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EXHIBIT 10.1
INVESTMENT AGREEMENT
between
GENOMIC SOLUTIONS INC.
and
PERKINELMER, INC.
Dated as of December 14, 1999
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TABLE OF CONTENTS
PAGE NO.
EXHIBITS
Exhibit A - Certificate of Designations
Exhibit B - Intentionally Omitted
Exhibit C - Exceptions to Representations
Exhibit D - List of Securityholders
Exhibit E - Intentionally Omitted
Exhibit F - Form of Securities Purchase Agreement
Exhibit G - Form of Shareholders Agreement
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INVESTMENT AGREEMENT
This Agreement dated as of December 14, 1999 is entered into by and between
Genomic Solutions Inc., a Delaware corporation (the "Company"), and PerkinElmer,
Inc., a Massachusetts corporation (the "Purchaser").
Recitals
WHEREAS, the Purchaser wishes to acquire, and the Company wishes to sell, shares
of its Series P Convertible Preferred Stock;
WHEREAS, the Purchaser and the Company wish to provide the Purchaser with the
option to acquire (i) from the Company sufficient shares so that the Purchaser
would hold 19.9% (on a fully-diluted basis) of the outstanding capital stock of
the Company and/or (ii) from the Company's equity holders all of the equity
securities of the Company; and
WHEREAS, the Purchaser and the Company, simultaneous with the execution of this
Agreement, are entering into a Sales, Marketing and Distribution Agreement,
providing for the distribution of the Company's products by the Purchaser as
described therein (the "Distribution Agreement");
In consideration of the mutual promises and covenants contained in this
Agreement, the parties hereto agree as follows:
1. Authorization and Sale of Shares.
1.1 Authorization. The Company has, or before the Closing (as
defined in Section 2) will have, duly authorized the sale and issuance, pursuant
to the terms of this Agreement, of 1,269,841 shares of its Series P Convertible
Preferred Stock, $.001 par value per share (the "Series P Preferred"), having
the rights, restrictions, privileges and preferences set forth in the
Certificate of Designations attached hereto as Exhibit A (the "Certificate of
Designations"). The Company has, or before the Closing will have, adopted and
filed the Certificate of Designations with the Secretary of State of the State
of Delaware.
1.2 Sale of Shares. Subject to the terms and conditions of
this Agreement, at the Closing the Company will sell and issue to the Purchaser,
and the Purchaser will purchase, 1,269,841 shares of Series P Preferred for the
purchase price of $6.30 per share. At the Closing, the Purchaser may elect to
purchase, at a price of $6.75 per share, an additional number of shares of
Series P Preferred that will result in the Purchaser's holding on the Closing
Date 19.9% of the outstanding capital stock of the Company, assuming the
conversion, exercise and exchange into
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or for Common Stock of all of the Company's securities convertible into,
exercisable for or exchangeable for Common Stock (the "19.9% Option"). The
shares of Series P Preferred sold under this Agreement are referred to as the
"Shares."
2. The Closing. The closing (the "Closing") of the sale and purchase of
the Shares under this Agreement shall take place at the offices of Xxxx and Xxxx
LLP, 00 Xxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx at 10:00 a.m. on January 20, 2000,
or at such other time, date and place as are mutually agreeable to the Company
and the Purchaser, but in no event later than March 31, 2000. If the Closing has
not occurred on or prior to March 31, 2000, this Agreement shall terminate. At
the Closing, the Company shall deliver to the Purchaser a certificate for the
Shares, registered in the name of the Purchaser, against payment to the Company
of the purchase price for the Shares by wire transfer. The date of the Closing
is hereinafter referred to as the "Closing Date." If at the Closing any of the
conditions specified in Section 5 shall not have been fulfilled, the Purchaser
shall, at its election, be relieved of its obligations under this Agreement
without thereby waiving any other rights it may have by reason of any breach by
the Company of its covenants hereunder.
3. Representations of the Company. Except as disclosed by the Company
in Exhibit C hereto, the Company hereby represents and warrants to the Purchaser
that the statements contained in this Section 3 are true, complete and correct.
Exhibit C shall be arranged in paragraphs corresponding to the numbered and
lettered paragraphs contained in this Section 3, and the disclosures in any
paragraph of Exhibit C shall qualify the corresponding paragraph of this Section
3 and any other paragraphs of this Section 3 to which they logically relate.
References to the Company in the representations and warranties set forth in
this Section 3 shall include the Company's predecessors in interest; provided,
however, that all of the Company's representations and warranties as to any such
predecessors in interest are qualified to the Company's actual knowledge.
3.1 Organization and Standing. The Company is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Delaware and has full corporate power and authority to conduct its
business as presently conducted by it and to enter into and perform this
Agreement, all other agreements required to be executed by the Company at or
prior to the Closing pursuant to Section 5.4 and the Distribution Agreement (the
"Ancillary Agreements") and to carry out the transactions contemplated by this
Agreement and the Ancillary Agreements. The Company is duly qualified to do
business as a foreign corporation and is in good standing in the State of
Michigan and in every other jurisdiction in which the failure so to qualify
would have a material adverse effect on the business, prospects, assets or
condition (financial or otherwise) of the Company (a "Company Material Adverse
Effect"). The Company has furnished to the Purchaser true and complete copies of
its Certificate of Incorporation and By-Laws, each as amended to date and
presently in effect. The Company
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has at all times complied with all provisions of its Certificate of
Incorporation and By-laws and is not in default under, or in violation of, any
such provision.
3.2 Capitalization. The authorized capital stock of the
Company (immediately prior to the Closing) consists of 40,000,000 shares of
common stock, $.001 par value per share (the "Common Stock"), of which 3,032,842
shares are issued and outstanding, and 10,000,000 shares of Preferred Stock
("Preferred Stock"), $.001 par value per share, of which 1,680,880 shares have
been designated as Series B Preferred Stock, 1,680,880 shares of which are
issued and outstanding; 4,070,339 shares have been designated as Series C
Preferred Stock, 4,070,339 of which are issued and outstanding; 1,100,000 shares
have been designated as Series D Preferred Stock, 1,100,000 shares of which are
issued and outstanding; 50,000 of which have been designated as Series M
Preferred Stock, 50,000 shares of which are issued and outstanding; and
3,800,000 shares shall have been designated as Series P Preferred prior to the
Closing, none of which are issued or outstanding. All of the issued and
outstanding shares of Common Stock and Preferred Stock have been duly authorized
and validly issued and are fully paid and nonassessable. Except as provided in
this Agreement and in Section 3.2 of Exhibit C, (i) no subscription, warrant,
option, convertible security, call or other right (contingent or otherwise) to
purchase or acquire any shares of capital stock of the Company is authorized or
outstanding, (ii) the Company has no obligation (contingent or otherwise) to
issue any subscription, warrant, option, convertible security, call or other
such right or to issue or distribute to holders of any shares of its capital
stock any evidences of indebtedness or assets of the Company, (iii) the Company
has no obligation (contingent or otherwise) to purchase, redeem or otherwise
acquire any shares of its capital stock or any interest therein or to pay any
dividend or make any other distribution in respect thereof, and (iv) there are
no outstanding or authorized stock appreciation, phantom stock or similar rights
with respect to the Company. All of the issued and outstanding shares of capital
stock of the Company have been offered, issued and sold by the Company in
compliance with applicable federal and state securities laws.
3.3 Subsidiaries, Etc. Section 3.3 of Exhibit C sets forth for
each subsidiary of the Company (a "Subsidiary") its name and jurisdiction of
incorporation. The Company owns all of the outstanding securities of each
Subsidiary. Each Subsidiary is a corporation duly organized, validly existing
and in good standing under the laws of the jurisdiction of its incorporation.
Each Subsidiary is duly qualified to conduct business and is in good standing
under the laws of each jurisdiction in which the nature of its businesses or the
ownership or leasing of its properties requires such qualification, except where
the failure to so qualify would not have a material adverse effect on the
business, properties or rights of such Subsidiary. Each Subsidiary has all
requisite corporate power and authority to carry on the businesses in which it
is engaged and to own and use the properties owned and used by it. The Company
has delivered or made available to the Purchaser correct and complete copies of
the corporate charter and By-laws
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of each Subsidiary, as amended to date. All of the issued and outstanding shares
of capital stock of each Subsidiary are duly authorized, validly issued, fully
paid, nonassessable and are held of record and beneficially by either the
Company or another Subsidiary, free and clear of any restrictions on transfer
(other than restrictions under the Securities Act of 1933, as amended (the
"Securities Act") and state securities laws), claims, security interests,
options, warrants, rights, contracts, calls, commitments, equities and demands.
There are no outstanding or authorized options, warrants, rights, agreements or
commitments to which the Company or any Subsidiary is a party or which are
binding on any of them providing for the issuance, disposition or acquisition of
any capital stock of any Subsidiary. There are no outstanding stock
appreciation, phantom stock or similar rights with respect to any Subsidiary.
There are no voting trusts, proxies or other agreements or understandings with
respect to the voting of any capital stock of any Subsidiary. No Subsidiary is
in default under or in violation of any provision of its corporate charter or
By-Laws. The Company does not control directly or indirectly or have any direct
or indirect equity participation in any corporation, partnership, trust, limited
liability company or other business association (each, a "Business Entity")
which is not a Subsidiary.
3.4 Securityholder Lists and Agreements. Attached as Exhibit D
is a true and complete list of the securityholders of the Company, showing the
number of shares of Common Stock, Preferred Stock or other securities of the
Company held by each securityholder as of the date of this Agreement and, in the
case of options, warrants and other convertible securities, the exercise price
thereof and the number and type of securities issuable thereunder. Except as
provided in this Agreement, and in Section 3.4 of Exhibit C, there are no
agreements, written or oral, between the Company and any holder of its
securities, or, to the best of the Company's knowledge, among any holders of its
securities, relating to the acquisition (including without limitation rights of
first refusal, anti-dilution or pre-emptive rights), disposition, registration
under the Securities Act or voting of the capital stock of the Company.
3.5 Issuance of Shares. The issuance, sale and delivery of the
Shares in accordance with this Agreement, and the issuance and delivery of the
shares of Common Stock issuable upon conversion of the Shares, have been, or
will be on or prior to the Closing, duly authorized by all necessary corporate
action on the part of the Company, and all such shares have been, or will be
prior to the Closing, duly reserved for issuance. The Shares when so issued,
sold and delivered against payment therefor in accordance with the provisions of
this Agreement, and the shares of Common Stock issuable upon conversion of the
Shares, when issued upon such conversion, will be duly and validly issued, fully
paid and nonassessable.
