Exhibit 2.1
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Execution Copy
ASSET PURCHASE AGREEMENT
BY AND BETWEEN
WATERS TECHNOLOGIES CORPORATION
AND
RHEOMETRIC SCIENTIFIC, INC.
October 14, 2002
TABLE OF CONTENTS
1. Definitions...........................................................1
2. Acquisition of Assets by Buyer........................................7
2.1 Purchase and Sale of Assets..................................7
2.2 Excluded Assets..............................................9
2.3 Assumption of Liabilities...................................10
2.4 Liabilities Not Assumed.....................................10
2.5 Purchase Price..............................................12
2.6 The Closing.................................................16
2.7 Deliveries at the Closing...................................16
2.8 Allocation of Purchase Price; Tax Matters...................16
2.9 Employment Agreements.......................................17
2.10 Piscataway Lease............................................17
2.11 Schedule of Accounts Payable and Accrued Expenses...........18
2.12 Non-U.S. Jurisdictions......................................18
3 Representations and Warranties of the Company........................18
3.1 Organization................................................18
3.2 Authorization of Transaction................................19
3.3 Noncontravention............................................20
3.4 Brokers' Fees...............................................20
3.5 Title to Assets.............................................20
3.6 Financial Statements........................................21
3.7 Absence of Changes..........................................21
3.8 Legal and Other Compliance..................................22
3.9 Real Property...............................................22
3.10 Intellectual Property.......................................23
3.11 Inventories.................................................25
3.12 Contracts...................................................25
3.13 Powers of Attorney..........................................26
3.14 Litigation; Environmental Matters...........................27
3.15 Affiliated Transactions.....................................27
3.16 Suppliers...................................................27
3.17 Consents....................................................28
3.18 Employees and Consultants...................................28
3.19 Insurance Policies..........................................29
3.20 Intentionally Omitted.......................................29
3.21 Employee Benefits...........................................29
3.22 Books and Records...........................................30
3.23 Disclosure..................................................30
3.24 No Other Representations or Warranties......................31
4. Representations and Warranties of the Buyer..........................31
4.1 Organization of the Buyer...................................31
4.2 Authority for Agreement.....................................31
4.3 Noncontravention............................................32
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4.4 Brokers' Fees...............................................32
4.5 Financing...................................................32
4.6 Regulatory Matters..........................................32
4.7 Knowledge of Breach.........................................32
5. Covenants............................................................32
5.1 Pre-Closing Covenants.......................................33
5.2 Post-Closing Covenants......................................36
6. Conditions to Obligation to Close....................................39
6.1 Conditions to Obligation of the Buyer.......................39
6.2 Conditions to Obligations of the Company....................41
7. Confidentiality......................................................42
8. Noncompetition.......................................................43
9. Indemnification......................................................43
9.1 Survival of Representations and Warranties;
Knowledge of Breach.......................................
9.2 Indemnity by the Company....................................44
9.3 Indemnity by the Buyer......................................45
9.4 Matters Involving Third Parties.............................46
9.5 Losses Net of Insurance.....................................48
9.6 Sole Remedy; Waiver.........................................49
9.7 No Consequential Damages...................................49
9.8 No Set-Off..................................................49
10. Termination..........................................................49
10.1 Termination by Agreement of the Parties.....................49
10.2 Termination by Reason of Breach.............................50
10.3 Termination After Passage of Time...........................50
10.4 Termination For Superior Proposal...........................50
10.5 Effect of Termination.......................................50
10.6 Termination Fee.............................................51
11. Miscellaneous........................................................51
11.1 Press Releases and Public Announcements.....................51
11.2 No Third-Party Beneficiaries................................51
11.3 Entire Agreement............................................51
11.4 Succession and Assignment...................................51
11.5 Counterparts................................................52
11.6 Headings....................................................52
11.7 Notices.....................................................52
11.8 Governing Law; Forum........................................53
11.9 Amendments and Waivers......................................53
11.10 Severability................................................54
11.11 Expenses....................................................54
11.12 Construction................................................54
11.13 Incorporation of Exhibits and Schedules.....................54
11.14 Specific Performance........................................54
11.15 Waiver of Jury Trial........................................55
11.16 Bulk Transfer Laws..........................................55
11.17 Return of Information.......................................55
11.18 Non Solicitation............................................55
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Exhibits
A - Escrow Agreement
B - Xxxx of Sale
C - Assignment and Assumption Agreement
D - Financial Statements
E - Required Opinions of Company' Counsel
F - Form of Opinion of Buyer's Counsel
G - Patent Assignment
H - Trademark Assignments
I - Form of Non-Competition Agreement
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Schedules
Schedule 2.1(a)(i) Fixed Assets
Schedule 2.1(a)(ii) Inventory
Schedule 2.1(a)(iii) Accounts Receivable
Schedule 2.1(b) Licenses
Schedule 2.1(d) Customer, Distributor, Supplier and Mailing Lists
Schedule 2.1(e) Assumed Contracts
Schedule 2.2(e) Intercompany Accounts Receivable
Schedule 2.2(g) Excluded Raw Materials, WIP and Inventory
Schedule 2.2(k) Other Excluded Assets
Schedule 2.8 Allocation of Purchase Price
Schedule 2.10 Lease Terms
Schedule 3.3 Noncontravention
Schedule 3.5 Liens
Schedule 3.7 Absence of Changes
Schedule 3.9 Real Property Leases
Schedule 3.10(a) Intellectual Property
Schedule 3.10(b) Infringements
Schedule 3.10(c) Intellectual Property of the Company
Schedule 3.10(d) Intellectual Property of Others
Schedule 3.12 All Contracts and Agreements
Schedule 3.14 Litigation
Schedule 3.15 Affiliated Transactions
Schedule 3.16 Suppliers
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Schedule 3.17 Consents
Schedule 3.18(a) Employees
Schedule 3.18(b) Consultants
Schedule 3.19 Insurance Policies
Schedule 3.20 Standard Terms and Conditions of Sale or Lease
Schedule 3.21(a) Employee Benefit Plans
Schedule 3.21(d) Certain Employment Agreements
Schedule 5.2(c)(i) Inactive Employees
Schedule 5.2(c)(ii) Limitations on Admission of New Employees
Schedule 6.1(c) Required Consents
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ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement (the "Agreement") is entered into as of
October 14, 2002 by and between Waters Technologies Corporation, a Delaware
corporation (the "Buyer"), and Rheometric Scientific, Inc., a Delaware
corporation (the "Company"). The Buyer and the Company are together referred to
herein as the "Parties" and individually from time to time as a "Party".
This Agreement contemplates a transaction in which the Buyer will
purchase certain of the assets of the Company in consideration of the Purchase
Price (as defined below) and Buyer's assumption of certain of the Company's
liabilities.
Now, therefore, in consideration of the premises and the mutual
promises herein made, and in consideration of the representations, warranties,
and covenants herein contained, the Parties agree as follows.
1. Definitions.
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"Accountant" has the meaning set forth in Section 2.5(e).
"Accounts Payable and Accrued Expenses Report" has the meaning set
forth in Section 2.11.
"Accounts Receivable" has the meaning set forth in Section 2.1(a)(iii).
"Accounts Receivable Report" has the meaning set forth in Section
2.5(c)(ii).
"Accounts Receivable Value" has the meaning set forth in Section
2.5(c)(i).
"Acquired Assets" has the meaning set forth in Section 2.1.
"Affiliate" has the meaning set forth in Rule 12b-2 of the regulations
promulgated under the Securities Exchange Act.
"Agreement" has the meaning set forth in the preamble above and
includes, in all instances, the schedules and exhibits to this Agreement.
"Allocation" has the meaning set forth in Section 2.8.
"Allocation Schedule" has the meaning set forth in Section 2.8.
"Assumed Liabilities" has the meaning set forth in Section 2.3.
"Business" means that portion of the Company's business relating
primarily to rheology instruments and services, including rheometers, thermal
analysis instruments, viscometers, surface chemistry instrumentation and related
software. The term Business expressly excludes (i) the Company's protein
solutions group, and (ii) all corporate activities of a general, administrative
or professional nature. Without limiting the
generality of the first sentence of this paragraph, the Parties agree that all
assets located at the Company's Piscataway, New Jersey facility, except for the
Excluded Assets, relate primarily to the acquired business.
"Buyer" has the meaning set forth in the preamble above.
"Buyer's 401(k) Plan" has the meaning set forth in Section 5.2(d).
"Buyer's Piscataway Lease" has the meaning set forth in Section 2.10.
"Closing" has the meaning set forth in Section 2.6.
"Closing Date" has the meaning set forth in Section 2.6.
"Code" means the Internal Revenue Code of 1986, as amended.
"Collateral Source" has the meaning set forth in Section 9.5.
"Company" means Rheometric Scientific, Inc., a Delaware corporation,
and unless the context clearly suggests otherwise, references in this Agreement
to the Company include the Subsidiaries.
"Company 401(k)" has the meaning set forth in Section 5.2(d).
"Company Losses" has the meaning set forth in Section 9.3.
"Confidential Information" means any and all information concerning the
businesses and affairs of the Company, the Business or the Buyer, other than
that information which is already generally or readily obtainable by the public
or is publicly known or becomes publicly known through no fault, action or
inaction of the Parties. In addition, information concerning the transactions
contemplated by this Agreement shall be considered Confidential Information.
"Consultants" has the meaning set forth in Section 3.18(b).
"Contracts" has the meaning set forth in Section 2.1(e).
"Current Employees" has the meaning set forth in Section 3.18(a).
"Customer Lists" has the meaning set forth in Section 2.1(d).
"Deficiency" has the meaning set forth in Section 2.5(c)(i).
"Deficiency Payment" has the meaning set forth in Section 2.5(c)(i).
"Disclosing Party" has the meaning set forth in Section 7.
"Employee Benefit Plan" has the meaning set forth in Section 3.21.
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"Employee Letter" has the meaning set forth in Section 5.2(c).
"Environmental Law" means any federal, state, or local law, statute,
ordinance, rule, regulation, order, consent, decree, agreement, judgment or
common-law doctrine, and the provisions and conditions of permits, licenses,
waivers and other operating authorizations relating to pollution or protection
of the environment, including, without limitation, ambient air, surface water,
ground water or land, waste, asbestos, lead paint, hazardous or toxic
substances, whether relating to manufacture, storage, disposal, cleanup,
release, threat of release, transport, monitoring, testing, handling, reporting,
personal injury or property damage, including all requirements to install
pollution control equipment and all requirements to test, monitor or remove
aboveground or underground storage tanks, and shall include but not be limited
to any of the following: CERCLA, the Resource Conservation and Recovery Act, the
Superfund Amendments and Reauthorization Act of 1986, the Clean Air Act, the
Clean Water Act, and the Toxic Substance Control Act.
"Equity Securities" means any capital stock, membership or partnership
interest or other equity interest or any securities convertible into or
exchangeable for any of the foregoing or any other rights, warrants or options
to acquire any of the foregoing securities.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"ERISA Affiliate" has the meaning set forth in Section 3.21.
"Escrow Account" has the meaning set forth in Section 2.5(b)(i).
"Escrow Agent" means Citizens Bank of Massachusetts.
"Escrow Agreement" has the meaning set forth in Section 2.5(b)(i).
"Escrow Termination Date" means the first anniversary of the Closing
Date.
"Escrowed Amount" has the meaning set forth in Section 2.5(b)(i).
"Excluded Assets" has the meaning set forth in Section 2.2.
"Financial Statements" has the meaning set forth in Section 3.6.
"Fixed Assets" has the meaning set forth in Section 2.1(a)(i).
"Foreign Asset Transfer Subsidiaries" has the meaning set forth in
Section 2.12.
"GAAP" means United States generally accepted accounting principles as
in effect from time to time and consistently applied.
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"Indemnified Party" has the meaning set forth in Section 9.4(a).
"Indemnifying Party" has the meaning set forth in Section 9.4(a).
"Intellectual Property" means patents, patent applications, copyrights,
Trademarks, instrument or equipment designs, mask works, know-how, trade
secrets, designs and processes, internet domain names, tradenames, customer
lists and all other types of intellectual property rights all applications for
any of the foregoing, and any license or agreement granting rights related to
the foregoing.
"Inventory" has the meaning set forth in Section 2.1(a)(ii).
"Knowledge" means actual knowledge of Xxxxxx Xxxxxxxx, Xxxx Xxxxxxx,
Xxxxxx Xxxxxxxxx, Xxxxxxx Bilt, Xxxx Xxxxxxxx and Xxx Xxxxxxx, in the case of
the Company and Xxxx Xxxxxx, Xxxxxx Xxxxxx, Xxxxx Xxxxx and Xxxxx Xxxxxxx, in
the case of the Buyer.
"Late Invoices" has the meaning set forth in Section 2.5(g).
"Laws" means all laws, rules, regulations, statutes, codes, judgments,
orders, injunctions, decrees, rulings, directives, interpretations,
constitution, ordinances, common law, or treaty, of any federal, state, local
municipal and foreign, international, or multinational government or
administration and related agencies.
"Leased Premises" means the real property leased pursuant to the Real
Property Leases.
"Liability" or "Liabilities" means any liability or obligation (whether
known or unknown, whether asserted or unasserted, whether absolute or
contingent, whether accrued or unaccrued, whether liquidated or unliquidated,
whether incurred or consequential and whether due or to become due), including
any liability for Taxes.
"Licenses" has the meaning set forth in Section 2.1(b).
"Lien" means any mortgage, pledge, lien, security interest, charge,
claim, equitable interest, encumbrance, restriction on transfer, conditional
sale or other title retention device or arrangement (including, without
limitation, a capital lease), transfer for the purpose of subjection to the
payment of any indebtedness, or restriction on the creation of any of the
foregoing, whether relating to any property or right or the income or profits
therefrom.
"Losses" has the meaning set forth in Section 9.2.
"Material Adverse Change" has the meaning set forth in Section 6.1(h).
"Material Adverse Effect" means any change, effect or circumstance that
is materially adverse to the financial condition or results of operations of the
Business, taken as a whole, other than with respect to any adverse changes,
effects or circumstances which, directly or indirectly, relate to or result from
(i) public, private or industry
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knowledge relating to the transactions contemplated by this Agreement, (ii)
general economic conditions or other conditions affecting the industry in which
the Business competes, including fluctuating conditions resulting from the
seasonality or cyclicality of the Business, (iii) the identity of the Buyer or
any action by the Buyer or its representatives preparing for the change of
ownership of the Business or (iv) financial or operating trends attributable to
the Business of a nature and in an amount similar to those prevailing prior to
the date hereof or otherwise disclosed on Schedule 3.7. For clarity, absent
clear and convincing evidence to the contrary, for purposes of the
representations and warranties of Section 3 and the indemnification provisions
of Section 9.2(a) relating to breaches by the Company of representations and
warranties only (and not for any other purpose, including, without limitation,
for purposes of determining whether a condition to a Party's obligation to close
has been met under Section 6), a change, effect or circumstance involving
$100,000 or more is material and a change, effect or circumstance involving less
than $100,000 is immaterial.
"Monthly Report" means the full accounting package customarily prepared
by the Company with respect to the Business for each fiscal monthly period prior
to the Closing in accordance with the Company's normal internal accounting
policies, which policies have been consistently applied in all material respects
since at least January 1, 2002.
"Most Recent Fiscal Period End" has the meaning set forth in Section
3.6.
"Notice Period" has the meaning set forth in Section 9.4(b).
"Opening of Business" has the meaning set forth in Section 2.6.
"Orchestrator License" has the meaning set forth in Section 6.2(i).
"Ordinary Course of Business" means the ordinary course of business
consistent with past custom and practice (including with respect to quantity and
frequency).
"Outstanding Claim" means a claim made by Buyer that remains
outstanding.
"Paid Claim" means a claim made by Buyer and paid by the Escrow Agent.
"Party" and "Parties" have the meanings set forth in the preamble
above.
"Payment Threshold" has the meaning set forth in Section 2.5(d).
"Person" means an individual, a general or limited partnership, a
corporation, a limited liability company, an association, a joint stock company,
a trust, a joint venture, an unincorporated organization, a governmental entity
(or any department, agency, or political subdivision thereof) or any other kind
of entity.
"Piscataway Facility" has the meaning set forth in Section 2.10.
