responsibility pursuant to Section 9.6;
(i) all liabilities of any Asset Seller for product liability
claims with respect to or relating to occurrences after the Closing with
respect to the operation of the Analytical Instruments Business; and
(j) any other liability or obligation of the Assets Sellers not
referred to in the foregoing provisions of this Section 1.6 that is required
to be included or reflected in the Closing Balance Sheet referred to in
Section 2.6 or the notes thereto.
The liabilities and obligations assumed by Buyer in accordance with
this Section 1.6 are sometimes hereinafter referred to as the "Assumed
Liabilities".
1.7. Excluded Liabilities. It is expressly understood and agreed
that, notwithstanding anything to the contrary in this Agreement, Assumed
Liabilities shall not include the following (collectively, the "Excluded
Liabilities"):
(a) except to the extent expressly assumed pursuant to the
provisions of Sections 1.6(a) through 1.6(k), inclusive, all debts,
liabilities or obligations of the Asset Sellers to the extent they are
attributable to the Asset Sellers' business other than the Analytical
Instruments Business as conveyed to Buyer on the Closing Date pursuant to
this Agreement;
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(b) all liabilities or obligations of any Asset Seller in the
nature of Indebtedness, including any obligation or liability under any
contract or agreement relating to the same; as used in this Agreement,
"Indebtedness" of any Person means, without duplication, (i) all indebtedness
of such Person for borrowed money, (ii) all obligations of such Person
evidenced by bonds, debentures, notes or other similar instruments (or
reimbursement obligations with respect thereto), other than letters of credit
incurred by such Person in the Ordinary Course of Business, (iii) all
obligations of such Person to pay the deferred and unpaid purchase price of
property or services, other than trade payables and accrued expenses incurred
in the Ordinary Course of Business and (iv) all capitalized lease obligations
of such Person;
(c) all liabilities and obligations in respect of employee
relations and benefits not expressly assumed by Buyer pursuant to Section 6
hereof;
(d) liabilities or obligations under foreign currency contracts to
which any Asset Seller is a party;
(e) all obligations with respect to intercompany receivables,
notes or loans between any of the Transferred Subsidiaries, on the one hand,
and Seller or any of its other subsidiaries (excluding Transferred
Subsidiaries), on the other hand, except as listed in Section 1.7(e) of the
Seller Schedule and except for trade payables or receivables relating to the
provision of goods or services to or by the Analytical Instruments Business
in the Ordinary Course of Business;
(f) liabilities arising from or in connection with the
discontinued operations of the Analytical Instruments Business not
attributable to the Analytical Instruments Business as conveyed to Buyer on
the Closing Date pursuant to this Agreement;
(g) all liabilities arising out of or relating to the Excluded
Assets;
(h) except as otherwise expressly provided herein, (i) all
liabilities and obligations for Taxes of the Asset Sellers and the
Transferred Subsidiaries in any jurisdiction for all taxable periods ending
on or before the Closing Date, and with respect to taxable periods beginning
before the Closing Date and ending after the Closing Date to the extent
allocable to the period ending on the Closing Date (it being agreed that any
such allocation to Taxes to the pre-Closing period be made on the same basis
as in Section 9.4(a)(iv)) and (ii) all liabilities of the Asset Sellers as
described in Section 9.3.
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(i) all liabilities with respect to actions, suits, proceedings,
disputes, claims or investigations filed or commenced prior to the Closing
Date not expressly assumed by Buyer pursuant to Section 9.6;
(j) all liabilities for product liability claims with respect to
or relating to occurrences prior to the Closing with respect to the operation
of the Analytical Instruments Business;
(k) all liabilities and obligations for which Seller has expressly
assumed responsibility pursuant to this Agreement;
(l) liabilities and obligations under Restricted Assets to the
extent Seller does not obtain the consents and waivers necessary to assign,
transfer or sublicense such Restricted Assets to Buyer and Seller does not
provide Buyer the benefits of the Restricted Assets pursuant to Sections 2.5
and 9.14 hereof; and
(m) except to the extent expressly assumed by Buyer pursuant to
Section 1.6(e) and subject to the provisions of Section 9.5, all liabilities
with respect to (i) any actual or alleged release of any Materials of
Environmental Concern into the environment relating to the Assets or the
operation of the Analytical Instruments Business occurring on or prior to the
Closing Date, (ii) any actual or alleged release of any Materials of
Environmental Concern into the environment on or prior to the Closing Date
from or at any site owned or operated by the Company on or prior to the
Closing Date or from or at any location to which any Materials of
Environmental Concern generated by the Company were actually or allegedly
transported by or on behalf of the Company on or prior to the Closing Date or
(iii) any actual or alleged violation of any Environmental Law by the Company
occurring on or prior to the Closing Date.
2. Closing; Payment of Purchase Price at Closing
2.1. Closing Date. Unless this Agreement shall have been
terminated and the transactions herein contemplated shall have been abandoned
pursuant to Section 7.1, the closing with respect to the transactions
provided for in this Agreement (the "Closing") shall take place at the
offices of Xxxxxxx Xxxxxxx & Xxxxxxxx, located at 000 Xxxxxxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000-0000, at 10:00 a.m., New York City time, on the fifth
Business Day after satisfaction or waiver of all of the conditions to the
Closing set forth in Section 5 hereof, or at such other time, date and place
as shall be agreed upon by Seller and Buyer. The date of the Closing is
herein called the "Closing Date". The Closing shall be deemed effective as
of the close of business on the Closing Date in each location at which the
Analytical Instruments Business is conducted.
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2.2. Closing Deliveries by Seller. At the Closing, Seller shall
deliver or cause to be delivered to Buyer:
(a) executed counterparts of the License Agreements and the
Transition Agreements;
(b) certificates representing the shares of the Subsidiary Stock,
duly endorsed in blank or accompanied by stock powers or other applicable
documents of transfer duly executed in blank pursuant to Section 1.1;
(c) bills of sale, and such other instruments as may be reasonably
requested by Buyer to transfer the Assets to Buyer or to evidence such
transfer on the public records pursuant to Section 1.4;
(d) a receipt for the Purchase Price;
(e) resignations from each of the directors and officers of the
Transferred Subsidiaries that Buyer requests at least ten calendar days prior
to the Closing Date; and
(f) certificates from executive officers of Seller as to the
satisfaction of the conditions to Closing set forth in this Agreement and
other documents pursuant to Section 5.
2.3. Closing Deliveries by Buyer. At the Closing, Buyer shall
deliver to Seller:
(a) (i) $ 275 million dollars (the "Cash Purchase Price") by
wire transfer of immediately available funds to the bank account or bank
accounts specified by Seller in a written notice delivered to Buyer at least
five Business Days prior to the Closing Date (including such bank account or
bank accounts as Seller may so specify for purposes of extinguishing
receivables and payables in accordance with Section 4.3); and (ii) a secured
promissory note of Buyer in the principal amount of $150 million dollars
having the terms set forth in Exhibit E hereto (the "Note", and collectively
with the Cash Purchase Price, the "Purchase Price");
(b) executed counterparts of the Assumption Agreement, License
Agreements, Transition Agreements and the Security Agreement (as defined in
Exhibit E hereto);
(c) such other documents as may be reasonably requested by Seller
to effect the assumption by Buyer of the Assumed Liabilities; and
(d) certificates from executive officers of Buyer as to the
satisfaction of the conditions to Closing set forth in this Agreement and
other documents pursuant to Section 5.
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2.4. Purchase Price Allocation. Section 2.4 of the Seller Schedule
sets forth an allocation of the Purchase Price to each country in which
Assets or Subsidiary Stock will be transferred pursuant to this Agreement.
No later than 10 Business Days prior to the Closing, Seller shall provide
Buyer with a proposed final version of Section 2.4 of the Seller Schedule.
Buyer and Seller shall then cooperate in good faith to finalize such Section
2.4 on or prior to the Closing. As soon as practicable following the Closing,
but in no event later than 90 days prior to the date on which Internal
Revenue Service Form 8594 (or any similar form required by any foreign
jurisdiction) is due, Buyer will prepare, on a basis consistent with Section
2.4 of the Seller Schedule, an allocation schedule (the "Allocation
Schedule") of the Purchase Price and Assumed Liabilities among the Assets
(including classes of assets) and Subsidiary Stock along with the first draft
of Internal Revenue Service Form 8594 (and any similar form required by any
foreign jurisdiction). Within thirty (30) days after the receipt of such
Allocation Schedule and Form 8594 (and similar forms), Seller shall propose
any changes to such Allocation Schedule and Form 8594 (and similar forms) or
shall indicate its concurrence therewith, which concurrence shall not be
unreasonably withheld. Seller and Buyer shall endeavor in good faith to
resolve any differences with respect to the Allocation Schedule and Form 8594
(and similar forms). Seller and Buyer agree to act in accordance with the
computations and allocations contained in the Allocation Schedule, after
giving effect to the foregoing procedures, in any relevant tax returns or
filings (including any forms or reports required to be filed pursuant to
Section 1060 of the Internal Revenue Code of 1986, as amended (the "Code"),
the Treasury Regulations promulgated thereunder or any provisions of local,
state and foreign law ("1060 Forms")), and to cooperate in the preparation of
any 1060 Forms and to file such 1060 Forms in the manner required by
applicable law.
2.5. Restricted Assets. (a) Seller shall, and shall cause the
Company and the Asset Sellers (collectively, the "PE Group") to, use all
reasonable efforts, and Buyer shall cooperate reasonably with the PE Group,
(i) to promptly obtain the consents and waivers necessary to convey or cause
to be conveyed to Buyer all of the Restricted Assets (which for purposes of
this Section 2.5 shall include the capital stock of the Transferred
Subsidiaries), and (ii) as of and subject to the occurrence of the Closing,
to convey or cause to be conveyed to Buyer the Restricted Assets for which
the Company received the necessary consents and waivers; provided, however,
that Seller shall not, and shall cause the PE Group not to, amend or change
any Restricted Asset without the prior written consent of Buyer unless Seller
reasonably deems it necessary to preserve the value of the Restricted Asset.
Seller shall, and shall cause the PE Group to, cooperate with Buyer in making
applications and filings or taking any other action necessary for Buyer to
obtain such franchises, licenses, permits or other instruments or agreements,
if any, as are substantially equivalent to any Restricted Assets that are not
assignable to Buyer as a matter of law. In no event shall Buyer's
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cooperation hereunder require Buyer to make any payments or incur any out-of-
pocket expenses, except that Buyer shall reimburse Seller for any
consideration paid, with the prior approval of Buyer, to any Person from whom
a consent or waiver is requested.
(b) To the extent that the consents and waivers necessary to
assign, transfer, sublease or sublicense any of the Restricted Assets are not
obtained, Seller shall, commencing on the Closing Date and continuing for the
duration thereof or until such time as any Restricted Assets have been
transferred to Buyer pursuant to Section 2.5(d) or otherwise disposed of in
accordance with Section 2.5(e), use all reasonable efforts to (i) provide to
Buyer the benefits of any such Restricted Asset not assigned, transferred or
subleased due to Seller's or the PE Group's failure or inability to obtain
such consent or waiver, and manage and operate the Restricted Assets for the
benefit and account of Buyer, with all gains, income, losses, Taxes or other
items generated thereby to be for the account of Buyer, (ii) cooperate with
Buyer to reach a reasonable and lawful arrangement designed to provide such
benefits to Buyer during such period and (iii) enforce at the request of
Buyer, or allow Buyer to enforce, any rights of the PE Group under any such
Restricted Asset against the issuer thereof or the other party or parties
thereto (including the right to elect to terminate such of the foregoing in
accordance with the terms thereof upon the request of Buyer); provided,
however, that the reasonable costs and expenses of the PE Group (including
reasonable professional fees and expenses) incurred at Buyer's request with
respect to any of the actions contemplated under (iii) above shall be
promptly paid or reimbursed by Buyer to Seller. Upon the transfer or
disposition or termination of any Restricted Asset, the PE Group shall have
no further duties or obligations under this Section 2.5 with respect to such
Restricted Asset and the failure or inability to obtain any necessary consent
or waiver with respect thereto shall not be a breach of this Agreement so
long as the Asset Sellers have carried out their obligations under this
Section 2.5. Prior thereto and subject to applicable law and regulations
(including, without limitation, all laws and regulations requiring investment
approvals or consents or anti-monopoly clearances, exemptions or waivers in
connection with any disposition of the Restricted Assets, and all exchange
controls and laws concerning foreign corrupt practices, expatriation of funds
or otherwise), the PE Group shall, in respect of any Restricted Assets, use
all reasonable efforts to follow and implement the reasonable written
instructions and policies of Buyer relating to the holding, management and
operation of the Restricted Assets.
(c) To the extent that Buyer is provided the benefits of any
Restricted Asset pursuant to clause (b) of this Section 2.5, Buyer shall
perform for the benefit of the issuer thereof, or the other party or parties
thereto, the obligations of any member of the PE Group thereunder or in
connection therewith, but only to the extent that (i) such action by Buyer
would not result in any default thereunder or in connection therewith and
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(ii) such obligation would have been an Assumed Liability but for the non-
assignability or non-transferability thereof; provided, however, that if
Buyer shall fail to perform to the extent required herein, the PE Group shall
thereafter cease to be obligated under this Section 2.5 to provide Buyer with
any benefits in respect of the Restricted Asset which is the subject of such
failure to perform unless and until such situation is remedied or, at the
sole option of Seller, Buyer shall promptly pay or reimburse Seller to remedy
such failure to perform during such period of failure of performance. For
purposes of this Section 2.5, the PE Group shall not include the Transferred
Subsidiaries after the Closing Date. Subject to compliance by the PE Group
with any reasonable instructions and directions of Buyer, no member of the PE
Group shall have any liability to Buyer arising out of the management or
operation by the PE Group of any Restricted Assets other than for fraud,
gross negligence or willful misconduct. Buyer shall reimburse the PE Group
and shall hold the PE Group harmless from and against all liabilities
actually incurred as a result of the post-Closing direct or indirect
ownership, management, operation or sale (other than to Buyer) of the
Restricted Assets by the PE Group, including, without limitation, the amount
of any additional Taxes payable by the PE Group (whether currently or in the
future) in excess of the amount of Taxes which would have been payable by the
PE Group, after application of the terms of this Agreement, if the Restricted
Assets had been transferred to Buyer on the Closing Date. Subject to Buyer
receiving a request for payment from the PE Group (together with any related
xxxx, claim, invoice or other request for payment including such detail and
supporting documentation as Buyer shall reasonably request), such
reimbursement shall be made by Buyer not less than thirty (30) days prior to
the date on which the PE Group is required to make such payment (unless being
contested by Buyer in good faith, in which event the uncontested portion of
such reimbursement shall be paid by Buyer not less than thirty (30) days
prior to such date). "Business Day" shall mean any day other than a Saturday
or Sunday or a day on which banking institutions located in New York, New
York are permitted or required by law, executive order or governmental decree
to remain closed.
(d) Unless otherwise disposed of upon Buyer's instructions in
accordance with Section 2.5(e), the consents, assignments and other good and
sufficient instruments of conveyance and assignment relating to the relevant
Restricted Assets as are necessary under applicable law in order to transfer
effectively such Restricted Assets, free and clear of all Encumbrances
(except Permitted Encumbrances and Encumbrances which are created with
Buyer's prior written consent during the period the Restricted Assets were
being held for Buyer's benefit), will be delivered to Buyer as soon as
practicable after all consents or waivers relating to any such Restricted
Assets or the transfer thereof shall have been obtained.
(e) At any time prior to the transfer to Buyer of any Restricted
Asset, the PE Group shall, on Buyer's written instructions (subject to
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applicable law and regulations), or may at any time after three (3) years
from the Closing, with Buyer's consent (which shall not be unreasonably
withheld), for Buyer's benefit, dispose of the Restricted Assets and remit
the proceeds of such sale (less withholding or similar Taxes, if any, payable
with respect to such disposition or remittance) to Buyer; provided, that
Seller shall have no liability to any third party arising out of such
transactions other than for fraud, gross negligence or willful misconduct;
and provided, further, that any amount remitted to Buyer pursuant to this
Section 2.5(e) shall be reduced by, to the extent not previously paid by or
on behalf of Buyer pursuant to Section 2.5(c), the amount of any and all
liabilities described in Section 2.5(c) imposed upon or incurred by Seller as
a result of Seller's post-Closing direct or indirect ownership, management,
operation or sale of the Restricted Assets, including, without limitation,
the amount of any Taxes (other than Taxes previously paid by Buyer pursuant
to Section 2.5(c)) payable by Seller as a result thereof; and provided
further that any Contract, permit, license or other agreement or instrument
which is a Restricted Asset which has a fixed term of duration may not be
terminated or so disposed of by Seller prior to its expiration in accordance
with its terms except upon Buyer's specific instruction.
(f) For purposes of this Agreement, "Restricted Asset" means any
Asset (including any asset of an Asset Seller that was excluded from the
definition of Asset solely because it was not transferable but which may
become transferable after the Closing), which Asset cannot be validly
assigned, transferred, subleased or sublicensed without the consent or waiver
of the issuer thereof or the other party or parties thereto or a third Person
(including a Governmental Authority), or with respect to which such
assignment, transfer, sublease or sublicense or attempted assignment,
transfer, sublease or sublicense could reasonably be expected to
(i) constitute a breach thereof or a violation of any law, decree, order,
regulation, rule, ordinance or other governmental edict, or (ii) entitle the
other party or parties thereto to terminate such Asset or receive any
additional payment thereunder; and "Restricted Assets" means all of them
collectively. For purposes of this definition, "transfer" or similar word
shall include a transfer resulting or deemed to result under the terms of the
Restricted Asset as a consequence of the transfer of Subsidiary Stock and the
Assets to Buyer.
(g) With respect to those contracts, agreements or other
instruments which relate to both Assets or Assumed Liabilities and Excluded
Assets or Excluded Liabilities (the "Shared Contracts"), the Transition
Agreements shall provide for Buyer to receive the benefits and assume the
liabilities of the Shared Contracts to the extent such rights and liabilities
under the Shared Contracts relate to Assets and Assumed Liabilities and for
Seller to retain the benefits and liabilities of the Shared Contracts to the
extent such rights and liabilities under Shared Contracts relate to Excluded
Assets and Excluded Liabilities.
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2.6. Post-Closing Adjustments. (a) Within 60 days following the
Closing, Seller shall, at its expense, prepare, or cause to be prepared, and
deliver to Buyer an audited Combined Statement of Net Assets to Be Sold of
the Analytical Instruments Business together with the notes thereto and the
report thereon of PricewaterhouseCoopers, LLP (the "Closing Balance Sheet")
which shall set forth the Net Assets of the Analytical Instruments Business
immediately prior to the Closing (the "Closing Net Assets"). The Closing
Balance Sheet shall be prepared, and Closing Net Assets calculated, using the
same accounting principles, methods, practices, allocation methodologies and
estimation methodologies as were utilized in the preparation of the 1998
Statement of Net Assets after giving effect to the adjustments set forth in
Section 3.1(g) of the Seller Schedule. For purposes hereof, "Net Assets"
means the excess of the total assets of the Analytical Instruments Business
to be sold over the total liabilities of the Analytical Instruments Business
to be assumed as reflected in a combined statement of net assets of the
Analytical Instruments Business prepared and calculated as provided in the
immediately preceding sentence. At the same time, Seller shall deliver a
statement (the "Subsidiary Statement") indicating the excess (the
"Preliminary Adjustment Amount") of: (i) the amount (on a combined basis) as
of the Closing Date of the cash and cash equivalents of the Transferred
Subsidiaries (the "Subsidiary Cash Amount"); over (ii) the amount (on a
combined basis) as of the Closing Date of the Indebtedness of the Transferred
Subsidiaries to parties other than Seller or any of its subsidiaries (other
than the Transferred Subsidiaries) (the "Subsidiary Debt Amount"). The
Subsidiary Statement shall be prepared and determined in accordance with U.S.