3.6 Authority for Agreement; No Conflict. The execution,
delivery and performance by the Company of this Agreement and the Ancillary
Agreements, and the consummation by the Company of the transactions contemplated
hereby and thereby, have been
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duly authorized by all necessary corporate action. This Agreement has been, and
the Ancillary Agreements when executed at the Closing will be, duly executed and
delivered by the Company and constitute valid and binding obligations of the
Company enforceable in accordance with their respective terms. Except as set
forth in Section 3.6 of Exhibit C, the execution of and performance of the
transactions contemplated by this Agreement and the Ancillary Agreements and
compliance with their respective provisions by the parties thereto other than
the Purchaser will not (a) conflict with or violate any provision of the
Certificate of Incorporation or By-laws of the Company or any resolution adopted
by the board of directors or the shareholders of the Company, (b) require on the
part of the Company or any Subsidiary any filing with, or any permit,
authorization, consent or approval of, any federal, state, local or foreign
court, arbitrational tribunal, administrative agency or commission or other
governmental or regulatory authority or agency (each of the foregoing is
hereafter referred to as a "Governmental Entity"), (c) conflict with, result in
a breach of, constitute (with or without due notice or lapse of time or both) a
default under, result in the acceleration of, create in any party the right to
accelerate, terminate, modify or cancel, or require any notice, consent or
waiver under, any contract, lease, sublease, license, sublicense, franchise,
permit, indenture, agreement or mortgage for borrowed money, instrument of
indebtedness, Security Interest (as defined below) or other arrangement to which
the Company or any Subsidiary is a party or by which the Company or any
Subsidiary is bound or to which its assets are subject or of which the Company
has knowledge, (d) result in the imposition of any Security Interest upon any
assets of the Company or any Subsidiary or (e) violate any order, writ,
injunction, decree, statute, rule or regulation applicable to the Company or any
Subsidiary or any of their properties or assets. For purposes of this Agreement,
"Security Interest" means any mortgage, pledge, security interest, encumbrance,
charge, or other lien (whether arising by contract or by operation of law).
Based in part on the representations made by the Purchaser in Section 4 of this
Agreement, the offer and sale of the Shares to the Purchaser will be in
compliance with applicable federal and state securities laws.
3.7 Litigation. Section 3.7 of Exhibit C identifies, and
contains a brief description of, (a) any unsatisfied judgment, order, decree,
stipulation or injunction relating to the Company or any Subsidiary and (b) any
claim, complaint, action, suit, proceeding, hearing or investigation of, in or
brought before (by a private party or otherwise) any Governmental Entity or
before any arbitrator relating to or affecting the Company or any Subsidiary
which is currently pending or, to the knowledge of the Company, threatened. None
of the complaints, actions, suits, proceedings, hearings, and investigations set
forth in Section 3.7 of Exhibit C, individually or collectively, could have a
Company Material Adverse Effect.
3.8 Financial Statements. The Company has furnished to the
Purchaser a complete and correct copy of (i) the audited consolidated balance
sheets of the Company at December 31, 1996, December 31, 1997 and December 31,
1998 and the related audited
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consolidated statements of operations and cash flows for the fiscal years then
ended, and (ii) the unaudited consolidated balance sheet of the Company (the
"Balance Sheet") at October 31, 1999 (the "Balance Sheet Date") and the related
unaudited consolidated statements of operations and cash flow for the ten months
then ended, (collectively, the "Financial Statements"). The Financial Statements
are in accordance with the books and records of the Company and, taken together
as a whole, present fairly in all material respects the financial condition and
results of operations of the Company, at the dates and for the periods
indicated, and have been prepared in accordance with U.S. generally accepted
accounting principles ("GAAP") consistently applied, except that the unaudited
Financial Statements may not be in accordance with GAAP because of the absence
of footnotes normally contained therein and are subject to normal year-end audit
adjustments which in the aggregate will not be material.
3.9 Absence of Certain Changes. Since the Balance Sheet Date,
(i) there has not been any material adverse change in the assets, business,
financial condition or results of operations of the Company, and (ii) neither
the Company nor any Subsidiary has taken any of the following actions:
(a) created, incurred or assumed any debt (including
obligations in respect of capital leases); assumed, guaranteed, endorsed or
otherwise become liable or responsible (whether directly, contingently or
otherwise) for the obligations of any other person or entity; or made any loans,
advances or capital contributions to, or investments in, any other person or
entity;
(b) except as provided in Section 3.9 of Exhibit C, other than
in the Ordinary Course of Business, entered into, adopted or amended any
Employee Benefit Plan (as defined in Section 3.21) or any employment or
severance agreement or arrangement of the type described in Section 3.21(l) or
increased in any manner the compensation or fringe benefits of, or modified the
employment terms of, its directors, officers or employees, generally or
individually, or paid any benefit not required by the terms in effect on the
date hereof of any existing Employee Benefit Plan, except to the extent required
by applicable law;
(c) acquired, sold, leased, encumbered or disposed of any
assets or property (including without limitation any inventory and any shares or
other equity interests in or securities of any Business Entity or division
thereof), other than purchases and sales of assets in the ordinary course of
business consistent with past custom and practice including with respect to
frequency and amount ("Ordinary Course of Business");
(d) except as contemplated by this Agreement, amended its
Certificate of Incorporation or By-Laws;
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(e) changed its accounting methods, principles or practices,
except insofar as may be required by a generally applicable change in GAAP, or
made any new elections with respect to Taxes (as defined in Section 3.11(a)) or
any changes in current elections with respect to Taxes;
(f) except as provided in Section 3.9 of Exhibit C, sold,
assigned, transferred or licensed any Intellectual Property (as defined in
Section 3.13(e)), other than in the Ordinary Course of Business;
(g) except as provided in Section 3.9 of Exhibit C, entered
into any arrangement (including written agreements) which creates a liability on
the part of the Company or the Subsidiary in excess of $200,000;
(h) except as provided in Section 3.9 of Exhibit C, made or
committed to make any capital expenditure in excess of $50,000 per expenditure
or $200,000 in the aggregate;
(i) paid any dividend or other distribution or effected by
reclassification, combination or subdivision with respect to, or by purchase or
redemption by the Company or any Subsidiary of, any capital stock; or
(j) agreed in writing or otherwise to take any of the
foregoing actions.
3.10 Absence of Undisclosed Liabilities. Neither the Company
nor any Subsidiary has any liability (whether known or unknown, whether absolute
or contingent, whether liquidated or unliquidated, whether accrued or unaccrued
and whether due or to become due, or otherwise), except for (a) liabilities
shown on the Balance Sheet, (b) liabilities which have arisen since the Balance
Sheet Date in the Ordinary Course of Business and which are similar in nature
and amount to the liabilities which arose during the comparable period of time
in the immediately preceding fiscal period and (c) contractual liabilities and
obligations incurred in the Ordinary Course of Business which are not required
by GAAP to be reflected on the Balance Sheet and which in the aggregate are not
material.
3.11 Tax Matters.
(a) The Company and each Subsidiary has filed all Tax Returns
(as defined below) that it was required to file, and all such Tax Returns were
correct and complete in all material respects. The Company and each Subsidiary
has paid all Taxes (as defined below) that were shown to be due on any such Tax
Returns. The unpaid Taxes of the Company and any Subsidiary for tax periods
through the date of the Company's Balance Sheet do not exceed the accruals and
reserves for Taxes set forth on the Company's Balance Sheet (exclusive of any
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accruals for "deferred taxes" or similar items that reflect timing differences
between Tax and financial accounting principles). All Taxes that the Company or
any Subsidiary is or was required by law to withhold or collect have been duly
withheld or collected and, to the extent required, have been paid to the proper
Governmental Entity. For purposes of this Agreement, "Taxes" means all taxes,
charges, fees, levies or other similar assessments or liabilities, including
without limitation income, gross receipts, ad valorem, premium, value-added,
excise, real property, personal property, sales, use, transfer, withholding,
employment, payroll and franchise taxes imposed by the United States of America
or any state, local or foreign government, or any agency thereof, or other
political subdivision of the United States or any such government, and any
interest, fines, penalties, assessments or additions to tax resulting from,
attributable to or incurred in connection with any tax or any contest or dispute
thereof. For purposes of this Agreement, "Tax Returns" means all reports,
returns, declarations, statements or other information required to be supplied
to a taxing authority in connection with Taxes, including without limitation any
schedule, attachment or amendment.
(b) The Company has delivered or made available to the
Purchaser copies of all federal income Tax Returns and examination reports
related to statements of deficiencies assessed against or agreed to by the
Company or any Subsidiary.
(c) No examination or audit of any Tax Return of the Company
by any Governmental Entity is currently in progress or proposed or, to the
Company's knowledge, threatened. The Company has not received written notice
from any jurisdiction that the jurisdiction believes that the Company or any
Subsidiary was required to file any Tax Return that was not filed.
(d) Neither the Company nor any Subsidiary has waived any
statute of limitations with respect to Taxes or agreed to an extension of time
with respect to a Tax assessment or deficiency.
(e) Neither the Company nor any Subsidiary is a "consenting
corporation" within the meaning of Section 341(f) of the Internal Revenue Code
of 1986, as amended (the "Code"), and none of the assets of the Company or any
Subsidiary is subject to an election under Section 341(f) of the Code.
(f) The Company has not been a United States real property
holding corporation within the meaning of Section 897(c)(2) of the Code during
the applicable period specified in Section 897(c)(l)(A)(ii) of the Code.
(g) Neither the Company nor any Subsidiary has any actual
liability for any Taxes of any Person (other than the Company or such
Subsidiary) under Treasury Regulation
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Section 1.1502-6 (or any similar provision of federal, state, local, or foreign
law), or as a transferee or successor, by contract, or otherwise.
(h) None of the assets of the Company or any Subsidiary is
"tax-exempt use property" within the meaning of Section 168(h) of the Code.
(i) None of the assets of the Company or any Subsidiary
directly or indirectly secures any debt the interest on which is tax exempt
under Section 103(a) of the Code.
(j) The Company has not undergone a change in its method of
accounting resulting in an adjustment to its taxable income pursuant to Section
481(h) of the Code.
(k) Except as set forth in Section 3.11 of Exhibit C, no state
or federal "net operating loss" of the Company determined as of the Closing Date
is subject to limitation on its use pursuant to Section 382 of the Code or
comparable provisions of state law as a result of any "ownership change" within
the meaning of Section 382(g) of the Code occurring on or prior to the Closing
Date.
(l) The Company has not been required to make a basis
reduction pursuant to Treasury Regulation Section 1.1502-20(b) or Treasury
Regulation Section 1.337(d)-2(b).
(m) Except as set forth in Section 3.11 of Exhibit C, neither
the Company nor any Subsidiary has participated in or cooperated with an
international boycott within the meaning of Section 999 of the Code nor has the
Company or any Subsidiary had operations which are or may hereafter become
reportable under Section 999 of the Code.
(n) Except as set forth in Section 3.11 of Exhibit C, neither
the Company nor any Subsidiary has had a permanent establishment in any foreign
country, as defined in any applicable treaty or convention between the United
States and such foreign country.