"Piscataway Facility Lease" means that Lease Agreement dated February
23, 1996, between RSI (NY) QRS 12-13, Inc., as landlord and the Company, as
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tenant, as amended pursuant to a First Amendment of Lease Agreement dated June
10, 1996, and as further amended pursuant to a Second Amendment of Lease
Agreement dated February 20, 1997, and as further amended by a Letter Agreement
dated May 6, 1997, and as further amended pursuant to a Landlord Agreement and
Amendment of Lease dated March 6, 2000.
"Pre-Closing Breach" has the meaning set forth in Section 10.2.
"Proceeding" has the meaning set forth in Section 11.8.
"Purchase Price" has the meaning set forth in Section 2.5(a).
"Real Property Leases" has the meaning set forth in Section 3.9.
"Receiving Party" has the meaning set forth in Section 7.
"Retained Liabilities" has the meaning set forth in Section 2.4.
"SEC" means the United States Securities and Exchange Commission.
"Securities Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Settlement Date" has the meaning set forth in Section 2.5(c)(i).
"Stockholder Approval" means the approval by the stockholders of the
Company at a special meeting of the stockholders of the Company of: (i) the sale
of the Business by the Company to the Buyer and (ii) an amendment to the
Company's certificate of incorporation to amend the name of the Company, in each
case by the holders of a majority of the outstanding common stock of the Company
as provided in the Delaware General Corporation Law.
"Subsidiaries" means (i) Rheometric Scientific France SARL, a limited
liability company organized under the laws of France, (ii) Rheometric Scientific
F.E., Limited, a corporation organized under the laws of Japan ("Rheometric
Japan"), (iii) Rheometric Scientific GmbH, a corporation organized under the
laws of Germany, and (iv) Rheometric Scientific Limited, a company organized
under the laws of England and Wales.
"Superior Proposal" has the meaning set forth in Section 5.1(f).
"Tax" or "Taxes" means any federal, state, local, or foreign income,
gross receipts, license, payroll, employment, excise, severance, stamp,
occupation, premium, windfall profits, environmental (including taxes under Code
Section 59A), customs duties, capital stock, franchise, profits, withholding,
social security (or similar, including FICA), unemployment, disability, real
property, personal property, sales, use, transfer, registration, value added,
alternative or add-on minimum, estimated, or other tax of any
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kind whatsoever, including any interest, penalty, or addition thereto, whether
disputed or not.
"Termination Fee" has the meaning set forth in Section 10.6.
"Third Party Claim" has the meaning set forth in Section 9.4(a).
"Trademarks" means any trade names, trademarks, service marks, trade
dress, and logos, whether or not registered with any governmental agency,
together with all translations, adaptations, derivations, and combinations
thereof and including all goodwill associated therewith.
"Transferred Employees" has the meaning set forth in Section 5.2(c).
"WARN" shall mean the United States Worker Adjustment and Retraining
Notification Act (or any successor provision).
2. Acquisition of Assets by the Buyer.
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2.1 Purchase and Sale of Assets. Subject to and upon the terms and
conditions contained herein, at the Closing, the Company shall sell and
transfer to the Buyer, and the Buyer shall purchase from the Company,
free and clear of any Lien, all of the Company's right, title and
interest in, to and under the following properties and assets of the
Company, other than the Excluded Assets (collectively, the "Acquired
Assets"):
(a) All assets of the Company primarily relating to the
Business, including without limitation:
(i) all equipment, furniture, furnishings, computer and
office equipment and other tangible personal property
owned by the Company and which are primarily used by the
Company in the Business , including, without limitation,
those items listed in Schedule 2.1(a)(i) but excluding
those items listed in Schedule 2.2(k) (the "Fixed
Assets");
(ii) all inventory, including all raw materials, works in
progress and finished goods owned by the Company at
Closing which are primarily used by the Company in the
Business, including, without limitation, those items
listed in Schedule 2.1(a)(ii) but excluding those items
listed in Schedule 2.2(h) (the "Inventory");
(iii) all the Company's accounts and notes receivable
(other than receivables from the Company or any of its
Affiliates) relating to the Business, including, without
limitation, those items listed in Schedule 2.1(a)(iii)
(the "Accounts Receivable"); and
(iv) all shares of the capital stock of Rheometric Japan.
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(b) All rights of the Company, to the extent transferable, under
all licenses, permits, authorizations, orders, registrations,
certificates, variances, approvals, consents and franchises used
or necessary in connection with the operation of the Business or
any pending applications relating to any of the foregoing,
including without limitation all governmental permits, licenses,
authorizations, approvals and consents listed in Schedule 2.1(b)
(collectively the "Licenses");
(c) All Intellectual Property primarily relating to the
Business, the goodwill associated therewith, licenses and
sublicenses granted in respect thereto and rights thereunder,
remedies against infringements thereof and rights to protection
of any interest therein, including without limitation all
patents, Trademarks, copyrights, and other items listed in
Schedule 3.10(c);
(d) All customer, distributor, supplier and mailing lists for
the Business as set forth in Schedule 2.1(d) to be delivered at
the Closing (collectively the "Customer Lists");
(e) All contracts, agreements, arrangements and undertakings
(whether oral or written) to which the Company is a party
relating primarily to the Business, as follows: (i) as set forth
on Schedule 2.1(e), and including (subject to Sections 2.2(c)
and (d) below) any prepaid rents and expenses relating thereto,
(ii) contracts, agreements, arrangements and undertakings
(whether oral or written) (including, without limitation,
purchase and sales orders) with respect to products or services
relating to the Business entered into in the Ordinary Course of
Business (without regard to frequency or dollar amount), and
(iii) other such contracts, agreements, arrangements and
undertakings (whether oral or written) relating to the Business
involving Liability to the Buyer not to exceed $150,000 in the
aggregate (collectively, the "Contracts");
(f) All books, financial records, electronic files, plats,
architectural plans, drawings, notebooks, specifications,
creative and scientific materials, advertising and promotional
materials, marketing materials, and equipment repair,
maintenance and service records primarily of or relating
primarily to the Business, whether written or electronically
stored or otherwise recorded;
(g) All rights to the names "Rheometric Scientific Inc.",
"Rheometric" and any and all names similar to Rheometric,
subject to Sections 5.1(h) and 5.2(e); and
(h) All other assets of the Company that are currently primarily
used in the operation of the Business of every kind and
description, tangible or intangible, including goodwill.
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Notwithstanding anything to the contrary contained in this Agreement,
the Company may retain copies of any Contract, Books and Records or any
other document or materials to the extent that the Company (i) is
required to retain it by Law, (ii) may need such copies for tax
purposes, in connection with product liability claims or claims related
to Retained Liabilities or Excluded Assets, in which case, the Company
shall use such copies only in connection therewith or (iii) may need
such copies to carry out the terms or purposes of this Agreement.
2.2 Excluded Assets. There shall be excluded from the Acquired Assets
to be sold, assigned, transferred, conveyed and delivered to the Buyer
hereunder, and to the extent in existence on the Closing Date, there
shall be retained by the Company (collectively, the "Excluded Assets"):
(a) All assets primarily relating to the Company's protein
solutions business;
(b) All books, minutes and general corporate records of the
Company not solely relating to the Acquired Assets or the
Business;
(c) All books and records that the Company or any of its
Affiliates is required to retain pursuant to any statute, rule,
regulation or ordinance;
(d) All claims, choses in action and rights of action by the
Company or any of its Affiliates against third parties,
including but not limited to tax, insurance and other claims for
refunds against governmental agencies or other entities,
rebates, refunds, prepaid discounts, allowances or other monies
or consideration received by the Company or any of its
Affiliates, other than those primarily relating to the Acquired
Assets or the Assumed Liabilities;
(e) All intercompany accounts receivable from the Company or any
of its Affiliates set forth on Schedule 2.2(e);
(f) All cash, cash equivalents, notes, loans receivable, and
securities, investments of every nature of the Company relating
to the Business, wherever located, including, without
limitation, at the Piscataway Facility, in accounts, lock boxes
and other similar accounts, whether maintained at a bank,
savings and loan or other similar financial institution;
(g) All raw materials, component parts, work-in-progress and
finished goods inventory listed or described on Schedule 2.2(g);
(h) The Company's rights under a royalty-free, perpetual license
agreement between the Company and the Buyer relating to the
Orchestrator Software, such license to include access to the
source code and related documentation for such Orchestrator
Software, and all licensed software and computer hardware,
stored data, computer software and
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computer software documentation listed or described on Schedule
2.2(h) and all rights the Company may have with respect thereto;
(i) The Piscataway Facility Lease;
(j) All prepaid rents and expenses relating to the Piscataway
Facility;
(k) The assets, properties, contracts, agreements and rights
listed in Schedule 2.2(k); and
(l) The shares of capital stock of any of the Subsidiaries other
than Rheometric Japan.
2.3 Assumption of Liabilities. On the terms and subject to the
conditions set forth herein and subject to the provisions of Section
2.4, from and after the Closing, the Buyer will assume and satisfy or
perform when due the following Liabilities (and only those Liabilities)
of the Company related to the Business (the "Assumed Liabilities"):
(a) All Liabilities of the Company relating to the Business for
accounts payable and accrued expenses up to $6,000,000 in the
aggregate, as detailed in the Accounts Payable and Accrued
Expenses Report delivered in accordance with Section 2.11;
(b) All of the Liabilities of the Company arising under or
relating to (i) the Contracts and (ii) the Real Property Leases
(other than the Piscataway Facility Lease);
(c) All of the Liabilities assumed by Buyer pursuant to Section
5.2(c); and
(d) All warranty claims now or hereafter made against the Company
relating to the Business, including, without limitation, third
party claims in respect of person or property or relating to
products or services of the Business.
2.4 Liabilities Not Assumed. Notwithstanding the provisions of Section
2.3, the Buyer will not assume or perform any of the following
Liabilities (whether or not contemplated by Section 2.3) (the
"Retained Liabilities"):
(a) any Liability of the Company for accounts payable and accrued
expenses as of the Closing Date (i) in excess of $6,000,000 in
the aggregate, or (ii) that primarily relate to corporate
activities of a general, administrative or professional nature
(for example, fees and costs of attorneys, accountants, stock
exchanges and transfer agents and payments of debts to affiliates
or stockholders of the Company);
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(b) any Liability of the Company for any Taxes (i) relating to
the Business or the Acquired Assets that are incurred or are
attributable to pre-Closing periods, except to the extent not
included in Section 2.3(a), or (ii) not relating to the Business
or the Acquired Assets, whether or not incurred prior to or after
the Closing;
(c) any Liability of the Company for the unpaid pre-Closing Taxes
of any Person, except to the extent included in Section 2.3(a);
(d) any Liability of the Company to indemnify any Person by
reason of the fact that such Person was a director, officer,
employee, or agent of the Company or was serving at the request
of such entity as a partner, trustee, director, officer,
employee, or agent of another entity;
(e) except for the Assumed Liabilities, any Liability of the
Company arising as a result of any legal or equitable action or
judicial or administrative proceeding in respect of anything
done, suffered to be done or omitted to be done by Company or any
of respective directors, officers, employees or agents prior to
the Closing Date;
(f) any Liability of the Company for costs and expenses incurred
in connection with the making or performance by the Company of
this Agreement and the transactions contemplated hereby
(excluding costs and expenses incurred in the Ordinary Course of
Business);
(g) any Liability of the Company under this Agreement;
(h) any Liability primarily relating to or arising out of the
Company's protein solutions business;
(i) except as set forth in Section 5.2(c), any Liability of the
Company arising out of any employee benefit plan established or
maintained by the Company or to which the Company contributes or
any liability on the termination of any such plan;
(j) except for Liabilities set forth in Section 5.2(c), including
without limitation the severance obligations set forth therein,
any Liability of the Company for making payments or providing
benefits of any kind to its employees or any of the former
employees of the Company that relate to claims arising prior to
the Closing Date (whether first asserted before or after the
Closing Date), including, without limitation, (i) as a result of
the sale of the Acquired Assets or as a result of the termination
of any employees, (ii) any Liability arising from so-called COBRA
continuation coverage or certifications concerning HIPPA for
former employees, (iii) any Liability in respect of medical and
other benefits for existing and future retirees, and (iv) any
Liability in respect of work-related employee injuries or
worker's compensation claims;
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(l) any Liability of the Company with respect to any overdraft
facility, bank credit line or indebtedness for borrowed money;
(m) except for any Liability of the Company arising under or
relating to the Contracts, any Liability under any contracts,
agreements, arrangements and undertakings (whether oral or
written) to which the Company is a party; and
(n) any Liability of the Company or Rheometric Japan in
connection with any failure by the Company or Rheometric Japan
prior to the Closing Date to fund Rheometric Japan's pension
plan in accordance with the requirements of Japanese law.
2.5 Purchase Price.
--------------
(a) Purchase Price. Subject to adjustment as provided in Section
2.5(c) below, the Purchase Price to be paid by the Buyer to the
Company hereunder shall be Seventeen Million Dollars
(US$17,000,000) (the "Purchase Price").
(b) Payment Schedule. The Buyer shall pay to the Company Fifteen
Million Three Hundred Thousand Dollars (US$15,300,000) by wire
transfer in immediately available funds at the Closing. The
balance of the Purchase Price, One Million Seven Hundred Thousand
Dollars ($1,700,000), will be payable by the Buyer to the Company
only in accordance with the terms and conditions set forth in
Sections 2.5(b)(i) to 2.5(b)(iii) below:
(i) Pursuant to an escrow agreement to be executed by the
parties and delivered at the Closing in the form attached
hereto as Exhibit A (the "Escrow Agreement"), the Buyer
shall deposit One Million Seven Hundred Thousand Dollars
(US$1,700,000) (the "Escrowed Amount") of the Purchase
Price with the Escrow Agent in an escrow account (the
"Escrow Account") for purposes of satisfying any
obligations of the Company under Sections 2.5(f) and 9.2
of this Agreement. All expenses of the Escrow Agent will
be borne equally by the Buyer and the Company.
(ii) On the first business date that is six months after
the Closing Date, an amount equal to one-half of the
balance of the Escrowed Amount (i.e. the Escrowed Amount
less the aggregate amounts of all Paid Claims and
Outstanding Claims as of such date), shall be distributed
to the Company by wire transfer in accordance with the
terms of the Escrow Agreement.
(iii) Provided that no claim against the Escrowed Amount
remains outstanding, the remaining balance of the Escrowed
Amount, less the amount of any Paid Claims, shall be
distributed
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to the Company by wire transfer on the Escrow Termination
Date in accordance with the terms of the Escrow Agreement.
If there is an Outstanding Claim on the Escrow Termination
Date, the remaining balance of the Escrowed Amount less
the Paid Claims and the amount of any Outstanding Claim
shall be distributed to the Company by wire transfer in
accordance with the terms of the Escrow Agreement. The
remaining Escrowed Amount shall be distributed to the
Company or the Buyer, depending upon the resolution of any
Outstanding Claim, on the first business date after the
Escrow Termination Date on which no Outstanding Claim
remains.
(c) Settlement of Accounts Receivable.
---------------------------------
(i) The Company shall deliver to the Buyer a detailed
statement of its Accounts Receivable on and as of the date
which is five (5) days prior to the Closing Date and an
updated statement of Accounts Receivable on and as of the
Closing Date. The Buyer shall use commercially reasonable
efforts to collect the Accounts Receivable after the
Closing. In the event that the Buyer is unable to collect
any Accounts Receivable by the date that is 120 days
following the Closing Date (the "Settlement Date"), the
Buyer shall provide to the Company an Accounts Receivable
Report (as defined in paragraph (ii) below), and if the
Buyer has collected Accounts Receivable representing an
amount less than the difference between (x) the total
monetary amount of Accounts Receivable as of the Opening
of Business on the Closing Date and (y) $100,000 (such
difference, the "Accounts Receivable Value") by the
Settlement Date (a "Deficiency"), the Purchase Price shall
be reduced by an amount equal to the difference between
(a) the Accounts Receivable Value and (b) the amount of
Accounts Receivable actually collected by the Buyer. The
Company shall pay to the Buyer within 30 days of the
Settlement Date an amount equal to the Deficiency (a
"Deficiency Payment"), and the Buyer shall simultaneously
assign and transfer all the then uncollected Accounts
Receivable (including those included within the allowance
for doubtful accounts) to the Company. In the event that
the Buyer collects any monies for such Accounts Receivable
after the Accounts Receivable have been assigned and
transferred to the Company, the Buyer shall promptly pay
such amounts to the Company. The Buyer shall credit all
payments received by the Buyer after the Closing Date from
any account debtor in respect of any receivable owed by
such account debtor to the Accounts Receivable with the
oldest invoices.