GAAP.
(b) Buyer and Buyer's accountants shall, within 60 days after the
delivery by Seller of the Closing Balance Sheet and Subsidiary Statement and
calculation of Closing Net Assets and the Preliminary Adjustment Amount,
complete their review of Closing Net Assets and the Preliminary Adjustment
Amount. In the event that Buyer determines that Closing Net Assets or the
Preliminary Adjustment Amount have not been determined in accordance with the
accounting principles, methods, practices and estimation methodologies
required pursuant to Section 2.6(a), Buyer shall inform Seller in writing
(the "Buyer's Objection"), setting forth a specific description of the basis
of Buyer's Objection and the adjustments to Closing Net Assets and the
Preliminary Adjustment Amount which Buyer believes should be made, on or
before the last day of such 60-day period. Seller shall then have 30 days to
review and respond to Buyer's Objection. If Seller and Buyer are unable to
resolve all of their disagreements with respect to the determination of the
foregoing items within 30 days following the completion of Seller's review of
Buyer's Objection, they shall refer their remaining differences to KPMG Peat
Marwick or another nationally recognized firm of independent public
accountants as to which Seller and Buyer mutually agree (the "Accounting
Firm") who shall, acting as experts in accounting and not as arbitrators,
determine on the basis of the standards set forth in Section 2.6(a), and only
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with respect to the specific remaining accounting related differences so
submitted, whether and to what extent, if any, Closing Net Assets or the
Preliminary Adjustment Amount requires adjustment. Seller and Buyer shall
direct the Accounting Firm to use its best efforts to render its
determination within 45 days. The Accounting Firm's determination shall be
conclusive and binding upon Buyer and Seller. The fees and disbursements of
the Accounting Firm shall be shared equally by Buyer, on the one hand, and
Seller, on the other hand. Buyer and Seller shall make readily available to
the Accounting Firm all relevant books and records and any work papers
(including those of the parties' respective accountants) relating to the 1998
Statement of Net Assets, the January 1999 Financial Statements, the Closing
Balance Sheet, the Closing Net Assets, the Preliminary Adjustment Amount and
all other items reasonably requested by the Accounting Firm. The "Adjusted
Closing Net Assets" shall be (i) the Closing Net Assets in the event that
(x) no Buyer's Objection is delivered to Seller during the 60-day period
specified above, or (y) Seller and Buyer so agree, (ii) the Closing Net
Assets, adjusted in accordance with Buyer's Objection in the event that
Seller does not respond to Buyer's Objection within the 30-day period
following receipt by Seller of Buyer's Objection, or (iii) the Closing Net
Assets, as adjusted by either (x) the agreement of Seller and Buyer or
(y) the Accounting Firm. The "Final Adjustment Amount" shall be (A) the
Preliminary Adjustment Amount in the event that (x) no Buyer's Objection is
delivered to Seller during the 60-day period specified above, or (y) Seller
and Buyer so agree, (B) the Preliminary Adjustment Amount, adjusted in
accordance with Buyer's Objection in the event that Seller does not respond
to Buyer's Objection within the 30-day period following receipt by Seller of
Buyer's Objection or (C) the excess of the Subsidiary Cash Amount over the
Subsidiary Debt Amount as determined by either the agreement of Seller and
Buyer or the Accounting Firm.
(c) Buyer shall provide Seller and its accountants full access to
the books and records of the Analytical Instruments Business, to any other
information, including work papers of their accountants, and to any employees
to the extent necessary for Seller to prepare the Closing Balance Sheet or
the Subsidiary Statement and determine Closing Net Assets and the Preliminary
Adjustment Amount. Buyer and its accountants shall have prior notice of and
the opportunity to observe the taking of the Inventory (which may begin prior
to the Closing Date) in connection with the preparation of the Closing
Balance Sheet, Closing Net Assets and the Subsidiary Statement and shall have
full access to all information used by Seller in preparing the Closing
Balance Sheet and Closing Net Assets, the 1999 Financial Statements and the
Subsidiary Statement, including the procedures, books, records and (subject
to customary undertakings) work papers of its accountants. Seller shall
provide Buyer and Buyer's accountants full access to the books and records of
Seller, including work papers of its accountants (subject to customary
undertakings) and to any employees in connection with the 1998 Financial
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Statements and the Subsidiary Statement and the accounting principles,
methods, practices and allocation methodologies.
(d) Within 10 business days following determination of the
Adjusted Closing Net Assets, Buyer or Seller, as the case may be, shall make
an adjustment payment in U.S. dollars in the applicable amount hereinafter
provided. The adjustment payment will be made by Seller to Buyer to the
extent that the Adjusted Closing Net Assets are less than $132 million and by
Buyer to Seller to the extent that Adjusted Closing Assets are greater than
$142 million, plus, in either case, interest thereon from the Closing Date
through the date of payment at a rate equal to the 30-day commercial paper
rate for high-grade unsecured notes sold through dealers by major
corporations as listed in the Money Rates table of The Wall Street Journal on
the Closing Date (the "Interest Rate"). In addition, in the event that the
Final Adjustment Amount is positive, Buyer shall make a payment to Seller in
U.S. dollars in an amount equal to the Final Adjustment Amount within
ten (10) days following its determination. In the event that the Final
Adjustment Amount is negative, Seller shall make a payment to Buyer in U.S.
dollars in an amount equal to the Final Adjustment Amount within ten (10)
days following its final determination. The Final Adjustment Amount shall be
paid with interest at the rate provided above for the period from the Closing
Date through the date of payment. The adjustment payments payable pursuant
to the foregoing provisions of this Section 2.6(d) shall be paid by wire
transfer of immediately available funds to an account designated by Buyer, on
the one hand, or Seller, on the other hand, as the case may be.
(e) With respect to that certain Profit & Loss Pooling
Agreement between Xxxxxx-Xxxxx Holding GmbH Ueberlingen ("PEH") and
Bodenseewerk Xxxxxx-Xxxxx GmbH ("BSW"), Buyer shall promptly reimburse Seller
for any payment made by PEH to BSW and Seller shall promptly reimburse Buyer
for any payment made by BSW to PEH pursuant to that agreement if such
payments are made after the Closing Date due to the requirements of German
law and the statutory audit. Any such reimbursement by Buyer or Seller shall
be considered an adjustment to the Purchase Price. Seller shall cause PEH to
promptly reimburse BSW, or Buyer shall cause BSW to reimburse PEH, as the
case may be, for any amount due to or from either BSW or PEH with respect to
the VAT account between PEH and BSW promptly after the determination thereof
and in any case prior to the time for payment thereof.
3. Representations and Warranties
3.1. Representations and Warranties of Seller. Except as set forth
in the Seller Schedule, Seller, on behalf of itself and the Subsidiaries,
including, without limitation, the Transferred Subsidiaries and the Asset
Sellers, represents and warrants to Buyer that the statements contained in
this Section 3.1 are true, complete and correct. As used in this Agreement,
a "Seller Material Adverse Effect" means any material adverse effect on the
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operations, results of operations, financial condition, assets or business of
the Analytical Instruments Business taken as a whole, and a "Seller
Representation Adverse Effect" means any adverse effect on the operations,
results of operations, financial condition, assets or business of the
Analytical Instruments Business that is reasonably expected to result in a
liability to the Analytical Instruments Business in excess of $500,000.
(a) Due Organization; Good Standing and Power. Section 3.1(a) of
the Seller Schedule sets forth a true, complete and correct list of all the
Subsidiaries, their respective jurisdictions of incorporation and the number
of shares of capital stock of each Transferred Subsidiary outstanding and
such number owned beneficially and of record by Seller or the Subsidiaries.
Seller and each of the Subsidiaries is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation and has the requisite corporate power and authority to own,
lease and operate its property and to conduct the Analytical Instruments
Business as currently conducted by it. Seller has all requisite corporate
power and authority to enter into this Agreement and each of the other
agreements contemplated hereby to be entered into by it and to perform its
obligations hereunder and thereunder. Each Subsidiary has all requisite
corporate power and authority to enter into each agreement contemplated
hereby to be entered into by it and to perform its obligations thereunder.
Each of Seller and each Subsidiary Asset Seller has all requisite corporate
power and authority to convey good and marketable title to Buyer with respect
to the Assets owned by it. Each Affiliate of Seller which owns Subsidiary
Stock has all requisite corporate power and authority to enter into each
agreement contemplated hereby to be entered into by it and to perform its
obligations thereunder. Each Affiliate of Seller which owns Subsidiary Stock
has all requisite corporate power and authority to convey good and marketable
title to Buyer with respect to the Subsidiary Stock owned by it. Each of
Seller and the Subsidiaries is duly authorized, qualified or licensed to do
business as a foreign corporation and is in good standing in each of the
jurisdictions in which its right, title or interest in or to any of the
Assets held by it, or the conduct of the Analytical Instruments Business by
it, requires such authorization, qualification or licensing, except where the
failure to so qualify or to be in good standing would not, individually or in
the aggregate, have a Seller Representation Adverse Effect or materially
impair either (i) the ability of Seller or such Subsidiary to perform its
obligations hereunder or under any other agreement contemplated hereby to
which it is a party or (ii) the ability of Buyer to own the Assets and
Subsidiary Stock, and operate the Analytical Instruments Business, after the
Closing (except as may be affected by considerations applicable to Buyer that
would not be applicable to any other third party purchaser of the Analytical
Instruments Business).
(b) Authorization and Validity of Agreement. The execution,
delivery and performance by Seller of this Agreement and by each of Seller
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and each Subsidiary of any other agreements contemplated hereby (to the
extent such entity is a party thereto) and the consummation by each of the
transactions contemplated hereby and thereby have been duly authorized by the
Board of Directors of Seller. No other corporate or stockholder action is
necessary for the authorization, execution, delivery and performance by
Seller of this Agreement and by each of Seller and each Subsidiary of any
other agreements contemplated hereby (to the extent such entity is a party
thereto) and the consummation by Seller and the Subsidiaries of the
transactions contemplated hereby or thereby, other than certain corporate
approvals of the foreign Subsidiaries, which corporate approvals shall have
been obtained by the Closing Date. This Agreement has been duly executed and
delivered by Seller and constitutes a valid and legally binding obligation of
Seller, enforceable against it in accordance with its terms, subject to
(i) the effects of bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws relating to or affecting
the enforcement of creditors' rights generally, (ii) general equitable
principles (whether considered in a proceeding in equity or at law) and
(iii) an implied covenant of good faith and fair dealing. When executed and
delivered as provided in this Agreement, each other agreement contemplated
hereby to be executed and delivered by Seller or any Subsidiary will be a
valid and legally binding obligation of Seller or such Subsidiary (to the
extent a party thereto), enforceable against Seller or such Subsidiary in
accordance with its terms, subject to (i) the effects of bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and other
similar laws relating to or affecting the enforcement of creditors' rights
generally, (ii) general equitable principles (whether considered in a
proceeding in equity or at law) and (iii) an implied covenant of good faith
and fair dealing.
(c) No Governmental Approvals or Notices Required; No Conflict
with Instruments to Which Company Is a Party. Except for the pre-merger
notification requirements of the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act
of 1976, as amended, and the rules and regulations thereunder (the "HSR Act")
or as set forth in Section 3.1(c) of the Seller Schedule, the execution,
delivery and performance of this Agreement and any other agreements
contemplated hereby by Seller and the Subsidiaries and the consummation by
them of the transactions contemplated hereby and thereby (i) will not violate
(with or without the giving of notice or the lapse of time or both), or
require any consent, approval, filing or notice to be made by Seller or any
Subsidiary under, any provision of any law, rule or regulation, court order,
judgment or decree or Material Permit (to the extent transferable) applicable
to Seller or any Subsidiary, except for such violations the occurrence of
which, and such consents, approvals, filings or notices the failure of which
to obtain or make, would not, individually or in the aggregate, have a Seller
Representation Adverse Effect, or materially impair either (A) the ability of
Seller and the Subsidiaries to perform their respective obligations under
this Agreement and the other agreements contemplated hereby or (B) except as
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may be affected by considerations applicable to Buyer that would not be
applicable to any other third party purchaser of the Analytical Instruments
Business, the ability of Buyer to own the Assets and Subsidiary Stock, and
operate the Analytical Instruments Business after the Closing in the same
manner as conducted by the Company before the Closing (except as may be
affected by considerations applicable to Buyer that would not be applicable
to any other third party purchaser of the Analytical Investments Business)
and (ii) will not conflict with, or result in the breach or termination of
any provision of, require the counterparty's consent under or constitute a
default under, or result in the acceleration of the performance of the
obligations of Seller or any Subsidiary under, or result in the creation of a
lien, charge or encumbrance upon a portion of the properties or assets of any
Seller or any Subsidiary included in the Assets or the Analytical Instruments
Business pursuant to, the charter or by-laws (or analogous organizational
documents) of Seller or any Subsidiary, or any indenture, mortgage, deed of
trust, lease, licensing agreement, contract, instrument or other agreement to
which Seller or any such Subsidiary is a party or by which Seller or any
Subsidiary or any of the Assets held by Seller or any Subsidiary is bound,
except for such conflicts, breaches, consents, terminations, defaults,
accelerations, liens, charges or encumbrances which would not, individually
or in the aggregate, have a Seller Representation Adverse Effect or
materially impair the ability of Seller or such Subsidiary to perform its
obligations under this Agreement or any other agreement contemplated hereby
to which it is a party (except as may be affected by considerations
applicable to Buyer that would not be applicable to any other third party
purchaser of the Analytical Instruments Business).
(d) Capital Stock of the Transferred Subsidiaries. (i) There are
no options, warrants, convertible securities or other rights, subscriptions,
agreements, arrangements or commitments relating to the capital stock of, or
equity interests in, any of the Transferred Subsidiaries obligating Seller or
any of the Subsidiaries to issue, sell or acquire any shares of capital stock
of, or equity interests in, any Transferred Subsidiary or entitling any third
party to acquire from any Transferred Subsidiary any shares of capital stock
or other securities of such Transferred Subsidiary.
(ii) The Subsidiary Stock constitutes all of the issued and
outstanding shares of capital stock of each Transferred Subsidiary and
good title to the Subsidiary Stock is owned of record and beneficially
solely by Seller or a wholly owned subsidiary of Seller, free and clear
of all Encumbrances, other than certain nominee shares (the "Nominee
Shares"), as to which Seller and its subsidiaries have the requisite
contractual authority to convey good title to Buyer as set forth in
Section 3.1(d) of the Seller Schedule. All of the shares of Subsidiary
Stock have been duly authorized and validly issued and are fully paid
and nonassessable and were not issued in violation of and are free of
any preemptive rights. There are no voting trusts, stockholder
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agreements, proxies or other agreements or understandings in effect with
respect to the voting or transfer of any of the shares of Subsidiary
Stock except with respect to the Nominee Shares as described in
Section 3.1(d) of the Seller Schedule.
(iii) Subject only to recording on the books of the respective
Transferred Subsidiaries, the transfer of the shares of Subsidiary Stock
to Buyer at Closing will vest in Buyer good title to such shares, free
and clear of all Encumbrances, except for any Encumbrances resulting
from any action taken or omitted to be taken by or on behalf of Buyer.
(iv) No Transferred Subsidiary holds any direct or indirect equity
interest in any other partnership, firm, corporation, limited liability
company, association, trust, unincorporated organization or entity, or
any syndicate or group that would be deemed to be a Person under
Section 13(d)(3) of the United States Securities Exchange Act of 1934,
as amended ("Person"), except for another Transferred Subsidiary.
(e) Entire Business. Upon consummation of the transactions
contemplated by this Agreement, Buyer will acquire, or will acquire the
legally enforceable right to use, all the properties and assets included in
the Assets, and the properties and assets of the Transferred Subsidiaries and
such properties, assets and the rights acquired by Buyer, together with the
services to be provided to, and other rights of, Buyer under the Buyer
License Agreement and the Transition Agreements, shall be sufficient for
Buyer to conduct the Analytical Instruments Business in the same manner as it
is currently conducted, except, in each case, as may be affected by
circumstances applicable to Buyer that would not be applicable to any third
party purchaser of the Analytical Instruments Business.
(f) Title to Properties. The Asset Sellers and Transferred
Subsidiaries are, and immediately prior to the Closing will be, the true and
lawful owner of the Assets and the assets and properties of the Transferred
Subsidiaries, and will have the right to, and at the Closing shall, sell and
transfer to Buyer at Closing good, record and marketable title to the Assets,
free and clear of all liens, pledges, charges, encumbrances and equities of
any kind affecting either the Assets or the assets and properties of the
Transferred Subsidiaries (collectively, "Encumbrances"), except (A) as set
forth in Section 3.1(f) of the Seller Schedule; (B) as disclosed in the
Financial Information; (C) liens for Taxes, assessments and other
governmental charges not yet due and payable but not delinquent, or being
contested in good faith by appropriate proceedings; (D) mechanics',
workmen's, repairmen's, warehousemen's, carriers' or other like liens arising
or incurred in the Ordinary Course of Business, original purchase price
conditional sales contracts and equipment leases with third parties entered
into in the Ordinary Course of Business which, individually or in the
aggregate, would not materially adversely affect the use or value of such
-22-
assets or properties; (E) with respect to real property, (1) easements,
quasi-easements, licenses, covenants, rights-of-way and other similar
restrictions, including, without limitation, any other agreements, conditions
or restrictions which would be shown by a current title report or other
similar report or listing, (2) any conditions that may be shown by a current
survey, title report or physical inspection and (3) zoning, building and
other similar restrictions which in the case of (1), (2) and (3)
individually or in the aggregate, would not materially adversely affect the
use or value of such assets or properties; and (F) liens, charges or other
encumbrances which, individually or in the aggregate, would not materially
adversely affect the use or value of such assets or properties (collectively,
"Permitted Encumbrances") or Encumbrances resulting from any action taken or
omitted to be taken by or on behalf of Buyer.
(g) Financial Information. Seller has delivered to Buyer true,
complete and correct copies of certain historical results of operations and
statements of assets and liabilities relating to the Analytical Instruments
Business listed in Section 3.1(g) of the Seller Schedule (the "Financial
Information"), including the Combined Statement of Net Assets to Be Sold of
the Analytical Instruments Business as of June 30, 1998 (the "1998 Statement
of Net Assets") and the related Combined Statements of Operations and Cash
Flows of the Analytical Instruments Business for the three years ended June
30, 1998, together in each case with the notes thereto and the report thereon
of PricewaterhouseCoopers, LLP (collectively, the "1998 Financial
Statements") and the unaudited Combined Statement of Net Assets to Be Sold of
the Analytical Instruments Business as of January 29, 1999 (the "1999
Statement of Net Assets") and the related unaudited Combined Statement of
Operations of the Analytical Instruments Business for the seven months ended
January 29, 1999, together in each case with the notes thereto (collectively,
the "1999 Financial Statements"). Subject to any qualifications, assumptions
or other limitations expressly set forth in any of the Financial Information
or any notes thereto, except as disclosed in Section 3.1(g) of the Seller
Schedule: (i) the Financial Information (A) has been prepared in accordance
with the books of account and other financial records of the Analytical
Instruments Business, (B) has been prepared in conformity with accounting
principles generally accepted in the United States of America ("U.S. GAAP")
and (C) fairly presents in all material respects the information that
purports to be presented therein; (ii) after giving effect to the adjustments
described in Section 3.1(g) of the Seller Schedule, the 1998 Financial
Statements fairly present the combined financial position of the Analytical
Instruments Business as of June 30, 1998 and the combined results of its
operations for the three years then ended; and (iii) the 1999 Financial
Statements fairly present the combined financial position of the Analytical
Instruments Business as of January 29, 1999 and the combined results of its
operations for the seven months then ended, and, subject to the adjustments
described in Section 3.1(g) of the Seller Schedule, have been prepared in
accordance with the accounting principles, methods, practices, allocation
-23-
methodologies and estimation methodologies used to prepare the 1998 Financial
Statements.