(o) Neither the Company nor any Subsidiary is a party to any
joint venture, partnership or other arrangement or contract that could be
treated as a partnership for federal income tax purposes.
3.12 Ownership and Condition of Assets. The Company and each
Subsidiary owns or leases all material tangible assets necessary for the conduct
of its business as presently conducted. Each such asset is in good operating
condition and repair (subject to normal wear and tear) and is suitable for the
purposes for which it presently is used. The Company and each Subsidiary has
good and marketable title to each asset reflected as being owned by it on the
Balance Sheet, except for inventories sold or otherwise disposed of in the
Ordinary Course of
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Business for value and accounts and notes receivable paid in full since the
Balance Sheet Date. Except as set forth in Section 3.12(a) of Exhibit C, no
asset of the Company or any Subsidiary (tangible or intangible) is subject to
any Security Interest.
3.13 Intellectual Property.
(a) The Company and each Subsidiary owns, is licensed to use
or otherwise possesses the legally enforceable right to use, all Intellectual
Property (as defined in paragraph (e) below) used, or that covers technology
used, in the operation of its business or necessary for the operation of its
business as presently proposed to be conducted. Each such item of Intellectual
Property owned by the Company or a Subsidiary will continue to be owned by the
Company or the Subsidiary immediately following the Closing, and each such item
of Intellectual Property available for use by the Company or the Subsidiary will
continue to be available for use by the Company or the Subsidiary on identical
terms and conditions immediately following the Closing. The Company or the
applicable Subsidiary has taken reasonable measures to protect the proprietary
nature of each item of Intellectual Property and to maintain in confidence all
trade secrets and confidential information, that the Company or the Subsidiary
owns or uses. No other person or Business Entity (other than licensors of
software that is mass-marketed and generally is commercially available) has any
rights to any of the Intellectual Property owned or used by the Company or any
Subsidiary (except pursuant to agreements or licenses specified in Section
3.13(c) or 3.13(d) of Exhibit C), and the Company has no knowledge that any
other individual or Business Entity (collectively, "Persons") is infringing,
violating or misappropriating any of the Intellectual Property that the Company
or any Subsidiary owns or uses.
(b) The business, operations and activities of the Company or
the Subsidiaries as now conducted and as conducted prior to the date of this
Agreement have not infringed or violated, or constituted a misappropriation of,
and do not now infringe or violate, or constitute a misappropriation of, any
Intellectual Property rights of another Person that are known to the Company.
Neither the Company nor any subsidiary has received any written complaint, claim
or notice alleging any such infringement, violation or misappropriation, and to
the knowledge of the Company, there is no basis for any such complaint, claim or
notice.
(c) Section 3.13(c) of Exhibit C identifies each patent,
domain name, trade xxxx, trade name or copyright registration which has been
issued to, or is owned by, the Company or any Subsidiary, identifies each
pending patent application or application for registration which the Company or
any Subsidiary has made or which the Company or any Subsidiary owns, identifies
each software product (other than software that is mass-marketed and generally
commercially available) ever licensed or distributed by the Company or any
Subsidiary and identifies each license or other agreement pursuant to which the
Company or any Subsidiary
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has granted any rights to any third party with respect to any Intellectual
Property of the Company or a Subsidiary. The Company has delivered to the
Purchaser correct and complete copies of all such licenses and agreements (as
amended to date) and has specifically identified and made available to the
Purchaser correct and complete copies of all other written documentation
evidencing ownership of, rights to use and any claims or disputes relating to,
each item of Intellectual Property set forth in Section 3.13(c) of Exhibit C.
With respect to each such item of Intellectual Property that the Company or any
Subsidiary owns, licenses or distributes:
(i) with respect to each such item owned by the
Company or the Subsidiary, the Company or the Subsidiary possesses all right,
title and interest in and to such item;
(ii) such item is not subject to any outstanding
judgement, order, decree, stipulation or injunction; and
(iii) neither the Company nor any Subsidiary has
agreed to indemnify any person or entity for or against any infringement,
misappropriation or other conflict with respect to such item.
(d) Section 3.13(d) of Exhibit C identifies each item of
Intellectual Property known to the Company used in the operation of the Company
or any Subsidiary (other than software that is mass-marketed and generally
commercially available), that is owned by a Person other than the Company. The
Company has supplied the Purchaser with correct and complete copies of all
licenses, sublicenses or other agreements (as amended to date) pursuant to which
the Company or any Subsidiary uses such Intellectual Property, all of which are
listed on Section 3.13(d) of Exhibit C. With respect to each such item of
Intellectual Property, neither the Company nor any Subsidiary has agreed to
indemnify any person or entity for or against any interference, infringement,
misappropriation or other conflict with respect to such item.
(e) For purposes of this Agreement, "Intellectual Property"
shall mean and include all (i) patents, patent applications, patent disclosures
and all related continuation, continuation-in-part, divisional, reissue,
re-examination, utility model, certificate of invention and design patents,
patent applications, registrations and applications for registrations, (ii)
domain names, trademarks, service marks, trade dress, logos, trade names and
corporate names and registrations and applications for registration thereof,
(iii) copyrights and registrations and applications for registration thereof,
(iv) mask works and registrations and applications for registration thereof, (v)
computer software (including both source code and object code), data and
documentation, (vi) trade secrets and confidential business information, whether
patentable or nonpatentable and whether or not reduced to practice, know-how,
technical drawings, manufacturing and product processes and techniques, research
and development information,
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copyrightable works, financial, marketing and business data, pricing and cost
information, business and marketing plans and customer and supplier lists and
information, (vii) other proprietary rights relating to any of the foregoing
(including without limitation remedies against infringements thereof and rights
of protection of interest therein under the laws of all jurisdictions) and
(viii) copies and tangible embodiments thereof.
3.14 Inventory. All inventory of the Company and each
Subsidiary, whether or not reflected on the Balance Sheet, consists of a quality
and quantity useable and saleable in the Ordinary Course of Business, except for
inventory that is obsolete, of below-standard quality, unuseable, unsaleable,
or not saleable in the Ordinary Course of Business within one year, all of which
have been written-off or written-down to net realizable value on the Balance
Sheet. All inventories not written-off have been priced at the lower of cost or
market on a first-in, first-out basis. The quantities of each type of inventory
of the Company and each Subsidiary, whether raw materials, work-in-process or
finished goods, are not excessive in the present circumstances of the Company or
the Subsidiary.
3.15 Contracts.
(a) Section 3.15(a) of Exhibit C lists the following written
arrangements (including without limitation written contracts, commitments,
undertakings and agreements) to which the Company or any Subsidiary is a party:
(i) any written arrangement (or group of related
written arrangements) for the lease of personal property from or to third
parties providing for lease payments in excess of $100,000 per annum;
(ii) any written arrangement (or group of related
written arrangements) for the purchase, sale, supply or manufacture of raw
materials, commodities, supplies, products or other personal property or for the
furnishing or receipt of services (A) which involves more than $100,000, or (B)
in which the Company or the Subsidiary has granted manufacturing rights, "most
favored nation" pricing provisions or marketing or distribution rights relating
to any products or territory or has agreed to purchase a minimum quantity of
goods or services, agreed to make a minimum payment or agreed to purchase goods
or services exclusively from a certain party;
(iii) any written arrangement establishing a
partnership, joint venture or limited liability company;
(iv) any written arrangement (or group of related
written arrangements) under which the Company or the Subsidiary has created,
incurred, assumed or guaranteed (or
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may create, incur, assume or guarantee) indebtedness (including capitalized
lease obligations) or under which it has imposed (or may impose) a Security
Interest on any of the assets of the Company or the Subsidiary, tangible or
intangible;
(v) any written arrangement concerning
confidentiality, assignment of inventions or involving Intellectual Property;
(vi) any written arrangement involving any affiliate,
as defined in Rule 12b-2 under the Securities Exchange Act of 1934 (an
"Affiliate"), of the Company;
(vii) any agreement entered into since March 1, 1997
relating to the acquisition or disposition of assets (other than the purchase or
sale of assets in the Ordinary Course of Business), businesses or companies
(whether by sale of assets, sale of stock, merger or otherwise);
(viii) any written arrangement requiring the Company
or any Subsidiary to perform research and development activities with respect to
any product or proposed product or to develop or market any product or proposed
product; and
(ix) any other written arrangement (or group of
related written arrangements) either involving more than $100,000 or not entered
into in the Ordinary Course of Business.
(b) The Company has delivered or made available to the
Purchaser a correct and complete copy of each written arrangement (as amended to
date) listed in Section 3.15(a) of Exhibit C. With respect to each written
arrangement so listed: (i) the written arrangement is legal, valid, binding and
enforceable and in full force and effect; (ii) no consent or approval of any
third party is required in connection with the execution, delivery or
performance of this Agreement or the Closing of the transactions contemplated
hereby and each such arrangement will continue to be legal, valid, binding and
enforceable and in full force and effect immediately following the Closing in
accordance with the terms thereof as in effect prior to the Closing; and (iii)
neither the Company nor any Subsidiary is, and to the knowledge of the Company
no other party is, in breach or default in any material respect, and no event
has occurred which with notice or lapse of time would constitute a breach or
default or permit termination, modification or acceleration, under the written
arrangement, nor is there any dispute between the parties thereto.
(c) To the Company's knowledge, neither the Company nor any
Subsidiary is a party to any oral contract, agreement or other arrangement
which, if reduced to written form, would be required to be listed in Section
3.15(a) of Exhibit C under the terms of this Section 3.15.
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3.16 Accounts Receivable. All accounts receivable of the
Company or any Subsidiary reflected on the Balance Sheet are valid receivables
subject to no setoffs or counterclaims. All accounts receivable reflected in the
financial or accounting records of the Company or any subsidiary that have
arisen since the Balance Sheet Date are valid receivables subject to no setoffs
or counterclaims. The reserve for doubtful accounts set forth on the Balance
Sheet and any reserves for doubtful accounts created by the Company or any
Subsidiary in the Ordinary Course of Business subsequent to the Balance Sheet
Date are adequate and were created in accordance with GAAP.
3.17 Powers of Attorney. There are no outstanding powers of
attorney executed on behalf of the Company or any Subsidiary.
3.18 Insurance.
(a) Section 3.18(a) of Exhibit C sets forth a list (including
the name of the insurer, the name of the policyholder, the name of each insured,
the policy number and periods of coverage, the scope of coverage, a description
of any retroactive premium adjustments or other loss-sharing arrangement and all
claims made under such policies) of all policies of fire, theft, casualty,
liability, burglary, fidelity, workers compensation, business interruption,
environmental, product liability, product warranty, automobile and other forms
of insurance under which the Company or any Subsidiary has been a party, a named
insured or otherwise the beneficiary of coverage at any time since January 1,
1997; provided that information for Genomic Solutions, Ltd. and Genomic
Solutions, K.K. shall be added prior to the Closing Date.