(ii) On the Settlement Date, the Buyer shall deliver to
the Company a report (the "Accounts Receivable Report")
setting forth the record of payment and application
activity for such
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Accounts Receivable from the Closing Date through the
Settlement Date and the amount of Accounts Receivable that
have been collected by the Buyer by such date and the
amount of any Deficiency. The Buyer shall have the right,
in its sole reasonable discretion, without liability to
the Company, to settle, compromise or extend the time of
payment of any of the Accounts Receivable having a value
under $1,000; provided, however, that the full amount of
any such Account Receivable settled, compromised or
modified shall be deemed collected for purposes of
determining any Deficiency.
(iii) After the Closing and prior to the Settlement Date,
the Company shall comply with all reasonable requests from
the Buyer for assistance in the collection of the Accounts
Receivable. Such assistance may include, but shall not be
limited to, notifying account debtors that payment should
be remitted to the Buyer and providing the Buyer
information regarding the location, phone number and
status of any account debtor. In addition the Company
shall provide the Buyer with all files regarding the
credit history of the account debtors on the Accounts
Receivable. The Company shall not deposit or cash, but
shall promptly transfer, endorse over and deliver to the
Buyer any cash, checks or other property it may receive in
respect of any of the Accounts Receivable.
(iv) If there is a Deficiency, then on and after the
Settlement Date, the Buyer shall comply with all
reasonable requests from the Company for assistance in the
collection of the uncollected Accounts Receivable assigned
and transferred to the Company pursuant to paragraph (i)
above. Such assistance may include, but shall not be
limited to, notifying account debtors that payment should
be remitted to the Company and providing the Company
information regarding the location, phone number and
status of any account debtor. In addition the Buyer shall
provide the Company with all files regarding the credit
history of the account debtors on such Accounts
Receivable. The Buyer shall not deposit or cash, but shall
promptly transfer, endorse over and deliver to the Company
any cash, checks or other property it may receive in
respect of any of such Accounts Receivable.
(d) Payables Straddling the Closing Date. Sections 2.5(d)
through 2.5(g) shall apply if and only to the extent that
payments made under Sections 2.3(a), 2.5(e) and 2.5(g) exceed
$6,000,000 (the "Payment Threshold"). Provided the Payment
Threshold is met, for amounts above the Payment Threshold the
Parties shall equitably apportion the various ongoing direct
expenses of the Business that are billed by third parties for
periods of time that straddle the Opening of Business on the
Closing Date and are paid for by one of the Parties with a
benefit accruing to another Party. Those adjustments shall be
based on the number of days elapsed
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before, as contrasted with the number of days including and
after, the Opening of Business on the Closing Date during the
relevant billing period that includes the Closing Date. Provided
the Payment Threshold is met, the Buyer shall submit a statement
to the Company, within 35 days after the Closing Date, setting
forth what the Buyer believes is the appropriate payment
required by this Section 2.5(d) and the method for determining
such payment. If the Payment Threshold is not met, the Buyer
shall pay such payables straddling the Closing Date.
(e) Payment Procedure. The Company shall have up to 30 days
after it receives the statement described in Section 2.5(d) to
advise the Buyer, in writing, whether it agrees with the payment
proposed by the Buyer. If the Company does not so respond within
those 30 days, the Company will be considered to have accepted
the Buyer's proposal as of the last day of that 30-day period.
If the Company timely objects to the Buyer's proposal, the
Company and the Buyer shall attempt, in good faith, to resolve
the disagreement. If the Parties have not resolved the
disagreement within 10 days after the Buyer receives the
Company's notice advising the Buyer that the Company disagrees
with the Buyer's proposal, the Company or Buyer may direct that
the American Arbitration Association designate an accountant or
accounting firm (but not an accountant or accounting firm that
has performed services for any Party or any Affiliate of any
Party) to resolve the dispute. (The accountant or accounting
firm so chosen is referred to below as the "Accountant"). In
that case, the Company and the Buyer shall give the Accountant
access to all information reasonably requested by or useful to
the Accountant to resolve the dispute. The Parties shall also
direct the Accountant to resolve the dispute as promptly as
possible. The Accountant's decision shall be final and binding
on all Parties, absent fraud or manifest error. The Accountant's
fees and costs and any separate fees and costs of the American
Arbitration Association shall be paid by the Party that is not
the prevailing party in the dispute.
(f) Payment. Within five days after the payment required under
Sections 2.5(d) and 2.5(e) above is finally determined (whether
by agreement, acquiescence or the Accountant), the Party that
owes the payment shall pay that amount to the Party that is owed
the payment, together with simple interest at the rate of six
percent per year calculated on a per diem basis, based on a 365
day year, for the period beginning with the Closing Date and
ending with the day of payment. The Company hereby agrees that
any obligations under Sections 2.5(c) and (f) that are not paid
within fifteen (15) days of the due date may, at the option of
the Buyer, be offset against any amount then remaining in the
Escrow Account, in accordance with the terms of the Escrow
Agreement.
(g) Late Arriving Bills Etc. The Parties recognize that certain
Liabilities evidenced by third party invoices for direct
expenses of the Business for periods of time that straddle the
Opening of Business on the Closing Date may arise more than 30
days after the Closing Date, such
15
that the time periods specified in Section 2.5(d) and Section
2.5(e) do not accommodate the resolution of any issues presented
by those invoices ("Late Invoices"). If that happens and the
Payment Threshold is met, the Company and the Buyer will
cooperate in good faith to agree upon an appropriate payment for
such Late Invoices and, if such payment cannot be agreed upon
within 30 days after notice and a copy of such Late Invoice is
provided to whichever Party did not receive the invoice
directly, either the Company or the Buyer may refer the issue to
the Accountant for resolution. The determination of the
Accountant shall be final and binding, absent fraud or manifest
error. Payment on any adjustment determined in accordance with
this Section 2.5(g) shall be made in accordance with Section
2.5(f). If the Payment Threshold is not met, the Buyer shall pay
Late Invoices.
2.6 The Closing.The closing of the transactions contemplated by this
Agreement (the "Closing") shall take place at the Boston, Massachusetts
office of Xxxxxxxx Xxxxxxxx Xxxxxxxxx & Xxxxxxx, counsel to the Buyer,
commencing at 10 a.m. on the date which is three business days after
the date on which all of the conditions to the obligations of the
Parties to consummate the transactions contemplated by this Agreement
set forth in Section 6 (excluding the delivery of any documents to be
delivered at the Closing by either of the Parties) have been satisfied
or waived, but in no event later than January 15, 2003 (unless a later
date is mutually agreed to) (the "Closing Date"), and upon any such
Closing all instruments shall become effective as of 12:01 a.m. Eastern
Time (the "Opening of Business") on the Closing Date.
2.7 Deliveries at the Closing. Subject to the terms and conditions of
this Agreement, at the Closing, the Parties shall deliver properly
executed and acknowledged, if appropriate, (i) various certificates,
instruments, and documents referred to in Sections 6.1 and 6.2 below,
and (ii) such other instruments of sale, transfer, conveyance, and
assignment as may be reasonably requested by the other Party and its
counsel. The Company shall also execute, acknowledge (if appropriate)
and deliver the Escrow Agreement, the Xxxx of Sale in the form attached
hereto as Exhibit B and the Assignment and Assumption Agreement in the
form attached hereto as Exhibit C. The Buyer shall also execute,
acknowledge (if appropriate), and deliver such Escrow Agreement and
Assignment and Assumption Agreement. Simultaneously with such delivery,
the Company shall put the Buyer in possession and operating control of
the Acquired Assets, free and clear of all Liens. The Buyer shall also
make the payments to the Company and the Escrow Account set forth in
Section 2.5(b).
2.8 Allocation of Purchase Price; Tax Matters.
-----------------------------------------
(a) The Parties shall agree upon an allocation of the Purchase
Price (and all other items properly included in "consideration,"
as described in Treasury Regulation 1.1060-1(c)(1)) for purposes
of Taxes among the Acquired Assets in a manner consistent with
the principles set forth on Schedule 2.8 (the "Allocation"), as
follows. Within ninety (90) calendar
16
days following the Closing Date, the Buyer shall deliver to
Company a draft schedule setting forth the Allocation (the
"Allocation Schedule") prepared in a manner consistent with
Schedule 2.8. If there is any dispute concerning the Allocation
Schedule, Company shall notify Buyer within thirty (30) calendar
days after receiving the Allocation Schedule. The Parties shall
attempt to resolve such dispute and if they have not done so
within thirty (30) calendar days after the Company provides
notice of such dispute, all unresolved items shall be submitted
to the Accountant. The Accountant shall resolve all such items
within forty-five (45) calendar days prior to the time when
either Party is required to file a Form 8594 (or any comparable
form under state law) with respect to the purchase of the
Acquired Assets. The Parties shall act in accordance with the
Allocation (as finally agreed or determined by the Accountant,
absent fraud or manifest error) in the preparation and filing of
all Returns (including, without limitation, filing Form 8594 or
any supplements thereto with their United States federal income
Tax Returns for the taxable year that includes the Closing Date)
and in the course of any Tax audit relating thereto and to take
no position and cause their Affiliates to take no position
inconsistent with the Allocation. Not later than 30 days prior
to the filing of their respective Forms 8594 relating to this
transaction, each Party shall deliver to the other Party a copy
of its Form 8594.
(b) The Parties shall cooperate with each other in the conduct
of any audit or other proceeding relating to Taxes involving the
Acquired Assets or the Business.
(c) The Parties shall, with respect to persons who may be
employed by both of them for the calendar year that includes the
Closing Date, follow the Standard Procedure set forth in Revenue
Procedure 96-60, 1996-2 C.B. 399, whereby the Company shall be
responsible for employment tax reporting for such persons for
all times during which they were employed by the Company.
2.9 Employment Agreements. Simultaneous with the execution and delivery
of this Agreement, certain persons designated by the Buyer and notified
to the Company, have executed and delivered employment agreements with
the Buyer in the form heretofore provided to and approved by the
Company, each of which shall become effective immediately following the
Closing, if and only if the Closing occurs.
2.10 Piscataway Lease. Simultaneous with the execution and delivery of
this Agreement, the Buyer and RSI (NY) QRS 12-13, Inc. have executed
and delivered a letter agreement with respect to the entry into a lease
(the "Buyer's Piscataway Lease") for a portion of the facility
presently occupied by the Company in Piscataway, New Jersey (the
"Piscataway Facility") containing terms no less favorable to the Buyer
than those set forth on Schedule 2.10, which Buyer's Piscataway Lease
shall become effective immediately following the Closing, if and only
if the Closing occurs.
17
2.11 Schedule of Accounts Payable and Accrued Expenses. Five (5) days
prior to the Closing Date, the Company shall deliver to the Buyer a
detailed schedule (the "Accounts Payable and Accrued Expenses Report")
setting forth as of the Closing Date, all Liabilities of the Company
relating to the Business for accounts payable and accrued expenses in
substantially the form of the schedule of estimated accounts payable
and accrued expenses previously provided by the Company to the Buyer.
2.12 Non-U.S. Jurisdictions. Certain aspects of the Business are
conducted through the Subsidiaries which are organized in non-U.S.
jurisdictions. The transfer of the aspects of the Business conducted by
Rheometric Japan shall be effected by transfer of all the capital stock
of Rheometric Japan as contemplated by Section 2.1(a)(iv) to a
subsidiary of the Buyer organized in Japan. The transfer of the
Business conducted by the other Subsidiaries (the "Foreign Asset
Transfer Subsidiaries") shall be effected by transfer of assets and
liabilities (to the extent contemplated by this Agreement) to
subsidiaries of the Buyer organized in the same jurisdictions as the
transferring Subsidiary. The Buyer and the Company have not finally
determined the nature of the documentation and process necessary to
effect such transfers. Therefore it is agreed by the Buyer and the
Company that such transfers will be effected by appropriate and
customary documentation and procedures consistent with applicable local
law and customary practice, and shall reflect as nearly as may be
practicable the economics and allocation of risks reflected in the
terms and conditions applicable to the transfers of assets and
liabilities by Rheometric Scientific, Inc. The parties will use their
respective best efforts to minimize overall expenses and taxation with
respect to such transfers.
3. Representations and Warranties of the Company. The Company represents and
warrants to the Buyer that the statements contained in this Section 3 are true
and correct as of the date of this Agreement, except as otherwise set forth in
the Schedules accompanying this Agreement.
3.1 Organization.
------------
(a) The Company is a corporation validly existing and in good
standing under the laws of the State of Delaware. The Company is
duly qualified to conduct business and, with respect to
jurisdictions in which such concept is recognized, 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 for such jurisdictions the
failure to qualify in which could not reasonably be expected to
have a Material Adverse Effect. The Company has all requisite
corporate power and authority to carry on the Business and to
own, lease and operate its properties as now owned, leased and
operated by it. Copies of the certificate of incorporation and
bylaws of the Company, each as amended to date, have been
heretofore delivered to Buyer and are accurate and complete.
18
(b) The authorized capital stock of Rheometric Japan consists of
8,000 shares of capital stock. On the date hereof and on the
Closing Date, 2,000 shares of common stock of Rheometric Japan
are validly issued and outstanding, fully paid and
non-assessable and are owned, beneficially and of record by the
Company free and clear of any and all Liens. The Company has
good title to, and sole record and beneficial ownership of the
capital stock of Rheometric Japan, free and clear of any and all
Liens. Upon consummation of the Closing, and subject to transfer
and registration of the respective shares of capital stock into
the name of the Buyer and compliance with any requirements
imposed by applicable law in the jurisdiction of incorporation
of Rheometric Japan, including (i) board approval of the
transfer of the capital stock of Rheometric Japan under this
Agreement and (ii) delivery of the share certificates to the
Buyer on or before the Closing, the Buyer will acquire legal and
beneficial ownership of, good title to, and the right to vote
all shares of the capital stock of Rheometric Japan, free and
clear of all Liens. Except as set forth above in this Section
3.1(b), Rheometric Japan has no outstanding Equity Securities.
Rheometric Japan has no outstanding commitments to issue or sell
any Equity Securities, and no securities or obligations
evidencing any such right are outstanding. There are no
outstanding obligations, written or otherwise, of the Company or
Rheometric Japan to repurchase, redeem or otherwise acquire any
Equity Securities. There are no preemptive rights in respect of
any Equity Securities of Rheometric Japan. Any Equity Securities
of Rheometric Japan issued and reacquired by it were so
reacquired (and, if reissued, so reissued) in compliance with
all applicable Laws, and Rheometric Japan has no outstanding
obligation or liability with respect thereto.
3.2 Authorization of Transaction. The Company has the full corporate
power and authority to execute and deliver this Agreement and to
perform its obligations hereunder. Except for the Stockholder Approval,
all actions or proceedings to be taken by or on the part of the Company
and its board of directors and stockholders to authorize and permit the
execution and delivery by the Company of this Agreement and the
instruments required to be executed and delivered by the Company
pursuant hereto, the performance by the Company of its obligations
hereunder, and the consummation by the Company of the transactions
contemplated herein, have been duly and properly taken. This Agreement
has been duly executed and delivered by the Company and constitutes the
legal, valid and binding obligation of the Company, enforceable against
the Company in accordance with its terms and conditions, subject to
applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium or other similar laws relating to or
affecting the rights of creditors generally and to general principles
of equity, whether considered in a suit at law or in equity.