(h) Absence of Undisclosed Liabilities Etc.. As of the date of
this Agreement there are, and as of the Closing Date there will be, no
liabilities or obligations of the Analytical Instruments Business of any
nature, whether fixed, contingent, accrued or otherwise, liquidated or
unliquidated, and whether due or to become due, except (i) liabilities set
forth in or otherwise disclosed in Section 3.1(h) of the Seller Schedule,
(ii) liabilities reflected or reserved against in the 1999 Statement of Net
Assets or disclosed in the notes thereto, (iii) liabilities and obligations
under Material Contracts to which a Transferred Subsidiary is a party (except
for liabilities and obligations resulting from any breach thereof by the
Company); (iv) liabilities and obligations under any Material Contract which
is part of the Assets (except for any liabilities or obligations resulting
from any breach thereof by any Asset Seller), (v) and Contracts entered into
in the Ordinary Course of Business not required to be included in Section
3.1(s)(i) of the Seller Schedule, (vi) liabilities and obligations which have
arisen in the Ordinary Course of Business since January 29, 1999 (none of
which, individually or in the aggregate, has had a Seller Material Adverse
Effect) and (vii) other liabilities not exceeding $6,000,000 in the
aggregate.
(i) Absence of Certain Changes or Events. Since the date of the
1998 Financial Statements, except as set forth in Section 3.1(i) of the
Seller Schedule, neither Seller nor any Subsidiary, with respect to the
Analytical Instruments Business, has:
(A) incurred any liability for or in respect of borrowed
money in excess of $1 million in the aggregate, except current
liabilities incurred, and liabilities under Contracts entered into, in
the Ordinary Course of Business, or Indebtedness which is an Excluded
Liability or Indebtedness for which a post-Closing adjustment will be
made pursuant to Section 2.6;
(B) purchased any shares of capital stock or other
equity securities of any party unaffiliated with Seller that would be
set forth, summarized or described in the Assets (and no Transferred
Subsidiary has purchased any such shares or securities);
(C) mortgaged, pledged or subjected to any material
claim any material portion of the Assets or any material portion of the
assets of any Transferred Subsidiary, other than Permitted Encumbrances;
(D) acquired or sold, assigned, transferred or otherwise
disposed of a material amount of Assets or any material amount of the
-24-
assets of any Transferred Subsidiary, except in each case in the
Ordinary Course of Business;
(E) sold, assigned, licensed, sublicensed or transferred
any material Intellectual Property included in the Assets (provided that
all Intellectual Property set forth, summarized and/or described in
Section 1.2(a) of the Seller Schedule shall be automatically deemed
material for purposes of this paragraph (E)) or any material
Intellectual Property of any Transferred Subsidiary, except for licenses
of Intellectual Property in the Ordinary Course of Business in
conjunction with product sales;
(F) made any single capital expenditure or commitment
therefor other than as provided in the 1999 Budget previously provided
to Buyer;
(G) made any change in compensation of any member of
senior management (or employee of similar stature) except for increases
which are in the Ordinary Course of Business;
(H) materially changed its credit policy as to sale of
inventories or collection of receivables;
(I) entered into any joint venture, partnership or
similar arrangement;
(J) materially amended, modified or terminated any
material contract, understanding, commitment or agreement other than in
the Ordinary Course of Business, except for any such item that
terminated in accordance with its terms;
(K) authorized or issued any recall notice for any of
its products which has had or would reasonably be expected to have,
individually or in the aggregate, a Seller Representation Adverse
Effect;
(L) received notice of any warranty claim (other than in
the Ordinary Course of Business) or any products liability claim which
has had or which would reasonably be expected to have, individually or
in the aggregate, a Seller Representation Adverse Effect;
(M) changed its accounting methods, principles or
practices, other than as required by U.S. GAAP; or
(N) agreed to do any of the things listed in clauses (A)
through (M) of this Section 3.1(i).
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(j) Legal Proceedings. (i) Except as described in Section 3.1(j)
of the Seller Schedule, as of the date of this Agreement there is no claim,
action, suit, arbitration, mediation or proceeding ("Action") by or before
any government, governmental, statutory, regulatory or administrative
authority, agency, body or commission or any court, tribunal, or judicial or
arbitral body whether federal, state, provincial, local or foreign
("Governmental Authority") pending or, to the knowledge of the Company,
contemplated or threatened against the Company or the Analytical Instruments
Business, that would reasonably be expected to have, individually or in the
aggregate, a Seller Representation Adverse Effect or prevent or materially
delay the consummation by Seller or Buyer of the transactions contemplated by
this Agreement. To the knowledge of the Company, none of Seller, any
Subsidiary or any of the assets of the Analytical Instruments Business is
subject to any Governmental Order having, individually or in the aggregate, a
Seller Representation Adverse Effect.
(ii) There is no outstanding (A) injunction, decree, judgment,
award, fine or penalty by any court, arbitration panel, industrial
tribunal or Governmental Authority against or affecting the Analytical
Instruments Business, the Assets or the assets of the Transferred
Subsidiaries or (B) writ or order of any such entity against or
affecting the Analytical Instruments Business, the Assets or the assets
of the Transferred Subsidiaries, which has had or would reasonably be
expected to have, either individually or in the aggregate, a Seller
Representation Adverse Effect.
(k) Compliance with Laws; Certain Regulatory Matters. (i) The
Analytical Instruments Business has been and is currently being conducted in
compliance in all respects with all federal, state, provincial, local or
foreign laws and orders of any Governmental Authority applicable to the
Analytical Instruments Business (including, without limitation, the U.S.
Foreign Corrupt Practices Act and the U.S. Occupational Safety and Health Act
and regulations thereunder) except in such cases where non-compliance, either
individually or in the aggregate, would not result in a Seller Representation
Adverse Effect, and neither Seller nor any Subsidiary has received any
written notice to the effect that the Analytical Instruments Business is not
in compliance with any applicable law or order of any Governmental Authority
where non-compliance, either individually or in the aggregate, would result
in a Seller Representation Adverse Effect. Seller and each Subsidiary has
filed with the proper authorities all statements and reports required by all
applicable laws relating to the Analytical Instruments Business, the Assets
or the Transferred Subsidiaries except in such cases where the failure to so
file would not, either individually or in the aggregate, be expected to
result in a Seller Representation Adverse Effect.
(ii) No Transferred Subsidiary nor, in connection with the
Analytical Instruments Business, any Asset Seller is, or since January
-26-
1, 1996 has been, suspended or debarred from bidding on contracts or
subcontracts with any Governmental Authority; no such suspension or
debarment has been initiated or, to the knowledge of the Company,
threatened in writing; and the consummation of the transactions
contemplated by this Agreement will not result in any such suspension or
debarment (assuming that no such suspension or debarment will result
from the identity of Buyer). Except as set forth in Section 3.1(k) of
the Seller Schedule, no Transferred Subsidiary or, in connection with
the Analytical Instruments Business, Asset Seller has, since January 1,
1996, been audited or (to the knowledge of the Company) investigated or
is now being audited or, to the knowledge of the Company, has been
threatened in writing with an investigation by the U.S. Government
Accounting Office, the U.S. Department of Defense or any of its
agencies, the Defense Contract Audit Agency, the U.S. Department of
Justice, the Inspector General of any U.S. Governmental Authority, any
similar agencies or instrumentalities of any foreign Governmental
Authority, or any prime contractor with a Governmental Authority except
as would not be expected to result in a Seller Representation Adverse
Effect. To the knowledge of the Company, there is no valid basis for
(A) the suspension or debarment of any Transferred Subsidiary or, in
connection with the Analytical Instruments Business, Asset Seller, from
bidding on contracts or subcontracts with any Governmental Authority or
(B) any claim pursuant to any audit by any Governmental Authority in
connection with any contracts or subcontracts relating to the provision
of products or services to or for the benefit of a Governmental
Authority except as would not reasonably be expected to have a Seller
Representation Adverse Effect. No Transferred Subsidiary or, in
connection with the Analytical Instruments Business, Asset Seller, has
any agreements, contracts or commitments which require it to obtain or
maintain a security clearance with any Governmental Authority.
(l) Labor Controversies. (i) No Transferred Subsidiary or, in
the conduct of the Analytical Instruments Business, Asset Seller, has, since
January 1, 1996, experienced nor, to the knowledge of the Company, is there
currently threatened, any (A) work stoppages or strikes, (B) grievance,
arbitration proceedings or proceedings before any industrial tribunal arising
out of collective bargaining agreements, national labor union agreements or
otherwise covering employees of the Analytical Instruments Business, or
(C) unfair labor practice complaints, which would have a Seller
Representation Adverse Effect. To the knowledge of the Company, there is no
organizational effort presently being made or threatened by or on behalf of
any labor union or any formal collective bargaining agreement being
negotiated with respect to any employees of the Analytical Instruments
Business.
(ii) Section 3.1(l) of the Seller Schedule sets forth a true,
complete and correct list of each collective bargaining agreement or
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other labor union contract applicable to persons employed in the
Analytical Instruments Business other than statutory arrangements under
applicable foreign laws and no other collective bargaining agreement is
being negotiated by the Company. Except as set forth in Section 3.1(l)
of the Seller Schedule, no Asset Seller or Transferred Subsidiary
recognizes (expressly or impliedly) any trade union.
(m) Inventories; Receivables. (i) The inventories of the
Analytical Instruments Business are reflected in the Financial Statements at
the lower of cost (determined on the first-in first-out method) or market, in
conformity with U.S. GAAP.
(ii) All accounts receivable of the Analytical Instruments
Business reflected in the Financial Statements have arisen from bona
fide transactions in accordance with the requirements with U.S. GAAP and
are stated therein net of reserves for doubtful accounts in accordance
with the requirements of U.S. GAAP.
(n) Intellectual Property. (i) The Intellectual Property set
forth, summarized and/or described on Section 1.2(a) of the Seller Schedule,
together with the Intellectual Property set forth, summarized and/or
described in Section 4.8(a) of the Seller Schedule (to be licensed to Buyer
pursuant to the Buyer License Agreement), constitute all the Intellectual
Property necessary to conduct the Analytical Instruments Business as
currently conducted. In the event any Intellectual Property is erroneously
included in, or omitted from, these schedules, the parties agree to correct
such schedules prior to the Closing, so that the final schedules reflect the
parties' true intent regarding the proper allocation of Intellectual Property
between them.
(ii) Upon execution and delivery by the Asset Sellers to Buyer
of the instruments of conveyance referred to in Section 1.4 and the
Buyer License Agreement, and subject to Section 2.5, each item of
Intellectual Property owned or used by the Asset Sellers and the
Transferred Subsidiaries and necessary to conduct the Analytical
Instruments Business as currently conducted as of the Closing will be
owned or available for use by Buyer or the Transferred Subsidiaries on
substantively identical terms and conditions immediately following the
Closing. Each of the Asset Sellers and the Transferred Subsidiaries has
taken reasonable measures to protect the proprietary nature of such
Intellectual Property and to maintain in confidence the trade secrets,
know-how and confidential information that it owns or uses and is
necessary to conduct the Analytical Instruments Business as currently
conducted. No other Person has any rights to any of the material
Intellectual Property owned or used by the Asset Sellers or the
Transferred Subsidiaries that is necessary to conduct the Analytical
Instruments Business as currently conducted, except that the
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Intellectual Property identified in Section 1.2(a) of the Seller
Schedule is owned by the respective owners identified therein. To the
knowledge of the Company, no Person is infringing, violating or
misappropriating any of the material Intellectual Property to be
conveyed to Buyer at Closing.
(iii) To the Company's knowledge and except as set forth in
Section 3.1(n)(iii) of the Seller Schedule, none of the activities of
the Analytical Instruments Business as currently conducted materially
infringes or violates, or constitutes a material misappropriation of,
any Intellectual Property of any other Person (including, without
limitation, Seller or any Subsidiary). Except as disclosed in Section
3.1(n)(iii) of the Seller Schedule, no Transferred Subsidiary or Asset
Seller has received since January 1, 1996, any complaint, claim or
notice in writing alleging any such infringement, violation or
misappropriation with respect to any Intellectual Property to be
conveyed or licensed to Buyer pursuant to this Agreement or the Buyer
License Agreement, which complaint, claim or notice has not been
resolved to the mutual satisfaction of the parties involved in a manner
which involves no future obligations of Seller or any Subsidiary, except
to the extent any of the foregoing would not reasonably be expected to
result in a Seller Representation Adverse Effect.
(iv) Except as disclosed in Section 3.1(n)(iv) of the Seller
Schedule, with respect to each item of Intellectual Property necessary
to conduct the Analytical Instruments Business as currently conducted
and owned by a third party and used by a Transferred Subsidiary or, in
the conduct of the Analytical Instruments Business, an Asset Seller:
(A) the license, sublicense or other agreement covering such
item is, to the Company's knowledge, legal, valid, binding, enforceable
and in full force and effect with respect to the Asset Seller or
Transferred Subsidiary which is a party thereto;
(B) such license, sublicense or other agreement to which an
Asset Seller is a party is assignable by the Asset Seller to Buyer
without the consent or approval of or any payment to any party;
(C) the consummation of the transactions contemplated herein
will not conflict with, result in a violation or breach of or constitute
a default under (or would result in a violation, breach or default with
the giving of notice or the passage of time or both) any such license,
sublicense or other agreement which violation, breach or default
(together with all other such violations, breaches or defaults) would
have a Seller Representation Adverse Effect;
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(D) no Asset Seller, Transferred Subsidiary or, to the
Company's knowledge, any other party is in material breach or default
under any such license, sublicense or other agreement, and to the
Company's knowledge, no event has occurred which, with notice or the
passage of time or both, would constitute such a breach or default or
permit a termination, modification or acceleration thereunder;
(E) the underlying item of Intellectual Property is not
subject to any outstanding order of any Governmental Authority; and
(F) no Asset Seller or Transferred Subsidiary has agreed,
except in the Ordinary Course of Business in conjunction with product
sales, to indemnify any Person or entity for or against any
interference, infringement, misappropriation or other conflict with
respect to such item.
(o) Government Licenses, Permits and Related Approvals.
(i) Except as described in Section 3.1(o) of the Seller Schedule, the Asset
Sellers and the Transferred Subsidiaries (A) currently hold all governmental
licenses, permits and authorizations, including, without limitation, all
permits required under Environmental Laws necessary for the current use,
occupancy and operation of the Analytical Instruments Business (the "Material
Permits"), (B) are in compliance in all material respects with all such
Material Permits and (C) have made all required filings with, or
notifications to, all Governmental Authorities pursuant to applicable
requirements of all laws applicable to the Analytical Instruments Business
except for such failures to hold, be in compliance with or make filings or
notifications that individually or in the aggregate would not have a Seller
Representation Adverse Effect.
(ii) Each Material Permit is in full force and effect and no
suspension or cancellation of any Material Permit has been, to the
knowledge of the Company, threatened in writing except for such
suspensions or cancellations as would not have a Seller Representation
Adverse Effect. Except as described in Section 3.1(o) of the Seller
Schedule, and except in each case for any Material Permits listed in
Section 1.2(h) of the Seller Schedule , all such Material Permits
(whether held by an Asset Seller or Transferred Subsidiary) will
continue to be in full force and effect immediately following the
Closing for the benefit of Buyer in accordance with the terms thereof as
in effect immediately prior to the Closing, except to the extent that
the failure to be in full force or effect will not have a Seller
Representation Adverse Effect. To the knowledge of the Company, there is
no proposed or contemplated change in the terms of any Material Permit
which would, individually or in the aggregate, have a Seller
Representation Adverse Effect.
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(p) Employee Benefit Plans. (i) Section 3.1(p) of the Seller
Schedule sets forth a true, complete and correct list of each "employee
benefit plan" (as defined in Section 3(3) of the Employee Retirement Income
Security Act ("ERISA")) and all other employee benefit, bonus, incentive,
deferred compensation, stock purchase, stock option, severance, change in
control and fringe benefit plans (other than any employment or personnel
policy, practice or procedure) (hereinafter, "Benefit Plans") maintained or
contributed to by Seller, any Transferred Subsidiary or any ERISA Affiliate
for current or former employees (other than Foreign Employees) of the
Analytical Instruments Business (collectively, the "Seller Benefit Plans").
For purposes of this Agreement, "ERISA Affiliate" is any entity which is or
was at any relevant time, (A) a member of a controlled group of corporations
(as defined in Section 414(b) of the Code), or (B) a group of trades or
businesses under common control (as defined in Section 414(c) of the Code).
Section 3.1(p) of the Seller Schedule separately identifies those Seller
Benefit Plans that are maintained exclusively for the benefit of employees of
one or more Transferred Subsidiaries. With respect to each Seller Benefit
Plan, Seller has made available to Buyer a true, complete and correct copy of
the following, if any: (1) the most recent summary plan description for each
Seller Benefit Plan for which a summary plan description is required,
(2) such Seller Benefit Plan, and each trust agreement relating to such
Seller Benefit Plan, (3) in the case of each Seller Benefit Plan applicable
to United States Employees, the most recent annual reports (Form 5500) filed
with the Internal Revenue Service ("IRS"), (4) the most recent determination
letter issued by the IRS with respect to any Seller Benefit Plan intended to
be qualified under Section 401(a) of the Code, (5) the most recent financial
statement for each Seller Benefit Plan, and (6) the most recent actuarial
statement for each Seller Benefit Plan that is a defined benefit plan.
(ii) With respect to any Benefit Plans maintained by the
Seller, any Transferred Subsidiary or an ERISA Affiliate, no event has
occurred and there exists no condition or set of circumstances in
connection with which the Company could be subject to any fine, penalty,
tax or any other liability under the terms of such Benefit Plans, ERISA,
the Code, or any other applicable law which would, individually or in
the aggregate, have a Seller Representation Adverse Effect.
(iii) Except as set forth in Section 3.1(p) of the Seller
Disclosure Schedule, there are no inquiries or investigations by the
IRS, the U.S. Department of Labor, or the Pension Benefit Guaranty
Corporation, no termination proceedings and no actions, suits or claims
(other than claims for benefits in the Ordinary Course of Business)
pending or, to the knowledge of the Company, threatened against any
Seller Benefit Plan (or any Transferred Subsidiary with respect thereto)
or the assets thereof which would have a Seller Representation Adverse
Effect.
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(iv) The Company is in full compliance with the terms of each
of the Seller Benefit Plans and all applicable laws relating to the
Seller Benefit Plans, including, without limitation, ERISA, the Code and
the Health Insurance Portability and Accountability Act of 1996, all
required filings have been made and all required contributions have been
made to the Seller Benefit Plans, except where a failure to comply, file
or contribute, would result in a Seller Representation Adverse Effect.
(v) Neither Seller, any ERISA Affiliate nor any Transferred
Subsidiary has any liability which remains unsatisfied to a
"multiemployer plan" as defined in Section 4001(a)(3) of ERISA (a
"Multiemployer Plan"), in an amount which would have a Seller
Representation Adverse Effect. None of the Seller Benefit Plans is a
Multiemployer Plan and no Seller, ERISA Affiliate nor Transferred
Subsidiary has been required to contribute to, or sponsor, any
Multiemployer Plan after 1980.
(vi) The Seller Benefit Plans that are intended to be
qualified under Section 401(a) of the Code have received determination
letters from the Internal Revenue Service to the effect that such Seller
Benefit Plans are qualified and the plans and the trusts related thereto
are exempt from federal income taxes under Sections 401(a) and 501(a),
respectively, of the Code and, to the knowledge of Seller, it has
received no notice of an act or omission which has occurred since the
date of the last favorable determination letter issued with respect to a
Seller Benefit Plan which would reasonably be expected to result in the
revocation of such Benefit Plan's qualified status.