(b) Neither the Company nor any Subsidiary (i) is in breach or
default with respect to the payment of premiums or the giving of notices under
any policy listed in Section 3.18(a) of Exhibit C, (ii) to the knowledge of the
Company, is in breach or default with respect to any other obligations under any
such policy, and no event has occurred which, with notice or the lapse of time,
would constitute such a breach or default or permit termination, modification,
or acceleration, under any such policy, or (iii) has received any written notice
from the insurer disclaiming coverage or reserving rights with respect to a
particular claim under any such policy in general, or amending or canceling any
such policy. Neither the Company nor any Subsidiary has incurred any loss,
damage, expense or liability covered by any such insurance policy for which it
has not properly asserted a claim under the policy. The Company and each
Subsidiary is covered by insurance in scope and amount (x) sufficient to satisfy
the insurance provision of each written arrangement applicable to the Company or
the Subsidiary listed or required to be listed in Section 3.16(a) of Exhibit C
and (y) customary and reasonable for the business in which it is engaged.
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3.19 Product Warranty; Recall. None of the products of the
Company or any Subsidiary is subject to any recall. Neither the Company nor any
Subsidiary has plans to implement any product recall and, to the knowledge of
the Company, no product recall has been threatened to be imposed by any
Governmental Entity. To the knowledge of the Company, there is no basis for the
recall, withdrawal or suspension of any approval by any Governmental Entity with
respect to any of the products sold or proposed to be sold by the Company or any
Subsidiary. None of the products of the Company or any Subsidiary is subject to
regulation by the United States Food and Drug Administration.
3.20 Employees.
(a) If any employee of the Company or any Subsidiary has
entered into a confidentiality and/or assignment of inventions agreement with
the Company or a Subsidiary, a copy of each such agreement has previously been
delivered or made available to the Purchaser by the Company, and will continue
in full force and effect following the Closing on identical terms and
conditions as immediately prior to the Closing. To the knowledge of the
Company, no key employee or group of employees employed by the Company or any
Subsidiary has any plans to terminate employment with the Company or the
Subsidiary. Neither the Company nor any Subsidiary is a party to or bound by
any collective bargaining agreement, nor has the Company, nor has the Company
or any Subsidiary experienced any strikes, grievances, claims of unfair labor
practices or other collective bargaining disputes. The Company has no
knowledge of any organizational effort made or threatened, either currently or
within the past three years, by or on behalf of any labor union with respect to
its or any Subsidiary's employees. Except as set forth in Section 3.20 of
Exhibit C, neither the Company nor any Subsidiary is a party to any employment
of consulting agreement. Neither the execution and delivery of this Agreement
nor the consummation of the transactions contemplated hereby will trigger
otherwise result in any obligation of the Company or any Subsidiary to pay
severance or related costs under any employment of consulting agreement.
(b) For purposes of this Section 3.20, the term "employee"
shall be construed to include sales agents, sales representatives and other
independent contractors who spend at least 25 hours per week working for the
Company or any Subsidiary.
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3.21 Employee Benefits
(a) Section 3.21(a) of Exhibit C contains a complete and
accurate list of all Employee Benefit Plans. For purposes of this Agreement,
"Employee Benefit Plan" means any "employee pension benefit plan" (as defined in
Section 3(2) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA")), any "employee welfare benefit plan" (as defined in Section 3(1) of
ERISA), and any other written or oral plan, agreement or arrangement involving
direct or indirect compensation, including without limitation insurance
coverage, severance benefits, disability benefits, deferred compensation,
bonuses, stock options, stock purchase, phantom stock, stock appreciation or
other forms of incentive compensation or post-retirement compensation maintained
or contributed to by the Company or any ERISA Affiliate (as defined herein). For
purposes of this Agreement, "ERISA Affiliate" means any entity which is, or
within the last six years was, a member of (i) a controlled group of
corporations (as defined in Section 414(b) of the Code), (ii) a group of trades
or businesses under common control (as defined in Section 414(c) of the Code),
or (iii) an affiliated service group (as defined under Section 414(m) of the
Code or the regulations under Section 414(o) of the Code), any of which includes
or included the Company.
(b) Complete and accurate copies of the following documents
for the last three plan years for each Employee Benefit Plan have been delivered
or made available to the Purchaser by the Company, to the extent applicable: (A)
all Employee Benefit Plans which have been reduced to writing, (B) written
summaries of all unwritten Employee Benefit Plans, (C) all related trust
agreements, insurance contracts and summary plan descriptions, and (D) all
annual reports filed on IRS Forms 5500, 5500C or 5500R. Each Employee Benefit
Plan has been administered in all material respects in accordance with its terms
and each of the Company and the ERISA Affiliates has met its obligations in all
material respects with respect to such Employee Benefit Plan and has made all
required contributions thereto. The Company and all Employee Benefit Plans are
in compliance in all material respects with the currently applicable provisions
of ERISA and the Code and the regulations thereunder.
(c) All the Employee 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 Employee 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, no such determination letter has been revoked and revocation has not been
threatened, and no act or omission has occurred with respect to such Employee
Benefit Plan, that would reasonably be expected to adversely affect its
qualification or increase its cost.
(d) Neither the Company nor any ERISA Affiliate has ever
maintained an Employee Benefit Plan subject to Section 412 of the Code or Title
IV of ERISA.
(e) At no time has the Company or any ERISA Affiliate been
obligated to contribute to any "multiemployer plan" (as defined in Section
4001(a)(3) of ERISA).
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(f) No Employee Benefit Plan provides health, life or other
welfare benefits after termination of employment of any employee of the Company
(or to any beneficiary of any such employee), including but not limited to
retiree health coverage and deferred compensation, but excluding continuation of
health coverage required to be continued under Section 4980B of the Code and
insurance conversion privileges under state law and excluding routine payments
of disability benefits.
(g) No Employee Benefit Plan is funded by a "voluntary
employee's beneficiary association" within the meaning of Section 501(c)(9) of
the Code.
(h) Each Employee Benefit Plan is amendable and terminable
unilaterally by the Company and no Employee Benefit Plan, plan documentation or
agreement, summary plan description or other written communication distributed
generally to employees prohibits the Company from amending or terminating any
such Employee Benefit Plan.
(i) There are no investigations by any Governmental Entity,
termination proceedings or other claims (except claims for benefits payable in
the normal operation of the Employee Benefit Plans and proceedings with respect
to qualified domestic relation orders), audits, suits or proceedings against or
involving any Employee Benefit Plan or asserting any rights or claims to
benefits under any Employee Benefit Plan that could reasonably be expected to
give rise to any liability.
(k) No act or omission has occurred and no condition exists
with respect to any Employee Benefit Plan that would reasonably be expected to
subject the Company or any ERISA Affiliate to any material fine, penalty, Tax or
liability of any kind imposed under ERISA or the Code.
(l) Section 3.21(l) of Exhibit C discloses each: (i) agreement
with any employee or director of the Company or any Subsidiary (A) the benefits
of which are contingent, or the terms of which are altered, upon the occurrence
of a transaction involving the Company of the nature of any of the transactions
contemplated by this Agreement, (B) providing any term of employment or
compensation guarantee or (C) providing severance benefits or other benefits
after the termination of employment of such employee or director; (ii)
agreement, plan or arrangement under which any person may receive payments from
the Company or any Subsidiary 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 (iii) agreement, plan or
arrangement, including without limitation any stock option plan, stock
appreciation right plan, restricted stock plan, stock purchase plan, severance
benefit plan, or any Employee Benefit Plan, 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 contemplated by this Agreement.
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(m) The accruals for vacation, sickness and disability
expenses accrued for on the Balance Sheet are adequate and properly reflect the
expenses associated therewith in accordance with GAAP.
(n) None of the assets of any Employee Benefit Plan is or has
been invested in any property constituting employer real property or any
employer security within the meaning of Section 407(d) of ERISA.
3.22 Environmental Matters.
(a) To the Company's actual knowledge, the Company's ownership
and operation of the real property leased by it (the "Premises") is in material
compliance with all limitations, restrictions, conditions, standards,
prohibitions, requirements, obligations, schedules and timetables contained in
any federal, state, local or foreign law, statute, rule, regulation or common
law, relating to pollution or the environment, including, without limitation,
laws relating to emissions, discharges, releases or threatened releases of
pollutants, contaminants, chemicals or industrial, toxic or hazardous substances
or wastes (the "Hazardous Materials") into the environment (including, without
limitation, ambient air, surface water, ground water, land surface and
subsurface strata) or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transportation or handling of
Hazardous Materials (collectively, "Environmental Laws"). There is no material,
civil, criminal, administrative or other action, suit, demand, claim, hearing,
notice of violation, investigation, proceeding, notice or demand letter pending,
received or, to the Company's knowledge, threatened against the Company with
respect to the ownership or operation of the Premises or relating in any way to
the Environmental Laws.
(b) To the Company's actual knowledge, there are no past or
present events, conditions, circumstances, activities, practices, incidents and
actions or plans which may give rise to any material common law or legal
liability, or otherwise form the basis of any material claim, action, demand,
suit, proceeding, hearing, notice of violation, study or investigation, based on
or related to the manufacture, generation, ownership, processing, distribution,
use, treatment, abatement, storage, disposal, transportation, handling, or
omission, discharge or release or threatened release into the environment, of
any Hazardous Materials by the Company in connection with the ownership or
operation of the Premises.
(c) There have been no releases of Hazardous Materials into
the environment by the Company in violation of any Environmental Law.
3.23 Legal Compliance. The Company and each Subsidiary is
conducting and has conducted its business and operations in compliance in all
material respects with all applicable federal, state, local and foreign laws,
regulations and orders, including without limitation the rules and regulations
of any Governmental Entity. Neither the Company nor any Subsidiary has since
January 1, 1997 received any written notice or communication from any
Governmental Entity alleging noncompliance with any applicable federal, state,
local or foreign laws, regulations or orders.
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3.24 Permits. Section 3.24 of Exhibit C sets forth a list of
all permits, licenses, registrations, certificates, orders, approvals,
franchises, variances and similar rights ("Permits") and the status thereof
(including without limitation those issued or required under Environmental Laws)
issued to or held by the Company or any Subsidiary, other than Permits issued to
or held by Genomic Solutions, Ltd. or by Genomic Solutions, K.K. Such listed
Permits and the Permits issued to or held by Genomic Solutions, Ltd. or by
Genomic Solutions, K.K. are the only material Permits that are required for the
Company and each Subsidiary to conduct its business as presently conducted. Each
such Permit is in full force and effect and, to the knowledge of the Company, no
suspension or cancellation of such Permit is threatened and there is no basis
for believing that such Permit will not be renewable upon expiration. The
Company or the Subsidiary, as applicable, is in compliance in all material
respects with the terms and conditions of each such Permit. Each such Permit
issued to or held by the Company and each Subsidiary will continue in full force
and effect following the Closing without requiring the consent or approval of
any party.