3.3 Noncontravention. Except as set forth on Schedule 3.3 hereof,
neither the execution and the delivery of this Agreement, nor the
consummation of the transactions contemplated hereby (including the
assignments and assumptions referred to in Section 2 above), will,
assuming the receipt of all consents and
19
approvals set forth on Schedule 3.17, (i) violate any Law of any
government, governmental agency, or court to which the Company or any
of its property is subject or any provision of the certificate of
incorporation or bylaws of the Company or (ii) conflict with, result in
a breach of, constitute a default under, result in the acceleration of,
create in any Person the right to accelerate, terminate, modify, or
cancel, or require any notice under any agreement, contract, lease,
license, instrument, or other arrangement to which the Company is a
party or by which it is bound or to which its assets are subject (or
result in the imposition of any Lien upon any of its assets). Except in
relation to filings with the SEC in connection with the solicitation of
proxies from its stockholders and except as set forth in Schedule 3.3,
the Company is not required to give any notice to, make any filing
with, or obtain any authorization, consent, or approval of any
government or governmental agency in order for the Parties to
consummate the transactions contemplated by this Agreement.
3.4 Brokers' Fees. The Company has no Liability to pay any fees or
commissions to any broker, finder, or agent with respect to the
transactions contemplated by this Agreement.
3.5 Title to Assets.
---------------
(a) Assets other than Real Property. The Company has good, valid
and marketable title to the Acquired Assets comprising personal
property free and clear of all Liens, except (i) for minor
imperfections of title that will not materially detract from the
value of such asset or the use thereof and (ii) as otherwise set
forth on Schedule 3.5 hereto.
(b) Leased Real Property. The Company has valid leasehold
interests in the Real Property Leases subject, in all cases, to
the following: (i) exceptions, objections, agreements, claims,
defects, easements, rights of way, encroachments, encumbrances,
covenants, reservations, restrictions, conditions, leases,
tenancies and the like set forth on Schedule 3.5 hereto, (ii)
zoning, building, subdivision and other statutory or regulatory
conditions and restrictions, (iii) liens for Taxes and
assessments not yet due and payable, (iv) all matters, states of
fact and defects that are or should be apparent from a physical
inspection of leased real property or that would be disclosed by
an on the ground survey, (iv) Liens which would not have a
Material Adverse Effect, (v) Liens disclosed on Schedule 3.5(b)
and (vi) Liens upon the underlying fee estate.
3.6 Financial Statements. Attached hereto as Exhibit D are the (a)
audited consolidated balance sheets and consolidated statements of
income and cash flows (and notes thereto) as of and for the years
ending December 31, 2000 and December 31, 2001 and (b) Form 10-Q
consolidated balance sheets and consolidated statements of income and
cash flows (and notes thereto), as of and for the quarter ended June
30, 2002 (the "Most Recent Fiscal Period End"), for the Company and its
consolidated subsidiaries (collectively, the "Financial Statements").
The Financial Statements have been prepared in accordance with
20
GAAP applied on a consistent basis throughout the periods covered
thereby, are, taken as a whole, correct and complete in all material
respects and present fairly the financial condition of the Company as
of such date and the results of operations of the Company and its
consolidated subsidiaries for such periods and are consistent with the
books and records of the Company. The Buyer acknowledges that the
Financial Statements were not prepared to reflect the financial
condition of and results of operations of the Business on a stand-alone
basis; and, without limiting the generality of the foregoing, that the
allocations and estimates included in the Financial Statements are not
necessarily indicative of the costs that would have resulted if the
Business had been operated on a stand-alone basis as a separate entity
during such periods.
3.7 Absence of Changes. Since the Most Recent Fiscal Period End and
except as disclosed in Schedule 3.7, the Acquired Assets have not
undergone any Material Adverse Change in their condition or suffered
any material damage, destruction or loss (whether or not covered by
insurance); and since the Most Recent Fiscal Period End, there has been
no Material Adverse Change in the Business or the condition of the
premises covered by the Real Property Leases, whether as a result of
any change as to any Acquired Assets, any natural disaster, accident,
strike, sabotage, or confiscation of property, or any other event or
condition directly affecting or relating to the Company, whether or not
related to any of the foregoing, except for such changes as do not in
the aggregate have a Material Adverse Effect. Since the Most Recent
Fiscal Period End, the Company has operated the Business in the
Ordinary Course of Business and, other than in the Ordinary Course of
Business, the Company has not, with respect to the Business, taken any
of the following actions:
(i) acquired, sold, leased, encumbered or disposed of any
assets;
(ii) created, incurred or assumed any debt for borrowed
money or debt in respect of capital leases;
(iii) entered into, adopted or amended, other than as may
have been necessary to comply with applicable law or
maintain any plan's qualified status, any employee benefit
plan or any employment or severance agreement or
arrangement or increased in any manner the compensation or
fringe benefits of, or modified the employment terms of,
its officers or employees, generally or individually, or
paid any benefit not required by the terms of any existing
employee benefit plan as in effect on the date hereof;
(iv) changed its accounting methods, principles or
practices, or made any new elections with respect to Taxes
affecting the Acquired Assets or any changes in current
elections with respect to Taxes affecting the Acquired
Assets;
(v) paid any obligation or liability;
21
(vi) sold, assigned, transferred, licensed or sublicensed
any of the Business's Intellectual Property;
(vii) entered into, amended, terminated, taken or omitted
to take any action that would constitute a violation of or
default under, or waived any rights under, any Contract;
(viii) entered into any written arrangement or contract
that creates a liability on the Company's part in excess
of $50,000;
(ix) made or committed to make any capital expenditure in
excess of $25,000 per item or total capital expenditures
in excess of $100,000 in the aggregate (regardless of
whether or not in the Ordinary Course of Business);
(xi) agreed in writing or otherwise to take any of the
foregoing actions.
3.8 Legal and Other Compliance. To the Company's Knowledge, the Company
is in compliance with all applicable Laws, the violation of which,
either singularly or in the aggregate, could reasonably be expected to
have a Material Adverse Effect and, to Company's Knowledge, no action,
suit, proceeding, hearing, investigation, charge, complaint, claim,
demand, or notice has been filed or commenced against it alleging any
failure so to comply. Neither the ownership nor use of the Acquired
Assets by the Company nor the conduct of the Business as currently
conducted by the Company violates, or with the giving of notice or the
passage of time or both will violate, conflict with or result in a
default, right to accelerate or loss of rights under, any terms or
provisions of the Company's certificate of incorporation or bylaws or
any Lien, lease, license, agreement, understanding or Law to which the
Company is a party or by which it may be bound or affected, except to
the extent such violation, conflict, default, acceleration or loss of
rights could not reasonably be expected to have a Material Adverse
Effect.
3.9 Real Property. The Company does not own any real property in
connection with the Business. Schedule 3.9 lists all real property
leased or subleased by the Company in connection with the Business. The
Company has delivered to the Buyer correct and complete copies of the
leases as listed in Schedule 3.9 (as amended to date) (the "Real
Property Leases"). With respect to each Real Property Lease (other than
the Piscataway Facility Lease):
(a) with respect to the Company and, to the Knowledge of the
Company, with respect to any other party to the Real Property
Lease, the Real Property Lease is legal, valid, binding,
enforceable, and in full force and effect;
(b) neither the Company nor, to the Knowledge of the Company,
any other party to the Real Property Lease, is in breach or
default, and, to the Knowledge of the Company no event has
occurred which, with notice or
22
lapse of time, would constitute a breach or default or permit
termination, modification, or acceleration thereunder;
(c) no party to the Real Property Lease has repudiated any
provision thereof;
(d) to the Knowledge of the Company, there are no disputes, oral
or written agreements, or forbearance programs in effect as to
the Real Property Lease; and
(e) the Company has not assigned, transferred, conveyed,
mortgaged, deeded in trust, or encumbered any interest in the
leasehold or subleasehold.
3.10 Intellectual Property.
---------------------
(a) The Company owns or has the right to use pursuant to
license, sublicense, agreement, or permission or otherwise all
Intellectual Property necessary for the operation of the
Business as presently conducted, except where the failure to do
so would not have a Material Adverse Effect. Subject to
obtaining all necessary consents as disclosed in Schedule 3.17,
each license or agreement relating to the Intellectual Property
owned or used by the Company in the Business immediately prior
to the Closing will be valid and in full force and effect
immediately subsequent to the Closing, except where the failure
to do so would not have a Material Adverse Effect.
(b) Except as disclosed in Schedule 3.10(b), the Company has
not, to the Company's Knowledge, interfered with, infringed
upon, misappropriated, or otherwise violated any Intellectual
Property rights of third parties, and there has, within the last
three years, not been any charge, complaint, claim, demand, or
notice alleging, in writing, any such interference,
infringement, misappropriation, or violation (including any
claim that the Company must license or refrain from using any
Intellectual Property rights of any third party). Except as
disclosed in Schedule 3.10(b), to the Company's Knowledge, no
third party has interfered with, infringed upon,
misappropriated, or otherwise come into conflict with any
material Intellectual Property rights of the Company relating to
the Business.
(c) Schedule 3.10(c) identifies each patent, patent application,
copyright registration and application, mask work registration
and application, trademark and service xxxx registration and
application, domain name registration and any material
unregistered copyrights and trademarks owned by the Company and
used or held for use in connection with the Business. Section
3.10(c) also identifies each written license, agreement or other
material permission that the Company has granted to any third
party with respect to any of the Intellectual Property owned by
the
23
Company that relates primarily to the Business. With respect to
each item of Intellectual Property required to be identified in
Schedule 3.10(c):
(i) except as disclosed in Schedule 3.10(c), the Company
possesses all right, title and interest in and to the
item, free and clear of any Lien, license or other
restriction;
(ii) except as disclosed in Schedule 3.10(c), the item is
not subject to any outstanding injunction, judgment,
order, decree, ruling or charge;
(iii) except as disclosed in Schedule 3.10(c), no action,
suit, proceeding, hearing, investigation, charge,
complaint, or claim, is pending or has been threatened in
writing in the past three years, that challenges the
legality, validity, enforceability, use or ownership of
the item other than ex parte proceedings in the U.S.
Patent and Trademark Office, the U.S. Copyright Office or
other federal, state or foreign governmental agencies; and
(iv) except as disclosed in Schedule 3.10(c), and other
than pursuant to the licenses, agreements or other
permissions identified in Schedule 3.10(c), the Company
has not agreed to indemnify any Person for or against any
interference, infringement, misappropriation or other
violation with respect to the item.
(d) Schedule 3.10(d) identifies each written license,
sublicense, agreement or permission by which a third party
grants the Company the right to use any Intellectual Property
used in connection with the Business other than standard-form
licenses for commercially available software. With respect to
each item of Intellectual Property required to be identified in
Schedule 3.10(d), except as disclosed in Schedule 3.10(d):
(i) the license, sublicense, agreement or permission
covering the item is valid, and in full force and effect;
(ii) subject to obtaining necessary consents as disclosed
in Schedule 3.17, the license, sublicense, agreement or
permission will continue to be valid and in full force and
effect on identical terms following the consummation of
the transactions contemplated hereby (including the
assignments and assumptions referred to in Section 2
above) except where the failure to do so would not have a
Material Adverse Effect;
(iii) to the Company's Knowledge, no party to the license,
sublicense, agreement or permission is in breach or
default, and no event has occurred that with notice or
lapse of time would constitute a breach or default or
permit termination, modification or acceleration
thereunder;
24
(iv) to the Company's Knowledge, no party to the license,
sublicense, agreement or permission has repudiated any
provision thereof;
(v) with respect to each sublicense, the representations
and warranties set forth in subsections (i) through (iv)
above are true and correct with respect to the underlying
license to the Company's Knowledge;
(vi) the underlying item of Intellectual Property is not,
to the Knowledge of the Company, subject to any
outstanding injunction, judgment, order, decree, ruling or
charge;
(vii) to the Knowledge of the Company, no action, suit,
proceeding, hearing, investigation, charge, complaint,
claim or demand is pending or is threatened, which
challenges the legality, validity or enforceability of the
underlying item of Intellectual Property; and
(viii) the Company has not granted any sublicense or
similar right with respect to the license, sublicense,
agreement or permission.
3.11 Inventories. The Inventory of the Company, net of reserves,
consists of raw materials, works in progress and finished goods, which
are substantially merchantable and fit for sale in the Ordinary Course
of Business. Since the Most Recent Fiscal Period End, no Inventory has
been sold or disposed of except through sales in the Ordinary Course of
Business.
3.12 Contracts. Schedule 3.12 lists the following contracts and other
agreements relating to the Business to which the Company is a party or
by which it or any of the properties or assets of the Business are
bound:
(a) any agreement (or group of related agreements) for the lease
of personal property to or from any Person providing for lease
payments in excess of $50,000 per annum;
(b) any agreement (or group of related agreements) for the
purchase or sale of supplies, products, or other personal
property, or for the furnishing or receipt of services, the
performance of which will extend over a period of more than one
year or involve consideration in excess of $50,000, including
without limitation all agreements between the Company and a
manufacturer or distributor;
(c) any agreement concerning a partnership or joint venture;
25
(d) any agreement (or group of related agreements) under which
the Company has created, incurred, assumed, or guaranteed any
indebtedness for borrowed money or under which it has imposed a
Lien on any of the Acquired Assets, tangible or intangible;
(e) any agreement concerning confidentiality, assignment of
inventions, nonsolicitation or noncompetition;
(f) any agreement relating primarily to the Acquired Assets, the
Assumed Liabilities or the Business between or among the Company
and any of its Affiliates;
(g) any agreement under which the consequences of a default or
termination could reasonably be expected to have an Material
Adverse Effect; or
(h) any other agreement (or group of related agreements) the
performance of which involves consideration in excess of
$50,000.
The Company has delivered to the Buyer a correct and complete copy of
each written agreement listed in Schedule 3.12 (as amended to date) and
a written summary setting forth the terms and conditions of each oral
agreement referred to in Schedule 3.12. Except as disclosed in Schedule
3.12, with respect to each such agreement listed in Schedule 3.12: (i)
the agreement is legal, valid, binding and enforceable against the
Company, and in full force and effect; (ii) subject to the Company
obtaining the necessary consents disclosed in Schedule 3.17, the
agreement will continue to be legal, valid, binding and enforceable
against the Company, and in full force and effect on identical terms
following the consummation of the transactions contemplated hereby
(including the assignments and assumptions referred to in Section 2
above); (iii) neither the Company, nor to the Company's Knowledge, any
other party is in breach or default, 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 agreement;
and (iv) no party has repudiated any provision of the agreement.
3.13 Powers of Attorney. There are no outstanding powers of attorney
executed on behalf of the Company in respect of the Business or the
Acquired Assets or Assumed Liabilities of the Business.
3.14 Litigation; Environmental Matters. Except as disclosed in Schedule
3.14:
(a) There are no judicial or administrative actions, claims,
suits, proceedings or investigations, pending or, to the
Knowledge of the Company, threatened, in respect of the
Business. There are no judgments, orders, decrees, citations,
fines or penalties heretofore assessed against the Company
affecting the Acquired Assets or Assumed Liabilities that would
have a Material Adverse Effect.
26
(b) No claim, investigation, lawsuit, agency proceeding, or
other legal, quasi-legal or administrative challenge has been
brought, is pending or, to the Knowledge of the Company, has
been threatened against the Company relating to the existence of
any hazardous condition at any of the Leased Premises that would
have a Material Adverse Effect. The Company has not spilled,
discharged, deposited, released or disposed of any hazardous
substances (as regulated under any applicable Environmental Law)
at any of the Leased Premises that require remediation or
monetary payment by the Company under applicable Environmental
Laws which could reasonably be expected to result in a Material
Adverse Effect. The Company has no Knowledge of any spill,
discharge, deposit, release or disposal of any hazardous
substances (as regulated under any applicable Environmental Law)
by any third party at any of the Leased Premises that require
remediation or monetary payment by the Company under applicable
Environmental Laws that could reasonably be expected to result
in a Material Adverse Effect. No Person has served upon the
Company any written notice claiming any material violation of
any Environmental Law with respect to environmental conditions
at the Leased Premises. All environmental reports, studies or
correspondence prepared by third party environmental consultants
since January 1, 2000 and describing or related to the
environmental conditions of the premises leased by the Company
in the possession or control of the Company have been delivered
to or made available for review by the Buyer.
3.15 Affiliated Transactions. Except as set forth in Schedule 3.15, the
Company is not a party to or bound by any contract, commitment or
understanding primarily relating to the Business with any current or
former officer or director of the Company or any of their Affiliates
and no current or former officer or director of the Company or any of
their Affiliates owns or otherwise has any rights to or interests in
any Acquired Asset.