(vii) Other than as disclosed in Section 3.1(p) of the Seller
Schedule, no agreement or obligation exists to increase benefits or to
materially increase the employer cost of providing benefits under any
Seller Benefit Plan, in each case to a level above that in effect as of
the date of this Agreement, or to adopt any new Seller Benefit Plan,
where the increased liability in the aggregate would have a Seller
Representation Adverse Effect.
(viii) Except as set forth in Section 3.1(p) of the Seller
Schedule, there is no (A) agreement, plan or arrangement under which any
Person may receive payments from Seller or any Subsidiary with respect
to the Analytical Instruments Business, that may be subject to the tax
imposed by Section 4999 of the Code or included in the determination of
such Person's "parachute payment" under Section 280G of the Code; and
(B) agreement or plan binding on any Transferred Subsidiary, any of the
benefits of which will be increased, or the vesting of the benefits of
which will be accelerated, by the occurrence of any of the transactions
contemplated by this Agreement or the value of any of the benefits of
which will be calculated on the basis of any of the transactions
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contemplated by this Agreement, which in the aggregate would result in
liability that would have a Seller Representation Adverse Effect.
(ix) Except as would not, individually or in the aggregate,
have a Seller Representation Adverse Effect, with respect to each Seller
Benefit Plan that is applicable to Foreign Employees (each, a "Foreign
Seller Plan"), each Foreign Seller Plan has been maintained and operated
in compliance with the terms thereof and of the applicable law of the
foreign jurisdiction (including any funding, contribution or accounting
requirements).
(q) Environmental Matters. Except as would not have, individually
or in the aggregate, a Seller Material Adverse Effect, and except as set
forth in Section 3.1(q) of the Seller Schedule:
(i) Each Asset Seller and each Transferred Subsidiary is in
compliance in all material respects with all Environmental Laws
regarding the Analytical Instruments Business. There is no pending or,
to the knowledge of the Company, threatened Action, civil or criminal
litigation, written notice of violation, formal administrative
proceeding or investigation, inquiry or information request by any
Governmental Authority under any Environmental Law involving or relating
to the Analytical Instruments Business. As used herein, the terms
"release," "hazardous substance" and "environment" shall have the
meaning set forth in the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended ("CERCLA"). For
purposes of this Agreement, "Environmental Law" means any applicable
U.S. federal, state, foreign or local law, ordinance, code or statute,
or any rule or regulation implementing such law or statute and any case
law or administrative decision, in each case existing and in effect on
the date hereof, relating to pollution or protection of the environment,
including without limitation any statute or regulation pertaining to
(A) treatment, storage, disposal, generation or transportation of
Materials of Environmental Concern; (B) air or water or noise;
(C) groundwater and soil contamination; (D) the release or threatened
release into the environment of hazardous substances, or solid or
hazardous waste, including without limitation emissions, discharges,
injections, spills, escapes or dumping of Materials of Environmental
Concern; (E) the protection of wildlife, marine sanctuaries and
wetlands, including without limitation all endangered and threatened
species; (F) tanks, vessels and containers; (G) abandoned, disposed or
discarded barrels, tanks, vessels, containers and other closed
receptacles; and (H) manufacture, processing, use, distribution,
treatment, storage, disposal, transportation or handling of Materials of
Environmental Concern. For purposes of this Agreement, "Materials of
Environmental Concern" means any pollutants or contaminants, hazardous
substances (as such terms are defined under CERCLA), solid wastes and
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hazardous wastes (as such terms are defined under the Resource
Conservation and Recovery Act, as amended), radioactive materials, toxic
materials, oil or petroleum and petroleum products.
(ii) In connection with the Analytical Instruments Business,
there has been no release of any Materials of Environmental Concern in
amounts above reportable quantities or which otherwise resulted in an
obligation to report to a Governmental Authority under applicable
Environmental Laws into the environment at or from any parcel of real
property or any facility (i) currently owned, operated or controlled by
any Asset Seller or Transferred Subsidiary or (ii) formerly owned,
operated or controlled by Seller or any Subsidiary in the conduct of the
Analytical Instruments Business during the period of its ownership,
operation or control.
(iii) All material and non-privileged documents relating to
compliance with Environmental Laws, including those relating to releases
or threatened releases to the environment and environmental reports,
investigations and audits relating to premises currently owned or
operated by any Transferred Subsidiary or any Asset Seller in the
conduct of the Analytical Instruments Business, whether conducted by or
on behalf of any Transferred Subsidiary or Asset Seller, or a third
party, and whether done at the initiative of the Company or directed by
a Governmental Authority or other third party in the possession of the
Company have been provided or made available to Buyer.
(r) Tax. (i) (A) Each Transferred Subsidiary has timely filed,
or been included in a consolidated, combined or unitary Tax Return that was
timely filed, all Tax Returns required to be filed by it, taking into account
any extension of time to file granted to, or obtained on behalf of, Seller or
any Subsidiary, (B) all Taxes shown to be payable on such Tax Returns have
been or will be timely paid and (C) all Taxes owed by each Transferred
Subsidiary (whether or not shown on any Return) have been (or will be) paid
when due or an adequate reserve therefor will be included on the Closing
Balance Sheet.
(ii) (A) Except as set forth in Section 3.1(r)(ii) of the
Seller Schedule (1) the income Tax Returns of each Transferred
Subsidiary (and any consolidated, combined or unitary group of which
such Transferred Subsidiary is a member) have been audited and settled,
or are closed to assessment, for all years through the fiscal year
ending June 30, 1997; (2) there is no written claim or assessment
pending against any Transferred Subsidiary for any alleged deficiency in
Taxes, and, to the knowledge of the Company, there is no audit or
investigation with respect to any liability of any Transferred
Subsidiary for Taxes; and (3) there are no agreements in effect to
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extend the period of limitations for the assessment or collection of any
Tax for which any Transferred Subsidiary may be liable.
(B) Without limiting the generality of the foregoing, each
Transferred Subsidiary has withheld or collected and duly paid all Taxes
required to have been withheld or collected and paid in connection with
amounts paid or owing to or from any employee, independent contractor,
creditor, stockholder or other third party.
(C) None of the Transferred Subsidiaries has filed a consent
under Code Section 341(f) concerning collapsible corporations.
(D) None of the Transferred Subsidiaries has been a United
States real property holding corporation within the meaning of Code
Section 897(c)(2) during the applicable period specified in Code Section
897(c)(1)(A)(ii).
(E) None of the Transferred Subsidiaries is liable for the
payment or reimbursement of the Taxes of any other Person pursuant to
any contractual obligation or by operation of law.
(F) Seller or its Affiliates have made valid elections under
Treasury Regulation section 301.7701-3(c) (and such elections continue
to be valid) to treat Xxxxxx-Xxxxx Limited (U.K.), Xxxxxx-Xxxxx de
Argentina S.R.L., Xxxxxx-Xxxxx Chile Limitada and Xxxxxx-Xxxxx Colombia
Limitada as entities which are disregarded as separate entities from
their owners.
(iii) For purposes of this Agreement, (A) "Tax" or "Taxes"
means (1) all taxes, charges, fees, levies, duties, imposts, or other
similar assessments, including income, gross receipts, ad valorem,
premium, value-added, excise, real property, personal property, windfall
profit, sales, use, transfer, stamp, licensing, notary fees,
withholding, employment, payroll, minimum, estimated and franchise taxes
or goods and services taxes imposed by the United States or any state,
local, provincial or foreign government, or any subdivision, agency, or
other similar Person of the United States or any such government and
(2) any interest, fines, penalties, assessments, or additions to tax
resulting from, attributable to, or incurred in connection with, any
such tax or taxes; and (B) "Tax Returns" means all reports, returns,
declarations, statements or other information required to be supplied to
a taxing or governmental authority in connection with Taxes.
(s) Material Contracts. (i) Set forth in Section 3.1(s)(i) of
the Seller Schedule is a list of each of the following Material Contracts (as
hereinafter defined) as of the date of this Agreement (collectively, the
"Material AI Contracts"):
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(A) each Material Contract relating exclusively to the
Analytical Instruments Business to which any Asset Seller is a party or
by which it is or its Assets are bound;
(B) each Material Contract relating exclusively to the
Analytical Instruments Business to which any Transferred Subsidiary is a
party or by which it is or its property or assets are bound;
(C) each Material Contract relating exclusively to businesses
of the PE Group other than the Analytical Instruments Business to which
any Transferred Subsidiary is a party or by which it is bound;
(D) each Material Contract relating to both the Analytical
Instruments Business and to other business of the PE Group to which any
Asset Seller is a party or by which it is bound and that is required to
be transferred to Buyer to enable Buyer, after giving effect to all of
the transactions contemplated by this Agreement, to either conduct the
Analytical Instruments Business as currently conducted or perform its
obligations under the Transition Agreements; and
(E) each Material Contract included in the Assets that is an
Assumed Liability or that is a liability of a Transferred Subsidiary.
(ii) As used in this Agreement, a "Material Contract" means any
Contract: (A) relating to Intellectual Property that generated revenues
of the PE Group in any fiscal year in the Covered Period exceeding
$1,000,000; (B) relating to the provision of information technology with
a contract value exceeding $250,000 at any time during the Covered
Period; (C) with a supplier relating to annual purchases by the PE Group
exceeding $500,000 in any fiscal year in the Covered Period that (i) has
a fixed term, (ii) is not on current market terms, (iii) relates to a
sole source of supply or (iv) involves the supply of components that are
not otherwise readily available; (D) with a customer relating to annual
sales of the PE Group exceeding $1,000,000 in any fiscal year in the
Covered Period that has a fixed term or is not on current market terms;
(E) consisting of a lease of real property by the PE Group requiring
annual rental payments exceeding $250,000 in any fiscal year in the
Covered Period; (F) containing covenants limiting the freedom of the
Analytical Instruments Business to engage in any line of business or to
compete with any Person which would apply to Buyer as acquiror of the AI
Business or the Transferred Subsidiaries after the Closing; (G) granting
to any Person any right to distribute or resell any Analytical
Instruments Business product, or to represent or act as agent for the
Analytical Instruments Business in connection with the distribution or
sale of any Analytical Instruments Business product involving annual
sales in excess of $1 million in any fiscal year in the Covered Period,
that, in any case, cannot be canceled by the Analytical Instruments
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Business within 180 days, without material premium or penalty;
(H) establishing any joint venture, strategic alliance, partnership or
other equity arrangement that is material to the Analytical Instruments
Business; or (I) under which the consequences of a default or
termination would have a Seller Material Adverse Effect exceeding $1
million, or which gives or could give any other party thereto the right
to cause the transactions contemplated by this Agreement to be rescinded
following consummation, or which involves more than $1 million in the
aggregate. For purposes of this Agreement, the "Covered Period" shall
mean each of the fiscal years in the four-year period ending June 30,
1999, with amounts for the fiscal year ending June 30, 1999 being
determined by reference to Seller's budget for such fiscal year.
(iii) Except as specified in Section 3.1(s)(iii) of the
Seller Schedule, no Transferred Subsidiary or Asset Seller is (and, to
the knowledge of the Company as of the date hereof, no other party is),
in material breach or violation of, or material default under, any of
the Contracts which individually or in the aggregate would have a Seller
Representation Adverse Effect and no event has occurred which with
notice or the lapse of time would constitute a material breach or
violation of, or material default under, or permit termination or
acceleration thereof. Except as specified in Section 3.1(s)(iii) of the
Seller Schedule, each Material AI Contract is a valid agreement,
arrangement or commitment of Seller or any Subsidiary that is a party
thereto, enforceable against Seller or such Subsidiary, as the case may
be, in accordance with its terms, subject to (i) the effects of
bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws relating to or affecting the
enforcement of creditors' rights generally, (ii) general equitable
principles (whether considered in a proceeding in equity or at law) and
(iii) an implied covenant of good faith and fair dealing and such
Material AI Contracts will continue to be valid and binding obligations
immediately following the Closing.
(t) Recalls. Except as set forth in Section 3.1(t) of the Seller
Schedule, to the knowledge of the Company, there is no basis for the recall,
withdrawal or suspension of any approval by any Governmental Authority with
respect to any Analytical Instruments Business product produced in the
Covered Period except as would not individually or in the aggregate have a
Seller Representation Adverse Effect.
(u) Certain Business Relationships. Except as set forth in Section
3.1(u) of the Seller Schedule or as provided in the Transition Agreements, no
Affiliate of Seller (other than any Asset Seller relating to Assets being
conveyed to Buyer hereunder, or any Transferred Subsidiary) (i) owns any
property or right, tangible or intangible, which is necessary to conduct the
Analytical Instruments Business as currently conducted or is reflected in the
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1998 Financial Statements, (ii) has any claim or cause of action against the
Assets or any Transferred Subsidiary other than with respect to the provision
of goods or services to the Analytical Instruments Business in the Ordinary
Course of Business, or (iii) other than with respect to the provision of
goods or services by the Analytical Instruments Business in the Ordinary
Course of Business, owes any money to any Transferred Subsidiary or, in
connection with the Analytical Instruments Business, to any Asset Seller.
For purposes of this Agreement, "Affiliate" means, with respect to any
specified Person, any other Person that, directly, or indirectly through one
or more intermediaries, controls, is controlled by, or is under common
control with, such specified Person.
(v) Books and Records. The books, records, accounts, ledgers and
files of each Asset Seller with respect to the Analytical Instruments
Business, and each Transferred Subsidiary, have been maintained in all
material respects in accordance with good business and bookkeeping practices.
The minute books and other similar records of each Transferred Subsidiary of
actions taken at any meetings of such Subsidiary's stockholders, Board of
Directors, Managing Board, Supervisory Board or any committee thereof and of
all written consents executed in lieu of the holding of any such meeting are
true and complete in all material respects. The stock certificate books,
stock ledgers and/or share registers of each Transferred Subsidiary are true,
complete and correct in all material respects.
(w) Customers and Suppliers. Except as disclosed in Section
3.1(w) of the Seller Schedule, during the period from July 1, 1998 through
the date of this Agreement: no material supplier of the Analytical
Instruments Business has informed the Company in writing that it will stop,
or materially decrease the rate of, supplying materials, products, or
services to the Analytical Instruments Business; and no material customer of
the Analytical Instruments Business has informed the Company in writing that
it will stop, or materially decrease the rate of, buying materials, products
or services from the Analytical Instruments Business.
(x) Year 2000. (i) The Company is conducting a program of
assessment, and remediation where appropriate of all of the (A) applicable
Company internal systems that have been identified by appropriate personnel
as material to the Analytical Instruments Business, including, without
limitation, computer hardware systems, software applications, firmware,
equipment containing embedded microchips and other embedded systems, but
excluding any of the foregoing that individual Company employees have
personally installed on their own computers ("Internal Systems"), and
(B) software, hardware, firmware and other technology which have been
identified by appropriate personnel as constituting a material part of the
products that are currently or will be manufactured by, or services that are
currently or will be sold by, or are under a warranty that covers Year 2000
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Compliance from, the Analytical Instruments Business ("External Software")
(the "Year 2000 Program").
(ii) All of the Internal Systems and External Software will be
Year 2000 Compliant (as defined herein) to the extent that the arrival
of the Year 2000 will not create a material disruption to the Analytical
Instruments Business or cause a material defect in the products
currently manufactured by or the services currently sold by the
Analytical Instruments Business, and/or a reasonable workaround will be
identified to avoid such disruption or defect, provided that Buyer
continues to support the Year 2000 Program in accordance with the
Company's current plans, including but not limited to requirements for
manpower, funding and other resources.
(iii) As part of the Year 2000 Program, written assurances of
Year 2000 Compliance are now being sought by the Company from suppliers,
vendors and service providers that have been identified by appropriate
personnel as material to its operations. Except as disclosed in Section
3.1(x) of the Seller Disclosure Schedule, to the knowledge of the
Company, there is no failure to be Year 2000 Compliant of any supplier,
vendor or service provider that has been identified by appropriate
personnel as material to the Analytical Instruments Business.
Nonetheless, there is no assurance that any non-compliant systems of
such parties will become Year 2000 Compliant in a timely manner, and it
is recognized that failure to do so could have a Seller Material Adverse
Effect.
(iv) For purposes of this Agreement, "Year 2000 Compliant" shall
mean, with respect to a particular system or item, that:
(A) No value for current date will cause any interruption in
operation, but only through the year 2018;
(B) Date-based functionality must behave consistently, and
such system or item will calculate, manipulate and represent dates
correctly for the purposes for which they were intended, for dates prior
to, during, and after the year 2000 but only through the year 2018;
(C) In all interfaces and data storage, the century in any
date from the present through the year 2018 must be specified either
explicitly or by unambiguous algorithms or inferencing rules; and
(D) Year 2000 must be recognized as a leap year;
provided in each case, that all applications, hardware and other systems used
in conjunction therewith correctly exchange date data with, or provide data
to such system or item and are otherwise Year 2000 Compliant.
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(v) With respect to any appropriate remediation to the Internal
Systems or External Software that is required to make them Year 2000
Compliant to the extent that the arrival of the Year 2000 will not
create a material disruption to the Analytical Instruments Business or
cause a material defect in the products currently manufactured by or the
services currently sold by, or under a warranty that covers Year 2000
Compliance from, the Analytical Instruments Business, and the testing of
the foregoing, as so remediated, (i) a substantial amount of the
foregoing is reasonably expected to be completed by September 1, 1999
and (ii) all of the foregoing is reasonably expected to be completed by
December 31, 1999, provided that Buyer continues to support the Year
2000 Program in accordance with the Company's current plans, including
but not limited to requirements for manpower, funding and other
resources.
(y) Acquisitions. Section 3.1(y) of the Seller Schedule sets
forth a complete list, in reasonable detail, of all assets comprising a
separate line of business or company acquisitions outside of the Ordinary
Course of Business undertaken with respect to the Analytical Instruments
Business since July 1, 1996 and involving an aggregate purchase price in
excess of $2,500,000.
(z) Certain Fees. With the exception of fees and expenses payable
to Warburg Dillon Read LLC ("WDR"), which shall be paid by Seller, neither
Seller nor any of the Subsidiaries nor any of their respective officers,
directors or employees, on behalf of Seller or such Subsidiaries, has
employed any broker or finder or incurred any other liability for any
brokerage fees, commissions or finders' fees in connection with the
transactions contemplated hereby.
(aa) Real Estate. (i) Sections 1.2(b) and 3.1(aa) of the Seller
Schedule set forth a true, complete and correct list and description of the
location of all real property ("Owned Real Property") owned in fee by Seller
included in the Assets, or owned in fee by a Transferred Subsidiary. With
respect to each parcel of Owned Real Property:
(A) the owners identified in Sections 1.2(b) and 3.1(aa) of
the Seller Schedule have good title to such parcel, free and clear of
all Encumbrances, except for Permitted Encumbrances;
(B) except as set forth in Section 3.1(aa) of the Seller
Schedule, there are no leases, subleases, licenses or agreements
granting to any party or parties the right of use or occupancy of any
portion of such Owned Real Property; and
(C) except as set forth in Section 3.1(aa) of the Seller
Schedule, to Seller's knowledge there are no outstanding options or
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rights of first refusal to purchase such parcel, or any portion thereof
or interest therein;
except , in the case of (B) and (C) as would not have a Seller Representation
Adverse Effect.