3.25 Brokers' Fees. Except as set forth in Section 3.25 of
Exhibit C, the Company has no liability or obligation to pay any fees or
commissions to any broker, finder or agent with respect to the transactions
contemplated by this Agreement.
3.26 Books and Records. Except as set forth in Section 3.2 of
Exhibit C, the minute books and other similar records of the Company and each
Subsidiary, copies of all of which have previously been delivered or made
available to the Purchaser, contain true and complete records of all actions
taken at the meetings of the Company's or Subsidiary's, as applicable,
stockholders, Board of Directors or any committee thereof and of all written
consents executed in lieu of the holding of any such meeting. The books,
records, accounts, ledgers and files of the Company and each Subsidiary, copies
of all of which have previously been delivered or made available to the
Purchaser, are accurate and complete and have been maintained in accordance with
good business and bookkeeping practices.
3.27 Customers and Suppliers. No unfilled customer order or
commitment obligating the Company or any Subsidiary to process, manufacture,
sell or deliver products or perform services is likely to result in a Company
Material Adverse Effect upon completion of performance. No purchase order or
commitment is in excess of normal requirements, nor are prices provided therein
in excess of current market prices for the products or services to be provided
thereunder. Section 3.27 of Exhibit C sets forth a list of (a) each customer
that accounted for more than 10% of the revenues of the Company and the
Subsidiaries, on a consolidated basis, during each of the last two fiscal years,
and the amount of revenues accounted for by such customer during each such
period, and (b) each supplier that is the sole supplier of any significant
material, product, component or service used by the Company or any Subsidiary.
No such customer has indicated that it will stop, or decrease the rate of,
buying materials, products or components produced by, or services offered by,
the Company or any Subsidiary, and no such supplier of materials, products,
components or services has indicated that it will stop, or decrease the rate of,
supplying such materials, products, components or services.
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3.28 Real Property Leases. Section 3.28 of Exhibit C lists and
briefly describes all real property leased or subleased to the Company or any
Subsidiary and lists the term of each such lease, any extension or expansion
options, and the rent payable thereunder. The Company has delivered to the
Purchaser correct and complete copies of the leases and subleases (as amended to
date) listed therein. With respect to each such lease and sublease:
(a) the lease or sublease is legal, valid, binding,
enforceable and in full force and effect;
(b) the lease or sublease 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 prior to the Closing;
(c) neither the Company or the Subsidiary, as applicable, nor,
to the knowledge of the Company, any other party to the lease or sublease is in
breach or default in any material respect, and no event has occurred which, with
notice or lapse of time, would constitute a breach or default or permit
termination, modification or acceleration thereunder;
(d) there are no disputes, oral agreements or forbearance
programs to which the Company or the Subsidiary, as applicable, is a party in
effect as to the lease or sublease;
(e) the Company or the Subsidiary, as applicable, has not
assigned, transferred, conveyed, mortgaged, deeded in trust or encumbered any
interest in the leasehold or subleasehold; and
(f) all facilities leased or subleased thereunder are supplied
with utilities and other services necessary for the operation of said
facilities.
3.29 Owned Real Property. Neither the Company nor any
Subsidiary owns, directly or indirectly, any real property.
3.30 Government Contracts. Neither the Company nor any
Subsidiary has been suspended or debarred from bidding on contracts or
subcontracts with any Governmental Entity; no such suspension or debarment has
been initiated or, to the knowledge of the Company, threatened; and the
consummation of the transactions contemplated by this Agreement will not result
in any such suspension or debarment of the Company or any Subsidiary. Neither
the Company nor any Subsidiary has been audited or investigated and neither of
them is now being audited or investigated by the U.S. General 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 Entity, any similar agencies or instrumentalities of any foreign
Governmental Entity, or any prime contractor with a Governmental Entity nor, to
the knowledge of the Company, has any such audit or investigation been
threatened. To the knowledge of the Company, there is no valid basis for (a) the
suspension or debarment of the Company or any Subsidiary from bidding on
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contracts or subcontracts with any Governmental Entity or (b) any claim pursuant
to an audit or investigation by any of the entities named in the foregoing
sentence. Neither the Company nor any Subsidiary has any agreements, contracts
or commitments which require it to obtain or maintain a security clearance with
any Governmental Entity.
3.31 Year 2000 Compliance.
(a) The Company has conducted "year 2000" assessments with
respect to all of the Company's and the Subsidiaries' material internal systems
used in the business or operations of the Company and the Subsidiaries,
including, without limitation, computer hardware systems, software applications,
firmware, equipment containing embedded microchips and other embedded systems.
In addition, the Company has made inquiry of key suppliers and vendors regarding
their being Year 2000 Compliant. Neither the Company nor any Subsidiary has any
"year 2000" written audits, certificates, reports or other similar documents
that have been prepared or performed by or on behalf of the Company or the
Subsidiary with respect to any of their business or operations.
(b) To the best of the Company's knowledge and based on its
review and assessment, all of (i) the Company's and the Subsidiaries' material
internal systems used in the business or operations of the Company and the
Subsidiaries, including, without limitation, computer hardware systems, software
applications, firmware, equipment containing embedded microchips and other
embedded systems, and (ii) the software, hardware, firmware and other technology
which constitute part of the products and services manufactured, marketed or
sold by the Company or any Subsidiary or licensed by the Company or any
Subsidiary to third parties are Year 2000 Compliant (as defined in paragraph (d)
of this Section) and will not be adversely affected with respect to material
functionality, interoperability, performance or volume capacity (including
without limitation the processing and reporting of data) by virtue of the
arrival of the year 2000.
(c) The Company is not aware (but without any independent
review or confirmation by the Company) of any failure to be Year 2000 Compliant
of any third-party system used in connection with the business or operations of
the Company or any Subsidiary, including without limitation any system belonging
to any of the Company's or the Subsidiaries' suppliers, service providers or
customers.
(d) For purposes of this Agreement, "Year 2000 Compliant"
means that the applicable system or item:
(i) will accurately receive, record, store, provide,
recognize and process all date and time data from, during, into and between the
twentieth and twenty-first centuries, the years 1999 and 2000 and all leap
years;
(ii) will accurately perform all date-dependent
calculations and operations (including, without limitation, mathematical
operations,
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sorting, comparing and reporting) from, during, into and between the twentieth
and twenty-first centuries, the years 1999 and 2000 and all leap years; and
(iii) will not malfunction, cease to function or
provide invalid or incorrect results as a result of (x) the change of years from
1999 to 2000 or from 2000 to 2001, (y) date data, including date data which
represents or references different centuries, different dates during 1999 and
2000, or more than one century or (z) the occurrence of any particular date;
in each case without human intervention, other than original data entry;
provided, in each case, that all applications, hardware and other systems used
in conjunction with such system or item which are not owned or licensed by the
Company or any Subsidiary correctly exchange date data with or provide data to
such system or item.
3.32 Resolutions of the Board of Directors. The Company's
board of directors has approved the exercise by the Purchaser of its rights to
acquire equity securities of the Company pursuant to the Securities Purchase
Agreements (as defined in Section 5.4), and the acquisition of such equity
securities by the Purchaser and any subsequent business combination between the
Purchaser and the Company has been approved by the Company's board of directors
for the purposes of Section 203(a)(1) of the Delaware General Corporation Law.
The Company's board of directors has resolved to recommend to the Company's
holders of capital stock, options and warrants that they execute and deliver
Securities Purchase Agreements.
3.33 Budget. The Company shall deliver prior to the Closing,
to the Purchaser a copy of the budget (the "Budget") for the Company's fiscal
year ending December 31, 2000. As of the Closing Date, the Budget shall
represent the Company's good faith estimate of the future financial and
operating performance of the Company, based upon the best currently available
information.
3.34 Disclosure. No representation or warranty by the Company
contained in this Agreement and no statement contained in Exhibit C or any other
document, certificate or other instrument delivered or to be delivered by or on
behalf of the Company pursuant to this Agreement, and no other statement made by
any Company or any of its representatives in connection with this Agreement,
contains or will contain any untrue statement of a material fact or omits or
will omit to state any material fact necessary, in light of the circumstances
under which it was or will be made, in order to make the statements herein or
therein not misleading.
4. Representations of the Purchaser. The Purchaser represents and
warrants to the Company as follows:
4.1 Organization. The Purchaser is a corporation duly
organized, validly existing and in corporate and tax good standing under the
laws of the jurisdiction of its incorporation.
4.2 Authority. The Purchaser has all requisite corporate power
and authority to execute and deliver this Agreement and the Ancillary Agreements
to which it
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is a party and to perform its obligations hereunder and thereunder. The
execution and delivery by the Purchaser of this Agreement and the Ancillary
Agreements to which it is a party and the performance of this Agreement and such
Ancillary Agreements and the consummation of the transactions contemplated
hereby and thereby by the Purchaser have been duly and validly authorized by all
necessary corporate action on the part of the Purchaser. This Agreement has been
duly and validly executed and delivered by the Purchaser and constitutes a valid
and binding obligation of the Purchaser, enforceable against it in accordance
with its terms.
4.3 Noncontravention. Neither the execution and delivery by
the Purchaser of this Agreement or the Ancillary Agreements to which it is a
party, nor the consummation by the Purchaser of the transactions contemplated
hereby or thereby, will, directly or indirectly (with or without notice or lapse
of time), (a) conflict with or violate any provision of the charter or By-Laws
of the Purchaser or any resolution adopted by the board of directors or
shareholders of the Purchaser, (b) require on the part of the Purchaser any
filing with, or permit, authorization, consent or approval of, any Governmental
Entity or give any Governmental Entity the right to challenge any of the
transactions contemplated by this Agreement or the Ancillary Agreements, (c)
conflict with, result in breach of, constitute a default under, result in the
acceleration of, create in any party any right to accelerate, terminate, modify
or cancel, or require any notice, consent or waiver under, any contract, lease,
sublease, license, sublicense, franchise, permit, indenture, agreement or
mortgage for borrowed money, instrument of indebtedness, Security Interest or
other arrangement to which the Purchaser is a party or by which it is bound or
to which any of its assets is subject, or (d) violate any order, writ,
injunction, decree, statute, rule or regulation applicable to the Purchaser or
any of its properties or assets.
4.4 Brokers' Fees. The Purchaser has no liability or
obligation to pay any fees or commissions to any broker, finder or agent with
respect to the transactions contemplated by this Agreement.