3.16 Suppliers. Schedule 3.16 sets forth a complete and accurate list
of (a) the 20 largest suppliers of materials or services to the Company
in terms of purchases during the six months ended June 30, 2002, (b)
any single source suppliers of materials or services to the Company and
(c) any suppliers of materials or services to the Company for which
since January 1, 2002, the Company has or had minimum purchase
commitments in excess of $50,000.
3.17 Consents. Schedule 3.17 identifies any Person whose consent or
approval is required and the matter, agreement or contract to which
such consent relates in connection with the transfer, assignment or
conveyance by the Company of any of the Acquired Assets.
3.18 Employees and Consultants.
-------------------------
(a) Schedule 3.18(a) contains a true and complete list of the
persons employed by the Company or any Affiliate whose
responsibilities relate
27
primarily to the Business as of the date of this Agreement (the
"Current Employees"), their respective dates of hire, current
positions, current compensation under existing employment
policies, approximate hours worked per week by each such
employee, and the amount and nature of any severance obligations
that the Company would have to them in the event of their
termination of employment. To the Company's Knowledge, neither
the Company nor any Affiliate is delinquent in the payments to
any of the Current Employees or former employees of the Business
of any wages, salaries, commissions, bonuses or other direct or
indirect compensation for any services performed by them to the
date hereof or for any amounts required to be reimbursed to the
Current Employees. The Company has delivered or made available
to Buyer true and complete copies of all employee handbooks and
manuals of the Company.
(b) Schedule 3.18(b) contains a true and complete list of the
persons engaged by the Company or any Affiliate as a consultant
primarily to the Business as of the date of this Agreement (the
"Consultants"), the respective dates such Consultants began
their consulting arrangement with the Company, current
responsibilities, current compensation, approximate hours worked
per week by each such consultant, and the amount and nature of
any severance obligations that the Company would have to them in
the event of their termination of their consulting arrangement.
To the Company's Knowledge, neither the Company nor any
Affiliate is delinquent in the payments to any of the
Consultants or former consultants to the Business of any direct
or indirect compensation for any services performed by them to
the date hereof or for any amounts required to be reimbursed to
the Consultants.
(c) Except as could not reasonably be expected to have a
Material Adverse Effect, the Company is in compliance with all
applicable Laws respecting employment and employment practices,
terms and conditions of employment and wages and hours, and are
not engaged in any unfair labor practices. There is no
collective bargaining agreement in effect with respect to the
Current Employees. Since December 31, 1999, the Company has not
experienced any strike or work stoppage or other industrial
dispute involving its employees.
3.19 Insurance Policies. Schedule 3.19 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 with respect to the Business is on the date
hereof a party, a named insured or otherwise the beneficiary of
coverage. The Company has not, with respect to the Business, received
any notice from the insurer under any such policy disclaiming coverage,
reserving rights with respect to a particular claim or
28
such policy in general or canceling any such policy. All premiums due
and payable for such insurance policies have been duly paid and such
policies or extensions or renewals thereof in such amounts will be
outstanding and duly in full force without interruption until the
Opening of Business on the Closing Date.
3.20 Intentionally Omitted.
---------------------
3.21 Employee Benefits.
-----------------
(a) Schedule 3.21(a) contains a complete and accurate list of
all Employee Benefit Plans maintained, or contributed to, by the
Company, or any ERISA Affiliate. For purposes of this Agreement,
"Employee Benefit Plan" means any "employee pension benefit
plan" (as defined in Section 3(2) of 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 relating
to any Current Employee or former employee of the Business who
is still entitled to benefits. For purposes of this Agreement,
"ERISA Affiliate" means any entity that is, or was at any time
after December 31, 1995, 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 at
any time included the Company. Complete and accurate copies of
all Employee Benefit Plans and summary plan descriptions, if
any, that have been reduced to writing have been provided to the
Buyer, and the Company has provided the Buyer with written
summaries of any such plans that have not been reduced to
writing. All Employee Benefit Plans are in compliance in all
respects with the currently applicable provisions of ERISA and
the Code and the regulations thereunder, except where such
non-compliance could not reasonably be expected to have a
Material Adverse Effect.
(b) All the Employee Benefit Plans that are intended to be
qualified under Section 401(a) of the Code are so qualified and
have received determination letters from the Internal Revenue
Service (or have not yet received such letters, but timely filed
for such letters on or before February 28, 2002), to the effect
that such Employee Benefit Plans are qualified 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, to the Company's
Knowledge, revocation has not been threatened.
29
(c) No such Employee Benefit Plan has been amended since the
date of its most recent determination letter or application
therefor in any respect, nor to the Company's Knowledge, has any
other act or omission occurred, that could reasonably be
expected to adversely affect its qualification or materially
increase its cost.
(d) Except as set forth in Schedule 3.21(d), there are no
agreements with any Current Employee or former employee of the
Business (i) the benefits of which are contingent, or the terms
of which are materially altered, upon the occurrence of a
transaction involving the Company of the nature of any of the
transactions contemplated by this Agreement, (ii) providing any
term of employment or compensation guarantee or (iii) providing
severance benefits after the termination of employment of such
employee. Except as set forth in Schedule 3.21(d), there are no
agreements or plans, 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.
3.22 Books and Records. The books, records, accounts and ledgers of the
Company relating to the Business have been maintained in accordance
with good business and bookkeeping practices.
3.23 Disclosure. The representations and warranties contained in this
Section 3 (including the Schedules and Exhibits required to be
delivered by the Company to the Buyer pursuant to this Agreement) and
the certificate to be furnished by the Company to the Buyer pursuant to
Section 6.1(f) do not contain any untrue statement of a material fact.
Without limiting the generality of the preceding sentence, in making
such representations and warranties, the Company has not: (a) knowingly
made any misrepresentation of a material fact, or (b) committed
intentional fraud resulting in monetary damages to the Buyer in excess
of $100,000, or (c) intentionally made any misleading statement of a
material fact, and to the Company's knowledge, such representations and
warranties are true and correct. The copies of documents and agreements
included in the Disclosure Schedule or provided to Buyer and referenced
in the Disclosure Schedule are true, correct and complete copies of the
referenced documents and agreements.
3.24 No Other Representations or Warranties. Except for the
representations and warranties contained in this Article III, and any
amendment, supplementation or modification made pursuant to the express
provisions of this Agreement with respect to such representations and
warranties, neither the Company nor any other Person makes any express
or implied representation or warranty on behalf of Company, and the
Company hereby disclaims any such representation or warranty whether by
the Company or any of its officers, directors, employees,
30
agents or representatives or any other Person, with respect to the
execution and delivery of this Agreement or the transactions
contemplated hereby, notwithstanding the delivery or disclosure to the
Buyer or any of its officers, directors, employees, agents or
representatives or any other Person of any documentation or other
information by the Company or any of its officers, directors,
employees, agents or representatives or any other Person with respect
to any one or more of the foregoing.
4. Representations and Warranties of the Buyer. The Buyer represents and
warrants to the Company that the statements contained in this Section 4 are true
and correct as of the date of this Agreement.
4.1 Organization of the Buyer. The Buyer is a corporation validly
existing and in good standing under the laws of the State of Delaware.
4.2 Authority for Agreement. The Buyer has full corporate power and
authority to execute and deliver this Agreement and to perform its
obligations hereunder. All actions or proceedings to be taken by or on
the part of the Buyer and its board of directors and stockholders to
authorize and permit the execution and delivery by the Buyer of this
Agreement and the instruments required to be executed and delivered by
the Buyer pursuant hereto, the performance by the Buyer of its
obligations hereunder, and the consummation by the Buyer of the
transactions contemplated herein, have been duly and properly taken.
This Agreement has been duly executed and delivered by the Buyer, and
constitutes the legal, valid and binding obligation of the Buyer,
enforceable against the Buyer in accordance with its terms and
conditions, subject to applicable bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium or other similar laws relating
to or affecting the rights of creditors generally and to general
principles of equity, whether considered in a suit at law or in equity.
4.3 Noncontravention. Neither the execution and the delivery of this
Agreement, nor the consummation of the transactions contemplated hereby
(including the assignments and assumptions referred to in Section 2
above), will (i) violate any Law of any government, governmental
agency, or court to which the Buyer is subject or any provision of the
certificate of incorporation or bylaws of the Buyer or (ii) conflict
with, result in a breach of, constitute a default under, result in the
acceleration of, create in any Person the right to accelerate,
terminate, modify, or cancel, or require any notice under any
agreement, contract, lease, license, instrument, or other arrangement
to which it is a party or by which it is bound or to which any of its
assets is subject. The Buyer does not need to give any notice to, make
any filing with, or obtain any authorization, consent, or approval of
any government or governmental agency in order for the Parties to
consummate the transactions contemplated by this Agreement (including
the assignments and assumptions referred to in Section 2 above).
4.4 Brokers' Fees. The Buyer 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.
31
4.5 Financing. The Buyer has sufficient funds or firm financing
commitments in place with respect to all funds necessary to consummate
the transactions contemplated by this Agreement. The Buyer will have
available as of the Closing Date funds sufficient to pay the Purchase
Price.
4.6 Regulatory Matters. The Buyer has conducted its operations in
accordance with all applicable laws, rules and regulations, including,
without limitation, all environmental laws, except to the extent that
any non-compliance could not reasonably be expected to materially
affect its ability to have any permit or license transferred or
reissued to the Buyer as contemplated by this Agreement or otherwise to
consummate any of the transactions contemplated by this Agreement. The
Buyer is not subject to any enforcement action, citation, consent
decree or other similar action by any governmental authority that might
materially affect its or the Company's ability to have any permit or
license transferred or reissued to the Buyer as contemplated by this
Agreement or otherwise to consummate any of the transactions
contemplated by this Agreement.
4.7 Knowledge of Breach. The Buyer has no Knowledge of any breach by
the Company of any of its representations or warranties under this
Agreement, including without limitation, the representations made in
Section 3.23.
5. Covenants.
---------
5.1 Pre-Closing Covenants. The following covenants shall apply from the
date of this Agreement through the Closing:
(a) General. Each of the Parties will use its commercially
reasonable efforts to take such actions and do such things as
are necessary, proper, or advisable in order to consummate and
make effective the transactions contemplated by this Agreement
(including satisfaction, but not waiver, of the closing
conditions set forth in Section 6).
(b) Operation of Business. Except as otherwise contemplated by
this Agreement or consented to or approved by the Buyer in
writing (which consent or approval shall not be unreasonably
withheld or delayed), the Company will use commercially
reasonable efforts to cause the Business not to engage in any
practice, take any action, or enter into any transaction outside
the Ordinary Course of Business. Except for increases in
accordance with past practices or as may be required by any
contracts or agreements existing as of the date hereof, the
Company will not increase compensation or change the benefits
available to any of the Current Employees or Consultants.
(c) Preservation of Business. Subject to the impact of the
matters and trends set forth in Schedule 3.7, the Company will
use commercially reasonable efforts to keep the business and
properties of the Business substantially intact, including the
Business's current operations, physical
32
facilities, working conditions, and relationships with lessors,
licensors, suppliers, customers and employees.
(d) Full Access. Upon reasonable notice and during normal
business hours, the Company will permit representatives of the
Buyer to have reasonable access, and in a manner so as not to
interfere with the normal business operations of the Company, to
all premises, properties, personnel, books, records (including
Tax records), contacts, and documents of the Company which
relate to the Business, solely for purposes of verifying the
representations and warranties of the Buyer set forth herein; it
being understood that the Company, in its sole discretion, may
deny or restrict any access (i) involving possible breaches of
applicable confidentiality agreements or possible waivers of any
applicable attorney-client privileges, (ii) in the event the
Buyer is in breach of this Agreement or (iii) for so-called
Phase II investigations or other environmental investigations
involving sampling or testing. Subject to the foregoing
sentence, the Company shall cooperate with the Buyer in any
reasonable review of the Company's Inventory that the Buyer
desires to conduct prior to the Closing. All information
provided or obtained pursuant to this clause (d) shall be deemed
"Confidential Information" and held by the Buyer in accordance
with and subject to the terms and conditions of the
confidentiality agreement set forth in Section 7 hereof.
(e) Notice of Developments. Each Party will give prompt written
notice to the other of any development causing, or notice of any
event that with the passage of time would reasonably be expected
to cause, a breach of any of the representations, warranties or
covenants set forth in this Agreement of such notifying party.
No disclosure by any Party pursuant to this Section 5.1(e),
however, shall be deemed to amend or supplement the Schedules to
this Agreement or to prevent or cure any misrepresentations,
breach of warranty, or breach of covenant.
(f) Exclusivity. Subject to the Company's fiduciary obligations
under Law, the Company will not (and the Company will not cause
or permit any of its officers, directors, agents or Affiliates
to) solicit or engage in meetings or negotiations with any
potential third party buyer regarding any proposals with respect
to the sale to any third party of all or any part of the
Acquired Assets having an economic value in excess of $100,000
individually or in the aggregate out of the ordinary course of
business (whether directly by a stock sale, merger or otherwise
but excluding sales of instrumentation, software and services),
or provide any due diligence or other similar information in
furtherance of a possible sale of the Acquired Assets to any
third party Buyer; provided, however, that the Company may upon
receipt by the Company of an unsolicited offer, proposal or
indication of interest to effect a sale of the Business (through
merger, consolidation or sale of all or substantially all of the
assets of the Business) that would constitute a Superior
Proposal (as hereinafter defined), following delivery to the
Buyer of the notice set forth below,
33
participate in negotiations regarding such proposed sale and
furnish information with respect to the Company pursuant to a
customary confidentiality agreement. The Company will promptly
notify the Buyer of any inquiries, solicitations or indications
of interest it receives from third parties related to the
foregoing. The Company acknowledges to the Buyer that the
Acquired Assets are unique and that the Buyer shall have the
right, in addition to any other rights the Buyer may have, to
specific enforcement against the Company of its obligations
under this Section 5.1(f). "Superior Proposal" means any bona
fide proposal for the acquisition of the Business, whether by
issuance of securities or pursuant to an agreement of merger or
consolidation, of more than 50% of the outstanding voting
securities of the Company (as determined prior to giving effect
to such proposed transaction), or the acquisition of more than
50% of the consolidated assets of the Company related to the
Business measured by book value, in either case on terms which
the Board of Directors determines in its good faith reasonable
judgment to have an economic value to the Company in excess of
$23,750,000.
(g) Employees. The Company shall provide the Buyer with an
updated version of Schedule 3.18(a), as of a date within two
days of the Closing Date, and shall notify the Buyer if the
Company has received written notice, or if a member of the
Company's senior management team or manager in the human
resources department has received any oral notice, from any of
the persons listed on such schedule that such person(s) will not
continue his or her employment or engagement with the Buyer
after the Closing. The Company shall not hire or terminate any
employees other than in the Ordinary Course of Business, except
that the Company shall terminate all of the domestic U.S.
employees who provide services to the Business, other than those
executive level employees set forth in the Employee Letter (as
defined in Section 5.2(c) below), effective as of the Opening of
Business on the Closing Date.
(h) Change of Name. The Company shall change its corporate name,
and the corporate name of any Affiliate that includes the words
"Rheometric Scientific" or any variant of Rheometric, effective
as of or immediately following the Closing Date.
(i) Monthly Reports. The Company shall provide to the Buyer
copies of each Monthly Report promptly after such Monthly
Reports have been finalized (but in no event later than 7 days
following the end of the month to which such Monthly Report
pertains). The Monthly Reports delivered pursuant to this
Section 5.1(i) shall be prepared in a manner consistent in all
material respects with the Monthly Reports prepared with respect
to the Business during the twelve monthly accounting periods
immediately preceding the date of this Agreement.
(j) Material Loss of Distributors, Customers or Suppliers. As
promptly as practicable, but in no event later than three
business days after
34
the Company is notified in writing, or a member of the Company's
senior management team receives any oral notice from, one or
more distributors, vendors, representatives or customers of the
Business that generated $200,000 or more in revenues or expenses
in 2002 that such Persons have terminated or intend to terminate
their respective business relationships with the Company or are
modifying such relationships with the Company in a manner that
is materially less favorable to the Company or have decided not
to or will not do business with the Buyer on and after the
Closing on such terms and subject to conditions at least as
favorable as provided to the Company prior to Closing, the
Company shall provide written notice to the Buyer of such
termination, intended termination, modification or decision with
reasonable detail.