(ii) Section 3.1(aa) of the Seller Schedule sets forth a
true, complete and correct list of all material real property leased by
an unaffiliated third party to a Transferred Subsidiary or, in the
conduct of the Analytical Instruments Business, to an Asset Seller (the
"Leased Real Property"). Seller has delivered to Buyer true, complete
and correct copies of such leases and subleases (each as amended to
date). With respect to each lease and sublease of Leased Real Property:
(A) the lease or sublease is legal, valid, binding,
enforceable and in full force and effect with respect to each Asset
Seller and each Transferred Subsidiary which is a party thereto;
(B) except as set forth on Section 3.1(aa) of the Seller
Schedule, (1) each lease or sublease relating to the Leased Real
Property is assignable by the Asset Seller to Buyer without the consent
or approval of or any payment to any party, (2) no lease or sublease to
which a Transferred Subsidiary is a party requires any permission or
consent upon a change in control of such company, (3) all such leases or
subleases (whether the lessee is an Asset Seller or Transferred
Subsidiary) will continue to be legal, valid, binding, enforceable and
in full force and effect immediately following the Closing in accordance
with the terms thereof as in effect immediately prior to the Closing,
and (4) the consummation of the transactions contemplated herein will
not conflict with, result in a material violation or breach of or
constitute a material default under (or would result in such a
violation, breach or default with the giving of notice or the passage of
time or both) any such lease or sublease;
(C) (1) neither any Asset Seller nor any Transferred
Subsidiary is in breach or default in any material respect under any
such lease or sublease, and (2) to Seller's knowledge, no event has
occurred which, with the giving of notice or passage of time or both,
would constitute such a breach or default; and
(D) except as set forth on Section 3.1(aa) of the Seller
Schedule, neither any Asset Seller nor any Transferred Subsidiary has
assigned, transferred, conveyed, mortgaged, deeded in trust or
encumbered any interest in the leasehold or subleasehold under any
Leased Real Property and there are no leases, subleases, licenses or
agreements granting to any third party or parties the right of use or
occupancy of any portion of any Leased Real Property.
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except in the case of (B), (C) and (D) as would not have a Seller
Representation Adverse Effect.
(ab) No Other Representations or Warranties. Except for the
representations and warranties contained in this Section 3.1, neither Seller
nor any other Person makes any express or implied representation or warranty
on behalf of Seller or the Subsidiaries.
3.2. Representations and Warranties of Buyer. Except as set forth
in the Buyer Schedule previously delivered to Seller (the "Buyer Schedule"),
Buyer represents and warrants to Seller that the statements contained in this
Section 3.2 are true, complete and correct.
(a) Due Organization; Good Standing and Power. Buyer is a
corporation duly organized, validly existing and in good standing under the
laws of its jurisdiction of incorporation and has all the requisite corporate
power and authority to own, lease and operate its property and assets and to
conduct its business as currently conducted by it. Buyer has all requisite
corporate power and authority to enter into this Agreement and each of the
other agreements contemplated hereby to be entered into by it and to issue
the Note and to perform its obligations hereunder and thereunder. Buyer is
duly authorized, qualified or licensed to do business as a foreign
corporation and is in good standing in each of the jurisdictions in which its
right, title or interest in or to any of the assets held by it, or the
conduct of its business, requires such authorization, qualification or
licensing, except where the failure to so qualify or to be in good standing
would not, individually or in the aggregate, materially impair the ability of
Buyer to perform its obligations hereunder or under any other agreement
contemplated hereby.
(b) Authorization and Validity of Agreement. The execution,
delivery and performance by Buyer of this Agreement and any other agreements
contemplated hereby, the delivery and issuance of the Note and the
consummation by Buyer of the transactions contemplated hereby and thereby
have been duly authorized by its Board of Directors. No other corporate or
stockholder action is necessary for the authorization, execution, delivery
and performance by Buyer of this Agreement and any other agreements
contemplated hereby, the issuance of the Note and the consummation by Buyer
of the transactions contemplated hereby or thereby. This Agreement has been
duly executed and delivered by Buyer and constitutes a valid and legally
binding obligation of Buyer, enforceable against Buyer in accordance with its
terms, subject to (i) the effects of bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other similar laws relating to or
affecting the enforcement of creditors' rights generally, (ii) general
equitable principles (whether considered in a proceeding in equity or at law)
and (iii) an implied covenant of good faith and fair dealing. When executed
and delivered as provided in this Agreement and each other agreement
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contemplated hereby to be executed and delivered by Buyer and the Note will
be a valid and legally binding obligation of Buyer, enforceable against Buyer
in accordance with its terms, subject to (i) the effects of bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and other
similar laws relating to or affecting the enforcement of creditors' rights
generally, (ii) general equitable principles (whether considered in a
proceeding in equity or at law) and (iii) an implied covenant of good faith
and fair dealing.
(c) No Governmental Approvals or Notices Required; No Conflict
with Instruments to Which Buyer Is a Party. The execution, delivery and
performance of this Agreement and any other agreements contemplated hereby by
Buyer, the issuance of the Note and the consummation by Buyer of the
transactions contemplated hereby and thereby (i) will not violate (with or
without the giving of notice or the lapse of time or both), or require any
consent, approval, filing or notice under, any provision of any law, rule or
regulation, court order, judgment or decree applicable to Buyer, except for
such violations the occurrence of which, and such consents, approvals,
filings or notices the failure of which to obtain or make, would not
materially impair the ability of Buyer to perform its obligations under this
Agreement and the other agreements contemplated hereby and (ii) will not
conflict with, or result in the breach or termination of any provision of, or
constitute a default under, or result in the acceleration of the performance
of the obligations of Buyer under, the charter or by-laws of Buyer or any
indenture, mortgage, deed of trust, lease, licensing agreement, contract,
instrument or other agreement to which Buyer is a party or by which Buyer or
any of its assets or properties is bound, except for such conflicts,
breaches, terminations, defaults, accelerations, liens, charges or
encumbrances which would not, individually or in the aggregate, materially
impair the ability of Buyer to perform its obligations under this Agreement
or any other agreement contemplated hereby.
(d) Certain Fees. With the exception of fees and expenses payable
to Xxxxxxx, Xxxxx & Co., which shall be paid by Buyer, neither Buyer nor any
of its officers, directors or employees on behalf of Buyer, has employed any
broker or finder or incurred any other liability for any brokerage fees,
commissions or finders' fees in connection with the transactions contemplated
hereby.
(e) Legal Proceedings. There is no litigation, proceeding, tax
audit or governmental investigation pending or, to the knowledge of Buyer,
threatened in writing which seeks to question, delay or prevent the
consummation of, or would materially impair the ability of Buyer to
consummate the transactions contemplated hereby.
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(f) Access to Funds. Buyer has, or has prompt access to, and will
have on the Closing Date, sufficient cash to meet its obligations under
Section 2.3.
(g) No Other Representations or Warranties. Except for the
representations and warranties contained in this Section 3.2, neither Buyer
nor any other Person makes any express or implied representation or warranty
on behalf of Buyer.
3.3. Expiration of Representations and Warranties. Each
representation and warranty of Buyer and Seller made pursuant to this
Agreement shall survive for a period of eighteen (18) months following the
Closing Date regardless of any investigation made at any time by or on behalf
of either party, and thereafter neither party may make any claim for any
breach of such representations and warranties. Notwithstanding the
foregoing, the representations and warranties set forth in Sections 3.1(a),
3.1(b), 3.1(d), 3.1(e), 3.1(f), 3.2(a) and 3.2(b) shall survive in
perpetuity, the representations and warranties set forth in Sections 3.1(p)
and 3.1(q) shall survive for a period of three years following the Closing
Date, and the representations and warranties set forth in Section 3.1(r)
shall survive until the expiration of the applicable statute of limitations
with respect to the matters set forth therein.
4. Transactions Prior to Closing
4.1. Access to Information Concerning Properties and Records;
Confidentiality. (a) Seller agrees that, during the period commencing on
the date hereof and ending on the Closing Date, (i) it will give or cause to
be given to Buyer and its counsel, financial advisors, auditors and other
authorized representatives (collectively, "Representatives") such access,
during normal business hours and upon reasonable advance notice, to the
Plants, properties, books and records of the PE Group relating to the Assets
or the Analytical Instruments Business, as Buyer may from time to time
reasonably request and (ii) it will furnish or cause to be furnished to Buyer
such financial and operating data and other information with respect to the
business and properties of the Analytical Instruments Business, as Buyer may
from time to time reasonably request; provided, however, that Seller shall
have the right to have a representative present at all such times; and
provided, further, that such access shall be at the expense and risk of
Buyer. Buyer and its Representatives shall be entitled, in consultation with
Seller, to such access to the representatives, officers and employees of
Seller and the Subsidiaries to the extent they are involved in the Analytical
Instruments Business as Buyer may reasonably request. Buyer agrees that it
will, and will cause its Representatives to, continue to treat all
information so obtained from Seller as "Information" under the
Confidentiality Agreement entered into between WDR (on behalf of Seller) and
Buyer dated September 8, 1998 (the "Confidentiality Agreement"), and will
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continue to honor its obligations thereunder and that, if requested by
Seller, it will cause any of its Representatives so requested to enter into a
written agreement acknowledging the terms of the Confidentiality Agreement
and agreeing to be bound thereby.
(b) Notwithstanding Section 4.1(a) and the information provided to
Buyer after the date hereof, Buyer hereby acknowledges that it has made its
own determinations with respect to the Analytical Instruments Business, the
Assets, the Subsidiary Stock and the Assumed Liabilities, and acknowledges
and agrees that Seller has made and makes no representations or warranties,
express or implied, at common law, by statute or otherwise, except as
specifically set forth in this Agreement, and Seller hereby disclaims all
implied warranties, including warranties of merchantability or fitness for a
particular purpose.
4.2. Conduct of the Analytical Instruments Business Pending the
Closing Date. Seller agrees that, except as permitted, required or
contemplated by this Agreement, the Transition Agreements, License
Agreements, Note and Assumption Agreement or any of the Exhibits or Schedules
hereto, including, without limitation, those actions necessary in connection
with the transactions contemplated by Section 4.3 or as described in Section
4.2 of the Seller Schedule or as otherwise consented to or approved in
writing by Buyer, during the period commencing on the date hereof and ending
at the Closing, it will cause the Analytical Instruments Business to be
operated only in the usual, regular and ordinary manner. Without limiting
the generality of the foregoing, except as aforesaid, during the period
commencing on the date hereof and ending at the Closing:
(a) Seller agrees that it shall cause the Analytical Instruments
Business to be conducted in the Ordinary Course of Business;
(b) Seller agrees that it will cause the Company to use all
reasonable efforts to preserve substantially intact the business organization
of the Analytical Instruments Business, to keep available to Buyer the
services of the key employees of the Analytical Instruments Business and to
preserve the current relationships of the Analytical Instruments Business
with its customers, suppliers and other Persons with which the Analytical
Instruments Business has significant business relationships;
(c) Seller agrees that it shall not, and shall not permit any
Subsidiary to (provided that the consent of Buyer shall not be unreasonably
withheld with respect to any of the following):
(i) amend the certificate of incorporation or by-laws or
other equivalent organizational document of any Transferred Subsidiary,
or permit any Transferred Subsidiary to merge or consolidate, or
obligate itself to do so, with or into any other entity;
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(ii) issue or sell any shares of capital stock of, or other
equity interests in, any Transferred Subsidiary, or securities
convertible into or exchangeable for such shares or equity interests or
sell or transfer any Assets, except for sales of assets in the Ordinary
Course of Business and other asset sales to non-affiliates for
consideration aggregating not more than $100,000 individually or
$500,000 in the aggregate;
(iii) permit any Transferred Subsidiary to declare, set aside,
make or pay any dividend or other distribution, payable in stock,
property or otherwise (other than in cash), with respect to any of its
capital stock except in the Ordinary Course of Business;
(iv) establish or materially increase any bonus, insurance,
severance, deferred compensation, pension, retirement, profit sharing,
stock option (including, without limitation, the granting of stock
options, stock appreciation rights, performance awards, or restricted
stock awards), stock purchase or other employee benefit plan, or
otherwise increase the compensation payable or to become payable to any
officers or key employees of Seller or any Subsidiary who is a
Transferred Employee or Continuing Employee, except in the Ordinary
Course of Business or as may be required by law or by existing
contractual arrangements;
(v) enter into any employment, severance or collective
bargaining agreement with any of its employees whose services are
substantially devoted to the Analytical Instruments Business, except in
the Ordinary Course of Business or as may be required by law or by
existing contractual arrangements;
(vi) permit any Transferred Subsidiary to acquire (including,
without limitation, by merger, consolidation or acquisition of stock or
assets) any corporation, partnership, limited liability company, other
business organization or any division thereof for consideration in
excess of $100,000 individually or $500,000 in the aggregate;
(vii) permit any Transferred Subsidiary to assume, guarantee or
endorse, or otherwise as an accommodation become responsible for, the
obligations of any Person (other than another Transferred Subsidiary),
or make any loans or advances, except in the Ordinary Course of
Business;
(viii) authorize any capital expenditure for the Analytical
Instruments Business in excess of $100,000 for any single project that
is not provided for in the capital expenditure budget of the Analytical
Instruments Business for the fiscal year ending June 30, 1999 previously
delivered to Buyer;
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(ix) make any purchase commitment exceeding $50,000 in any
instance for the Analytical Instruments Business other than in the
Ordinary Course of Business other than as contemplated by the preceding
clauses (i) through (viii);
(x) change its accounting methods, principles or practices,
except insofar as may be required by a change in U.S. GAAP or comparable
requirements of any other jurisdiction in which the Analytical
Instruments Business is conducted;
(xi) mortgage or pledge to secure any Indebtedness of any
Asset Seller or Transferred Subsidiary any of the Assets or any of the
assets of a Transferred Subsidiary in each case having a value,
individually or in the aggregate, in excess of $1,000,000, or subject
any such Assets or assets to any Encumbrance other than Permitted
Encumbrances;
(xii) sell, assign, transfer or license or let lapse any
Intellectual Property included in the Assets or any Intellectual
Property of any Transferred Subsidiary, except for licenses of such
Intellectual Property in the Ordinary Course of Business in conjunction
with product sales;
(xiii) enter into, amend, terminate, take or omit to take any
action that would constitute a violation of or default under, or waive
any rights under, any Material AI Contract or Material Permit included
in the Assets or to which any Transferred Subsidiary is a party;
(xiv) take any action or fail to take any reasonable action
permitted by this Agreement if such action or failure to take action
would result in (A) any of the representations and warranties of Seller
set forth in this Agreement becoming untrue in any material respect or
(B) any of the conditions to the Closing set forth in Section 5 of this
Agreement not being satisfied; or
(xv) enter into or amend any contract, agreement, commitment
or arrangement with respect to any matter set forth in this
Section 4.2(c);
(d) Seller agrees that it shall, and shall cause each Asset Seller
and Transferred Subsidiary to cooperate with Buyer in communicating with
suppliers and customers to accomplish the transfer of the Assets to and the
purchase of the Analytical Instruments Business by Buyer on the Closing Date.
4.3. Transactions with Transferred Subsidiaries. (a) Prior to the
Closing Date, Seller shall cause the assets and liabilities of each
Transferred Subsidiary described in Section 4.3(a) of the Seller Schedule,
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none of which is necessary to conduct the Analytical Instruments Business as
currently conducted, to be transferred to or assumed by, as the case may be,
Seller or one of its subsidiaries (other than a Transferred Subsidiary).
Without limitation of the foregoing, the liabilities that shall be satisfied
or assumed by Seller include those of the nature specified in (a) through (m)
of Section 1.7.
(b) At or prior to the Closing: (i) all arrangements calling for
the transfer of funds by or to any Transferred Subsidiary in connection with
Seller's cash management system shall be terminated as of the Closing;
(ii) all arrangements between any Transferred Subsidiary, on the one hand,
and Seller or any of the Subsidiaries other than a Transferred Subsidiary, on
the other hand, pertaining to the allocation or sharing of liability for
Taxes shall be terminated as of the Closing; and (iii) the receivables and
payables constituting Excluded Assets and Excluded Liabilities in accordance
with Sections 1.3(k) and 1.7(e) shall be extinguished.
4.4. Guarantees. Buyer shall use all reasonable efforts (which
shall not include agreeing to any modifications of the terms of the
underlying obligations or the payment of any penalty or premium) to cause
itself or one or more of its Affiliates to be substituted in all respects for
Seller or the Subsidiaries (other than the Transferred Subsidiaries),
effective as of the Closing, in respect of all obligations of Seller and any
of the Subsidiaries (other than the Transferred Subsidiaries) under each of
the guarantees, indemnities, surety bonds, letters of credit and letters of
comfort set forth in Section 4.4 of the Seller Schedule (the "Guarantees").
If Buyer is unable to effect such a substitution with respect to any such
Guaranty after using reasonable efforts to do so, Buyer shall fully indemnify
and hold harmless Seller with respect to the obligations covered by each of
the Guarantees for which Buyer does not effect such substitution and any
Damages relating thereto incurred by Seller.
4.5. Further Actions. (a) Subject to the terms and conditions
hereof, Seller and Buyer agree to use all reasonable efforts to take, or
cause to be taken, all action and to do, or cause to be done, all things
necessary, proper or advisable to consummate and make effective the
transactions contemplated by this Agreement, including using all reasonable
efforts: (i) to obtain prior to the Closing Date all licenses, certificates,
permits, consents, approvals, authorizations, qualifications and orders of
governmental authorities and parties to contracts with Seller or the
Subsidiaries as are necessary for the consummation of the transactions
contemplated hereby, including but not limited to such consents and approvals
as may be required under the HSR Act as set forth below and any similar
foreign legislation; (ii) to effect all necessary registrations and filings;
and (iii) to furnish to each other such information and assistance as
reasonably may be requested in connection with the foregoing. Seller, the
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Subsidiaries and Buyer shall cooperate fully with each other to the extent
reasonably required to obtain such consents.
(b) Buyer and Seller shall timely and promptly make all filings
which may be required by each of them in connection with the consummation of
the transactions contemplated hereby under the HSR Act and any similar
foreign legislation. Each party shall furnish to the other such necessary
information and assistance as such party may reasonably request in connection
with the preparation of any necessary filings or submissions by it to any
U.S. or foreign governmental agency, including, without limitation, any
filings necessary under the provisions of the HSR Act. Except as expressly
provided in this Section 4.5(b), neither party shall be required to litigate
any issue arising out of the pursuit or receipt of any regulatory consent
from any Governmental Authority and Buyer shall not be required to divest any
subsidiary or assets of Buyer or its Affiliates or agree to hold separate any
assets of the Analytical Instruments Business.
4.6. Notification. (a) Notice of Certain Actions. Seller, on the
one hand, and Buyer, on the other hand, shall promptly notify the other such
party or parties of:
(i) any notice or other communication from any Person
alleging that the consent of such Person is or may be required in
connection with the transactions provided for in this Agreement;
(ii) any material notice or other communication from any
Governmental Entity in connection with the transactions provided for in
this Agreement; and
(iii) any action suit, claim, investigation or proceeding
commenced or, to its knowledge, threatened against or otherwise
affecting the Company, on the one hand, or Buyer, on the other hand,
which relates to the consummation of the transactions provided for in
this Agreement.
(b) Notice of Breaches; Updates. (i) By Seller. Seller shall
promptly deliver to Buyer written notice of any event or development of which
it obtains knowledge that would (A) render any statement, representation or
warranty of Seller in this Agreement (including the Seller Schedule)
inaccurate or incomplete in any material respect or (B) constitute or result
in a breach by Seller of, or a failure by Seller or any Subsidiary to comply
with, any agreement or covenant in this Agreement applicable to it. No such
disclosure shall be deemed to avoid or cure any such misrepresentation or
breach. Within 20 business days after the date hereof, Seller will provide
Buyer a true, complete and correct list of all leases of personal property
with respect to the Analytical Instruments Business involving any annual
expense in excess of $100,000 in any fiscal year in the Covered Period that
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cannot be cancelled by the Analytical Instruments Business within 90 days
without material premium or penalty, excluding any master leases for Company
Cars.
(ii) By Buyer. Buyer shall promptly deliver to Seller written
notice of any event or development of which it obtains knowledge that
would (A) render any statement, representation or warranty of Buyer in
this Agreement (including the Buyer Schedule) inaccurate or incomplete
in any material respect or (B) constitute or result in a breach by Buyer
or a failure by Buyer to comply with, any agreement or covenant in this
Agreement applicable to it. No such disclosure shall be deemed to avoid
or cure any such misrepresentation or breach.