4.5 Investment. The Purchaser is acquiring the Shares, and the
shares of Common Stock into which the Shares may be converted, for its own
account for investment and not with a view to, or for sale in connection with,
any distribution thereof, nor with any present intention of distributing or
selling the same; and, except as contemplated by this Agreement and the Exhibits
hereto, the Purchaser has no present or contemplated agreement, undertaking,
arrangement, obligation, indebtedness or commitment providing for the
disposition thereof. The Purchaser is an "accredited investor" as defined in
Rule 501(a) under the Securities Act.
5. Conditions to the Obligations of the Purchaser. The obligation of
the Purchaser to purchase the Shares at the Closing is subject to the
fulfillment, or the waiver by the Purchaser, of each of the following conditions
on or before the Closing:
5.1 Accuracy of Representations and Warranties. Each
representation and warranty contained in Section 3 shall be true on and as of
the Closing Date with the
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same effect as though such representation and warranty had been made on and as
of that date.
5.2 Performance. The Company shall have performed and complied
with all agreements and conditions contained in this Agreement required to be
performed or complied with by the Company prior to or at the Closing.
5.3 Opinion of Counsel. Purchaser shall have received an
opinion from Jaffe, Raitt, Heuer & Xxxxx, counsel for the Company, dated the
Closing Date, addressed to the Purchasers, and satisfactory in form and
substance to the Purchaser.
5.4 Ancillary Agreements.
(a) Securities Purchase Agreements. Securities
Purchase Agreements in the form attached hereto as Exhibit F (the "Securities
Purchase Agreements") shall have been executed and delivered by the Purchaser,
the Company and the holders of stock, options or warrants of the Company who
hold in the aggregate no less than 85% of the outstanding shares of Common
Stock, assuming the full conversion into, exercise for and exchange for Common
Stock of all of the Company's securities convertible into, exercisable for or
exchangeable for Common Stock.
(b) An Amended and Restated Stockholders Agreement
in the form attached hereto as Exhibit G (the "Stockholders Agreement") shall
have been executed and delivered by the Purchaser, the Company and all other
parties whose signature is required to amend and restate the Company's existing
stockholders' agreement.
5.5 Amendment to Certificate of Incorporation. The Company
shall have amended its Certificate of Incorporation to provide that the term of
each member of the Company's Board of Directors shall end upon the exercise by
the Purchaser of its rights to acquire 100% of the Equity Securities subject to
the Securities Purchase Agreements or the exercise of the Call Rights (as
defined in Section 7.7(b)) hereof for 100% of the Equity Securities subject to
the Call Rights.
5.6 Certificates and Documents. The Company shall have
delivered to the Purchaser:
(a) The Certificate of Incorporation of the Company,
as amended and in effect as of the Closing Date (including the Certificate of
Amendment and the amendment described in Section 5.5 hereof), certified by the
Secretary of State of the State of Delaware;
(b) Certificates, as of the most recent practicable
dates, as to the corporate good standing of the Company issued by the Secretary
of State of the State of Delaware and the Secretary of the State of the State of
Michigan;
(c) By-laws of the Company, certified by its
Secretary or Assistant Secretary as of the Closing Date; and
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(d) Resolutions of the Board of Directors of the
Company, authorizing and approving all matters in connection with this Agreement
and the transactions contemplated hereby, certified by the Secretary or
Assistant Secretary of the Company as of the Closing Date.
5.7 No Litigation. No action, suit or proceeding shall be
threatened by or pending before any Governmental Entity wherein an unfavorable
judgment, order, decree, stipulation or injunction would (i) prevent
consummation of any of the transactions contemplated by this Agreement or (ii)
cause any of the transactions contemplated by this Agreement to be rescinded
following consummation and no such judgment, order, decree, stipulation or
injunction shall be in effect.
5.8 Compliance Certificates. The Company shall have delivered
to the Purchaser a certificate, executed by the Chief Executive Officer of the
Company, dated the Closing Date, certifying (without qualification as to
knowledge or materiality or otherwise) to the fulfillment of the conditions
specified in Sections 5.1, 5.2, 5.4, 5.5 and 5.7 of this Agreement.
5.9 Other Matters. All corporate and other proceedings in
connection with the transactions contemplated by this Agreement and all
documents and instruments incident to such transactions shall be reasonably
satisfactory in substance and form to the Purchaser, and the Purchaser shall
have received all such counterpart originals or certified or other copies of
such documents as it may reasonably request.
6. Condition to the Obligations of the Company. The obligations of the
Company under Section 1.2 of this Agreement are subject to fulfillment, or the
waiver, of the following condition on or before the Closing:
6.1 Accuracy of Representations and Warranties. The
representations and warranties of the Purchaser contained in Section 4 shall be
true on and as of the Closing Date with the same effect as though such
representations and warranties had been made on and as of that date.
6.2 No Litigation. No action, suit or proceeding shall be
threatened by or pending before any Governmental Entity wherein an unfavorable
judgment, order, decree, stipulation or injunction would (i) prevent
consummation of any of the transactions contemplated by this Agreement or (ii)
cause any of the transactions contemplated by this Agreement to be rescinded
following consummation and no such judgment, order, decree, stipulation or
injunction shall be in effect.
6.3 Shareholders Agreement. The Shareholders Agreement shall
have been executed and delivered by the Purchaser, the Company and all other
parties whose signature is required to amend and restate the Company's existing
shareholders agreement.
6.4 Waiver of Rights, etc. The Company shall have received
from its shareholders all required consents and waivers of rights necessary to
effect the transactions contemplated by this Agreement.
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6.5 Certificate. The Purchaser shall have delivered to the
Company resolutions of the Board of Directors of the Purchaser, authorizing and
approving all matters in connection with this Agreement and the transactions
contemplated hereby, certified by the Clerk or Assistant Clerk of the Purchaser
as of the Closing Date.
7. Covenants.
7.1 Inspection and Observation.
(a) The Company shall permit an authorized
representative of the Purchaser, who is reasonably acceptable to the Company, to
visit and inspect the properties of the Company, including its corporate and
financial records, and to discuss its business and finances with officers of the
Company, during normal business hours upon not less than five days' prior
written notice and as often as may be reasonably requested.
(b) Until the later of (i) the termination of the
Securities Purchase Agreements in accordance with their terms without the option
thereunder having been exercised or (ii) the termination of the Call Rights
without their having been exercised and without the option under the Securities
Purchase Agreements having been exercised, the Company will permit an authorized
representative of the Purchaser who is reasonably acceptable to the Company, to
attend all meetings of the Board of Directors of the Company or any committee
thereof, other than those portions of meetings that involve discussions of the
contractual relations between the Purchaser and the Company or that, in the
reasonable determination of the Board of Directors, relate to products with
respect to which the Company and the Purchaser compete or are expected to
compete, and shall provide the Purchaser with such notice and other information
with respect to such meetings as are delivered to the directors of the Company
or members of the Committee, respectively, and shall promptly provide the
Purchaser with notice of any party's expression of interest in an Acquisition
Proposal (as defined in Section 7.6 hereof) and the ongoing status thereof. The
Purchaser's authorized representative shall have the right to present to the
Board of Directors of the Company the Purchaser's views relating to any proposed
financing or offering of securities of the Company and to present to the Board
of Directors of the Company the views of any financial advisors retained by the
Purchaser on such proposed financing or offering.
7.2 Financial Statements and Other Information.
(a) The Company shall deliver to the Purchaser:
(i) within 90 days after the end of each
fiscal year of the Company, an audited balance sheet of the Company as at the
end of such year and audited statements of income and of cash flows of the
Company for such year, certified by certified public accountants of established
national reputation selected by the Company, and prepared in accordance with
GAAP; and
(ii) within 45 days after the end of each
fiscal quarter of the Company (other than the fourth quarter), an unaudited
balance sheet of the Company
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as at the end of such quarter, and unaudited statements of income and of cash
flows of the Company for such fiscal quarter and for the current fiscal year to
the end of such fiscal quarter.
(b) The foregoing financial statements shall be
prepared on a consolidated basis if the Company then has any Subsidiaries. The
financial statements delivered pursuant to clause (ii) of paragraph (a) shall be
accompanied by a certificate of the Chief Executive Officer or the Chief
Financial Officer of the Company stating that such statements have been prepared
in accordance with GAAP consistently applied (subject to normal year-end
adjustments and without footnote disclosure) and fairly present in all material
respects the financial condition and results of operations of the Company and
its Subsidiaries at the date thereof and for the periods covered thereby.
7.3 Reservation of Common Stock. The Company shall reserve and
maintain a sufficient number of shares of Common Stock for issuance upon
conversion of all of the outstanding Shares.
7.4 Recommendation Regarding Securities Purchase Agreements.
The Company shall transmit to the holders of its capital stock, options and
warrants the recommendation of the Company's board of directors that such
holders execute and deliver Securities Purchase Agreements, shall include in
such transmission such information regarding the Securities Purchase Agreements
it deems appropriate and shall otherwise comply with its obligations pursuant to
Rule 14e-2 promulgated under the Securities Exchange Act of 1934, as amended.
The Company shall use its best efforts to obtain as promptly as possible (i) an
executed Securities Purchase Agreement from each of the holders of its capital
stock, options and warrants, (ii) an executed Stockholders Agreement from each
of the parties whose signature is required to amend and restate the Company's
existing shareholders agreement and (iii) the consents and waivers described in
Section 6.4 hereof.
7.5 Waiver of Restrictions. The Company hereby waives any and
all restrictions on transfer, rights of first refusal, rights of first offer or
other rights it now has or may have in the future as such rights apply to the
purchase by the Purchaser of securities pursuant to the Securities Purchase
Agreement.
7.6 No Solicitation of Acquisition Proposals. From the date
hereof through the Closing Date or the earlier termination of this Agreement in
accordance with its terms, the Company agrees that:
(a) neither it nor any of its Subsidiaries shall
initiate, solicit or knowingly encourage, directly or indirectly, any inquiries
or the making or implementation of any proposal or offer (including without
limitation any proposal or offer to its stockholders) with respect to a merger,
acquisition, tender offer, exchange offer, consolidation, sale of assets or
similar transaction involving all or any significant portion of the assets or
any equity securities of the Company or any of its Subsidiaries, other than the
transactions contemplated by this Agreement (any such proposal or offer being
hereinafter referred to as an "Acquisition Proposal") or engage in any
negotiations
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concerning or providing confidential information or data to, or
have any discussions with, any person or entity relating to an Acquisition
Proposal, or otherwise facilitate any effort to attempt to make or implement an
Acquisition Proposal;
(b) the Company shall direct and use its best efforts
to cause its and its Subsidiaries' officers, directors, employees, agents or
financial advisors not to engage in any of the activities described in clause
(a) above;
(c) the Company will immediately cease and cause to
be terminated any existing activities, discussions or negotiations with any
parties conducted heretofore with respect to any of the foregoing and will take
the necessary steps to inform the persons or entities referred to in clause (b)
above of the obligations undertaken in this Section 7.6; and
(d) the Company will notify the Purchaser promptly if
the Company receives any such inquiries or proposals, or any requests for such
information, or if any such negotiations or discussions are sought to be
initiated or continued with the Company.