Nothing in this Agreement shall diminish the Company's sole
title to the Business or shall be construed to limit the Company's
discretion to operate the Business in the ordinary course, or shall
give the Buyer any ownership rights to the Acquired Assets, before the
Closing Date. The Buyer acknowledges that the Company and its
Subsidiaries may transfer, assign or convey, by way of a dividend or
otherwise, cash, cash equivalents, marketable securities and other
financial instruments as well as any other Excluded Assets out of the
Business prior to Closing and the Company shall have complete and
absolute discretion over the terms of such transfers, assignments and
conveyances.
5.2 Post-Closing Covenants. The Parties agree that the following
covenants shall apply from and after the Closing:
(a) Taxes on the Transfer. The Company, on the one hand, and the
Buyer, on the other hand, shall share and contribute equally to
the payments of all transfer Taxes, including without
limitation, documentary, sales, use, real property transfer,
stamp, registration and other such transfer Taxes and fees,
imposed upon or incurred by any of the parties hereto in
connection with the transfer of the Acquired Assets to the
Purchaser under this Agreement, and each party shall bear its
own legal and other expenses relating to such transfer Taxes.
The party required by law to file any necessary Tax Return and
other document with respect to any such transfer Taxes shall do
so in a timely fashion after consultation with the other party.
(b) Future Assurances. At any time and from time to time,
whether before, at, or after the Closing, at the request of the
other party, each party will execute and deliver, or cause to be
executed and delivered, such other documents and instruments and
take, or cause to be taken, such other action as may be
reasonably necessary to consummate the transactions contemplated
by this Agreement, including without limitation, such documents,
instruments and actions as the Buyer may reasonably request to
transfer, convey and assign to the Buyer, and to confirm the
Buyer's title to or interest in the Acquired Assets, to put the
Buyer in actual possession and operating control thereof.
35
(c) Employment.
----------
(i) The Buyer shall offer to hire (or in the case of
Rheometric Japan continue the employment of) all of the
employees of the Business, other than those domestic U.S.
employees and corporate officers identified in a letter
delivered by the Buyer to the Company at least two
business days prior to the Closing Date and countersigned
by the Company (the "Employee Letter") for substantially
the same salary and benefits and on substantially the same
terms and conditions as such employees are employed as of
the Opening of Business on the Closing Date consistent
with the general employment policies of the Buyer for
similarly situated employees. For a period of one (1) year
after the Closing, the Buyer shall honor in accordance
with their terms all severance plans and programs of the
Company as in effect immediately prior to the Closing, it
being understood and agreed that the Buyer shall be
responsible for all severance obligations to employees of
the Business other than the corporate officers indicated
in the Employee Letter. For those employees identified in
the Employee Letter (other than the corporate officers
identified in the Employee Letter), the Buyer shall, one
business day prior to the Company's obligation to fund
such obligations and contributions, pay to the Company in
immediately available funds an amount equal to: (x) any
and all severance obligations, and (y) up to two (2)
months of health and dental contributions that the Company
is required to pay to or on behalf of such employees (or
to the Company's payroll administration provider) under
the Company's severance program following the Closing as
detailed in a schedule of severance obligations (prepared
by the Company based upon those employees listed in the
Employee Letter) delivered to the Buyer at least one
business day prior to the Closing Date. In addition, the
Buyer shall pay the Company an additional one-time fee of
$10,000 at the time the Buyer makes its first
reimbursement payment described above, such one-time fee
representing the Buyer's sole liability in connection with
the administrative aspects of the termination of such
employees. Buyer shall have no other obligations with
respect to those employees identified in the Employee
Letter. With respect to any employee of the Business who
is not actively employed at Closing due to short-term
disability or an approved leave of absence as set forth on
Schedule 5.2(c)(i) and who accepts the Buyer's offer of
employment, the Buyer shall provide such individual with a
similar employment status. All Employees of the Business
who accept the Buyer's offer of employment are herein
referred to as the "Transferred Employees."
36
(ii) All Transferred Employees shall be given credit for
all service with the Company only under (i) the Buyer's
401(k) Plan and retirement plans, for purposes of
eligibility and vesting but not benefit accrual, and (ii)
subject to the approval of the Buyer's Board of Directors,
the Buyer's employee stock option plan. In addition, to
the extent permitted by Law and the terms of the Buyer's
long term disability plan (as detailed on Schedule
5.2(c)(ii)), the Buyer agrees to waive any waiting periods
or limitations for preexisting conditions under its
medical, dental, and short-term and long-term disability
plans.
(d) The Company shall fully vest all benefits of Transferred
Employees in the Rheometric Scientific, Inc. Savings and
Investment Retirement Plan (the "Company 401(k)") as of the
Closing Date. Buyer shall, and shall cause the Waters Employee
Investment Plan (the "Buyer's 401(k) Plan") to accept the
rollover, by direct or indirect rollover, as selected by each
Transferred Employee, of that portion of the Transferred
Employees' accounts in the Company 401(k) that constitutes an
"eligible rollover distribution" as that term is defined by
section 402(c)(4) of the Code, provided that at the time a
Transferred Employee elects such a rollover that Transferred
Employee is employed by the Buyer. Any such rollover will be
effected in cash and, as applicable, any notes evidencing loans
from the Company 401(k) to the Transferred Employee electing
such rollover. The Buyer and the Company shall, and shall cause
the trustees of their respective 401(k) plans to, cooperate with
each other with respect to the rollover of the eligible rollover
distribution portions of the Transferred Employees' account
balances in the Company 401(k) Plan to the Buyer's 401(k) Plan.
(e) Use of Name. From and after the 31st day following the
Opening of Business on the Closing Date, neither the Company nor
any of its Affiliates shall use the name "Rheometric Scientific"
or any variant of Rheometric with respect to its ongoing
business activities except for non-commercial historical
reference.
(f) Financial Information. After the Closing, upon reasonable
written notice, the Buyer and the Company shall furnish or cause
to be furnished to each other and their respective accountants,
counsel and other representatives access, during normal business
hours, such information (including records pertinent to the
Business) as is reasonably necessary for financial reporting and
accounting matters, including, without limitation, to ensure
compliance with Section 2.5(c) hereof. The Buyer shall retain
all of the books and records of the Business for a period of
seven (7) years after the Closing Date or such longer time as
may be required by law.
(g) Compliance with WARN, etc. With respect to the Transferred
Employees, the Buyer will timely give all notices required to be
given under, or will otherwise comply with, WARN or other
similar statutes or
37
regulations of any jurisdiction relating to any plant closing or
mass layoff or as otherwise required by such statute or
regulation. For this purpose, the Buyer shall be deemed to have
caused a mass layoff if the mass layoff would not have occurred
but for the Buyer's failure to employ the Transferred Employees
in accordance with the terms of this Agreement.
(h) Allocation of Accounts Payable. Subject to the Buyer's
assumption of up to $6,000,000 of accounts payable and accrued
expenses pursuant to Sections 2.3(a), 2.5(e) and 2.5(g) above,
representatives of the Company and the Buyer shall determine
promptly after the Closing Date which specific accounts payable
and accrued expenses in excess of $6,000,000 will be retained by
the Company. The Parties agree that, of such accounts payable
and accrued expenses retained by the Company, approximately
one-third will have an invoice date not more than thirty (30)
days prior to the Closing Date, approximately one-third will
have an invoice date greater than thirty (30) days but not more
than sixty (60) days prior to the Closing Date and approximately
one-third will have an invoice date more than sixty (60) days
prior to the Closing Date. The Company agrees that it shall pay
each such retained accounts payable and accrued expense on or
prior to the later of: (i) five (5) business days after the
allocation of such accounts payable and accrued expenses is
determined by the Parties, and (ii) sixty (60) days from the
invoice date of such retained accounts payable or accrued
expense.
6. Conditions to Obligation to Close.
---------------------------------
6.1 Conditions to Obligation of the Buyer. The obligation of the Buyer
to consummate the transactions to be performed by it in connection with
the Closing is subject to satisfaction, as of the Closing Date, of the
following conditions:
(a) Representations and Warranties. The representations and
warranties set forth in Section 3 above (including the Schedules
thereto) shall be (i) true and correct in all material respects
when made and (ii) deemed to have been made again at and as of
the Closing and shall then be true and correct in all material
respects (except that representations and warranties that are
made as of a specific date other than the date of this
Agreement, need be true and correct in all material respects, or
true and correct, as the case may be, only as of such date,
except in the cases each of clause (i) and (ii) for those
representations and warranties that are already qualified as to
materiality or Material Adverse Effect; such qualified
representations and warranties shall be true and correct without
further qualification as to materiality or Material Adverse
Effect when made and as of the Closing. Except for Schedules
2.2(k), 2.8, 2.10 and 6.1(c) from time to time after the date of
this Agreement and at least three business days prior to the
Closing Date, Buyer shall be permitted to deliver updated and
amended Schedules to this Agreement to Seller reflecting
information which under this Agreement is contemplated or
permitted to change between the date of this Agreement and the
Closing
38
Date or which if not so permitted or contemplated, relates to
developments occurring between the date of this Agreement and
the Closing Date and does not result in a Material Adverse
Change from the information presented in the Schedules to this
Agreement delivered on the date of this Agreement. Upon such
delivery, such later-delivered Schedules shall become the
Schedules for purposes of this Agreement.
(b) Performance by the Company. The Company shall have performed
and complied with in all material respects all of its covenants,
agreements and obligations hereunder that are required to be
performed or complied with by it before or at the Closing;
(c) Required Consents. The Company shall have procured all of
the governmental approvals, consents or authorizations and third
party consents set forth in Schedule 6.1(c), and shall have
obtained the consent of the lender to the Landlord under the
Piscataway Facility Lease with respect to that certain Lease
Termination Agreement dated as of October 11, 2002 among, inter
alia, such Landlord and the Company (the "Landlord Lender
Consent");
(d) Absence of Litigation. No action, suit or proceeding shall
be pending or threatened in writing before any court or
quasi-judicial or administrative agency of any federal, state,
local or foreign jurisdiction wherein an unfavorable injunction,
judgment, order, decree, ruling, or charge would (i) prevent
consummation of the transactions contemplated by this Agreement,
(ii) cause the transactions contemplated by this Agreement to be
rescinded following consummation (and no such injunction,
judgment, order, decree, ruling, or charge shall be in effect);
or (iii) affect adversely the right of the Buyer to own or lease
the Acquired Assets, as the case may be, or to operate the
Business as now operated;
(e) Noncompetition. The agreement provided for in Section 8
shall have been duly executed and delivered to the Buyer;
(f) Certificates. The Company shall have delivered to the Buyer
a certificate to the effect that each of the conditions
specified in this Section 6 is satisfied in all respects;
(g) Opinion. The Buyer shall have received from Dechert, counsel
to the Company, an opinion in a form reasonably acceptable to
the Buyer, substantially in the form as set forth in Exhibit E
attached hereto, addressed to the Buyer, and dated as of the
Closing Date;
(h) No Material Adverse Change. There shall not have been any
change to the Acquired Assets or the Business that has resulted
in a Material Adverse Effect ("Material Adverse Change") and no
event has occurred or circumstance exists that could reasonably
be expected to result in such a Material Adverse Change;
39
(i) Director and Shareholder Approval. All approvals of the
directors of the Buyer and the directors and stockholders of the
Company necessary for the consummation of the transactions
contemplated hereby shall have been obtained in full conformity
with the requirements of applicable Law, and the same shall be
in full force and effect;
(j) Patent Assignment. The Company shall have executed and
delivered to the Buyer an assignment of the patents identified
on Schedule 3.10(c), substantially in the form attached hereto
as Exhibit G;
(k) Trademark Assignment. The Company shall have executed and
delivered to the Buyer assignments of the Trademarks,
substantially in the forms attached hereto as Exhibit H;
(l) Release of Liens. The Buyer shall have received a payoff
letter from (i) PNC Bank, National Association, (ii) Allendale
Machinery Systems, (iii) Coast Business Credit, a division of
Southern Pacific Bank, and (iv) Fidelity Leasing, Inc., each
indicating that each such party has agreed to (x) release all
Liens it has on the Business and the Acquired Assets and (y)
terminate all financing statements and security agreements with
respect to the Business and the Acquired Assets; and
(m) Termination of Agreement. The Company shall have terminated
or assigned that certain OEM Supply Agreement dated April 22,
2002 between Rheometric Scientific GMBH and Shimadzu Corporation
and shall have provided the Buyer with evidence reasonably
acceptable to the Buyer of such termination or assignment.
The Buyer may waive any condition specified in this Section 6.1 at or
prior to the Closing only in a signed writing and such waiver shall not
be considered a waiver of any other provision in this Agreement unless
the writing specifically so states.
6.2 Conditions to Obligations of the Company. The obligation of the
Company to consummate the transactions to be performed by it in
connection with the Closing is subject to satisfaction, as of the
Closing Date, of the following conditions:
(a) Representations and Warranties. The representations and
warranties set forth in Section 4 above shall be (i) true and
correct in all material respects when made and (ii) deemed to
have been made again at and as of the Closing and shall then be
true and correct in all material respects (except that
representations and warranties that are made as of a specific
date other than the date of this Agreement, need be true and
correct in all material respects, or true and correct, as the
case may be, only as of such date, except in the cases each of
clause (i) and (ii) for those representations and warranties
that are already qualified as to materiality or Material Adverse
Effect; such qualified representations and warranties
40
shall be true and correct without further qualification as to
materiality or Material Adverse Effect when made and as of the
Closing;
(b) Performance by Buyer. The Buyer shall have performed and
complied in all material respects with all of its covenants,
agreements and obligations hereunder that are required to be
performed or complied with by it before or at the Closing;
(c) Absence of Litigation. No action, suit or proceeding shall
be pending or threatened in writing before any court or
quasi-judicial or administrative agency of any federal, state,
local or foreign jurisdiction wherein an unfavorable injunction,
judgment, order, decree, ruling, or charge would (i) prevent
consummation of the transactions contemplated by this Agreement
or (ii) cause the transactions contemplated by this Agreement to
be rescinded following consummation (and no such injunction,
judgment, order, decree, ruling, or charge shall be in effect);
(d) Opinion. The Company shall have received from Xxxxxxxx
Xxxxxxxx Xxxxxxxxx & Manello, counsel to the Buyer, an opinion
in a form reasonably acceptable to the Company, substantially in
the form as set forth in Exhibit F attached hereto, addressed to
the Company, and dated as of the Closing Date;
(e) All Necessary Actions. All actions to be taken by the Buyer
in connection with the consummation of the transactions
contemplated hereby and all certificates, opinions, instruments
and other documents required to effect the transactions
contemplated hereby will be reasonably satisfactory in form and
substance to Company;
(f) Company Required Consents. The Company shall have procured
all of the governmental approvals, consents or authorizations
and third party consents set forth in Schedule 6.1(c), and shall
have obtained the consent of the lender to the Landlord under
the Piscataway Facility Lease with respect to that certain Lease
Termination Agreement dated as of October 11, 2002 among, inter
alia, such Landlord and the Company;
(g) Noncompetition. The agreement provided for in Section 8
shall have been duly executed by the Buyer and delivered to the
Company;
(h) Certificates. The Buyer shall have delivered to the Company
a certificate to the effect that each of the conditions
specified in this Sections 6.2 is satisfied in all respects;
(i) Orchestrator Software. The Buyer shall have executed and
delivered to the Company a royalty-free, perpetual license to
use the Company's Orchestrator Software (in a manner consistent
with the noncompetition agreement identified in Section 8), such
license to include access to the source code and related
documentation for such Orchestrator
41
Software and to be in a form reasonably acceptable to the
Company (the "Orchestrator License");
(j) Director and Shareholder Approval. All approvals of the
directors of the Buyer and the directors and stockholders of the
Company necessary for the consummation of the transactions
contemplated hereby shall have been obtained in full conformity
with the requirements of applicable Law, and the same shall be
in full force and effect; and
(k) Superior Proposal. The Company shall not have received a
Superior Proposal that remains outstanding, provided that this
Section 6.2(k) shall not be effective after January 14, 2003.