4.7. No Inconsistent Action. Subject to the provisions of
Sections 7.1 and 7.2, Seller and Buyer shall not take any action inconsistent
with their obligations under this Agreement or which could materially hinder
or delay the consummation of the transactions contemplated by this Agreement.
4.8. License Agreements. (a) On the Closing Date, Buyer and
Seller shall execute and deliver a license agreement (the "Buyer License
Agreement"), substantially in the form of Exhibit F, pursuant to which Seller
shall grant to Buyer a license to use the Intellectual Property set forth in
Section 4.8(a) of the Seller Schedule .
(b) On the Closing Date, Buyer and Seller shall execute and
deliver a license agreement (the "Seller License Agreement" and, together
with the Buyer License Agreement, the "License Agreements"), substantially in
the form of Exhibit G, pursuant to which Buyer shall grant to Seller a
license to use the Intellectual Property set forth in Section 4.8(b) of the
Seller Schedule.
4.9. Facilities and Services Agreement. On or prior to the Closing
Date, Buyer and Seller shall execute and deliver, or cause one or more of
their subsidiaries to execute and deliver, Facilities and Services Agreements
(the "Transition Agreements") with respect to facilities and services
currently shared by the Analytical Instruments Business and other business
operations of Seller or its Subsidiaries. With respect to each jurisdiction
or subject matter identified in Section 4.9 of the Seller Schedule, the
applicable Transition Agreement shall cover the facilities and services
specified in Section 4.9 of the Seller Schedule, on the terms and conditions
set forth therein. Each Transition Agreement shall be substantially in the
form of Exhibit H, with such modifications as are required to give effect to
the terms of Section 4.9 of the Seller Schedule.
4.10. No Solicitation. Prior to the earlier of the Closing Date
or termination of this Agreement in accordance with the terms hereof, each of
Seller and the Subsidiaries will not, nor will it authorize any of its
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officers, directors or employees or any investment banker, financial advisor,
attorney, accountant or other representative retained by it to, directly or
indirectly, (i) solicit, initiate or encourage (including by way of
furnishing information), or take any other action designed or reasonably
likely to facilitate, any inquiries or the making of any offer or proposal
relating to an acquisition of the Analytical Instruments Business (through a
merger, consolidation, acquisition of stock or assets or other like
transaction) or (ii) participate in any discussions or negotiations regarding
any such offer or proposal.
5. Conditions Precedent
5.1. Conditions Precedent to Obligations of Buyer and Seller. The
respective obligations of Buyer and Seller to consummate the transactions
contemplated by this Agreement shall be subject to the satisfaction at or
prior to the Closing Date of the following conditions:
(a) No Injunction, etc. At the Closing Date, there shall be no
injunction, restraining order or decree of any nature of any court or
Governmental Authority of competent jurisdiction that is in effect that
restrains or prohibits the consummation of the Stock Purchase or the transfer
to Buyer by Seller or the Subsidiaries of any Assets, except for the transfer
of any Assets or Subsidiary Stock the failure of which to transfer,
individually or in the aggregate with all other Assets and Subsidiary Stock
not being transferred on the Closing Date, would not be material to the
operations of the Analytical Instruments Business. For purposes of this
Section 5.1(a), any failure to transfer shall not be regarded as material to
the operations of the Analytical Instruments Business so long as the
aggregate revenue for the fiscal year ended June 30, 1998 of all the Assets
not transferred does not exceed $20 million. No legal action, suit or
proceeding, investigation or inquiry shall be pending by or on behalf of any
Governmental Authority wherein an unfavorable judgment, order, decree,
stipulation, ruling, decision or injunction would (i) prevent the
consummation of the sale of any material portion of the Assets or Subsidiary
Stock as contemplated hereby or (ii) cause the sale of any material portion
of the Assets or Subsidiary Stock as contemplated by this Agreement to be
rescinded following consummation. No legal action, suit or proceeding by or
on behalf of any other Person shall be pending as to which there is a
reasonable likelihood of an outcome that would (A) prevent the consummation
of the sale of any material portion of the Assets or Subsidiary Stock as
contemplated hereby or (B) cause the sale of any material portion of the
Assets or Subsidiary Stock as contemplated by this Agreement to be rescinded
following consummation.
(b) Regulatory Authorizations. All consents, approvals,
authorizations and orders of federal, state and foreign Governmental
Authorities set forth in, or required to be set forth in, Section 3.1(c) of
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the Seller Schedule (the "Required Consents") shall have been obtained, and
all applicable waiting periods specified under the HSR Act or any similar
foreign law or regulation with respect to the transactions contemplated by
this Agreement shall have lapsed or been terminated, except for Required
Consents of state and foreign Governmental Authorities the failure of which
to obtain, individually or in the aggregate, would not, in the reasonable
opinion of Buyer, be material to the operations of the Analytical Instruments
Business.
(c) Third Party Consents. All consents, approvals and waivers of
third parties set forth in, or required to be set forth in, Section 3.1(c) of
the Seller Schedule, or that would have been required to be set forth in
Section 3.1(c) of the Seller Schedule in the case of agreements entered into
subsequent to the date of this Agreement, shall have been obtained by Seller,
except for any thereof the failure of which to obtain, individually or in the
aggregate, would not, in the reasonable opinion of Buyer, be material to the
operations of the Analytical Instruments Business.
5.2. Conditions Precedent to Obligations of Buyer. The obligations
of Buyer under this Agreement are subject to the satisfaction (or waiver in
writing by Buyer) at or prior to the Closing Date of each of the following
conditions:
(a) Accuracy of Representations and Warranties. All
representations and warranties of Seller qualified as to materiality
contained herein or in any certificate or document delivered to Buyer
pursuant hereto shall be true and correct in all respects and those not so
qualified shall be true and correct in all material respects, in each case on
and as of the Closing Date, with the same force and effect as though such
representations and warranties had been made on and as of the Closing Date,
except as contemplated or permitted by this Agreement and except to the
extent that any such representation or warranty is made as of a specified
date, in which case such representation or warranty shall have been true and
correct as of such date; provided that notwithstanding the foregoing, in the
event the representations and warranties of Seller referred to in this
Section 5.2(a) fail to be true and correct as of the Closing or such
specified date as of which such representations and warranties are made, the
condition set forth in this Section 5.2(a) shall be deemed satisfied unless a
Material Adverse Closing Event shall have occurred; and provided further that
the deemed satisfaction of such condition referred to in the preceding
proviso shall in no way constitute a release of Seller or a waiver of Buyer's
right to indemnification from Seller with respect to any such Damages
pursuant to Section 9.4 hereof.
(b) Performance of Agreements. Seller shall have performed in all
material respects all obligations and agreements, and complied in all
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material respects with all covenants and conditions, contained in this
Agreement to be performed or complied with by it prior to or at the Closing;
(c) Officer's Certificate. Buyer shall have received a
certificate of the Company, dated the Closing Date, executed on its behalf by
the President or a Senior Vice President of Seller to the effect that the
conditions specified in Sections 5.2(a), (b) and (d) have been fulfilled;
(d) No Material Adverse Change. Since June 30, 1998, there
shall not have been any event or occurrence which has had or which could
reasonably be expected to have, individually or in the aggregate, a Seller
Material Adverse Effect other than (i) changes or effects resulting from the
transactions contemplated by this Agreement (or the public announcement
thereof), (ii) currency fluctuations, (iii) changes in general economic,
regulatory or political conditions, (iv) changes in the levels of financial
markets, (v) other changes that affect the analytical instrument industry in
general or (vi) changes disclosed in Section 5.2(d) of the Seller Schedule.
(e) License Agreements. Seller shall have executed and delivered
to Buyer the License Agreements; and
(f) Transition Agreements. Seller and its subsidiaries shall have
executed and delivered to Buyer the Transition Agreements.
5.3. Conditions Precedent to the Obligations of Seller. The
obligations of Seller under this Agreement are subject to the satisfaction
(or waiver in writing by Seller) at or prior to the Closing Date of each of
the following conditions:
(a) Accuracy of Representations and Warranties. All
representations and warranties of Buyer qualified as to materiality contained
herein or in any certificate or document delivered to Seller pursuant hereto
shall be true and correct in all respects and those not so qualified shall be
true and correct in all material respects, in each case on and as of the
Closing Date, with the same force and effect as though such representations
and warranties had been made on and as of the Closing Date, except as
contemplated or permitted by this Agreement and except to the extent that any
such representation or warranty is made as of a specified date, in which case
such representation or warranty shall have been true and correct as of such
date;
(b) Performance of Agreements. Buyer shall have performed in all
material respects all obligations and agreements, and complied in all
material respects with all covenants and conditions contained in this
Agreement to be performed or complied with by it prior to or at the Closing
Date;
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(c) Officer's Certificate. Seller shall have received a
certificate of Buyer, dated the Closing Date, executed on its behalf by the
President or a Senior Vice President of Buyer to the effect that the
conditions specified in Sections 5.3(a) and (b) have been fulfilled;
(d) Note and Assumption Agreement. Buyer shall have executed and
delivered to Seller the Note and the Assumption Agreement;
(e) License Agreements. Buyer shall have executed and delivered
to Seller the License Agreements;
(f) Transition Agreements. Buyer and its subsidiaries shall have
executed and delivered to Seller the Transition Agreements; and
(g) Security Agreement. Buyer shall have executed and delivered
to Seller the Security Agreement.
6. Employee Relations and Benefits
6.1. Pre-Closing Conduct; Other Liabilities. (a) Certain
Severance Benefits; Certain Arrangements. In the event that the employment
of an employee of the Analytical Instruments Business who is eligible for
coverage immediately prior to the Closing Date under Seller's severance plans
for Asset Employees and employees of the Transferred Subsidiaries, as
described in Section 6.1(a)(i) of the Seller Schedule (collectively, the
"Seller's Severance Plans"), and who continues employment with the Analytical
Instruments Business without interruption (a "Continuing Employee"), is
terminated by Buyer after the Closing Date other than for cause, Buyer shall
pay such terminated employee severance benefits in accordance with the terms
of Buyer's severance plan, giving credit for the time served as employees of
the Company; provided that Buyer shall not be liable for severance for the
persons listed on Section 6.1(a)(ii) of the Seller Schedule. Service with
Seller, the Subsidiaries and Buyer for periods prior to and after the Closing
Date shall be aggregated for purposes of calculating severance benefits for
such employees. To the extent permitted by applicable law, Seller shall use
its reasonable best efforts, prior to the Closing, to amend, or cause to be
amended, every severance plan or arrangement, to the extent that it would be
reasonably likely to give rise to eligibility for severance benefits for
Continuing Employees with respect to any termination of employment which
arises solely because of the consummation of the transaction contemplated by
this Agreement, so as to reduce or eliminate to the extent possible such
eligibility. Under no circumstances shall Buyer be liable for payment of
severance benefits which arise from the operation of law or otherwise as a
result of the consummation of the transactions contemplated by this
Agreement.
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(b) United States Pension and Retirement Plans. (i) Cessation of
Benefit Accruals and Full Vesting. Effective as of the Closing Date, the
Company shall cease benefit accruals under (i) The Employee Pension Plan of
The Xxxxxx-Xxxxx Corporation ("Seller Plan") and (ii) The Employee Savings
Plan of The Xxxxxx-Xxxxx Corporation (the "Seller 401(k) Plan") with respect
to those participants in the Seller Plan and the Seller 401(k) Plan who are
United States Employees, and all benefits accrued by such United States
Employees, as of the Closing Date, in the Seller Plan and the Seller 401(k)
Plan shall be fully vested as of the Closing Date. No assets or liabilities
shall be transferred from the Seller Plan or the Seller 401(k) Plan to any
employee benefit plan of Buyer.
(ii) Seller 401(k) Plan. Seller and Buyer shall cooperate to
take whatever steps are necessary to effect, as promptly as practicable
after the Closing Date, to the extent elected by participants, the
distribution and direct rollover to Buyer's 401(k) Plan of the accrued
benefit as of the Closing Date of United States Employees under the
Seller 401(k) Plan. With respect to such rollover: (i) Buyer shall
provide to Seller written assurances that Buyer's 401(k) Plan is an
"eligible retirement plan" and (ii) Seller shall provide to Buyer
written assurances that the Seller 401(k) Plan are or are part of an
"eligible retirement plan." For purposes of this Section 6.1(b), the
term "eligible retirement plan" shall have the meaning set forth in
Sections 401(a)(31)(D) and 402(c)(8)(B) of the Code. Buyer shall
indemnify Seller in accordance with Section 9.4 against any losses
incurred by it as a result of the failure of Buyer's 401(k) Plan to
qualify as an "eligible retirement plan." Similarly, Seller shall
indemnify Buyer in accordance with Section 9.4 against any losses
incurred by it as a result of the failure of Seller 401(k) Plan to
qualify as an "eligible retirement plan."
(iii) Retiree Medical. If an employee of the Company is
entitled on or prior to the Closing Date to elect the retiree medical
coverage under a Seller Benefit Plan, such employee may elect to receive
such coverage under the terms of the Seller Benefit Plan as in effect on
the Closing Date commencing either at the Closing Date or upon
termination of the employee's employment with Buyer or one of its
Affiliates on or prior to attaining age 65. Such electing employee
shall not be required to pay for coverage during the period of
employment with Buyer or one of its Affiliates so long as such employee
has not yet commenced receiving coverage under such Seller Benefit Plan.
(c) Additional Provisions Relating to Employees. (i) Employee
Transfer. Buyer shall make offers of employment, to be effective as of the
Closing Date, to all domestic and foreign employees (collectively, the "Asset
Employees") of the Asset Sellers identified in Section 6.1(c) of the Seller
Schedule (adjusted to reflect terminations and hirings in the Ordinary Course
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of Business from the date hereof and finalized at least 10 days prior to the
Closing Date and delivered to Buyer). The employees who accept such offer of
employment made by Buyer, or are automatically transferred to Buyer shall be
referred to as, the "Transferred Employees"). Except as may be required by
applicable laws, Buyer shall have no obligation to offer employment to
individuals who are not actively at work on the Closing Date or absent from
work due to approved leaves of absence unless or until any such person
returns from such inactivity or leave. At such time, Buyer shall be
obligated to offer employment to such person or, if no job is then available,
be liable for any severance to which person would be entitled. For purposes
of this Agreement, "actively at work" means employees who are not on long-
term disability or who are not eligible for long-term disability but have
been continuously absent from work for a period exceeding 60 days and not
expected to return prior to the Closing Date. Without limiting Buyer's
obligations under any other provision of this Section 6, Buyer's offers of
employment shall be at least at the current wage or salary rate for such
employees.
(ii) Starting on the Closing Date, Buyer shall, for a period
ending on the date twelve (12) months after the Closing Date, provide
each Continuing Employee who continues his or her employment after the
Closing Date with total cash compensation at least equal to such
Continuing Employee's total cash compensation during the twelve months
immediately prior to the Closing Date. Starting on the Closing Date,
Buyer shall also, for a period ending on the date twelve (12) months
after the Closing Date, maintain (or cause its subsidiaries to maintain)
employee benefit plans, agreements, programs, policies and arrangements
for the benefit of each Continuing Employee that are no less favorable
in the aggregate to those provided by Buyer to its employees who are
similarly situated to such Continuing Employee ("Buyer Plans").
Notwithstanding anything to the contrary in this Agreement, starting on
the Closing Date Buyer shall, for a period ending on the date twelve
(12) months after the Closing Date, maintain (or cause its subsidiaries
to maintain) a severance pay plan, program or practice for the benefit
of each Continuing Employee that is no less favorable than the Seller's
Severance Plans in effect immediately prior to the Closing Date with
respect to such Continuing Employee.
(iii) Buyer acknowledges that the Acquired Rights Directive
(77/187 EEC) as enacted in the Member States of the European Union and
similar laws in other jurisdictions which safeguard the rights of
employees in transfers of undertakings, businesses or parts of
businesses (collectively, the "Transfer Laws") may operate to
automatically transfer all or some of the Asset Employees to Buyer.
Buyer agrees that it will comply with the Transfer Laws, if any, of any
jurisdiction in which the Asset Employees are employed. Buyer agrees
that after the Closing Date, the contracts of employment of the
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Transferred Employees (except for any rights or obligations which do not
transfer under the Transfer Laws, or are not otherwise assumed by
Buyer), if any, will have effect as if originally entered into between
Buyer and the Transferred Employees.
(d) Other Employee Benefits Matters. (i) Service Credit. Under
Buyer's employee benefit plans, arrangements and policies, each employee of
the Analytical Instruments Business who continues employment with the
Analytical Instruments Business after the Closing without interruption shall
receive credit for service accrued or deemed accrued prior to the Closing
Date with Seller, any Subsidiary or any of their respective Affiliates for
all purposes of such plans (except for purposes of benefit accruals under
pension and post-retirement benefit plans), and shall be entitled to
participate in any such employee benefit plans. Buyer shall also permit the
employees of the Analytical Instruments Business and their eligible
dependents to participate in its group health plans, and shall waive any
waiting periods and any restrictions and limitations on preexisting medical
conditions.
(ii) Plant Closing Laws. After the Closing Date, Buyer shall
be responsible for providing any notice of layoff or plant closing, as
may be required, with respect to the Analytical Instruments Business
after the Closing pursuant to the United States Federal Worker
Adjustment and Retraining Notification Act of 1988, any successor United
States federal law, and any applicable plant closing notification Law.
(iii) Post-Closing Benefits. Until December 31, 1999, Buyer
shall continue for employees "actively at work" (as defined herein)
healthcare and welfare benefits that are comparable or similar to those
benefits under Seller's plan as of the Closing Date for continuing
employees. Seller agrees to cooperate with Buyer to facilitate the
coordination of such benefits during such period provided that Buyer
shall have no obligation to provide post-termination life insurance.
(iv) UK Pension Plan. With respect to the defined benefit
pension plan of Xxxxxx-Xxxxx Ltd. maintained or contributed to by the
Company (the "UK Pension Plan"), Seller shall pay on the Closing Date to
Buyer the sum of (Pound Sterling) 2.1 million in respect of agreements
reached between Seller and Buyer concerning the UK Pension Plan and on
or after the Closing Date, Buyer shall assume and become the sponsor of
the UK Pension Plan and have responsibility for all liabilities,
obligations and costs arising out of or in connection with the UK
Pension Plan.
(v) Accrued Vacation. Buyer shall, or shall cause the
Transferred Subsidiary to, provide for Employees of the Analytical
Instruments Business to take their accrued vacations after the Closing
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Date, in such manner and at such times as is consistent with Seller's
past practices and not disruptive of the Analytical Instruments
Business.
(vi) Consultation Requirements. Seller and Buyer shall
cooperate to take whatever steps are reasonably necessary to comply with
any employee consultation requirements arising under any applicable law.
(vii) No Liability. Other than as expressly assumed in this
Article 6, Buyer shall not be liable for any benefits under any Seller
Benefit Plan which is not maintained by the Company after the Closing or
under any Benefit Plan ever maintained by the Company. Buyer shall not
be liable for long-term disability benefits nor any other benefit
payable for Asset Employees who are not "actively at work" (as defined
herein) on or prior to the Closing Date. Buyer shall not be liable for
any health care continuation benefits for employees who terminated
employment on or prior to the Closing Date.
(viii) Retention of Liabilities by Seller. Seller and the
Subsidiaries shall retain all pension obligations under the Seller Plan
with respect to Employees of the Analytical Instruments Business which
accrue up to and including the Closing Date. Benefits relating to such
pension obligations shall be provided by Seller and the Subsidiaries to
Employees under the terms of the Seller Plan, based only upon the
Employee's credited service with Seller and the Subsidiaries and
measured by the applicable benefit formula in effect on the Closing
Date, and subject to all other terms, conditions and limitations of the
Seller Plan in effect on the Closing Date.
(ix) Co-Operations. Buyer and Seller agree to cooperate to
obtain any amendments of any of the collective bargaining agreements
which may be necessary to implement the provisions of this Agreement.