7.7 Issuance of Securities by the Company.
(a) Prior to the consummation of a bona fide initial
public offering of the Company's capital stock that is firmly underwritten by a
nationally recognized underwriter, that results in no less than $20,000,000 of
gross proceeds to the Company and that results in the Company's stock being
listed for trading on the New York Stock Exchange or the National Market Tier of
the Nasdaq Stock Market (a "Qualified IPO"), the Company shall issue shares of
its capital stock or securities convertible into, exercisable for or
exchangeable for its capital stock (collectively, "Equity Securities") only to
Persons who execute and deliver to the Purchaser, prior to or simultaneous with
the issuance to them of Equity Securities, an agreement substantially in the
form of the Securities Purchase Agreement.
(b) The Company shall issue Equity Securities (and
any securities into or for which such Equity Securities are convertible,
exercisable or exchangeable) pursuant to a Qualified IPO or thereafter only if
such Equity Securities are of a class or series that is subject, by the terms of
the Certificate of Incorporation then in effect, to the following provisions:
(i) Such Equity Securities, other than any
Equity Securities held by the Purchaser, shall be subject to an automatic
redemption at a time or times determined by the Purchaser (the "Call Right");
(ii) The Purchaser may direct the Company to
exercise the Call Rights only for 100% of the Equity Securities subject to the
Call Rights;
(iii) Any Equity Securities issued pursuant
to the Qualified IPO shall be a series of common stock ("Callable Common Stock")
and, except
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as set forth in this Section 7.7, shall have the same rights, privileges,
restrictions and preferences as the Common Stock;
(iv) Any Equity Securities issued subsequent
to a Qualified IPO shall be Callable Common Stock or securities that are subject
to the Call Right and are convertible into, exercisable for or exchangeable for
Callable Common Stock;
(v) Subject to Section 7.7(b)(vi) hereof,
the redemption price per share of Callable Common Stock shall be the greater of
(a) 120% of the average of the last reported sale prices per share of Callable
Common Stock, as reported on the New York Stock Exchange or the Nasdaq Stock
Market, as applicable, over the 30 trading days ending on the trading day before
the day on which the Purchaser directs the Company to exercise the Call Rights,
(b) 120% of the last reported sale price per share of Callable Common Stock, as
reported on the New York Stock Exchange or the Nasdaq Stock Market, as
applicable, on the trading day before the day on which the Purchaser directs the
Company to exercise the Call Rights or (c) the price set forth below (subject to
adjustment for stock splits, recapitalization, reclassifications and similar
events applicable to the Common Stock or the Callable Common Stock), determined
on the date the Purchaser gives notice directing the Company to exercise the
Call Rights (the "Call Notice Date"):
Price per Share of Callable Common Stock
Number of Days that have Elapsed Between the
Closing Date and the Call Notice Date
$6.75
1 through 182
$7.00
183 through 365
$7.50
366 through 548
$8.00
549 through 730
; provided, however, that no days during which the Purchaser is prohibited from
(x) exercising its purchase rights under the Securities Purchase Agreements or
(y) directing the Company to exercise the Call Rights, including without
limitation pursuant to Section 7.7(b)(vi) or Section 7.7(b)(x) hereof
(collectively, the "Blackout Periods"), shall be included in calculating the
number of days that have elapsed between the Closing Date and the Call Notice
Date.
(vi) If the Company notifies the Purchaser
(the "Acceptable Acquisition Proposal Notice"), prior to the Purchaser's
directing the Company to exercise the Call Rights, that the Company has received
a bona fide firm Acquisition Proposal, not subject to further due diligence and
not subject to any financing
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contingency, that contains a proposal as to price and that the Board of
Directors of the Company is prepared to accept (an "Acceptable Acquisition
Proposal"), the redemption price per share of Callable Common Stock shall equal
the price per share of Callable Common Stock set forth in the Acceptable
Acquisition Proposal; provided, however, that if the Acceptable Acquisition
Proposal sets forth a proposed transaction involving currency other than cash,
the cash price of such proposed transaction for purposes of this Section
7.7(b)(vi) shall be determined, at the sole expense of the Purchaser, by a
nationally recognized investment banker selected by the Purchaser and reasonably
acceptable to the Company and which has not rendered service to the Purchaser
during the three-year period preceding such selection; provided, further, that
following receipt of the Acceptable Acquisition Proposal Notice, the Purchaser
shall have five business days in which to direct the Company to exercise the
Call Rights, during which period the transaction contemplated by the Acceptable
Acquisition Proposal may not be consummated, and if the Purchaser does not so
direct the Company within such period, the Purchaser may not direct the Company
to exercise the Call Rights until the earlier of (a) the withdrawal or rejection
of the Acceptable Acquisition Proposal, (b) the modification of the price or
value of the Acceptable Acquisition Proposal in a manner adverse to the Company
or its stockholders or (c) the 180th day following the receipt of the
Acquisition Proposal Notice;
(vii) If the Purchaser directs the Company
to exercise the Call Rights during the five business day period contemplated by
Section 7.7(b)(vi) hereof, the Purchaser shall pay the actual out-of-pocket
expenses incurred by the Person that made the Acceptable Acquisition Proposal in
connection with making such proposal, up to a maximum amount of $300,000, such
payment to be made promptly after receipt by the Purchaser of documentation of
such expenses reasonably satisfactory to the Purchaser;
(viii) The redemption price of Equity
Securities other than Callable Common Stock shall be calculated on the basis of
the number of shares of Callable Common Stock into or for which the Equity
Security is convertible, exercisable or exchangeable, net of any conversion,
exercise or exchange price that would be payable by the holder;
(ix) The Purchaser shall provide the Company
as promptly as practicable after directing the Company to exercise the Call
Rights with sufficient funds to redeem all of the Equity Securities subject to
the Call Rights and to comply with Section 160 of the Delaware General
Corporation Law;
(x) The Purchaser may not direct the Company
to exercise the Call Right during the 180-day period following the consummation
of a Qualified IPO; provided, however, that in no event shall the aggregate of
all Blackout Periods exceed 270 days; and
(xi) The Call Rights shall terminate on the
earlier of (a) the second anniversary of the Closing Date or (b) the
consummation of a transaction set forth in an Acceptable Acquisition Proposal;
provided, however, that the date described
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in clause (a) of this Section 7.7(b)(xi) shall be extended by the aggregate
number of days in all Blackout Periods.
(c) Prior to the consummation of a Qualified IPO, the
Company shall effect a recapitalization of the Company that results in the
exchange of one share of Callable Common Stock for each outstanding share of
Common Stock, other than shares held by the Purchaser, and the exchange of
convertible securities, options and warrants subject to Call Rights and
convertible into, exercisable for or exchangeable for Callable Common Stock for
all outstanding convertible securities, options or warrants, other than those
held by the Purchaser.
(d) Any certificates for Equity Securities subject to
the provisions of Section 7.7(b) shall bear a legend indicating that the Equity
Securities are so subject. The amendments to the Company's Certificate of
Incorporation, any certificates of designation or other documents that contain
the provisions set forth in this Section 7.7 shall be subject to the approval of
the Purchaser, which shall not be unreasonably withheld.
7.8 Restrictions on Transfer of the Shares.
(a) The Purchaser agrees that it will not sell,
transfer, assign or otherwise dispose of ("Transfer") the Shares prior to the
second anniversary of the Closing Date. Notwithstanding the foregoing, the
Purchaser shall have the right to effect the Transfer of any or all of the
Shares (i) at any time following the termination of the Distribution Agreement
for any reason, (ii) at any time following the 180th day after the consummation
of a Qualified IPO or (iii) at any time after the termination by the Company of
the Purchaser's exclusive distribution rights set forth in the Distribution
Agreement as a result of the Purchaser's failure to meet specified sales
targets. A "Transfer" shall not include any transfer or assignment to any
Affiliate of the Purchaser or the transfer or assignment to the successor in
interest of the Purchaser.
(b) If the event described in clause (iii) of Section
7.8(a) has occurred, then until the second anniversary of the Closing Date, so
long as neither of the events described in clauses (i) and (ii) of Section
7.8(a) has occurred, if the Purchaser desires to effect a Transfer of the Shares
to a bona fide third party purchaser in an arms'-length transaction, the
Purchaser shall give notice to the Company of the proposed Transfer, specifying
the price on which the Transfer would be effected. Such notice shall constitute
an offer to sell the Shares proposed to be transferred to the Company for the
price and upon the terms and conditions specified therein. The Company shall
have a period of ten business days to accept or reject the offer with respect to
all, but no less than all, of the Shares proposed to be transferred. If the
Company rejects the offer or fails to accept the offer within such ten-business
day period, then the Purchaser may proceed to consummate the proposed Transfer.
If the Company accepts the offer within such ten-business day period, the
closing of the purchase by the Company shall be held at the offices of the
Purchaser no later than five business days following acceptance of the offer.
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(c) If a Qualified IPO has not occurred and the
Purchaser gives notice to the Company that it wishes to sell some or all of the
Equity Securities it owns, the Company shall use commercially reasonable efforts
to locate a purchaser for the Equity Securities that the Purchaser wishes to
sell.
(d) Any certificates for Shares shall bear a legend
indicating that the Shares are subject to the provisions of Section 7.8(a)
hereof.
7.9 Cooperation with Purchaser. The Company shall cooperate
with the Purchaser in effecting the transactions contemplated by this Agreement,
including without limitation the exercise by the Purchaser of its purchase
rights under the Securities Purchase Agreements and the exercise of the Call
Rights at the direction of the Purchaser. The Company shall make all required
filings with Governmental Entities in connection with such transactions. Without
limiting the foregoing, the Company shall from time to time make such filings as
the Purchaser may request under the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act
of 1976, as amended. The Company shall not take any action having the intent or
effect of impeding the consummation of the transactions contemplated by this
Agreement, including without limitation the exercise by the Purchaser of the
purchase rights under the Securities Purchase Agreements or the exercise by the
Company of the Call Rights at the direction of the Purchaser.
7.10 Maintenance of Insurance. The Company shall maintain in
full force and effect the insurance policies set forth on Schedule 3.18(a) of
Exhibit C and shall not reduce the amount or scope of coverage of such policies.
7.11 Intervening Events. If any event, circumstance or change
of condition occurs, after the date hereof and prior to the Closing Date, that
would cause any of the Company's representations and warranties in Section 3
hereof no longer to be true (an "Intervening Event"), the Company, upon becoming
aware of an Intervening Event, shall promptly notify the Purchaser of such
Intervening Event. If the Company so notifies the purchaser of such Intervening
Event prior to the Closing Date, (i) the existence of the Intervening Event
shall not give rise to any liability on the part of the Company except to the
extent the cause of such Intervening Event constitutes a breach of any covenant
of the Company and (ii) the Purchaser may terminate this Agreement and be
relieved by its obligations hereunder.