The Company may waive any condition specified in this Section 6.2 at or
prior to the Closing only in a signed writing and such waiver shall not
be considered a waiver of any other provision in this Agreement unless
the writing specifically so states.
7. Confidentiality. At all times, whether before or after the Closing, and
subject to the provisions of Section 11.1, the Parties will treat and hold as
confidential all of the other Party's Confidential Information. Accordingly, the
Parties will not use or disclose any of the other Party's Confidential
Information, except as set forth in this Section 7 and Section 11.1. After the
Closing, the Company shall use or disclose Confidential Information relating to
the Business only for: preparing financial statements and filings under state
and federal securities laws, preparing and defending tax returns and tax
positions, defending claims by third parties, and as otherwise required by Law.
Notwithstanding the foregoing, in the event that the party receiving
confidential information (the "Receiving Party") from the disclosing Party (the
"Disclosing Party") is requested or required (by oral question or request for
information or documents in any legal proceeding, interrogatory, subpoena, civil
investigative demand, or similar process) to disclose any Confidential
Information, the Receiving Party will notify Disclosing Party promptly of the
request or requirement so that the Disclosing Party may seek an appropriate
protective order or waive compliance with the provisions of this Section 7. If,
in the absence of a protective order or the receipt of a waiver hereunder, the
Receiving Party is, on the advice of counsel, compelled to disclose any
Confidential Information or else stand liable for contempt or suffer other
censure, it may disclose such information; provided, however, that the Receiving
Party may only disclose the specific information that it is compelled to
disclose. Neither Party shall have any discussions with any of the suppliers or
customers of the other Party relating to the subject matter of this Agreement or
the transactions contemplated hereby or the past, present or future of the
Business without the prior written approval of the other Party, such approval
not to be unreasonably withheld or delayed, it being agreed that, except for
communications regarding the ASTRA product, either Party may communicate its
future product strategies to suppliers and customers of either Party, consistent
with the written product strategy of the Buyer as previously delivered to the
Company.
8. Noncompetition. The Company and the Buyer shall enter into a Non-Competition
Agreement in the form attached hereto as Exhibit I.
42
9. Indemnification.
---------------
9.1 Survival of Representations and Warranties; Knowledge of Breach.
All of the representations and warranties of the Company contained
herein or in the certificate required to be delivered pursuant to
Section 6.1(f) shall survive the Closing and continue in full force and
effect until the first anniversary of the Closing Date (except for (i)
those contained in Sections 3.5 (Title to Assets) and 3.14
(Environmental Matters), which shall continue in full force and effect
until the fifth anniversary of the Closing Date and (ii) those
contained in Section 3.2 (Authorization of Transaction), which shall
survive the Closing and shall continue in full force and effect without
limit as to time (subject to any applicable statutes of limitations).
The termination of any representation and warranty, however, shall not
affect any claim for breaches of representations or warranties if
written notice thereof and a reasonable description of the event or
circumstances upon which such claim is based is given to the breaching
party or parties prior to such termination date. All of the
representations and warranties of the Buyer contained in Section 4 or
in the certificate required to be delivered pursuant to Section 6.2(h)
shall survive the Closing and shall continue in full force and effect
until the first anniversary of the Closing Date (except for those
contained in Section 4.2 (Authorization of Transaction), which shall
continue in full force and effect without limit as to time, subject to
any applicable statute of limitations). Subject to Section 10, all
covenants of any Party in this Agreement, including the indemnification
covenants set forth in this Section 9,or in any document or certificate
delivered hereunder which relate to the performance of obligations
after the Closing shall survive the Closing for the periods
contemplated by their terms.
No party hereto shall be deemed to have breached any representation,
warranty, or covenant prior to Closing contained herein if (i) such
party shall have notified the other party hereto in writing, at least
three business days prior to the Closing Date, of the breach of, or
inaccuracy in, or of any facts or circumstances constituting or
resulting in the breach of or inaccuracy in, such representation,
warranty or covenant, and such other party has permitted the Closing to
occur under circumstances in which such other party either had the
right to terminate this Agreement pursuant to Section 10.2 or the
notifying party has provided such other party with a written notice
stating that such other party may terminate this Agreement at any time
during the next succeeding 10 days as if it otherwise had the right to
terminate this Agreement pursuant to Section 10.2, in which case, for
purposes of this Agreement, such other party is thereby deemed to have
waived such breach or inaccuracy, or (ii) the other party was aware
prior to the execution and delivery of this Agreement of the breach of,
or inaccuracy in, or of any facts or circumstances constituting or
resulting in the breach of, or inaccuracy in, such representation or
warranty.
9.2 Indemnity by the Company. Subject to Section 9.1, the last sentence
of this Section 9.2 and Section 9.7, the Company hereby agrees to
indemnify, defend and hold harmless the Buyer and its directors,
officers, stockholders, agents and
43
Affiliates against and in respect of all liabilities, obligations,
judgments, Liens, injunctions, charges, orders, decrees, rulings,
damages, dues, assessments, Taxes, losses, fines, penalties, expenses,
fees, costs, amounts paid in settlement (including reasonable
attorneys' and expert witness fees and disbursements in connection with
investigating, defending or settling any action or threatened action),
arising out of any claim, damages, complaint, demand, cause of action,
audit, investigation, hearing, action, suit or other proceeding
asserted or initiated or otherwise existing in respect of any matter
(collectively, the "Losses") that result from:
(a) the breach of any representation or warranty made by the
Company herein, or resulting from any misrepresentation, breach
of warranty or nonfulfillment of any agreement or covenant of
the Company contained herein or in any agreement or instrument
required to be entered into in connection herewith or from any
misrepresentation in or omission from any schedule, document,
certificate or other instrument required to be furnished by
Company; or
(b) any failure of the Company to pay or perform any Retained
Liability; or
(c) any failure of the Company to continue COBRA coverage for
any employees or former employees of the Business to the extent
such failure would require Buyer to offer and provide such
coverage for employees or former employees other than
Transferred Employees.
In the event that the Company is obliged to indemnify the Buyer under
both subsection (a) and subsection (b) of this Section 9.2, the
Company's obligations under subsection (b) shall be controlling and the
limitations provided in Section 9.1 hereof relating to their
obligations in respect of Losses resulting from the inaccuracy of any
representation and warranty, or any misrepresentation, breach of
warranty or nonfulfillment of an agreement or covenant as described in
Section 9.2(a), shall not apply.
The Buyer shall provide the Company written notice for any claim made
in respect of the indemnification provided in this Section 9.2, whether
or not arising out of a claim by a third party. In no event shall the
Company be obligated to indemnify the Buyer until the aggregate of the
Buyer's Losses exceeds $100,000 (and then only for any amounts in
excess of $50,000), nor shall Company be obligated for amounts in
excess of $1,700,000 for all indemnification claims in the aggregate;
provided; however; that such limitation on liability shall not apply to
any failure of the Company to perform or satisfy the Retained
Liabilities.
9.3 Indemnity by the Buyer. Subject to Section 9.1, the last sentence
of this Section 9.3 and Section 9.7, the Buyer hereby agrees to
indemnify, defend and hold harmless the Company and its directors,
officers, stockholders, agents and Affiliates against and in respect of
all liabilities, obligations, judgments, Liens, injunctions, charges,
orders, decrees, rulings, damages, dues, assessments, Taxes,
44
losses, fines, penalties, damages, expenses, fees, costs, amounts paid
in settlement (including reasonable attorneys' and expert witness fees
and disbursements in connection with investigating, defending or
settling any action or threatened action) arising out of any claim,
complaint, demand, cause of action, audit, investigation, hearing,
action, suit or other proceeding asserted or initiated in respect of
any matter (collectively, "Company Losses") that results from:
(a) the breach of any representation or warranty made by Buyer
herein, or resulting from any misrepresentation, breach of
warranty or nonfulfillment of any agreement or covenant of the
Buyer, contained herein or in any agreement or instrument
required to be entered into in connection herewith or from any
misrepresentation in or omission from any schedule, document,
certificate or other instrument required to be furnished by the
Buyer hereunder;
(b) any Assumed Liability from and after the Closing; or
(c) the use, ownership, possession or operation of any Acquired
Assets, or actions taken by, or omitted to be taken by, the
Buyer or its Affiliates from and after the Closing.
In the event that the Buyer is obliged to indemnify the
Company under both subsection (a) and subsection (b) of this
Section 9.3, the Buyer's obligations under subsection (b)
shall be controlling and the limitations provided in Section
9.1 hereof relating to their obligations in respect of Losses
resulting from the inaccuracy of any representation and
warranty, or any misrepresentation, breach of warranty or
nonfulfillment of an agreement or covenant as described in
Section 9.3(a), shall not apply.
The Company shall provide the Buyer written notice for any
claim made in respect of the indemnification provided in this
Section 9.3, whether or not arising out of a claim by a third
party. The Buyer shall not be liable under this Section 9.3 in
respect of any Company Losses until the aggregate of such
Company Losses exceeds $100,000 (and then only for any amounts
in excess of $50,000). In no event shall the Buyer be
obligated to indemnify the Company for amounts in excess of
$1,700,000; provided; however; that such limitation on
liability shall not apply to any failure of the Buyer to
perform or satisfy the Assumed Liabilities.
9.4 Matters Involving Third Parties.
-------------------------------
(a) If any third party notifies any Party (an "Indemnified
Party") with respect to any matter (a "Third Party Claim") that
may give rise to a claim for indemnification against any other
Party (an "Indemnifying Party") under this Section 9, then the
Indemnified Party shall promptly, but in no event more than
thirty (30) days following such Indemnified Party's receipt of
such third party notification, notify each Indemnifying Party in
writing of such claim and the amount or the estimated amount
thereof to
45
the extent feasible (which estimate shall not be conclusive of
the final amount of such claim or demand). However, no delay on
the part of the Indemnified Party in notifying an Indemnifying
Party shall relieve that Indemnifying Party from any obligation
hereunder unless (and then solely to the extent that) the
Indemnifying Party is thereby prejudiced, but in no event shall
the Indemnifying Party be liable for expenses incurred prior to
its receipt of notice.
(b) Any Indemnifying Party will have the right at its option, to
defend the Indemnified Party against the Third Party Claim with
counsel of the Indemnifying Party's choice, reasonably
satisfactory to the Indemnified Party, so long as (i) the
Indemnifying Party notifies the Indemnified Party in writing
within 30 days after the Indemnified Party has given notice of
the Third Party Claim (the "Notice Period") that the
Indemnifying Party is electing to defend the Third Party Claim,
(ii) the Indemnifying Party provides the Indemnified Party with
reasonable evidence that the Indemnifying Party will have the
financial resources to defend the Third Party Claim and fulfill
its indemnification obligations hereunder (or that the amount
remaining in the Escrow Account is sufficient to meet such
indemnification obligations), (iii) there is no conflict of
interest created by the Indemnifying Party's choice of counsel,
and (iv) the Indemnifying Party conducts the defense of the
Third Party Claim actively and diligently. An election to assume
the defense of such claim or demand shall not be deemed to be an
admission that the Indemnifying Party is liable to the
Indemnified Party in respect of such claim or demand. All costs
and expenses incurred by the Indemnifying Party in defending
such claim or demand shall be a liability of, and shall be paid
by, the Indemnifying Party. In the event that it is ultimately
determined that the Indemnifying Party is not obligated to
indemnify, defend or hold the Indemnified Party harmless from
and against any third party claim, the Indemnified Party shall
reimburse the Indemnifying Party for any and all reasonable
costs and expenses (including without limitation, reasonable
attorney's fees and court costs) incurred by the Indemnifying
Party in its defense of the Third Party Claim. In the event that
the Indemnifying Party notifies the Indemnified Party within the
Notice Period that it desires to defend the Indemnified Party
against such claim or demand, except as hereinafter provided,
the Indemnifying Party shall have the right to defend the
Indemnified Party by appropriate proceedings. If a Third Party
Claim includes a request for a temporary restraining order or
preliminary injunction requiring immediate response or action,
the Indemnified Party shall have the right to respond to such
Claim as it deems appropriate, and thereafter, counsel appointed
by the Indemnifying Party (if it chooses to defend pursuant to
this Section 9.4(b)) and the Indemnified Party shall serve as
co-counsel in defending the Third Party Claim. If the
Indemnified Party has a counterclaim against the third party
bringing the Third Party Claim that arises from the same
transaction or occurrence as the subject matter of the Third
Party Claim or is otherwise substantially related to the subject
matter of the Third Party Claim, and the Indemnified
46
Party desires to assert and pursue that counterclaim as part of
the same proceeding (if any) as the proceeding in which the
third party pursues the Third Party Claim, the Indemnified Party
shall so notify in writing the Indemnifying Party. In that
event, the Indemnified Party and the Indemnifying Party shall
fully cooperate in good faith to defend the Third Party Claim
and pursue that counterclaim in a manner that fairly protects
their respective interests. If the Indemnifying Party elects to
defend the Third Party Claim and the Indemnified Party desires
to participate in, but not control, any such defense or
settlement, it may do so at its sole cost and expense. To the
extent the Indemnifying Party shall control or participate in
the defense or settlement of any Third Party Claim or demand,
the Indemnified Party will give the Indemnifying Party and its
counsel access to, during normal business hours, the relevant
business records and other documents, and shall permit them to
consult with the employees and counsel of the Indemnified Party.
The Indemnified Party shall use all commercially reasonable
efforts in the defense of all such claims.
(c) So long as the Indemnifying Party is conducting the defense
of the Third Party Claim, the Indemnifying Party will not
consent to the entry of any judgment or enter into any
settlement with respect to the Third Party Claim without the
prior written consent of the Indemnified Party. However, the
Indemnified Party shall not unreasonably withhold or delay its
consent. Moreover, the Indemnified Party's consent shall not be
required if the judgment or settlement does not include any
injunctive or other equitable relief that binds the Indemnified
Party; the Indemnifying Party is paying 100 percent of any money
damages payable to the third party claimant; and the third party
delivers a full release of the Indemnified Party (including its
directors, officers and Affiliates) to the Indemnified Party.
(d) If the Indemnifying Party does not timely elect to defend
the Third Party Claim, the Indemnified Party may elect to defend
the Third Party Claim and the Indemnifying Party shall be
responsible for the reasonable costs and expenses pertaining to
such defense. In that case, the Indemnified Party will not
consent to the entry of any judgment or enter into any
settlement with respect to the Third Party Claim without the
prior written consent of the Indemnifying Party. However, the
Indemnifying Party shall not unreasonably withhold or delay that
consent.
(e) The Company hereby agrees that any claim for indemnification
by the Buyer under this Section 9 shall first be offset against
any amount then remaining in the Escrow Account, in accordance
with the terms of the Escrow Agreement.
(f) In no event shall any Indemnifying Party be responsible for
the fees and expenses of more than a single counsel.
47
9.5 Losses Net of Insurance. The amount of any Loss or Company Loss for
which indemnification is provided under Sections 9.2 and 9.3 shall be
net of (i) any amounts recovered by the Indemnified Party pursuant to
any indemnification by or indemnification agreement with any third
party, (ii) any insurance proceeds or other cash receipts or sources of
reimbursement received as an offset against such Loss or Company Loss
(each source named in clauses (i) and (ii), a "Collateral Source") and
(iii) an amount equal to the present value of the Tax benefit, if any,
available to or taken by the Indemnified Party attributable to such
Loss. The parties shall take and shall cause their Affiliates to take
all reasonable steps to mitigate any Loss or Company Loss upon becoming
aware of any event that would reasonably be expected to, or does, give
rise thereto, including incurring costs only to the minimum extent
necessary to remedy a breach that gives rise to the Loss or Company
Loss. Indemnification under this Section 9 shall not be available to
the Buyer or the Company, as the case may be, to the extent the party
seeking indemnification under this Section 9 fails to first use
reasonable efforts to seek recovery from all Collateral Sources. The
parties acknowledge and agree that no right of subrogation shall accrue
or inure to the benefit of any Collateral Source hereunder. The
Indemnifying Party may require an Indemnified Party to assign the
rights to seek recovery pursuant to the preceding sentence; provided,
that the Indemnifying Party will then be responsible for pursuing such
recovery at its own expense. If the amount to be netted hereunder from
any payment required under Section 9.2 or 9.3 is determined after
payment by the Indemnifying Party of any amount otherwise required to
be paid to an Indemnified Party pursuant to this Section 9, the
Indemnified Party shall repay to the Indemnifying Party, promptly after
such determination, any amount that the Indemnifying Party would not
have had to pay pursuant to this Section 9 had such determination been
made at the time of such payment.