7. Termination
7.1. General. This Agreement may be terminated and the
transactions contemplated herein may be abandoned, (a) by mutual written
consent of Buyer and Seller or (b) by Buyer or Seller by written notice to
the other party in the event that the Closing Date shall not have occurred on
or before October 31, 1999; provided, however, that if the Closing Date shall
not have occurred on or before such date due to the act or omission of Buyer
or Seller, then that party may not terminate the Agreement. This Agreement
may also be terminated and the transactions contemplated herein abandoned by
either Buyer or Seller by written notice to the other party, in the event a
Material Adverse Closing Event has occurred. As used in this Agreement, a
"Material Adverse Closing Event" means that (i) the representations and
warranties of Seller have failed to be true and correct as of the Closing or
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such earlier date on which such representations and warranties are made and
(ii) the Damages therefore reasonably expected to result from such failure
equal or exceed $40 million.
7.2. Obligations in Event of Termination. In the event of any
termination of the Agreement as provided in Section 7.1, this Agreement shall
forthwith become wholly null and void and of no further force and effect and
there shall be no liability on the part of Buyer or Seller, except that the
obligations of the parties under Section 4.1 with respect to confidentiality
and Section 9.2 and this Section 7.2 shall remain in full force and effect,
and except that termination shall not preclude any party from suing the other
party for breach of this Agreement.
8. Transactions and Activities Subsequent to Closing
8.1. Access to Books and Records; Confidentiality. (a) For a
period of ten (10) years following the Closing Date, Buyer shall retain and
afford, and will cause its Affiliates to retain and afford, to Seller and its
Subsidiaries, including the Subsidiary Asset Sellers, their counsel and their
accountants, during normal business hours and upon reasonable advance notice,
reasonable access to the books, records and other data of the Analytical
Instruments Business and of the Transferred Subsidiaries (including, without
limitation, any books, records or other data that may be reasonably requested
by Seller in connection with any audit described in Section 8.4(c)) with
respect to the period prior to the Closing Date and, in the case of any
Transferred Subsidiary, with respect to the applicable current taxable
period, to the extent that such access may be reasonably required by Seller
or any Subsidiary Asset Seller to facilitate (i) the preparation and timely
filing by Seller or such Subsidiary Asset Seller of such Tax Returns as it
may be required to file with respect to the operations of the Analytical
Instruments Business or the preparation and timely filing of such Tax Returns
as Seller shall bear responsibility for preparing pursuant to Section 8.4,
the making of any election related to Taxes or in connection with any audit,
amended return, claim for refund or any suit or proceeding with respect
thereto, (ii) the investigation, litigation and final disposition of any
claims, suits or proceedings which may have been or may be made against
Seller or such Subsidiary Asset Seller by third parties in connection with
the Analytical Instruments Business and (iii) the payment of any amount
pursuant to Section 9.4 or in connection with any liabilities or obligations
which have not been assumed by Buyer under this Agreement. Buyer will not,
and will cause its Affiliates not to, dispose of, alter or destroy any such
books, records and other data without giving thirty (30) days' prior notice
to Seller to permit Seller, at its expense, to examine, duplicate or
repossess such records, files, documents and correspondence.
(b) Buyer shall further cooperate with Seller in the preparation
for and prosecution of the defense of any audit, claim, action or cause of
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action arising out of or relating to any Excluded Liabilities which have not
been assumed by Buyer under this Agreement including, without limitation, by
making available evidence within the control of Buyer and Persons needed as
witnesses employed by Buyer, in each case as reasonably needed for such
defense. Seller shall reimburse Buyer for its reasonable out-of-pocket costs
relating to its cooperation under this subparagraph.
(c) For a period of ten (10) years following the Closing Date,
Seller shall retain and afford, and will cause the Subsidiary Asset Sellers
to retain and afford, to Buyer, its counsel and its accountants, during
normal business hours and upon reasonable advance notice, reasonable access
to the books, records and other data of Seller and the Subsidiary Asset
Sellers with respect to the period prior to the Closing Date to the extent
that such access may be reasonably required by Buyer or any Affiliate of
Buyer to facilitate (i) the preparation by Buyer or such Affiliate of such
Tax Returns as it may be required to file with respect to the operations of
the Analytical Instruments Business, the making of any election related to
Taxes or in connection with any audit, amended return, claim for refund or
any suit or proceeding with respect thereto, (ii) the investigation,
litigation and final disposition of any claims, suits or proceedings which
may have been or may be made against Buyer or such Affiliate by third parties
in connection with the Analytical Instruments Business and (iii) the payment
of any amount pursuant to Section 9.4 or in connection with any liabilities
or obligations which have been assumed by Buyer under this Agreement. Seller
will not, and will cause its Affiliates not to, dispose of, alter or destroy
any such books, records and other data without giving thirty (30) days' prior
notice to Buyer to permit Buyer, at its expense, to examine, duplicate or
repossess such records, files, documents and correspondence.
(d) Seller further agrees to cooperate with Buyer in the
preparation for and prosecution of the defense of any audit, claim, action or
cause of action arising out of or relating to any liability which has been
assumed by Buyer hereunder, including, without limitation, by making
available evidence within the control of Seller and Persons needed as
witnesses employed by Seller, in each case as reasonably needed for such
defense. Buyer shall reimburse Seller for its reasonable out-of-pocket costs
relating to its cooperation under this subparagraph.
8.2. Further Agreements. Seller authorizes and empowers Buyer on
and after the Closing Date to receive and open all mail received by Buyer
relating to the Analytical Instruments Business, the Transferred Subsidiaries
or the Assets and to deal with the contents of such communications in any
proper manner. Seller shall, and shall cause other Asset Sellers to,
promptly deliver to Buyer any mail or other communication received by them
after the Closing Date pertaining to the Analytical Instruments Business, the
Transferred Subsidiaries or the Assets and any cash, checks or other
instruments of payment to which Buyer is entitled. Buyer shall promptly
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deliver to Seller any mail or other communication received by it after the
Closing Date pertaining to the assets and liabilities described in Sections
1.3 and 1.7, and any cash, checks or other instruments of payment in respect
thereof.
8.3. Asset Returns. In the event Buyer receives any assets of the
Company that are not intended to be transferred pursuant to the terms of this
Agreement, Buyer agrees to promptly return such assets to Seller at Seller's
expense. In the event any payments are made to Buyer following the Closing
with respect to Accounts Receivable that are not attributable to the
Analytical Instruments Business or that relate to any Excluded Assets or
Excluded Liabilities, Buyer agrees to forward such payments to Seller
promptly. In the event any payments are made to Seller following the Closing
with respect to Accounts Receivable that are attributable to the Analytical
Instruments Business or that relate to any Assets or Assumed Liabilities,
Seller agrees to forward such payments to Buyer promptly. In the event that,
following the Closing, Seller or any of the Subsidiaries receives any assets
that were intended to be, but were not, transferred pursuant to this
Agreement at the Closing, Seller shall promptly notify Buyer to such effect
and shall comply with its obligations in respect thereof contemplated by
Section 1.5.
8.4. Certain Tax Matters. (a) Seller shall prepare, or cause to
be prepared, all Tax Returns in respect of the Transferred Subsidiaries for
all taxable periods ending on or prior to the Closing Date and all taxable
periods beginning prior to the Closing Date and ending after the Closing
Date. In the case of any such Tax Return that is filed after the Closing
Date, Buyer shall deliver to Seller at least 60 days prior to the due date
for filing the relevant Tax Return a true and correct accounting of all
relevant Tax Items (as defined below) relating to the applicable Transferred
Subsidiary for the taxable period. Seller shall submit any part of such Tax
Return relating to a Transferred Subsidiary to Buyer at least 30 days prior
to the date on which the Tax Return is due (including extensions). Buyer
shall submit its comments to Seller within 14 days of receipt of the relevant
portions of such Tax Return. If such Tax Return relates to a period ending
on or prior to the Closing Date, Seller shall not be required to alter the
Tax Return to reflect such comments unless Buyer receives an opinion of
counsel, which counsel shall be reasonably acceptable to Seller, to the
effect that failure to make such alteration would create a significant risk
of imposition of a penalty on Buyer or any Transferred Subsidiary. If such
Tax Return relates to a period ending after the Closing Date, Seller and
Buyer agree to consult and resolve in good faith any issue arising as a
result of Buyer's review of such Tax Return and mutually to consent to the
filing as promptly as possible of such Tax Return. In the event the parties
are unable to resolve any dispute, the parties shall jointly request that a
mutually acceptable accounting firm which is not the past or then current
principal auditors of Buyer or Seller resolve any issue before the due date
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of any such Tax return, in order that such Tax return may be timely filed.
The scope of the accounting firm's review shall be limited to the disputed
items. Seller and Buyer shall each pay one-half of the accounting firm's
fees and expenses. The term "Tax Item" shall mean any item of income,
capital gain, net operating loss, deduction, credit or other Tax attribute
relevant to the calculation of Tax liability.
(b) Buyer shall timely file, or cause to be timely filed, all Tax
Returns prepared pursuant to this Section 8.4 that are filed after the
Closing Date (other than any consolidated returns relating to pre-Closing tax
periods of any Transferred Subsidiary). Buyer shall pay to the relevant
taxing authority all Taxes due in connection with any such Tax Return. If,
pursuant to Section 9.4, Seller would be liable for any Taxes relating to
such Tax Return, Seller shall pay the amount of such Taxes to Buyer no later
than five (5) Business Days after the Tax Return is filed.
(c) Notwithstanding anything in this Agreement to the contrary,
Seller shall control the representation of the interests of Seller and any
Subsidiaries in any Tax audit or administrative or court proceeding relating
to Tax Returns with respect to which Seller may be liable for Taxes pursuant
to this Agreement; provided, however, that Seller will consult with Buyer
regarding any Tax issue of a Transferred Subsidiary that may have a
materially adverse effect on the Tax liability of Buyer, any of its
Affiliates or any Transferred Subsidiary for any period ending after the
Closing Date and, in such situation, Buyer shall have the right, at its
discretion, to participate in (but not to control) any such audit or
proceeding solely with respect to such Tax issue, provided that, in such
case, Buyer shall not communicate with any taxing authority in connection
with such audit or proceeding without the consent of Seller. Buyer shall
have the right, at its discretion after good faith consultation with Seller,
to release Seller from its obligation to indemnify Buyer with respect to such
Tax issue by a written agreement mutually agreed to by Seller and Buyer and,
in that event, to control the representation of the interest of the relevant
Subsidiary solely with respect to such Tax issue. Seller and Buyer shall
bear their own expenses with respect to their participation in any proceeding
under this Section 8.4(c). Buyer and Seller mutually agree to consult and
cooperate with each other so that the transfer of control is effected in a
manner that will minimize any disruption to any such audit or proceeding and
so that Seller is not prejudiced in any way.
(d) Each of Seller and Buyer shall promptly notify the other party
in writing upon receipt by the notifying party, or any Affiliate of the
notifying party, of notice of any pending or threatened Tax audits or
assessments relating to Taxes covered by Section 8.4.
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(e) Seller shall provide Buyer with such information as is
necessary for the application of the incremental research credit provisions
of Code section 41(f)(3)(A).
(f) The parties agree that any indemnification payments made
pursuant to this Agreement shall be treated for tax purposes as an adjustment
to the Purchase Price, unless otherwise required by applicable law. Buyer
agrees not to make any election under Section 338 of the Code (other than
with respect to BSW) unless Seller consents to such election in writing which
consent shall not be unreasonably withheld.
8.5. Non-Solicitation of Employees. (a) During the period
beginning on the Closing Date and ending on the fifth anniversary of the
Closing Date, without the prior written consent of Buyer, Seller shall
refrain from, either alone or in conjunction with any other Person (including
any Affiliate), directly or indirectly:
(i) soliciting the employment by Seller or any of its Affiliates
of any Transferred Employee unless such Transferred Employee is
terminated by Buyer; or
(ii) causing or attempting to cause any Transferred Employee to
resign or sever a relationship with Buyer or any of its subsidiaries
(including the Transferred Subsidiaries).
(b) During the period beginning on the Closing Date and ending on
the fifth anniversary of the Closing Date, without the prior written consent
of Seller, Buyer shall refrain from, either alone or in conjunction with any
other Person (including any Affiliate), directly or indirectly:
(i) soliciting the employment by Buyer or any of its Affiliates of
any Person who is an employee of Seller or any of the Subsidiaries other
than Transferred Employees unless such employee is terminated by Seller;
or
(ii) causing or attempting to cause any employee of Seller or any
of its subsidiaries other than Transferred Employees to resign or sever
a relationship with Seller or any of the Subsidiaries.
(c) The parties agree that the foregoing restrictions in
subsections (a) and (b) shall not apply to any general solicitation by Buyer
or Seller not specifically directed at employees of Seller or Transferred
Employees made in a newspaper or other periodical.
8.6. Non-Competition. During the period beginning on the Closing
Date and ending on the third anniversary of the Closing Date, without the
prior written consent of Buyer, Seller shall refrain from, either alone or in
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conjunction with any other Person (including any Affiliate), directly or
indirectly, manufacturing, distributing, servicing or selling products or
their successor products that are the same or substantially similar to those
manufactured, distributed and/or sold by the Analytical Instruments Business
or under development as of the date of this Agreement, solely as such
products are specifically listed in Section 8.6(a) of the Seller Schedule
(the "Analytical Instruments Products"), in any field of use listed in
Section 8.6(b) of the Seller Schedule, or in any field of use other than Life
Sciences (as defined below) listed in Section 8.6(c) of the Seller Schedule,
to the extent (but only to the extent) that Seller and its subsidiaries
(exclusive of the Analytical Instruments Business), as of the date of this
Agreement, are not manufacturing, producing, developing, distributing or
selling such products in such fields, and have no pending plans to do so (the
"Excluded Fields"). Buyer expressly acknowledges that Seller shall not be in
violation of this Section 8.6 if it develops or sells products listed in
Section 8.6(a) of the Seller Schedule for applications outside the fields of
use set forth in Section 8.6(b) of the Seller Schedule. Buyer further
acknowledges that the foregoing provisions of this Section 8.6 shall not be
construed to prohibit any Person that becomes a controlling Affiliate of
Seller following the Closing Date from continuing to engage in any business
in which it is engaged at the time it becomes such a controlling Affiliate.
As used in Section 8.6(c) of the Seller Schedule, "Life Sciences" means the
measurement, creation or purification of substances for the purpose of
characterizing and/or altering biological organisms, or constituents thereof.
Life Sciences does not include material science or petroleum analysis.
9. Miscellaneous
9.1. Public Announcements. Prior to the Closing Date, no news
release or other public announcement pertaining in any way to the
transactions contemplated by this Agreement will be made by either party
without the prior consent of the other party, unless in the opinion of
counsel to such party such release or announcement is required by law or the
requirements of the New York Stock Exchange.
9.2. Expenses. Subject to the provisions of Section 9.3, whether
or not the transactions contemplated by this Agreement are completed, each of
the parties hereto shall pay the fees and expenses incurred by it in
connection with the negotiation, preparation, execution and performance of
this Agreement, including, without limitation, attorneys' fees and
accountants' fees.
9.3. Transfer Taxes and Recording Expenses. Buyer and Seller shall
each pay and be responsible for fifty percent (50%) of all U.S. or foreign
transfer, documentary, sales, excise, stamp, motor vehicle, registration,
value added or similar taxes and notary, filing or recording expenses or
fees, if any, required to be paid in connection with this Agreement and the
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transactions contemplated hereby (other than the transactions contemplated by
Section 4.3 for which taxes, recording fees and other charges and expenses
shall be paid by Seller), including any interest charge, penalty or addition
to tax with respect thereto. Each party shall be entitled to pay any such
amounts on behalf of the other party, and the non-paying party shall promptly
reimburse the paying party for any amounts so paid.
9.4. Indemnification. (a) Seller shall indemnify and hold Buyer
harmless against and in respect of (i) all obligations and liabilities of
Seller and the Subsidiaries (other than the Transferred Subsidiaries),
whether accrued, absolute, fixed, contingent or otherwise, not expressly
assumed by Buyer pursuant to this Agreement or the Assumption Agreement;
(ii) any loss, liability, damage, claims, costs or expenses (including
reasonable attorneys' fees and other reasonable costs of defense) (but
excluding any liability for taxes of any kind or interest or penalties
thereon which are included in the calculation of the Tax cost or Tax Benefit
under Section 9.4(e)) (collectively, "Damages") incurred or sustained by
Buyer as a result of any breach by Seller of its covenants contained herein
which survive the Closing; (iii) any Damages incurred or sustained by Buyer
as a result of any breach by Seller of its representations and warranties
contained herein; provided, that (x) Seller shall be required to indemnify
Buyer pursuant to this clause (iii) for such breaches if, and only to the
extent that, the aggregate actual Damages (as adjusted pursuant to
Section 9.4(e)) resulting from such breaches to Buyer exceeds $4,600,000, (y)
Seller shall not be required to indemnify Buyer pursuant to this clause (iii)
in an aggregate amount in excess of $425 million, and (z) any claim for
indemnification under this clause (iii) must be made in writing with
reasonable specificity to Seller by Buyer prior to the expiration (as
specified in Section 3.3) of the representation or warranty in respect of
which such claim for indemnification is made; (iv) to the extent exceeding
the amounts accrued on the Closing Balance Sheet (exclusive of any accruals
for "deferred taxes" or similar items that reflect timing differences between
Tax and financial accounting principles) , any Taxes of the Transferred
Subsidiaries with respect to any taxable period ending on or before the
Closing Date (and any taxable period beginning before and ending after the
Closing Date to the extent allocable to the portion of such period beginning
before and ending on the Closing Date), it being agreed that any allocation
required to determine Taxes attributable to any period beginning before and
ending on the Closing Date shall be made by means of a closing of the books
and records of the Transferred Subsidiaries as of the Closing Date and, to
the extent not susceptible to such allocation, by apportionment on the basis
of elapsed days; (v) the Excluded Liabilities, (vi) all Damages in connection
with Excluded Assets and (vii) any liabilities of the Transferred
Subsidiaries under Environmental Laws attributable to the ownership or
leasing of real property that has been disposed of (or the lease in respect
of which terminated or expired) prior to the Closing Date.
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(b) Buyer shall indemnify and hold Seller and the other Asset
Sellers harmless against and in respect of (i) all obligations and
liabilities of Seller and the other Asset Sellers expressly assumed by Buyer
pursuant to this Agreement or the Assumption Agreement; (ii) any actual
Damages incurred or sustained by Seller or the other Asset Sellers as a
result of any breach by Buyer of its covenants contained herein; (iii) any
Damages incurred or sustained by Seller or any of the other Asset Sellers as
a result of any operations of the Analytical Instruments Business after the
Closing; (iv) any Damages incurred or sustained by Seller or any of the other
Asset Sellers as a result of any breach by Buyer of its representations and
warranties contained herein; provided, that (x) Buyer shall be required to
indemnify Seller and the other Asset Sellers pursuant to this clause (iv) for
such breaches if, and only to the extent that, the aggregate actual Damages
(as adjusted pursuant to Section 9.4(e)) resulting from such breaches to
Seller and the Subsidiary Asset Sellers exceeds $4,600,000, (y) Buyer shall
not be required to indemnify Seller and the Subsidiary Asset Sellers pursuant
to this clause (iv) in an aggregate amount in excess of $425 million, and
(z) any claim for indemnification under this clause (iv) must be made in
writing with reasonable specificity to Buyer by Seller prior to the
expiration (as specified in Section 3.3) of the representation or warranty in
respect of which such claim for indemnification is made; and (v) all
obligations of Seller or any of the Subsidiaries (other than the Transferred
Subsidiaries) under any guarantees, indemnities, surety bonds, letters of
credit or letters of comfort given or obtained by Seller or any of the
Subsidiaries (other than the Transferred Subsidiaries) for the benefit of the
Analytical Instruments Business as to which no substitution has been effected
pursuant to Section 4.4 prior to the Closing.