7.12 Grant of Option. The Company hereby grants the Purchaser
an option to acquire such number of shares of Series P Preferred Stock or, if
the Company shall have consummated a Qualified IPO, such number of shares of
Callable Common Stock, that will result in the Purchaser's holding 19.9% of the
outstanding Common Stock or Callable Common Stock, as the case may be, assuming
the conversion, exercise or exchange of all of the Company's securities
convertible into, exercisable for or exchangeable for Common Stock or Callable
Common Stock, as applicable. The option granted under this Section 7.12 shall be
exercisable at any time that the Purchaser has the right to exercise purchase
rights under the Securities Purchase Agreements or the right to direct the
Company to exercise the Call Rights; provided that the Purchaser may not
exercise this option if the Purchaser has exercised the 19.9% Option on the
Closing Date.
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The price per share payable by the Purchaser in connection with the exercise of
the option shall be the price per share of Callable Common Stock, as set forth
in Section 7.7(b)(v) hereof, calculated on the day the notice of exercise of the
option is given; provided that if a Qualified IPO has not been consummated, the
price per share shall be the price set forth in clause (c) of Section 7.7(b)(v).
The closing of the purchase of the shares pursuant to the exercise of the option
hereunder shall be held at the offices of the Purchaser on the fifth business
day following the exercise of the option.
8. Survival; Indemnification
8.1 Survival. All covenants and agreements of the parties
contained herein, including indemnity or indemnification agreements contained
herein, or in any Schedule or Exhibit hereto, or any certificate, document or
other instrument delivered in connection herewith shall survive the Closing. All
representations and warranties of the parties contained herein, or in any
Schedule or Exhibit hereto, or any certificate, document or other instrument
delivered in connection herewith shall survive until the second anniversary of
the Closing; provided, however, that any claim asserted in writing prior to the
expiration of such two-year period shall survive until finally resolved and
satisfied in full.
8.2 Indemnification by Purchaser or the Company.
(a) The Purchaser shall indemnify and hold harmless
the Company, its successors and assigns, from and against any and all damages,
claims, losses, expenses, costs, obligations, and liabilities, including
liabilities for all reasonable attorneys' fees and expenses (including attorney
and expert fees and expenses incurred to enforce the terms of this Agreement)
(collectively, "Loss and Expenses") suffered, directly or indirectly, by the
Company by reason of, or arising out of, (i) any breach as of the date made or
deemed made or required to be true of any representation or warranty made by the
Purchaser in or pursuant to this Agreement, (ii) any failure by the Purchaser to
perform or fulfill any of its covenants or agreements set forth herein or (iii)
any Employee Benefit Plan which the Purchaser maintains or to which the
Purchaser has an obligation to contribute.
(b) The Company shall indemnify and hold harmless the
Purchaser, its successors and assigns, from and against any and all Loss and
Expenses, suffered, directly or indirectly, by the Purchaser by reason of, or
arising out of, (i) any breach as of the date made or deemed made or required to
be true of any representation or warranty made by the Company in or pursuant to
this Agreement and any statements made in any certificate delivered pursuant to
this Agreement, or (ii) any failure by the Company to perform or fulfill any of
its covenants or agreements set forth herein. Loss and Expenses of the Purchaser
as to which the Purchaser shall be indemnified by the Company in accordance with
this Section 8.2(b) shall in all cases be adjusted upwards to reflect payment,
when made by the Company to the Purchaser, of indemnity pursuant to this Section
8.2(b), such that the Purchaser receives indemnity from the Company with respect
to the liability represented by any payment to the Purchaser pursuant to this
Section 8.2(b).
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(c) Except with respect to third-party claims being
defended in good faith or claims for indemnification with respect to which there
exists a good faith dispute, the indemnifying party shall satisfy its
obligations hereunder within 30 days of receipt of a notice or claim under this
Section 8.
8.3 Third Party Claims. If a claim by a third party is made
against an indemnified party and if such indemnified party intends to seek
indemnity with respect thereto under this Section 8, such indemnified party
shall promptly notify the indemnifying party in writing of such claims setting
forth such claims in reasonable detail. The indemnifying party shall have 30
days after receipt of such notice to undertake, through counsel of its own
choosing and at its own expense, the settlement or defense thereof, and the
indemnified party shall cooperate with it in connection therewith; provided,
however, that the indemnified party may participate in such settlement or
defense through counsel chosen by such indemnified party, provided that the fees
and expenses of such counsel shall be borne by such indemnified party. The
indemnified party shall not pay or settle any clam which the indemnifying party
is contesting. Notwithstanding the foregoing, the indemnified party shall have
the right to pay or settle any such claim, provided that in such event it shall
waive any right to indemnity therefor by the indemnifying party. If the
indemnifying party does not notify the indemnified party within 30 days after
the receipt of the indemnified party's notice of a claim of indemnity hereunder
that it elects to undertake the defense thereof, the indemnified party shall
have the right to contest, settle or compromise the claim but shall not thereby
waive any right to indemnity therefor pursuant to this Agreement.
9. Miscellaneous.
9.1 Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of the parties and their respective successors and
permitted assigns. This Agreement, and the rights and obligations of the
Purchaser hereunder, may be assigned by the Purchaser to any of its Affiliates;
provided that the transferee provides written notice of such assignment to the
Company and the Purchaser remains primarily liable for its obligations
hereunder. The Company may not assign its rights under this Agreement.
9.2 Severability. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement.
9.3 Specific Performance. In addition to any and all other
remedies that may be available at law in the event of any breach of this
Agreement, the Purchaser shall be entitled to specific performance of the
agreements and obligations of the Company hereunder and to such other injunctive
or other equitable relief as may be granted by a court of competent
jurisdiction.
9.4 Governing Law. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of Delaware (without
reference to the conflicts of law provisions thereof).
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9.5 Notices. All notices, requests, consents, and other
communications under this Agreement shall be in writing and shall be deemed
delivered (i) two business days after being sent by registered or certified
mail, return receipt requested, postage prepaid or (ii) one business day after
being sent via a reputable nationwide overnight courier service guaranteeing
next business day delivery, in each case to the intended recipient as set forth
below:
If to the Purchaser, at PerkinElmer, Inc., 00 Xxxxxxxx Xxxxxx, Xxxxxxxxx, XX
00000, Attention: Xxxxxxxx Xxxxxxx, or at such other address or addresses as may
have been furnished in writing by the Purchaser to the Company, with a copy to
Xxxx and Xxxx LLP, 00 Xxxxx Xxxxxx, Xxxxxx, XX 00000, Attention: Xxxxx X.
Xxxxxxx, Esq. and Xxxxxxx X. Xxxxxx, Esq.;
If to the Company, at 0000 Xxxxxxx Xxxxx, Xxxxx X, Xxx Xxxxx, XX 00000,
Attention: Xxxxxxx Xxxxxxxx or at such other address or addresses as may have
been furnished to the Purchaser in writing by the Company, with a copy to Jaffe,
Raitt, Heuer & Xxxxx, P.C., Xxx Xxxxxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx, XX 00000,
Attention: Xxxxx Sugar.
Any party may give any notice, request, consent or other communication under
this Agreement using any other means (including, without limitation, personal
delivery, messenger service, telecopy, first class mail or electronic mail), but
no such notice, request, consent or other communication shall be deemed to have
been duly given unless and until it is actually received by the party for whom
it is intended. Any party may change the address to which notices, requests,
consents or other communications hereunder are to be delivered by giving the
other parties notice in the manner set forth in this Section.
9.6 Complete Agreement. This Agreement (including its
Exhibits) and the Ancillary Agreements constitute the entire agreement and
understanding of the parties hereto with respect to the subject matter hereof
and supersedes all prior agreements and understandings relating to such subject
matter.
9.7 Amendments and Waivers. Except as otherwise expressly set
forth in this Agreement, any term of this Agreement may be amended or terminated
and the observance of any term of this Agreement may be waived (either generally
or in a particular instance and either retroactively or prospectively), with the
written consent of the Company and the Purchaser. No waivers of or exceptions to
any term, condition or provision of this Agreement, in any one or more
instances, shall be deemed to be, or construed as, a further or continuing
waiver of any such term, condition or provision.
9.8 Pronouns. Whenever the context may require, any pronouns
used in this Agreement shall include the corresponding masculine, feminine or
neuter forms, and the singular form of nouns and pronouns shall include the
plural, and vice versa.
9.9 Counterparts; Facsimile Signatures. This Agreement may be
executed in any number of counterparts, each of which shall be deemed to be an
original, and all of which shall constitute one and the same document. This
Agreement may be executed by facsimile signatures.
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9.10 Section Headings. The section headings are for the
convenience of the parties and in no way alter, modify, amend, limit, or
restrict the contractual obligations of the parties.
10. Definitions. For purposes of this Agreement, each of the following
defined terms is defined in the Section of this Agreement indicated below:
Defined Term Section
------------ -------
Acceptable Acquisition Proposal 7.7(b)
Acceptable Acquisition Proposal Notice 7.7(b)
Acquisition Proposal 7.6(a)
Affiliate 3.15(a)
Ancillary Agreements 3.1
Balance Sheet 3.8
Balance Sheet Date 3.8
Business Entity 3.3
Call Right 7.7(a)
CERCLA 3.22(a)
Certificate of Designations 1.1
Closing 2
Closing Date 2
Code 3.11
Common Stock 3.2
Company Introduction
Company Material Adverse Effect 3.1
Confidential Information 10.2
Distribution Agreement Recitals
Employee Benefit Plan 3.21(a)
Environmental Laws 3.22(a)
ERISA 3.21(a)
ERISA Affiliate 3.21(a)
Financial Statements 3.8
GAAP 3.8
Governmental Entity 3.6
Hazardous Materials 3.22(a)
Intellectual Property 3.13(e)
Licensing Agreement Recitals
Ordinary Course of Business 3.9(b)
Person 3.13(a)
Preferred Stock 3.2
Purchase Price 1.2
Purchaser Introduction
Qualified IPO 7.7(a)
Residuals 10.2
Securities Act 3.3
Securities Purchase Agreements 5.4(a)
Security Interest 3.6
Series P Preferred 1.1
Shares 1.2
Stockholders Agreement 5.4(b)
Subsidiary 3.3
Taxes 3.11(a)
Tax Returns 3.11(a)
Year 2000 Compliant 3.31(d)
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IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first set forth above.
COMPANY:
GENOMIC SOLUTIONS INC.
By: /s/ Xxxxxxx X. Xxxxxxxx
---------------------------
PURCHASER:
PERKINELMER, INC.
By: /s/ X. Xxxxxxx
---------------------------
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