9.6 Sole Remedy; Waiver. The Parties acknowledge and agree that the
remedies provided for in this Agreement shall be the parties' sole and
exclusive remedy with respect to the subject matter of this Agreement.
In furtherance of the foregoing, the Parties hereby waive and release,
to the fullest extent permitted by applicable law, any and all other
rights, claims and causes of action (including rights of contribution,
if any) known or unknown, foreseen or unforeseen, which exist or may
arise in the future, that it may have against Company or any of its
Affiliates, or the Buyer or any of its Affiliates, as the case may be,
arising under or based upon any national, federal, state or local
statute, law, ordinance, rule, regulation or judicial decision
(including, without limitation, any such statute, law, ordinance, rule,
regulation or judicial decision relating to environmental matters, or
warranty of title, in rem entitlements, or arising under or based upon
any securities law, common law or otherwise). This Section 9.6 shall
survive Closing.
9.7 No Consequential Damages. Notwithstanding anything to the contrary
contained herein, no Indemnifying Party shall be liable to or otherwise
responsible to any Indemnified Party for consequential, incidental,
unforeseen or punitive damages or for diminution in value that arise
out of or relate to this
48
Agreement or the performance or breach thereof or any liability
retained or assumed hereunder.
9.8 No Set-Off. Except as set forth in Section 9.4(e), neither the
Buyer nor the Company shall have any right to set-off any Losses or
Company Losses against any payments to be made by either of them
pursuant to this Agreement or otherwise.
10. Termination.
10.1 Termination by Agreement of the Parties. This Agreement may be
terminated by the mutual written agreement of the Parties hereto. In
the event of such termination by agreement, unless otherwise agreed by
the Parties, the Buyer shall have no further obligation or liability to
the Company under this Agreement, and the Company shall have no further
obligation or liability to the Buyer under this Agreement.
10.2 Termination by Reason of Breach. Subject to the second paragraph
of Section 9.1, this Agreement may be terminated by the Company, if at
any time prior to the Closing there shall occur a material breach of
any of the representations, warranties or covenants of the Buyer or the
failure by the Buyer to perform any of its conditions or obligations
hereunder, which in each case has not been cured prior to the earlier
of January 15, 2003 and the date which is twenty (20) days after
written notice thereof by the Company to the Buyer, and may be
terminated by the Buyer, if at any time prior to the Closing there
shall occur a material breach of any of the representations, warranties
or covenants of the Company, or the failure of the Company to perform
any of its conditions or obligations hereunder, which in each case has
not been cured prior to the earlier of January 15, 2003 and the date
which is twenty (20) days after written notice thereof by the Buyer to
the Company (any such a breach shall be referred to herein as a
"Pre-Closing Breach").
10.3 Termination After Passage of Time. This Agreement may be
terminated upon written notice to the other Party by the Company alone
or by the Buyer alone if the Closing has not occurred by the close of
business on January 15, 2003 (unless extended by the Parties). However:
(a) the Company may not avail itself of this Section 10.3 if a breach
of this Agreement by the Company has been a principal reason why the
Closing has not occurred or if the Company is in discussions with a
third party in connection with a Superior Proposal, and (b) the Buyer
may not avail itself of this Section 10.3 if a breach of this Agreement
by the Buyer has been a principal reason why the Closing has not
occurred.
10.4A Termination For Superior Proposal. Subject to Section 5.1(f),
this Agreement may be terminated by the Company in respect of a
Superior Proposal (provided the Company shall have paid the Termination
Fee to the extent required by Section 10.6).
49
10.4B Termination By Reason of No Landlord Lender Consent. This
Agreement may be terminated upon written notice to the Buyer by the
Company alone, in the event the Landlord Lender Consent has not been
obtained by the close of business on November 1, 2003 (unless extended
by the Company to a date not after January 14, 2003 by written notice
to the Buyer).
10.5 Effect of Termination. In the event of termination of this
Agreement in accordance with Section 10.1, 10.2, 10.3, 10.4A or 10.4B,
this Agreement shall forthwith become void and have no effect, except
(i) to the extent that such termination results from the willful breach
by a party hereto of its obligations hereunder (in which case such
breaching party shall be liable for all damages, including reasonable
legal fees and expenses, allowable at law and any relief available at
equity), (ii) as otherwise set forth in any written termination
agreement and (iii) that Sections 11.1, 11.7, 11.8, 11.11, 11.18,
11.19, this Section 10.5 and the last sentence of Section 5.2(d) shall
survive termination of this Agreement.
10.6 Termination Fee. If this Agreement shall have been terminated by
the Company pursuant to Section 10.4A, then the Company shall pay the
Buyer a fee of Seven Hundred Fifty Thousand Dollars (US$750,000) in
cash (the "Termination Fee") as liquidated damages and in discharge of
any and all obligation or liability of the Company under and in
connection with this Agreement.
11. Miscellaneous.
11.1 Press Releases and Public Announcements. No Party shall issue or
make, or cause to be made or issued, any press release or public
announcement relating to the subject matter of this Agreement or the
transactions contemplated hereby (except to the respective directors,
officers and creditors of the Company and the Buyer) without the prior
written approval of the other Party; provided, however, that any Party
may make any public disclosure it believes in good faith is required by
applicable law or any listing or trading agreement concerning its
publicly-traded securities (in which case the disclosing Party will
provide the other Party with the opportunity to review in advance the
disclosure). In addition, any Party may make such disclosures as they
deem reasonably necessary to obtain any consents required for
consummation of the transactions contemplated by this Agreement. In
addition, the Company may discuss the possibility of the transactions
contemplated hereby (but not the details of such transactions) with its
employees.
11.2 No Third-Party Beneficiaries. Except as provided in Section 5.2(c)
and Section 9 of this Agreement, this Agreement shall not confer any
rights or remedies upon any Person other than the Parties (and their
respective successors and assigns permitted by Section 11.4).
11.3 Entire Agreement. This Agreement (including the documents referred
to herein) constitutes the entire agreement among the Parties and
supersedes any
50
prior understandings, agreements, or representations by or among the
Parties, written or oral, to the extent they related in any way to the
subject matter hereof, including without limitation that certain
non-binding letter agreement between the Parties dated August 15, 2002,
as extended by those two letter agreements between the Parties dated
September 20, 2002 and October 3, 2002, respectively.
11.4 Succession and Assignment. This Agreement shall be binding upon
and inure to the benefit of the Parties named herein and their
respective heirs, administrators, successors and permitted assigns. No
Party may assign either this Agreement or any of its or his rights,
interests, or obligations hereunder without the prior written approval
of the other Party.
11.5 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of
which together will constitute one and the same instrument.
11.6 Headings. The section headings contained in this Agreement are
inserted for convenience only and shall not affect in any way the
meaning or interpretation of this Agreement.
11.7 Notices. All notices, requests, demands, claims, and other
communications hereunder will be in writing. Any notice, request,
demand, claim, or other communication hereunder shall be deemed duly
given (i) on the date of delivery, if delivered personally, (ii) upon
confirmation of facsimile, if sent via facsimile transmission to the
facsimile numbers given below, (ii) one business day following the date
sent when sent by overnight delivery a reputable and recognized
next-day express courier service and (iii) five business days following
the date mailed when mailed by certified mail return receipt requested
and postage prepaid at the following addresses:
If to the Company:
Rheometric Scientific, Inc.
Xxx Xxxxxxxxxx Xxxx
Xxxxxxxxxx, XX 00000
Attn: Chairman and Chief Executive Officer
Facsimile: 208.723.1069
Copy to:
Dechert
00 Xxxxxxxxxxx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxx Xxxxx, Esq.
Facsimile: 212.698.3599
51
If to the Buyer:
Waters Technologies Corporation
00 Xxxxx Xxxxxx
Xxxxxxx, XX 00000
Attn: Xxxx Xxxxxx, Vice President, Finance
with a copy Attn: Legal Department
Facsimile: 508.482.3361
Copy to:
Xxxxxxxx Xxxxxxxx Xxxxxxxxx & Xxxxxxx
000 Xxxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Xxxxx Xxxxxxx, Esq.
Facsimile: 617.946.8100
Any Party may change the address to which notices, requests, demands,
claims, and other communications hereunder are to be delivered by
giving the other Parties notice in the manner herein set forth.
11.8 Governing Law; Forum. This Agreement shall be governed by and
construed in accordance with the domestic laws of the State of New York
without giving effect to any choice or conflict of law provision or
rule (whether of the State of New York or any other jurisdiction) that
would cause the application of the laws of any jurisdiction other than
the State of New York. The Parties agree that if (i) the Company
initiates any suit, action or other proceeding arising out of this
Agreement or any transactions contemplated hereby (collectively,
"Proceeding"), the courts of the Commonwealth of Massachusetts and of
the United States of America located in Boston, Massachusetts shall
have exclusive jurisdiction for the purposes of such Proceeding, and
(ii) if the Buyer initiates a Proceeding, the courts of the State of
New York and of the United States of America located in New York, New
York shall have exclusive jurisdiction over such Proceeding. Each of
the Parties hereby irrevocably and unconditionally submits and consents
to the foregoing grants of exclusive jurisdiction and hereby waives the
right to assert the lack of personal or subject matter jurisdiction or
improper venue in connection with any such Proceeding. In furtherance
of the foregoing, each of the Parties (i) waives the defense of
inconvenient forum, (ii) agrees not to commence any suit, action or
other proceeding arising out of this Agreement or any transactions
contemplated hereby other than in accordance with the terms of this
Section 11.8, (iii) agrees that a final judgment in any such Proceeding
shall be conclusive and may be enforced in other jurisdictions by suit
or judgment or in any other manner provided by law and (iv) agrees that
service of any process, summons, notice or document by U.S. certified
mail to the Company or the Buyer, as the case may be, at the addresses
set forth in Section 11.7 hereof, shall be effective service of process
for any such Proceeding.
11.9 Amendments and Waivers. No amendment or waiver of any provision of
this Agreement shall be valid unless the same shall be in writing and
signed by the Party against whom enforcement of any such amendment or
waiver is sought.
52
No waiver by any Party of any default, misrepresentation, or breach of
warranty or covenant hereunder, whether intentional or not, shall be
deemed to extend to any prior or subsequent default, misrepresentation,
or breach of warranty or covenant hereunder or affect in any way any
rights arising by virtue of any prior or subsequent such occurrence.
11.10 Severability. Any term or provision of this Agreement that is
invalid or unenforceable in any situation in any jurisdiction shall not
affect the validity or enforceability of the remaining terms and
provisions hereof or the validity or enforceability of the offending
term or provision in any other situation or in any other jurisdiction.
11.11 Expenses. Except as otherwise provided herein, whether or not the
transactions provided for herein are consummated, each of the Parties
will assume and bear all expenses, costs and fees incurred by such
Party in connection with the preparation, negotiation and execution of
this Agreement and the other documents and agreements contemplated
hereby.
11.12 Construction. The Parties have participated jointly in the
negotiation and drafting of this Agreement. In the event an ambiguity
or question of intent or interpretation arises, this Agreement shall be
construed as if drafted jointly by the Parties and no presumption or
burden of proof shall arise favoring or disfavoring any Party by virtue
of the authorship of any of the provisions of this Agreement.
Disclosure of an item in a Disclosure Schedule corresponding to a
particular Section in this Agreement shall be deemed to be disclosed in
another Disclosure Schedule whether or not an explicit cross-reference
appears to the extent that the existence of the item or its contents is
reasonably apparent to be relevant to such other Disclosure Schedule,
but inclusion on a disclosure schedule shall expressly not be deemed to
constitute an admission by the Company or the Buyer or otherwise imply
that any such matter is material, has a Material Adverse Effect or
creates a measure for, or further defines the meaning of, materiality
or Material Adverse Effect and their correlative terms for the purposes
of this Agreement. All accounting terms not defined in this Agreement
shall have the meanings determined by generally accepted accounting
principles as of the date of this Agreement. All references to
immediately available funds or dollar amounts contained in this
Agreement shall mean United States dollars. All capitalized terms
defined herein are equally applicable to both the singular and plural
forms of such terms. Any reference to any federal, state, local, or
foreign statute or Law shall be deemed also to refer to all rules and
regulations promulgated thereunder, unless the context requires
otherwise. The word "including" shall mean including without limitation
and the word "include" shall mean includes, without limitation.
11.13 Incorporation of Exhibits and Schedules. The Exhibits and
Schedules identified in this Agreement are incorporated herein by
reference and made a part hereof.
11.14 Specific Performance. Each of the Parties acknowledges and agrees
that the other Party would be damaged irreparably in the event any of
the provisions of
53
this Agreement are not performed in accordance with their specific
terms or otherwise are breached. Accordingly, each of the Parties
agrees that the other Party shall be entitled to an injunction or
injunctions to prevent breaches of the provisions of this Agreement and
to enforce specifically this Agreement and the terms and provisions
hereof in any action instituted in any court of the United States or
any state thereof having jurisdiction over the Parties and the matter
in addition to any other remedy to which it may be entitled, at law or
in equity.
11.15 Waiver of Jury Trial. TO THE EXTENT NOT PROHIBITED BY APPLICABLE
LAW, THE PARTIES HEREBY WAIVE, AND COVENANT THAT THEY WILL NOT ASSERT
(WHETHER AS PLAINTIFF, DEFENDANT OR OTHERWISE), ANY RIGHT TO TRIAL BY
JURY IN ANY FORUM IN RESPECT OF ANY ISSUE, CLAIM, DEMAND, ACTION OR
CAUSE OF ACTION ARISING OUT OF OR PASSED UPON THIS AGREEMENT OR THE
SUBJECT MATTER HEREOF, WHETHER NOW EXISTING OR HEREAFTER ARISING AND
WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE.
11.16 Bulk Transfer Laws. The Buyer hereby waives compliance by the
Company and its Subsidiaries with the provisions of any so-called bulk
transfer laws of any jurisdiction in connection with the sale to the
Buyer of the Acquired Assets.
11.17 Return of Information. If for any reason whatsoever the
transactions contemplated by this Agreement are not consummated, the
Buyer shall upon request from the Company promptly return to the
Company all books, records and documents (including all copies, if any,
thereof) furnished by the Company, the Subsidiaries of the Company, or
any of their respective agents, employees, or representatives, and
shall not use or disclose the information contained in such books,
records or documents for any purpose or make such information available
to any other entity or person.
11.18 Non Solicitation. The Buyer agrees that, if this Agreement is
terminated, for a period of one year from the date that this Agreement
is terminated, neither it nor any of its Affiliates shall, directly or
indirectly, solicit for employment or employ any employee of the
Company or any of its Affiliates who are employed in the Business;
provided, however, that the foregoing provision will not prevent the
Buyer from soliciting (but not employing) any such person (i) as a
result of the employer's placing advertisements in trade journals,
newspapers or similar publications or (ii) as a result of the efforts
of executive recruiters or other third parties who contact such persons
without any direct or indirect solicitation by or knowing encouragement
from the Buyer or its Affiliates.
* * * *
54
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement on the date
first above written.
RHEOMETRIC SCIENTIFIC, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
---------------------------------
Name: Xxxxxx X. Xxxxxxxx
-------------------------------
Title: Chairman & CEO
-------------------------------
WATERS TECHNOLOGIES CORPORATION
By: /s/ Xxxx Xxxxxx
---------------------------------
Name: Xxxx Xxxxxx
-------------------------------
Title: Chief Financial Officer
-------------------------------
For purposes of acknowledging its approval of the transactions contemplated by
this Agreement in its capacity as a stockholder of the Company, and as a
material inducement to the Buyer to enter into this Agreement, but for no other
purposes, Andlinger Capital XXVI LLC hereby agrees to vote in favor of the
transactions contemplated by this Agreement as part of the Stockholder Approval,
except in the case of a Superior Proposal.
ANDLINGER CAPITAL XXVI LLC
By: /s/ Xxxxxxx X. Xxxxxxxxx
---------------------------------
Xxxxxxx X. Xxxxxxxxx
Managing Member
55