(c) With respect to third-party claims, all claims for
indemnification by Buyer or Seller, as the case may be (an "Indemnified
Party"), hereunder (other than claims specifically addressed in Section
8.4(c)) shall be asserted and resolved as set forth in this Section 9.4(c).
In the event that any written claim or demand for which Buyer or Seller, as
the case may be (an "Indemnifying Party"), would be liable to any Indemnified
Party hereunder is asserted against or sought to be collected from any
Indemnified Party by a third party, such Indemnified Party shall promptly
notify the Indemnifying Party of such claim or demand and the amount or the
estimated amount thereof to the extent then feasible (which estimate shall
not be conclusive of the final amount of such claim or demand) (the "Claim
Notice"). The Indemnifying Party shall have thirty (30) days from the date
of receipt of the Claim Notice (the "Notice Period") to notify the
Indemnified Party (A) whether or not the Indemnifying Party disputes the
liability of the Indemnifying Party to the Indemnified Party hereunder with
respect to such claim or demand and (B) whether or not it desires to defend
the Indemnified Party against such claim or demand. All costs and expenses
incurred by the Indemnifying Party in defending such claim or demand shall be
a liability of, and shall be paid by, the Indemnifying Party. Except as
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hereinafter provided, in the event that the Indemnifying Party notifies the
Indemnified Party within the Notice Period that it desires to defend the
Indemnified Party against such claim or demand, the Indemnifying Party shall
have the right to defend the Indemnified Party by appropriate proceedings and
shall have the sole power to direct and control such defense. If any
Indemnified Party desires to participate in any such defense, it may do so at
its sole cost and expense. The Indemnified Party shall not settle a claim or
demand without the consent of the Indemnifying Party. The Indemnifying Party
shall not, without the prior written consent of the Indemnified Party,
settle, compromise or offer to settle or compromise any such claim or demand
on a basis which would result in the imposition of a consent order,
injunction or decree which would restrict the future activity or conduct of
the Indemnified Party or any subsidiary or Affiliate thereof or if such
settlement or compromise does not include an unconditional release of the
Indemnified Party for any liability arising out of such claim or demand. If
the Indemnifying Party elects not to defend the Indemnified Party against
such claim or demand, whether by not giving the Indemnified Party timely
notice as provided above or otherwise, then the amount of any such claim or
demand or, if the same be contested by the Indemnified Party, that portion
thereof as to which such defense is unsuccessful (and the reasonable costs
and expenses pertaining to such defense) shall be the liability of the
Indemnifying Party hereunder, subject to the limitations set forth in
Sections 9.4(a) and 9.4(b). Buyer and Seller shall each render to each other
such assistance as may reasonably be requested in order to insure the proper
and adequate defense of any such claim or proceeding.
(d) The indemnities provided in this Section 9.4 shall survive the
Closing. Except with respect to claims based on actual fraud, the indemnity
provided in this Section 9.4 shall be the sole and exclusive remedy of the
Indemnified Party against the Indemnifying Party at law or equity for any
matter covered by paragraphs (a) and (b) above.
(e) The amount of any Damages for which indemnification is
provided under this Section 9.4 shall be computed net of any insurance
proceeds received by the Indemnified Party in connection with such Damages.
If the amount with respect to which any claim is made under this Section 9.4
(an "Indemnity Claim") gives rise to a currently realizable Tax Benefit (as
defined below) to the party making the claim, the indemnity payment shall be
reduced by the amount of the Tax Benefit available to the party making the
claim. Any indemnity payment made pursuant to an Indemnity Claim shall be
increased to take account of any net Tax cost incurred by the claiming party
arising from the receipt of indemnity payments hereunder. To the extent such
Indemnity Claim does not give rise to a currently realizable Tax Benefit, if
the amount with respect to which any Indemnity Claim is made gives rise to a
subsequently realized Tax Benefit to the party that made the claim, such
party shall refund to the Indemnifying Party the amount of such Tax Benefit
when, as and if realized. For the purposes of this Agreement, any
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subsequently realized Tax Benefit shall be treated as though it were a
reduction in the amount of the initial Indemnity Claim, and the liabilities
of the parties shall be redetermined as though both occurred at or prior to
the time of the indemnity payment. For purposes of this Section 9.4(e), a
"Tax Benefit" means an amount by which the tax liability of the party (or
group of corporations including the party) is reduced (including, without
limitation, by deduction, reduction of income by virtue of increased tax
basis or otherwise, entitlement to refund, credit or otherwise) plus any
related interest received from the relevant taxing authority. Where a party
has other losses, deductions, credits or items available to it, the Tax
Benefit from any losses, deductions, credits or items relating to the
Indemnity Claim shall be deemed to be realized proportionately with any other
losses, deductions, credits or items. For purposes of this Section 9.4(e), a
Tax Benefit is "currently realizable" to the extent it can be reasonably
anticipated that such Tax Benefit will be realized in the current taxable
period or year or in any Tax Return with respect thereto (including through a
carryback to a prior taxable period) or in any taxable period or year prior
to the date of the Indemnity Claim. In the event that there should be a
determination disallowing the Tax Benefit, the Indemnifying Party shall be
liable to refund to the Indemnified Party the amount of any related reduction
previously allowed or payments previously made to the Indemnifying Party
pursuant to this Section 9.4(e). The amount of the refunded reduction or
payment shall be deemed a payment under this Section 9.4 and thus shall be
paid subject to any applicable reductions under this Section 9.4(e).
(f) The parties agree that any indemnifications payments made
pursuant to this Agreement shall be treated for tax purposes as an adjustment
to the Purchase Price, unless otherwise required by applicable law.
(g) Each Indemnified Party shall be obligated in connection with
any claim for indemnification under this Section 9.4 to use all reasonable
efforts to mitigate Damages upon and after becoming aware of any event which
could reasonably be expected to give rise to such Damages. Without limiting
the foregoing, otherwise indemnified Damages under or relating to
Environmental Laws shall be indemnified hereunder only to the extent such
Damages were reasonably required to be incurred under Environmental Laws.
(h) Notwithstanding anything to the contrary contained herein,
neither party hereto nor any Affiliate of either of them shall be liable for
any consequential, punitive or special damages pursuant to this Agreement or
any of the agreements contemplated hereby (it being understood, however, that
lost revenues or income may, if otherwise appropriate, be utilized in the
valuation of Assets or Subsidiary Stock for purposes of the calculation of
any Damages, except to the extent a party to this Agreement or any of its
Affiliates is liable for such consequential, punitive or special damages to a
third party.
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(i) Buyer shall promptly pay to Seller any refund or credit
(including any interest paid or credited with respect thereto) received by
Buyer, any Transferred Subsidiary or any Affiliate thereof after the Closing
of Taxes relating to any taxable period ending on or before the Closing Date
or, with respect to any taxable period beginning before and ending after the
Closing Date, Taxes relating to the portion of such period beginning before
and ending on the Closing Date determined as provided in Section 9.4(a)(iv).
Buyer shall, if Seller reasonably so requests, cause the relevant Transferred
Subsidiary (or other related entity) to file for any refund or credit to
which Seller believes it is entitled under this Section 9.4(i).
9.5. Environmental Remediations. (a) After the Closing, Seller
and Buyer shall equally share the cost of any investigation, monitoring,
clean-up or other remediation of any release of Materials of Environmental
Concern ("Environmental Remediation") at or from any Plant or any real
property currently owned by any Transferred Subsidiary or leased by any
Transferred Subsidiary from any third party to the extent any such
Environmental Remediation: (i) relates to events or conditions occurring or
existing on or prior to the Closing Date and (ii) is reasonably required by
Environmental Laws; provided that in no event shall Buyer's obligations
pursuant to this Section 9.5(a) exceed $4 million in the aggregate.
(b) Seller shall perform all Environmental Remediations subject to
cost-sharing pursuant to Section 9.5 (a) hereof ("Shared Remediations").
Notwithstanding any provision of this Agreement to the contrary, Seller shall
have no obligation to perform or provide indemnification for any
Environmental Remediation, and Buyer shall be solely responsible for and
shall indemnify and hold harmless Seller and the Asset Sellers against any
Damages relating to, any Environmental Remediation at or relating to any
Plant or any real property currently owned by any Transferred Subsidiary or
leased by any Transferred Subsidiary from any third party to the extent such
Environmental Remediation is not a Shared Remediation.
(c) Seller and Buyer agree that any Shared Remediation shall be
undertaken and performed in the most cost-effective manner reasonably
acceptable to the Governmental Authority with jurisdiction over the Shared
Remediation. Seller and Buyer shall cooperate and take all reasonable
actions to eliminate and minimize costs relating to any Shared Remediation,
including without limitation, if reasonably requested by Seller, Buyer shall
impose deed restrictions on properties subject to Shared Remediations
limiting such properties to future uses that will not result in materially
greater Environmental Remediation expenses than if such future uses were
restructured to industrial or commercial uses.
(d) In any Shared Remediation, Seller shall have sole authority
over communications and negotiations with any Governmental Authority;
provided however, that Seller shall coordinate in advance with and obtain
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approval from Buyer for such communication or negotiation, such approval not
to be unreasonable withheld, and Seller shall promptly provide Buyer with
copies of all written communications and a summary of all negotiations and
oral communications with Governmental Authorities relating to Shared
Remediations.
(e) Buyer agrees that upon reasonable prior notice to Buyer,
Seller and Seller's agents and representatives shall have the right to enter
upon any property at which a Shared Remediation is being undertaken, or is
proposed to be undertaken, in order to initiate, implement or complete any
Shared Remediation. Seller shall use all reasonable efforts to conduct all
Shared Remediations in a manner which, to the extent practicable, avoids
interference with or minimizes any interference with Buyer's use of the
property subject to the Shared Remediation.
9.6. Pre-Closing Litigation. (a) After the Closing, Seller and
Buyer shall equally share the cost of and Damages with respect to any action,
suit, proceeding, dispute, claim or investigation arising out of or related
to the operations of the Analytical Instruments Business which is filed or
commenced at any time after the date of this Agreement and prior to the
Closing against Seller or any of its Affiliates or which is set forth in
Section 9.6 of the Seller Schedule ("Pre-Closing Litigation"); provided that
in no event shall Buyer's obligations pursuant to this Section 9.6(a) exceed
$4 million in the aggregate; and provided further that in no event shall
Buyer's obligations with respect to Damages (other than attorneys fees and
costs of defense which shall in no way be limited except as set forth in the
preceding proviso) with respect to item 3 of Section 9.6 of the Seller
Schedule exceed $1 million.
(b) Seller and Buyer shall cooperate and take all reasonable
actions to eliminate and minimize any Damages relating to any Shared
Litigation. Seller shall have the right to defend the Pre-Closing Litigation
by appropriate proceedings and shall have the sole power to direct and
control such defense (except for item 3 of Section 9.6 of the Seller
Schedule, which Buyer shall have sole power to direct and control) subject
to cost-sharing pursuant to Section 9.6 (a) hereof ("Shared Litigation");
provided that in no event shall Seller (or Buyer, as the case may be) settle,
compromise or offer to settle or compromise any Shared Litigation without the
prior written consent of Buyer (or Seller, as the case may be) to all terms
of such settlement or compromise; and provided further that Buyer shall have
the right to defend against any Pre-Closing Litigation if Seller declines or
fails to do so in a timely manner. Notwithstanding any provision of this
Agreement to the contrary, Seller shall have no obligation to perform or
provide indemnification for any Shared Litigation. Buyer shall receive one-
half of any proceeds received by Seller in the final resolution after
exhaustion of available appeals of item 3 of Section 9.6 of the Seller
Schedule, up to a total payment to Buyer of $1 million. Buyer shall allow
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Seller access to employees and records of the Analytical Instruments Business
relating to Shared Litigation.
9.7. Notices. All notices, requests, demands and other
communications which are required or may be given under this Agreement shall
be in writing and shall be deemed to have been duly given if delivered
personally, if telecopied or mailed, first class mail, postage prepaid,
return receipt requested, or by overnight courier as follows:
(a) If to Seller:
The Xxxxxx-Xxxxx Corporation
000 Xxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxxx 00000
Attention: Secretary
Fax: (000) 000-0000
with a copy to:
Xxxxxxx Xxxxxxx & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxxx, Esq.
Fax: (000) 000-0000
(b) If to Buyer:
EG&G, Inc.
00 Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxxx Xxxxx, Esq.
Fax: (000) 000-0000
or to such other address as either party shall have specified by notice in
writing to the other party. All such notices, requests, demands and
communications shall be deemed to have been received on the date of personal
delivery or telecopy, on the third Business Day after the mailing thereof or
on the first day after delivery by overnight courier.
9.8. Entire Agreement. This Agreement (including the Exhibits and
Schedules hereto) constitutes the entire agreement between the parties hereto
and supersedes all prior agreements and understandings, oral and written,
between the parties hereto with respect to the subject matter hereof.
9.9. Binding Effect; Benefit. This Agreement shall inure to the
benefit of and be binding upon the parties hereto and their respective
successors and assigns. Nothing in this Agreement, expressed or implied, is
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intended to confer on any Person other than the parties hereto or their
respective successors and assigns, any rights, remedies, obligations or
liabilities under or by reason of this Agreement.
9.10. Bulk Sales Law. Buyer and Seller each agree to waive
compliance by the other with the provisions of the bulk sales law of any
jurisdiction.
9.11. Assignability. This Agreement shall not be assignable by
Seller without the prior written consent of Buyer or by Buyer without the
prior written consent of Seller; provided, that Buyer may assign its rights
and obligations, in whole or in part, to one or more majority-owned
subsidiaries of Buyer so long as Buyer remains bound by all the terms of this
Agreement to the same extent as if no such assignment or assignments has been
made.
9.12. Amendment; Waiver. This Agreement may be amended,
supplemented or otherwise modified only by a written instrument executed by
the parties hereto. No waiver by either party of any of the provisions
hereof shall be effective unless explicitly set forth in writing and executed
by the party so waiving. Except as provided in the preceding sentence, no
action taken pursuant to this Agreement, including without limitation, any
investigation by or on behalf of any party, shall be deemed to constitute a
waiver by the party taking such action of compliance with any
representations, warranties, covenants or agreements contained herein, and in
any documents delivered or to be delivered pursuant to this Agreement and in
connection with the Closing hereunder. The waiver by any party hereto of a
breach of any provision of this Agreement shall not operate or be construed
as a waiver of any subsequent breach.
9.13. Schedules and Exhibits. Any fact or item which is clearly
disclosed on any Schedule or Exhibit to this Agreement or in the Financial
Information in such a way as to make its relevance to a representation or
representations made elsewhere in this Agreement or to the information called
for by another Schedule or other Schedules (or Exhibit or other Exhibits) to
this Agreement readily apparent shall be deemed to be an exception to such
representation or representations or to be disclosed on such other Schedule
or Schedules (or Exhibit or Exhibits), as the case may be, notwithstanding
the omission of a reference or cross-reference thereto. Any fact or item
disclosed on any Schedule or Exhibit hereto shall not by reason only of such
inclusion be deemed to be material and shall not be employed as a point of
reference in determining any standard of materiality under this Agreement.
9.14. Other Covenants. In addition to Seller's obligations set
forth in Section 2.5 hereof, to the extent that any consents needed to assign
to Buyer any of the Assets have not been obtained on or prior to the Closing
Date, this Agreement shall not constitute an assignment or attempted
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assignment thereof if such assignment or attempted assignment would
constitute a breach thereof. If any such consent shall not be obtained on or
prior to the Closing Date, then (i) Seller and Buyer, if required under
applicable law, shall use their reasonable efforts in good faith to obtain
such consent as promptly as practicable thereafter and (ii) if in the
reasonable judgment of Buyer such consent may not be obtained, the parties
shall use reasonable efforts in good faith to cooperate, and to cause each of
their respective Affiliates to cooperate, in any lawful arrangement designed
to provide for Buyer the benefits under any such Assets.
9.15. Section Headings; Table of Contents. The section headings
contained in this Agreement and the table of contents to this Agreement are
for reference purposes only and shall not affect the meaning or
interpretation of this Agreement.
9.16. Severability. If any provision of this Agreement shall be
declared by any court of competent jurisdiction to be illegal, void or
unenforceable, all other provisions of this Agreement shall not be affected
and shall remain in full force and effect.
9.17. Counterparts. This Agreement may be executed in any number
of counterparts, each of which shall be deemed to be an original and all of
which together shall be deemed to be one and the same instrument.
9.18. Governing Law; Jurisdiction and Service of Process. This
Agreement shall be governed by, and construed in accordance with, the laws of
the State of New York. Any suit, action or proceeding against any party with
respect to this Agreement may be brought in a court of the United States
sitting in the City of New York in the State of New York or in the
Commonwealth of Massachusetts or, if jurisdiction is lacking in such a court,
in a court of record in the State of New York or the Commonwealth of
Massachusetts, and each party hereto hereby irrevocably waives, to the
fullest extent permitted by law, any objection that it may have, whether now
or in the future, to the laying of venue in, or to the jurisdiction of, any
and each of such courts for the purpose of any such suit, action or
proceeding and further waives any claim that any such suit, action or
proceeding has been brought in an inconvenient forum, and each hereby submits
to such jurisdiction.
9.19. No Third Party Beneficiaries. This Agreement is for the
sole benefit of the parties hereto and their respective successors and
assigns and nothing herein, express or implied, is intended to or shall
confer upon any other Person or entity any legal or equitable right, benefit
or remedy of any nature whatsoever under or by reason of this Agreement.
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IN WITNESS WHEREOF, the parties hereto have executed and delivered
this Agreement as of the date first above written.
THE XXXXXX-XXXXX CORPORATION
By:/s/ Xxxxxx X. Xxxxxx
-----------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Senior Vice President and
Chief Financial Officer
EG&G, INC.
By:/s/ Xxxxxxx X. Xxxxx
-----------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Chief Executive Officer
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Exhibits to Purchase Agreement:
Exhibit A: Subsidiaries Intentionally Omitted
Exhibit B: Locations of Operations Intentionally Omitted
Exhibit C: Transferred Subsidiaries Intentionally Omitted
Exhibit D: Subsidiary Asset Sellers Intentionally Omitted
Exhibit E: Terms of Note
ISSUER: Buyer
ISSUANCE DATE: Closing Date
MATURITY DATE: First anniversary of Closing Date
PRINCIPAL AMOUNT: (U.S.) $150 million
INTEREST RATE: 5% per annum
PRINCIPAL PAYMENT: Single installment on Maturity Date
INTEREST PAYMENTS: Quarterly
SECURITY: First priority, perfected security interests
in Assets and Subsidiary Stock pursuant to
one or more security agreements containing
customary representations, covenants and
events of default (collectively, the
"Security Agreement")
RANKING: Senior, secured credit obligation of Buyer
MANDATORY PREPAYMENT: Prepayable from the proceeds of any sale of
collateral outside the ordinary course of
business
Prepayable in full upon any change in control
of Buyer
OPTIONAL PREPAYMENT: Prepayment of principal, together with
accrued and unpaid interest, may be made at
any time in whole or in part in increments of
not less than $1.0 million without premium or
penalty
EVENTS OF DEFAULT AND Failure to make any payment of principal or
REMEDIES: interest when due, defaults under Security
Agreement and other defaults as customary
TRANSFER: Transferrable by Seller, in whole or in part,
subject to compliance with applicable law
Exhibit F: Form of Buyer License Included as Exhibit 2.2 to the
Agreement Form 8-K of PE Corporation
dated May 28, 1999.
Exhibit G: Form of Seller License Included as Exhibit 2.3 to the
Agreement Form 8-K of PE Corporation
dated May 28, 1999.
Exhibit H: Form of Transition Agreement Included as Exhibit 2.4 to the
Form 8-K of PE Corporation dated
May 28, 1999.
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